Ep 18: Insurance

You're listening to Cash Talk. It doesn't have to be a major accident. It could be, no one's hurt. You have 15,000 for your property damage.

Yeah, you can't risk 80s. I mean, that's a, what, $80,000 car sometime? Okay, well now you, that car's told, you owe $80,000 and you have a check from your insurance company for 15. You have, you know, 14 months to get this paid off.

Figure it out. Hi, my name's Adrian. Hi, I'm Missy. And we are your host at the Cash Talk Podcast.

You can find us on Facebook, Twitter, and Instagram at Cash Talk Podcast. Today we have Ashley Holt joining us. She's a licensed property insurance agent. She's been in the business for a little over two years and she has nine years of sales experience from real estate offices to door door sales for a security company.

When she is not selling insurance, she likes to spend time where there has been outdoors in the mountains hiking, doing things that I don't prefer to do because they're athletic. But I wouldn't say athletic. The great outdoors. Is there anything that I've left off your intro?

Anything that you want to add? No, I think that pretty much covers it. All right. Let's begin.

So insurance, what happens to insurance to you sale? And what's the difference? What's the difference? What's kind of like a rundown of each type?

Yeah. Okay. So there's either property and casualty or life and health. So property and casualty is going to be homeowners, renters, landlord policies, condos, auto insurance, motorcycles, boats, trailers, et cetera.

That type of RTs, ATDs, that kind of thing. And then of course life and health is life insurance and health insurance. So I'm not licensed in life and health. Property and casualty is pretty much anything else.

So you do mostly like individual policies for policies for themselves instead of for a business? Right. Yes. We can do them, but we usually have someone else that just specializes in underwriting those commercial policies handle all of that just because there's not a huge demand for the commercial policies.

So we want to make sure with insurance you can have anything, any mess up. So yeah, very, very cost-a-tea-dotch-wise. Do we all have to have insurance? What's the importance of having insurance?

Oh, I mean, those are extremely- It's extremely hard. All familiar with insurance. Yeah. So as an agent, I'm glad you asked that because before I was an agent, I really didn't get the point, you know, I didn't understand why it was important either.

And I would have never had renters insurance because in my mind, I just thought, well, I don't have, I got all my stuff on Craigslist. You know, I was early 20s, right? Like, what are any renters insurance? I mean, I'll state myself like renters insurance as an example.

The first time I ever got it was when an apartment complex made me get it for I can move in. I didn't know I needed it. Right, yeah. And saying, you know, with car insurance, I would just have, I was just like, I don't care.

Whatever's cheap. It's just giving me the cheapest. And so many people are like that. And I've just never been educated.

And honestly, the agents I had never taken the time to educate me. So I always try to do that. So the reason why I'm so important, so I'll start with renters since I mentioned that, is if you're a renter, maybe you don't have, you know, a whole lot of expensive stuff. And that's fine.

But what happens if you're a apartment or the home that you're renting catches on fire? Well, you're so responsible for your lease. And now you have to live somewhere else. And if it's your fault that the fire started, now you're also held liable and have to pay for those damages.

Right. So you have renters insurance, which generally is around $20 a month or less and takes care of that. So yes, your things will be replaced, but that's the least of your worries because now you're so responsible for your lease because you're in a contract. Your renters insurance will pay for you to have somewhere else to live while, you know, depending on what your coverages are.

So a lot of policies say up to a dollar amount. A lot of policies say for 12 months or 24 months. So you want to know what your policy says. But if you're living is damaged to where you can't live in it, then it pays for you to have some else to live while it's being repaired or rebuilt.

That's worth it. That's right there. Right. Yeah.

So and then at the same time, if you are liable, you know, you're going to have liability on that. A lot of people make the mistake of just getting, you know, a very small amount of liability. But I would say never have less than $100,000 of liability on renters policy because 50,000 is just not going to go. I mean, essentially there's a fire in your liable for it.

50,000 is not going very far. Yeah. When you think like you're replacing beds, tables, TVs, toothbrushes, clothes. If you're running an apartment, everything's kind of in a smaller space than if you were in a house.

And if it's fire, it's going to catch a lot more things on fire. Right. Yeah. And like if I'm going, if I was cooking something, I started grease frying and burn down Macy's apartment.

She wants her stuff paid for and it's my fault because it's my fire. Absolutely. And what a lot of people make a mistake of thinking is they say, well, what did they say? You can't squeeze blood before and it's my fire.

Right. Okay. Yes, they can. So.

Yeah. But they get blood from that turn up. Yes, because this is the thing. So let's say like the example you just gave.

So if we're in an apartment complex together, you know, in your neighbors and I start a fire and it's my fault. And I'm like, oh, I'm not going to get it. So I call it your apartment to burn down and I don't have any runners insurance, but you do. Your runners insurance will pay for that.

But then your runners, whoever your insurance is with is doing me to pay them back. And that's called they'll suffer gain. Yeah. So, and they don't, I mean, pay it.

That's just all that you're going to pay it. So you say, and I people say, well, I don't have $100,000. We're going to get the money. Well, do you have a job?

Do you have a check coming? Because they'll take it. Do you own, I mean, if you ever own property, you might get a lean. Yeah.

So it's a huge deal. And it's you can't ever be personally. I don't think you can really be over insured because you never know what's going to happen. So, but especially if you have assets, I think that you should have higher levels, but.

Absolutely. Wow. That makes a lot of sense. I didn't know that about the, you know, I didn't think about the having your neighbor because actually a friend of mine, some of them, her apartment caught on fire and it messed up a part of the neighbors.

But I never really thought of it in that way. I was like, okay, well, this is the complexes. Responsibility. Yeah, this is their, you know, I'm sure there's going to be something they work out, but that's totally yours.

I mean, and so I guess I never really thought about it that way as far as it affecting your neighbor. Right. And where they stand on that. Yeah.

And well, and another thing is if you, if you've done something that damages, I guess belonging to the complex, then the complex can also, there's a US for these damages too. So if you're in a complex, and that's why most apartment complexes do require that now. They have something because they want, if you do something, they want something back, they don't want to have to go through the long process of court and wait. Yeah.

So, yeah. If you set a bench on firebacks and like you're brewing or something, which in our county, you're not supposed to keep a grill in your pad or an apartment, I'm pretty sure. But if you set a bench on firebacks and they want their bench replaced, right, their fault. And if you're trying to collect from you, it's going to be hard, but then it's going to be insurance then.

There you go. Yeah, absolutely. And especially if, you know, because even though like you said, you're not supposed to have a grill, but people will sometimes, then you're really, you know, I mean, you're really so even if maybe someone else, if you did something that was not allowed and somebody else was negligent and came over and kicked your grill over, I mean, you can still be held responsible because you had to begin with. Right.

Yeah. So along with renters insurance, what's similar to that is homeowners insurance, of course. And homeowners insurance essentially is the same thing but also covers your structure. So you need to know that it's important what your homeowners insurance coverage is because it's not just about replacing your home, but again, it's going to be, it's going to pay for you guys to live because, you know, if your house catches on fire, you still have to pay your mortgage payment, but you can't live there.

So your homeowners insurance pays for you guys to live as well. So paying your mortgage payment and trying to figure out where to stay while they fix your house. Right. And by all your new stuff.

Yes. So, and that's another good thing. So unlike auto insurance where auto insurance pays actual cash value to replace cars, homeowners and renters insurance generally pay replacement costs for your property. So if you have, you know, I always give an example.

When I first moved out, I got everything in my apartment. I've probably paid less than $200 for it because I got it all on Craigslist or we just found it somewhere for free or car sales. Yeah. Yeah.

So, but still I had an apartment full of furniture. If my apartment had caught on fire and all that burned up, then my insurance would buy me an apartment full of furniture. So that's replacing cost. They're going to replace it what it costs.

It doesn't matter if it depreciates or not. Whatever it costs today is what that's what replacing cost is. So your property, yeah, your personal property on your homeowners and your homeowners insurance, they'll replace it new. And then there's some things that you can list specifically, you know, like collectibles and things like that.

A lot of times I had a Picasso painting in my house. Yeah, that would have to be listed specifically things like that because you'll get a blanket amount and it depends on the carrier a lot of times. But generally it's like, you know, you'll have maybe 2,500 for drawing furs or 1,500. So you have to list it specifically.

Yeah, if you want more coverage. Yeah. Yeah. And then we list it specifically at that time you'll send in documentation.

So your carrier will have record of those. But sometimes they'll send out, you know, an appraiser, like let's say you have something you have collectible and it's a set and one of them's stolen and they can send out a appraiser. And they can either take the other one and replace the whole set, you know, with cash or they'll just replace the one. So I mean, that's a whole other story.

But the general basics of homeowners, that's important. And then as far as the structure, what a lot of people don't know is that the replacement cost is not going to be the same as what you pay for on the house. So when we calculate the replacement cost, we're talking about what is it going to cost to rebuild this house materials? And like, that's what we're looking at.

And also you can't have as many claims on homeowners as you can without it. Oh, yeah. So you don't want to have, you know, some people want to have a $200 deductible for their homeowners insurance. Don't do that.

You don't need a file claim for $200. You don't need a file claim when you're home. Honestly, I wouldn't say for anything less than $2,000. I would say save up, you know, have $2,000.

Then it goes wrong. Pay for it out of pocket. If it's more than $2,000, okay, file claim because you only get like two claims on homeowners policy every five to ten years, depending on your carrier. So yeah, it's designed for like catastrophic issues.

I know somebody, I cringe so hard when I saw it, but somebody broke into her house and stole her TV. I don't know, $600 TV. Let's say $1,000 we know to be real generous. And she fought on homeowners insurance.

I'm like, that's, I would use homeowners insurance if a tree fell on my house, not somebody stole my TV. Right. Well, and to her defense, she probably doesn't know. I mean, you think people think I paying for insurance.

I can use it when something happens. But yeah, you can, but now you have one other. So what if you have two things that are major losses? You're not, I mean, it's going to be nearly impossible to find a carrier to write you for about five years.

Yeah. If you, if you do that. So you don't want to have, you don't have any claims. So that's something too, because I've seen people experience that.

And especially fire, like fire, claim and theft. That's even worse too. She filed a theft claim. That's going to follow her for a while because, and it also was interesting is it also follows the address.

So they're not every carrier is like this, but a lot of carriers, when they pull that report, they're, we're homeowners policy runners. They're pulling out anything that's been, that's ever been filed at that address or that person. I thought about that. Yeah.

You can see like if something's happened at that house before, where they're not you live there. Yeah. So let's say you have this house and somebody breaks in and you follow a theft claim. And then five years later, well, maybe not five years, but whatever, a few years later, I've been here.

And I've never had a claim in my life, but they're like, nope, you've had a theft claim. Yeah. Something's happened at that house, that house seemed to risk. Right.

Yeah. Because they would say, well, you know, I had somebody once, the address had like fourth theft claims. So they went right, because they're like, well, obviously there's a theft problem where you're moving to. So we're not, because of high risk.

We're not writing that. So, yeah. So if it's, you know, especially if it's theft or fire, those are considered very high risk claims. You know, if it's a small kitchen fire, there's minimal damage.

Unless, you know, if your whole house is going to smell like smoke forever, obviously, you know, do what you have to do. But if it's like, whatever, there's not a lot of damage to be done or to be fixed. And then I would say fix it yourself. But that especially if your TV stole one and you got to fix the window, fix it.

Yeah. Do it yourself because you're going to pay for it later. And I know it sucks. I wish I, you know, if I mean the rules may be different, but that's, that's across the board.

That's not carrier specific. So, yeah. So car insurance, that's the area that I know the most about. I'm sure it affects a lot of people because in the world we live in, most people have to have a car.

What, what, what experience do you see? Like what is enough coverage? What's too much? What's too little?

Okay. So full coverage. Let me just start there. I will use that term so people can understand, you know, where I'm coming from because everyone's using hearing it, but I don't like it.

And my first insurance job, we were not allowed to say it for that reason is very misleading. So as a consumer, I mean, just to give an example, as a consumer when you hear full coverage, what do you think? I think I'm covered by everything's covered. Anything that happens on cover.

Yeah. So, yeah. That's just not true. With auto insurance, you have the option to have rental car or not or to any labor or not.

And the term full coverage is up to interpretation. So if you tell me I want full coverage, then to me all that means is you probably find its car and you want comprehensive inclusion on it. And I'm going to ask you about everything else. That doesn't tell me that you want to own in labor.

But you might say no, I said full coverage. I want to be fully covered. I want the maximum amount of everything I don't want to deductible. I don't want, you know.

I've got a couple of friends like that. Yeah. I'm not saying we need to say full coverage because I can mean so many different things. Right.

Yeah. I've known a couple of people who've had an incident and they say they have full coverage and I'm like, well, why don't you just have them come to your car then? I'm like, well, because I don't think I have towing. Yeah.

It's interpretation. Like for me, I would think that would be comprehensive collision liability towing rental car acts and forgiveness, all these various things. But it's so up to interpretation. Right.

And see, not every carrier, not every carrier even has accident forgiveness. And some carriers offer it, but it depends on the policy you get. So it's something that an endorsement that you have to add on. So comprehensive is if there's anything damage to the car that's not accidentally related.

So if there's hail damage, if tree falls on it, someone steals it, vanillizes it, your windshield breaks, you hit an animal, those things are all considered comprehensive claims. And so it's comprehensive and then collision is the other part. Collision is if you have an accident where you're at fault, you hit somebody else, you hit a fence, you hit a tree, then that is covered under collision. So, but if you have an accident and it's the other person's fault, of course, they're insurance based.

Okay. So that's why liability is required. Because essentially you have to protect other people. Like a lot of people have liability only.

So you're driving down the street, you hit somebody's car, they get another car because it was your fault. But if you didn't choose to get comprehensive insurance or anything, you're out basically. Yes. Yes.

And that's why lien holders will require you to carry comprehensive inclusion because they want their money back for the loan if your car is told. It's also a good idea to consider having lower deductibles on your comprehensive because a windshield is usually not $500 for your place. If you have a $500 deductible, then you're just going to get a pocket for your windshield. So just things like that.

I have a $100 deductible and my comprehensive. But sometimes just a chip can even be less than that. And there are carriers out there that offer $0 deductible and comprehensive. Yeah.

It's very specific. It's definitely worth looking over. If you ever are going to read a contract, read like look at your insurance, switch it by contract, you're not bound to the contract as a consumer. But it's still, I mean, that's your- We need to use it.

Yeah. That's every letter. No one- Yeah. Absolutely.

I know what you're paying for each month. I've never really looked at my insurance with a fine tooth comb until I got an accident. I can probably tell you every single word that's most- Yeah. Every single word.

And that's not the time that you want to look either. Exactly. I'm glad you took the time to look but you want to know proactively. Right.

You're on the right side of that equation. Well, I've had people before where I tried to talk to them about it and I'm like, oh, I don't care. Just tell me how much it is. You know, I'm like, okay, what do you mean?

Don't care. You know, when you have an accident, you're going to care. You're going to call me. So you need to care what your insurance has.

You need to care about your insurance. You need to care about the carrier that you're with. You need to care about your limits. Your deductibles.

You need to care about all those things. And find out, too, ask questions. Like, some carriers- and this really surprised me, you know, when I was getting into insurance, some carriers will count towing claims as comprehensive. Like, it'll show up on your clarity board.

So as towing claims. That's where I would get in trouble. Yeah. Well, so comprehensive claims don't affect your rate.

But there are carriers that if you've had a certain amount of claims in, you know, two years or three years, they won't write you. So- Yeah, they wonder like, why are they doing towing his car every five days? Mm-hmm. And now you have, like, the carrier I worked for, we don't put on the, we don't report that for towing.

But I think they'll still only do it so many times a year. But some carriers, they will report it. And I had a customer one day, you know, I asked him if you had any accidents or claims. He said, no, because he wasn't thinking about it.

And he didn't other than his 10 towing claims. So until I pulled all his reports, I could see it. And the company was working for the time. I couldn't pull the reports.

I could get them a quote based off of what they told me. And I couldn't pull in your reports. The only thing left for me to do was to push by. So I would pull the reports right before that just to make sure everything was right.

And then so we go through this whole long process. And I pull up his 10 claims and I went right him. So that's, you know, something that's too, because towing's usually pretty cheap, but why pay for, you know, I would ask your carrier because you don't have a great carrier and just not get towing with them to get a roadside program. So that's just something, you know.

Sometimes that comes with the make, you know, your vehicles make, sometimes it comes with benefits under a, you know, it's like warranty. I know I went through my, when I, this is horrible, my random. Yeah, from the interstate, I was horrible. I was just trying to see how long a car would go.

Boy did you learn. That was me just, you know, testing things out, you know. And so I'm on a phone with, you know. So I'm not trying to test how low you got, is that what that was?

Yeah. Like what says it's empty, but is it really? Is it so? I feel like I could do an extra mile.

I could not. And so I called my insurance and then, or no, oh no, I called them, I guess, if you went for a set assistant or whatever. And then while I'm talking to them, because I was going to call my insurance and then I realized my car is still under dealer warranty or, I guess, factory warranty or your college. Yeah, I mean, factories warranty.

And so, but then the, like with the incident people, the highway incident people come behind me while I'm trying to tell the vehicle my location. And so I had like three, I had three backups. I had my insurance, I had my vehicle, and then the highway incident. So I was covered.

But I mean, it's, so you, I think it's a good idea. Yeah. I would just find out because you don't want to, for me, I just don't even know. I just don't even get towing on my policy because I'm, I just get a roadside, I have a roadside program that I get.

So, but everybody's different. So I would just ask before you get towing on your policy and if you're going to use it, something that really affects price that much, but as some of it, if that's going to count as you file an claim. Because if it counts as you file an claim, you may want to just get a roadside program because you didn't use ads anytime you want, you know, depending on some of them have a limit, but whatever, it's never going to show up on your insurance. I mean, your coverage, whatever happens is always determined by what your policy says.

So what a lot of people don't realize is that there's several different levels of liability, different deductibles that you can choose from and you're going to be subject to your deductible. And then you also are eliminated as to who can drive the car and who can't. So, yeah, I've had people think that, you know, they can just, so I had a friend that he says, I have full coverage, so I can drive so and so's car and have a rec and their car and my insurance is going to pay for it. But that's not true.

Insurance. Yeah. And a lot of people think that. Insurance is not good with the person.

The car insurance goes with the car. If it follows the car and not the person. Yes. So you have a rec and someone else's car, then their insurance is what will pay, whatever they have.

And if they don't have that, I mean, if they don't have coverage, you can still be in trouble for driving the insurance. So that's something just to keep in mind. But as far as other people driving your car. So you really want to check with your carrier, whoever your insurance is through, because they kind of all different underwriting guidelines.

But as a rule, the most common thing is that if someone lives in that house, in the same house as you, then they're considered having, they're considered to have access to your vehicle. Whether they never drive it or not, the carrier says if they live there, how can you tell me that they're never going to drive the car? Yeah. Like they just pick up the car key and walk outside and boom, they're in it driving.

Yeah, absolutely. Or, you know, if you've walked them in, they can go move your car and then the neighbor drives it. Yeah. It's being driven.

Right, absolutely. So as a rule, if someone is living in a household and they drive the car, they're considered, if they're not on an insurance policy, a lot of times you may not be covered for that accident. Or they may pay, your company may pay out and they just drop you because you didn't disclose the driver. So, and that depends on the carrier because some of them are not like that.

Some of them are, yeah, so you want to check. But also what's interesting is that there's someone that doesn't live in the house, like, let's say you came over to visit me and my car was blocking you in and we needed ice. You could take my car, drive it to the door to get ice, how to wreck, and my insurance would pay because that's considered permissive use. So it's not a regular driver.

And I know that's a little confusing. Yeah. Yeah, but you gave me permission to use your car. Right.

Yes. Okay. Short term, whether it's a door or a Mac. Yeah, usually it's as long as, you know, they're not driving it for, and again, every carrier is different.

Some of them are, if they drive it one to twelve times, they need to be on the policy. Some of them are going for more than 30 days or two weeks. Right. Yeah, it is.

Yeah. Yeah. Okay. We've been on each other.

How long have you not got to drive your car one time? And you're going to get to your car once because I moved it in my driveway. Yeah. So I'm probably one offing it.

It doesn't touch the public street, but I technically drove it. Yeah. So, and then, you asked me about coverages and full coverage. When people say full coverage, they come in and they say, hey, I want full coverage insurance on the spot of the car.

What is it that you would give them? And you mentioned that you don't like to use full coverage. Why is that? Because, yeah, because like I said, it's misleading because if you're a consumer just like in all those examples, unless you've taken the time to research insurance and know what your limits are, know what your limits are, know what those things, a lot of consumers, especially I think, you know, in the twenty inch age range, just have no idea what that means.

And they just think, well, I just trust you to do whatever. But insurance is pretty competitive, especially with auto rates being at a pretty high level right now with the increase in accidents. So you can't just trust everybody, because you do have agents that will look at your policy and see that you have $100,000 in coverage and say, I can be your price and give you $25,000. And you don't know what's on your policy, and you want to be.

Well, they cut my rate in half. Sure they did. They cut your coverage in a quarter, too. Yeah.

So yeah. So if someone walks in and they say, hey, about this car, I need full coverage. Then luckily, we kind of have a system where we can pull their insurance history and see what their current liability is. So they already have higher coverage.

Then I can just say, I'm going to give you the same coverage that you have, and then just talk about their deductibles. But if they have low coverage, so I had a gentleman that he had state minimums, which is in Tennessee, the state minimum is $25,000 per person, $50,000 per accident. And those numbers are referring to bodily injury. If you are in an accident where the person that you hit is injured, then that will pay out a maximum of $25,000 per person for their injuries or overall $50,000 for the whole accident.

That sounds like a lot, but I'll get to why it's not. Yeah. OK. So that's what he had.

And then also for property damage, which is what pays for the car or fence or whatever it is that you hit someone else's property, and to seize only $15,000. Oh, wow. Yeah, state minimum. That's not much.

I mean, I'd imagine if you hit a stop sign or stop sign, you've got some money behind it. I mean, my Kia is worth $115,000. So yeah. So that's not going far.

And so he's a homeowner with state minimums. And I see this, and I'm like, you've got to have higher coverage. And I'm trying to explain to him, you really should have at least $100,000 per person, $300,000 per accident, and $100,000 per property damage, because you own a home, and you want to protect your assets. And there is a, you know, sometimes I'll try to have people work their way up gradually.

So it's not such a huge increase in the price at first. But he just did not. He just wasn't hearing it. You know, and in his mind, he was, he thought, if I have this higher coverage, and I have an accident, there's going to sue me for whatever I have for insurance.

And it doesn't matter how much I have, there's going to sue me for that amount. And that's just not the case. So yeah, that's just not the case. So that's just kind of things you run into, because there's misconceptions, because agents, a lot of times, don't educate their customers.

They're trying to make a quick sale, or they just, well, maybe not that, but maybe like they just want to kind of say, well, here's what you said you need, so I'm giving you what you want. Yeah, right. So trying to fit a price, even if the price doesn't really take care of their needs. I know a while back I had a car accident, and I had a brand new car, and it wasn't even, it was like nine, ten months later, I was in Iraq, and totaled it.

So if I did not, I mean, I think at the time, I told it was a $26,000 in a day, or $26,000 I would have paid it off or something like that. And had I not had, if I had the $25,000, or if I had even lower, that would not be. You get state minimum coverage, for example. Yes.

And so if I had, if I didn't have enough, there's no way that would have been. Well now, are you saying that you were in the accident, and it was your car that was messed up? Yes, actually, although actually I say that, but I wasn't the one, it wasn't my insurance that it was the other. It was the other person's right.

Their fault, so they actually paid it. Yes. The insurance though took over, because it was a weekend, and I knew that I would probably try to be at work on Monday, and so I went around the car and everything. So I called my insurance.

And when you were talking earlier about subrogating, that's exactly what my insurance did. They took care of it, and just, I guess, that's the whole point of insurance. You have no idea. I was turning left at a stop, like that had an arrow.

It literally, probably the safest thing you could do. I mean, it's not like I was switching lanes, or anything like that. I was not expecting it at all. So insurance is supposed to be there for those moments that, you know, nobody can, I mean, they're got what I called accidents, not supposed to be.

Yes. Yes. I've heard this. You won't believe this, but I've heard this a million times.

Whenever I try to talk to some other coverage, and it's not even because of the premium difference, it's maybe $3 or $4 a month sometimes. So it's not even about a sale. And that's, I think, a common misconception, is that some people think when their agent is trying to educate them on why they need higher coverage is, they think, oh, they're just trying to sell me something. But no, it's because we are licensed agents, and we can't sleep at night knowing that we're writing new estate minimums when you own a house and have kids.

So in your first example, what would happen if he got into a car accident and was statement when he said $25,000, and he did $40,000 damage? Do you have the person who was his fault? What would happen if he didn't have enough coverage? So the difference, he would be responsible for.

And either, so what would happen is if he had $25,000, and he hit a Porsche. Yeah, a nice car. That really, the big S-E-V-G-C going around. Yeah, so that's what I tell you.

So OK, if you just talk about property damage alone, let's just not even go yet, too, if someone's hurt. OK. So just property damage alone. He hit a parked car.

Yeah. I mean, how many cars are, or even if it's not a parked car, it's nobody's hurt, but you told the car, because you hit the frame just right. I mean, my husband had a car accident. It didn't even look like there was any damage.

It was a newer car. I mean, it looked like there was damage, but very minimal. But he hit the frame a certain way. Her car was totally.

Oh, that frame damage. Yeah. I mean, they totaled her car. So you can't straighten that back out.

Right. So it doesn't even have to be a major accident. It could be no one's hurt. And you hit, you have $15,000 for your property damage.

And yeah, you hit them with 80s. I mean, that's what? $80,000 car sometimes? If you get the higher end models?

OK, well now you hit that car, it's totaled. You owe $80,000 and you have a check from your insurance company for $15. Yeah. That makes me expect you to pick up.

Well, I mean, what would happen? Because if that happened to me, I don't know. Thankfully, I have an insurance. But if that happened to me, I hit them with $15,000 check.

I have to give it to them. I know I owe them 80. What could they do? Like, involving my home or anything else I have?

Yeah, they can definitely put a link on your house. And it does not matter if you still own your house or not. They can still take that house. And you can be left paying for a house that you no longer have.

Or you mean, like, take the house. And basically require you to sell it. And whatever money you get out goes towards paying that issue. Yeah.

But then if you're still in a mortgage, like, you know, either you, I don't know how that would work. You know more about a mortgage, something like me. But either I guess we didn't have it for a close or you still have to keep paying it. I'm not sure how that works.

But yes, they can take anything. Yeah. I mean, ideally they would force you in some sort of payment plan, but it's not like a payment plan of your choice. It's like, OK.

It's just a payment plan that's going to hurt. Yes. Like, OK. You can get money back in a timely, somewhat timely manner.

Yeah, you have 14 months to get this paid off. Figure it out. Or we can get food for the month. Yeah, exactly.

Yeah. And yeah, so I mean, I've seen people before, so about bankruptcy before. And at that point, I mean, you have to turn in your assets. So you still lose your assets.

At least you can start over. But it's a hard process. Yeah, to do that. And I mean, these are things, stories that I've heard from actual clients.

I had a lady, she was carrying 100,000 per person, 300,000 per accident, which that's the bodily injury part. If someone's hurt. So if something to know, people don't think of, if someone's hurt in a car accident, all other care is charged as emergency care, which is astronomical. Yeah.

I mean, the same. So I worked in a doctor's office for a little while. And I did just receptionist stuff. So I had to enter charges and things like that.

So an x-ray at this doctor's office was 60 bucks. An x-ray, I had an x-ray in the emergency room. It was like over $300. Yeah, the same thing is in charge.

Yeah, an x-ray. It was exactly the thing. But it was emergency there. So anything from an accident, emergency care.

So keep that in mind. Also probably. You're going to go right after. I think once you go to the right after, you can make it a point with your doctor.

Like I said, an accident. Yeah, because it won't be covered then. Yeah. And they probably haven't handled it.

God forbid if they have to have life-star or something like that. So that's pretty funny. Yeah. So if it's accidents your fault, you're paying those bills.

So I had a lady, she was carrying 100,000 per person, 300,000 per accident. And what that means, those different numbers. So let's say that we're driving in front of me, and I'm re-ending you, and you're hurt. Then my insurance is going to pay maximum $100,000 for your injuries.

But let's say you are driving a minivan, and there's a people in the car. Then across the board for those eight people, my insurance is going to pay 300,000 all together. Everybody. Right.

So if you have 25, 50,000 divided by 8, is not going very far for emergency medical expenses. So she had 100, 300. And she and her husband, her husband, he had an accident. He was a thought.

I think she said he teed the guy. The guy would not be OK, but he wasn't a hospital for I think two days. Two days was more than $100,000. So their insurance maxed out paid it.

I believe it. Their insurance paid out $100,000, and they were still being separated against for the remaining balance. And the reason I know is because she was calling me to raise her limits to $250,500. So can you do that after the fact?

I mean, it won't apply to that accident. You can do it for anything like that. Yeah, she was like, OK, that wasn't enough. So I'm going to get more.

So yeah, I mean, this is also something a lot of people don't know. You actually get better rates for carrying higher coverage. So insurance companies see that as a lower risk, even though if you have something happen, they're going to pay out more. If you're taking the time to know about your insurance, then they see that you're probably a more responsible driver.

Yeah, you have more to lose. Yes, if you're just trying to find the cheapest thing, then chances are, that's not most important. Yeah, I don't know. I don't know everything about insurance pricing.

I'm not an expert on that area by any means. But I can think of some of my friends who, like, they, for instance, if they want the absolute cheapest item they can get, I know if something happens, they're going to just walk away from all the problems and say, you know what, I can't deal with this. But somebody who stops around, they want quality to make sure that they're being healthy or they're choosing something that has vitality or something that can protect them, they'll be more conscious and they feel like they have more to lose, there's more risk. Right, yeah.

So I can imagine that's kind of like insurance, like, where they're seeing it as well with like, trans and pricing and claims and whatnot. Yeah, absolutely. Yeah. While we're talking about pricing, that's probably a good next topic.

Because I know people, you know, they're listening to us to talk about how high, you know, it can be for the rates or hello or, you know, what coverage did you choose. I guess without going into total specific details since it is per carry or whatever. Yeah, per person. Yes, yes, and what you've chosen to get.

What is, because I know they say if you get married, you can lower your rate or if you don't have an accident for this long, it'll always be right. What could I do to have really low insurance? So what a lot of people don't know is part of your interest. You kind of have an insurance score.

And yeah. I'm like a credit score sort of. OK. I was like one thing.

What's the type of your alley? Yeah. And it's a whole algorithm of things. So things are factored into that.

Insurance score is one would be how long have you had insurance, have you had a bunch of lapses, or have you had continuous coverage. Because if you have a lapse, then that shows your responsibilities. You're more likely to have claims and accidents and things like that. So if you have laps, then they're not.

Laps being that you just stopped paying for that month, so coverage ended. Right, or canceled it didn't get, you know, some people, oh, before I forget, this is important. If they have a car and it's not running for a little bit, they're going to go on vacation for a month. They'll just cancel their insurance.

And then they come. Then they want to get insurance again, and it's double the price. The reason why, if you ever have a lapse of insurance, it hurts you a little bit. But anytime you have a lapse for 30 days or longer, it's as if you're starting over for a new insurance, like a new insurance score.

So just cancel their insurance. That actually hurts me. I could understand the logic. Like, I mean, not that I would ever do it.

But like if I'm going overseas, like I'm playing to next year, I could say, oh, I'm going to park my car in my garage and my house is extremely safe. Nothing's going to happen. So why am I going to pay my rate for my car? I'm not using nothing's happening in the weather.

That doesn't mean that I can fall on the house and crush the car. Right. I find I'm stealing your car when you're gone. Yeah.

Somebody stole my car. Yeah. I see the thought process. But I also understand why that's risky too.

Yeah. And a lot of times you can get a garage in policy, which will allow you to still have insurance. But all that has on it is comprehensive only. Another thing that goes into that is how your coverage has been.

So if you're coming to me from your carrier, and you've been carrying $25.50, and she's coming to me from the same carrier, everything's identical, your twins, and you have everything about you as 100% the same, same driving history, same everything. But she has 100, 300. And I give you all the same quote. Her is going to be cheaper.

So if you have high coverage, that's what I try to tell people if you're carrying statements right now, buy the bullet, pay $5 or $10 more a month to double your coverage, because now you're going to have $5,100, and then when you renew, your rate will go down. Now you can raise it again to 100, 300, and when you renew, your rate will go down again. So now you're going to be essentially within a year. You'll be carrying four times the amount of insurance for maybe the same price or less.

Yeah. That's good. Yeah. OK.

So another thing that goes into it is credit. So we know. Yes. It's our hot button issue, my head.

I won't go to a rabbit hole. Yeah. Yeah. So that's important people.

We don't. Insurance agents don't actually see your credit history. It doesn't affect you as far as inquiries or anything like that. It's a soft check.

It's really a soft check that's on sales and nothing to say. So but what it does is somehow in the background, it's able to pull that information. And it just gives us, like, carriers are different. But in our system, we have a range between 1 and 50, and 50 is the worst.

And we just get a number. This person has an insurance score of 6. And all of that is going to have their credit factored into that. I mean, all of that.

So that's how we can just see you could have a very good. And every carrier is different. It's what they look for. So you could have a very good credit score, but have a recent bankruptcy.

And that could cause your insurance score to be lower. And their country is to be lower. Yeah. Or you could not really have much credit, but what you do have is perfect.

And then you're going to have a better. So it's kind of strange. It's not like getting a loan or anything like that. But yes, your credit definitely affects your insurance rates.

Quite a bit depending on the carrier, especially if it's a preferred carrier, which leads me to the next thing that affects your rates. The carrier that you're with will have a part in determining the price you get from other carriers. So there's three levels you've got. Non-standard carriers, standard carriers, and preferred carriers.

And non-standard carriers, they'll have a different appetite of customer that they look for. So non-standard carrier is looking for people that have needs S or 22, has three at fault accidents, and some tickets. It's not 22, is that the DUI one? It's not only for DUIs.

It can be if you have an accident, and you didn't have insurance. That's not the accident. They'll require you to have an S or 22 for three to five years. Wow.

And yes. So in the credit score world, that's like the 500 area, people who have some shaky history. Yeah. So non-standard carriers are going to have more affordable rates for people that have some struggles.

But a lot of times, those carriers, depending on how difficult your history is, won't even offer anything above state minimums, because you're high risk. And they don't want to pay anything. So you're going to get state minimums, and that's it. So that's something to think about, especially if you have a claim, you want to make sure that not saying that all non-standard companies out there have excellent claims service that take really good care of their customers.

But there are some that just, you know, they're going to try, think about it, their appetite is high risk people. So they're paying out claims all the time. So they're trying to get out of as many claims as possible. And then you have preferred carriers on the opposite end of the spectrum.

But they don't. Their customers are, they got it together. They're carrying 100, 300, or 250, 500 all the time. They have for the past 10 years.

They've now had a lapse of insurance. They've been with a preferred carrier. They're switching to a preferred carrier. They hardly ever have any tickets or accidents or anything like that.

They're going to have lower rates. And if they do have a claim, they're just going to pay it. Because they don't have to pay them any claims. So they're just going to pay that claim.