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Are You Kidding? It Has To Be Covered!

Avoiding insurance screw ups because too late is too late.

We all have it, or should have it, but don’t know much about an important product: Insurance.

It's not the sexiest of topics, which is why you should let your agent guide your decisions.

life raft on a balcony
Are you prepared?

Mike Gehman, Innovative Insurance, answered some typical and not-so-typical questions. I approached Mike because he not only sells insurance, he’s proactive in educating his clients before and after the initial sale.

How long have you been an agent?

I’ve been an agent since 2003. That’s 18 years!

What do you like about being an insurance agent?

Different clients, different days, different claims, different risks…..lots of variety in the work, and always something new.

What should people look for in an agent?

I know when I look for an advisor on taxes, financial, medical, legal, etc., I prefer to connect via referral if possible and like to see experience and history with similar issues or tasks that I am seeking help with. And after the initial engagement or “post-sale,” you can tell if your experience with the agent regarding communication and attention is to your liking.

Does longevity with an agent/company count? (For the almost 5 decades I’ve had insurance from several companies, I NEVER heard from them after the sales call and the day I said I was moving on.) There are some definitive benefits to longevity with an insurance company. Many companies offer discounts for longevity thresholds. Some companies offer conditions of policies being “non-cancellable” after specific points. Beyond these, there are some subjective benefits. A history with a company could give your agent leverage when advocating for a billing, claim or service problem, etc.

What do you wish customers would do more of, more often?

More open communication without holding back things the customer thinks the insurance company “may not allow.”

I question why people would spend $1,000 on a policy and materially misrepresent details on the application. At the time of the loss, when the insurance company does its homework, the claim will get denied. So why pay $1,000 for a policy that won’t cover a claim. Just go without the insurance if that’s the case. Or pay $1,200 for the right policy and have the proper coverage at the time of the claim.

What do people forget to insure?

Maybe it is “forgotten,” or maybe it is “neglected,” but it’s their physical body. It’s easy to insure machines, cars, tangible items, and dwelling structures. But the one “asset” that is most responsible for a lifetime of income is your physical body. For an individual who has a family that relies on that income or a small business that relies on that one key functioning employee, a life insurance and disability policy would be missing in most insurance plans.

Also, check with your agent to see if all drivers in your household are covered. Adult 'children' with cars in their own names are not always covered.

How should they document their valuables? How often? Does it need an official appraisal?

Pictures and appraisals. Insurance companies have varying rules on appraisals. For example, when writing new insurance, one company may require a current appraisal (within the last year) for any individual piece of jewelry that is $10K or more. Once the insurance is written, the value of that jewelry could change over time. The frequency of obtaining new appraisals would not be a requirement of the insurance company, but it is good practice for the policyholder to keep the insurance limit on that jewelry up to date.

For example: What if a ring was insured for $8,000, but after three years of inflating gold prices, the ring is worth $14,000. Without getting a new appraisal, the policyholder would be underinsured and receive only $8,000.

Does the average homeowner need an umbrella policy, and how do they affect the premiums on standard policies?

If you accidentally run over your neighbors' mailbox, do you need an umbrella policy? No.

But, if you’re on the PA turnpike and accidentally change lanes with a car in your blind spot, and that triggers a three-vehicle accident, and one of these vehicles is a church van with eight kids in it? Yes!