While many people see insurance as a necessary evil to address and move on from as quickly as possible, the fact is that not all insurance is created equal. You will have coverage (which may cover you correctly or may leave gaping gaps), you will definitely pay an insurance premium……but when you really see the difference is when it comes time to pay out a claim. Which is the entire reason you have insurance to begin with, right? Therefore….shouldn’t the financial strength and ability of that company to pay your claim really be your primary concern at the beginning of the insurance-choosing process? We think it should.
Here is an Insurance 101 nugget of learning. There are two main :”markets” of insurance: standard markets and non-standard markets. A standard market (also called an admitted carrier) is an insurance provider that is backed by the Virginia Guarantee Association while a non-standard (also known as a non-admitted carrier) is not back by the Virginia Guarantee Association. Why does this matter to you? Well, living near the coast, we get multiple coastal storms per year (some are named hurricanes, some are tropical storms, some are heavy rain and wind…but we get them nevertheless). Many of these storms cause extensive damage to homes, businesses, automobiles and property. Then, factor is your claims that happen as a matter of just living life completely apart from claims that occur across entire regions of the country in our coastal markets as a result of storms. Now, imagine how many people file claims after storms. Probably a fair amount, right? So…what happens if the insurance company runs out of money to pay out the claims? You have paid your premiums so you expect that when you call your provider that you will get your claim paid. However, if you have a non-standard insurance provider….they are not backed by the Virginia Guarantee Association…meanign that there is no guaranteed financial backing that YOUR claim will get paid. That’s why it matters what provider you have. If you are with an admitted, or standard market provider, regardless of that company’s claim payout in a specific area…you are guaranteed to get your claim paid regardless of that specific company’s financial solvency. Pretty important, right?
Some voice the opinion that, “How often does that really happen? Do we really need to worry about claims payouts on such a large scale? It’s unlikely that a non-standard market would run out of money.” Sorry to be the barer of realtiy but that just isn’t true. And besides….do you really want to take that gamble if you have the option for a guaranteed payout? Why would anyone choose that? Let’s take a look at just a few statistics:
- Hurricane Andrew hit Flordia in August of 1992. This storm broke the expectations of insurance companies and communities in terms of the amount of damage that a single storm could produce. Insurance claims paid out $15.5 BILLION…and is still the second costliest payout on record. Hurricane Andrew hit a large area, very intensely, causing massive damage…that had massive claims payouts.
- Hurricane Katrina hit southeastern Louisiana and impacted a large portion of the East Coast. Katrina is noted as the worst insured loss event in the hostory of insurance anywhere in the world…and hurricane Rita followed just a few weeks after (http://www.insurancejournal.com/news/southcentral/2015/08/26/379650.htm). Hurricane Katrina resulted in an estimated $41 BILLION worth of payouts between all the states that were affected. There were more than 1.7 MILLION insurance claims filed from this hurricane. That’s a LOT of payouts.
So what do you, as subscriber of insurance need to do? Here are a few tips to make sure that YOUR home and family are covered:
1-) Be objective about price. Just because a company gives you a home, auto, business or LIFE policy quote….that does NOT mean that it includes a tailored assessment of what YOU and YOUR family need. Looking at one quote with a higher premium and another with a lower premium and choosing the lower price merely for the sake of price is about as smart as thinking that spending a dollar on your Dollar Store jeans will be the same as paying a little more and buying a quality product from Levi. You can choose either one…but I don’t recommend the Dollar Tree jeans if you have any intention of sitting down (aka: ever relying on using your insurance).
2-) Ask questions. Seriously, if your agent can’t answer your question or isn’t willing to go find the answer…you have the WRONG agent. They either don’t have the experience to know or they don’t care enough to go get the answer for you. Either way, that’s not the person you want when it’s claims time.
3-) Know who’s got your back (ing). Ask who the financial backing is for the carrier you are considering. Ask if it is a standard or non-standard company. Ask what the rating is. Google the company and check the service reviews. Knowing that quality of the company you choose can save you time, money, and hassle down the road.
To get the tailored policy coverage that you need for your home, valuables, auto, LIFE, or business, call The CHOICE Insurance Team today at 757-416-5100 and ask for a free, comprehensive review. Give us a call today!
All the Best,
The CHOICE Team
In 2008 Choice Insurance Agency was created out of the former Realty Consultants Insurance Agency founded in 1980 by George Ayers Capt. USN Ret. Since 2008 the Choice Insurance Agency has more than tripled in size and is continue on a track of rapid growth. The Choice Insurance Agency focuses on four areas of expertise: Private Client Group, Coastal Coverage, Senior Programs and Commercial/Business Insurance. Our business model has allowed us to expand into all of the states on the Eastern Seaboard from New York to Florida including Pennsylvania and DC to better serve our ever-growing client base. As an Insurance brokerage stationed in Hampton Roads with access to well over 40+ insurance carriers, the Choice Insurance Agency is able to shop for the best rates, cover those picky coastal zones and create a tailored plan to fit your insurance needs. The Choice Insurance Agency. Call us today and see why we are the top “CHOICE” in Hampton Roads.