Insurance Myth #8: Costs keep going UP!

I haven't made any claims on my home or auto and my policies keep going up!

BUSTED

The cost of building materials and auto repairs continue to rise consistently driven by supply and demand. Petroleum, wood, copper and steel continue to rise in cost and that is recognized when losses occur. Autos have electronics and sensors. Older vehicle repair parts are difficult to find driving the cost higher. Your loss record applies to your policy but all insurers spread the cost of insuring their risk value according to actuarial data bases. 

Proximity to the coast increases the potential loss so your cost to insure is more than that of someone at a distant location. Higher populated areas see more frequent losses due to fire, theft, and accidents so that is calculated. Proximity to fire services and water supplies increase the amount of potential losses for rural areas. 

Potential for inclement weather (ice, hail, wind storms,) as well as the age and exterior of your home are included. Unfortunately, your record isn’t the only factor considered at each policy period renewal. It is important that you can reach your agent at GIA LLC “the available agent” when you have any questions or concerns about your coverage “Where customer satisfaction is the gauge we measure success by!”

Insurance Myth #7: Personal Property

Everything inside my house is covered on my homeowner's policy as personal property. 

BUSTED

About 35% of your personal property value is located in your kitchen. This includes all appliances portable or fixtured. If you have replacement cost coverage (like new) or actual cost value (depreciated) coverage also affects your coverage level here. 

Specific limits (usually $2,500) always apply to specific items such as jewelry, tools, computers, silver, money/coins, etc. If you own antiques, valuable art, collections of discontinued items, musical instruments or heirlooms that are valued over $2500 you should have them apprised and documented for “scheduled articles” coverage by your insurer. 

This coverage only applies if the loss occurs at home. If you wear it or take it from home another coverage is required “inland marine” that will allow for damage, theft or loss. The cost for these are minimal compared to the item value but knowing it is covered before you have a loss is more important to us. At GIA LLC we ask these questions so you can make an educated decision to insure or not!

Insurance Myth #6: Deductibles

Raising your home or auto deductible always saves you money in the long run.

BUSTED

Unfortunately and statistically that isn’t true. A small savings may look better but as you raise your out of pocket expense (deductible), you are transferring the expense of insuring to you! 

Start with 1% of all perils on your home and $500 for comprehensive and collision on your autos. Granted, the cost to insure will be greater but saving a little now with the potential of paying a lot later is an eye opener! 

Auto incidents usually occur in 4 year intervals and home events occur in 7 year sequences (typically weather or water). At GIA LLC we will offer optional deductibles real time so you can factor whether the savings is truly worth the risk!

Insurance Myth #5: Auto Coverage

Comprehensive coverage covers theft of your vehicle, damange due to flood and all items contained within. 

BUSTED

Comprehensive coverage on your auto insurance policy only covers items Original Equipment Manufactured and installed components. This does not include your car stereo or GPS device if it was added by you or previous owner after taking possession. 

Aftermarket items such as custom wheels, flat screens, entertainment systems or engine performance upgrades must be added to your policy “customization” for accurate rating, authentication and approval for an additional cost. 

For coverage on items contained in your car such as iPods, clothing, and compact discs you will need Homeowners or Renters coverage and is subject to your policy deductible. 

In the event of flood damage, you have no personal property coverage because flood is specifically “excluded” on all property policies. Your auto is only covered subject to your comprehensive deductible. Flood insurance protection is only available for home, renters and commercial property and purchased separately usually through FEMA. 

At GIA LLC we offer options associated with your specific vehicle so you know you’re covered for that!

Insurance Myth #4: Auto Rates

INSURANCE MYTH #4

Auto insurance rates automatically decrease when your vehicle is paid off or when you turn 25.

BUSTED

Age is an important consideration and is used to predict the potential that the insured will make a claim. While people under 25 are statistically more likely to get into an accident, each company handles the impact of age on the price of the policy differently. 

Some carriers may offer pricing breaks at 25, with optional savings for defensive driving, married status and more. When shopping for a new policy a variety of other ways to receive discounts may include bundling a homeowner's or renter's policy with your auto coverage, paperless billing and in some cases, paying your premium in full. It is also important to ask for alumni or professional association discounts! 

Insurance Myth #3: Drivers and Your Insurance

Insurance Myth #3

If you allow a licensed drive to borrow your car, then your vehicle IS NOT covered against damages.

BUSTED

Typically this is not true for personal auto policies unless the driver is specifically excluded on your policy. If your current policy includes comprehensive and collision coverage, that will provide protection against ANY DAMAGES to your vehicle. 

Your auto policy is the primary insurer however, if your designated driver exceeds the limits of your policy, their insurance policy would become secondary for the remaining damages. Claims made could result in an increase in your auto insurance premium. 

Uninsured/underinsured coverage should not considered important in Texas. If you reject the coverage, you  may be penalized even if it is not an at-fault accident!

Insurance Myth #2: Online Providers

INSURANCE MYTH #2

Working with a web based insurer is always cheaper than going through a local agent.

BUSTED

While it's true that web based insurers save money on their costs by not incurring agent commissions, don't expect the savings will be passed to you. Many web based home and auto insurance providers will use those savings to spend more on marketing their brand and product. 

Insurance pricing matrixes for insurance policies are extremely complex, so you may discover a large range in price for any single individual. You should feel comfortable working with a local agent or direct carrier! Prepare to learn as you go! We believe that an informed client is the best client! 

Insurance Myth #1: Contracts

Join us on a journey of 8 Insurance Myths explained! 

INSURANCE MYTH #1

You can only shop for home or auto insurance when your current policy expires.

BUSTED!

Many customers don't realize that they ARE NOT bound to their auto insurance coverage for the full 6 or 12 month term. A policy owner can, in fact, cancel at anytime, subject to fees that vary by carrier. Occasionally the carrier will charge a fee on any unused premium. You should ask your agent for any early cancellation fees to compare with the potential savings you receive by switching your auto insurance coverage. Your insurance should be your choice!

At Godbee Insurance, we will advise your potential savings per day so you can decide how much to save. Call us to save today! 832-573-9020 or email godbeej@nationwide.com
John T. Godbee-Agent
Nationwide Insurance-Home, Auto, Flood, PUL, Life, Business Owner Policies
Cell-832-573-9020 Off-832-886-5544 Fax-281-201-2010 GodbeeJ@Nationwide.com