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Jean Says What?

By March 3, 2022May 12th, 2022Personal Insurance
Jeans Says What? March 2022

NEW DISCOUNTS

As a way to save money on your auto insurance, most insurance companies have come out with telematics. This is also known as “usage-based coverage,” or a “pay how you drive” discount. Generally, you have to download an app on your phone, and it does the tracking. It will observe and score your driving activity for each driver. Based on this, you could obtain additional discounts. Some of our insurance companies also offer a credit at sign-up time.

MORE RENTAL CAR COVERAGE NEEDED

What we are seeing in the world of auto insurance is the issue of not having enough rental car coverage to ensure you have a substitute vehicle if you have a minor or major accident. I recently hit a deer in December. What normally would have taken two weeks, took six weeks to fix and get my car back to me. Most of this is due to supply chain issues coming out of COVID-19, so the labor and parts shortages we are seeing everywhere. Most auto policies only give you 30 days of rental car coverage, and a $25-50 per day maximum. With minor repairs often taking over a month, and major repairs even longer, 30 days will likely not be enough while these delays continue.

Some of our insurance companies have come up with endorsements, so you can add more rental car coverage if you like. If you buy a new car, we will be quoting this for you and letting you know the cost. However, more rental car coverage can be added at any time, not just on your renewal date.

ADEQUATE DWELLING LIMITS

What we are seeing in the world of homeowner’s insurance are concerns about having adequate dwelling coverage, or replacement cost, to cover a total loss. Again, due to rising inflation related to the labor and supply shortages, the cost to replace a home has skyrocketed. Keep in mind that market value is not the same as the cost to rebuild your home. Some of our insurance companies are doing Guaranteed Replacement Cost, versus a hard number estimate.

For example, if your home is insured for a replacement cost of $350,000, and heaven forbid it blows away or burns down, how much would it actually cost to rebuild it today? Most policies have some type an inflation guard. In this scenario, if you have a 25% inflation guard, the most the carrier can pay is $437,500; for a 50% inflation guard, the most they can pay is $525,000. However, due to current inflation trends, and the cost of building materials and labor, the replacement cost of the house today may actually be $600,000-$700,000. With Guaranteed Replacement coverage, the insurance company is going to pay whatever the cost is, regardless of inflation.

If you have any questions or concerns, please reach out to us! We are here to help.

  • Jean Mabry, Personal Risk Advisor | (513) 644-1266 | jmabry@risksource.com
  • Cindy Thomas, Client Experience Manager | (513) 644-1282 | cthomas@risksource.com
  • Jenny Miller, Client Experience Manager | (513) 644-1281 | jmiller@risksource.com
  • Andrea McNeal, Client Experience Manager | (513) 644-1269 | amcneal@risksource.com
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