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Scott J. Sims, Insurance Protection Specialists

Topics, events and places in the Reservoir community with a little insurance talk along the way…

WHY INSURE YOUR HOME TO FULL RECONSTRUCTION COST?

My home is only worth $200,000 in today’s market, why do you want me to insure it for $240,000? This is type of question that I get monthly when quoting homeowners’ insurance. I wanted to take a high-level view of reconstruction cost and give a few of the reasons why we insure to 100% reconstruction cost and not simply what the real estate value is or what the home might be worth to the insured.

Reconstruction Cost

The first thing to take into consideration is that while the real estate market can fluctuate, construction materials have been steadily increasing year over year. Each year it costs more and more to build new construction due to these increasing costs. So, if your home was built in 2010 for $200,000, it might take $240,000 to build that same home from the ground up in today’s climate.

Those of us in this area know all too well about major catastrophes like Katrina. As soon as the rebuild begins the goods that increase the most in cost are construction materials. Your insurance must take this into consideration because even if your home could be rebuilt for $220,000 under normal loss conditions, a rebuild after a catastrophe could be $240,000 due to increased labor and material costs.

Lastly, as it relates to newer construction, builders usually get discounts when they are building multiple houses at once. So, if your home was built in a development the builder probably got deep discounts for buying in bulk and thus passed some of that savings on to you. Those same discounts may not be available should your home be a total loss and a rebuild was necessary.

Obviously, there is more that goes into formulating reconstruction cost including individual features of homes, but I wanted to paint a picture for you that hopefully lets you see a little of “method behind the madness”. The last thing we as agents want is to be in a situation where you need a check from your insurance carrier for $240,000 but the one you receive is only $200,000.

 

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HVAC Worksite Injuries and Work Comp Claims

HVAC business owners: Do you know what is the leading cause of on-site injuries? My initial thought was falling from attic ladders/steps or being struck by falling tools or objects. My 2 guesses came in 2nd and 4th for total cost of claims. The costliest employee injury per a Workers’ Compensation study done by Liberty Mutual is “manual material handling”. This would include seemingly simple, mundane tasks as lifting, pushing, pulling, lowering or twisting. The good news is that most these incidents can be avoided by proper training, being more careful and purchasing the proper equipment to get the job done safely. Below I’ve listed a few easy ways to keep work site injuries to a minimum.

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  • Arrange equipment in your shop to reduce carrying distance for larger objects to the truck.
  • Modify trucks/vans so they can be loaded/unloaded easily.
  • Use mechanical handling devices such as carts, pipe stand or pipe lifters.
  • Train employees on safe lifting techniques.
  • Use fall protection and platform ladders when possible.
  • Keep work areas well-lit.
  • Keep walkways clean of debris and mud.

I’d love to know if these results are surprising and other ideas you may have to make your work sites safer places for your employees. After all, this safety investment keeps money in your pocket as business owners.

Steps for Success in 2017

Every year about this time millions of people have already flopped on their New Year’s resolutions. I think this is due to people making broad, sweeping declarations that aren’t easily measured or obtained. Saying that you are going to be healthy in 2017 is great, but how can you truly measure health? Weight loss, body fat, eating a certain way? My point is how will you be motivated to stick to your goal if you don’t exactly see what you are aiming for. Two personalities that I believe have the right idea when it comes to goal setting and which I base my goals on are Dave Ramsey and Michael Hyatt. Below I’ve outlined the 3 basic steps that I use and hope you join me in achieving goals in this new year.

  1. Begin with the end in mind – You must know exactly what you are aiming at in order to hit your goal. Once you know where you want to go, you can work backwards to determine how to get there. For example, I would like to be 175 pounds by the end of the year. If I am 185 now, I then can figure out that I need to lose 1 pound a month in order to make that happen. Taking small bites makes it mentally easier to work towards your goal.
  2. The goal must be specific and measurable – Define exactly what and by when you are trying to accomplish the goal, not a broad idea like I want to make a lot of money in 2017. Instead try, I want to make $100,000 after taxes by December 31, 2017.
  3. Write it down – This one is the simplest, yet the most important step – take the time to hand write the goals and keep them somewhere visible. I know everyone wants to keep things on the computer or on the notes app of their phone, but I promise there is something different about hand writing each goal.

goals

 

Let’s Talk about Umbrella Liability Insurance

I’m sure you have heard your uncle over the holidays, a financial person on the radio and hopefully your insurance agent talk about an umbrella policy at some point in your life. What exactly is this and why do you need it? It really is as simple as an extra layer of liability insurance over your existing home and auto insurance.

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Let’s take a look at the following scenario to understand why you need this coverage.

Say you are involved in an at fault accident with another vehicle. Your current auto policy has limits of $250,000 injury for one person/$500,000 total for all injuries in vehicle/$100,000 of property damage. Side note: These are really awesome limits and kudos to you if you carry these high limits.

Unfortunately, the driver of the other vehicle sustains multiple injuries and leaves by ambulance. As weeks go by the surgeries and missed time off of work pile up for the driver of the other vehicle. You end up with a lawsuit seeking damages of $750,000. This sounds extreme but I assure you it can and does happen. Your auto insurance policy would pay the limit of $250,000 BUT you would be left holding the bill for the remaining $500,000. Who has that kind of money lying around? Most don’t, so they end up losing their homes, retirement accounts and even if you don’t have those assets the courts will come after your paycheck.

Now assume you have an umbrella policy in place. The auto insurance pays the same $250,000 and here comes the umbrella insurance to pay the remaining $500,000 including attorney’s fees. It just makes sense in most cases to add this coverage so your financial foundation is on firm ground and not at risk of losing your hard-earned assets or future paychecks.

The good news is most umbrella policies start around $200 a year. Don’t let an accident potentially cause a road block on everything you are working towards.

The Value of an Independent Insurance Agent

Free to do what’s right for you. This is the tagline for Trusted Choice Independent Insurance Agents which my agency is a part of. This group of independent agents is held accountable for our actions and how we handle and treat people who come through our offices or call us on the phone. At the end of the day, we are here to serve you, the customer. Insurance doesn’t need to be difficult or something you say preceded by a curse word. Let me help you understand why there is a better way.

choice

I get up every day to work for my clients. I don’t answer to one company who is expecting me to write a certain amount of business with them or pushing a certain product. My job is to make sure that I quote, discuss and advise you on multiple insurance companies and options. This ensures that you are getting not only the best price but more importantly the best VALUE.

Not every client is the same. Some companies fit a certain client better than others. Have a youthful driver? There are companies that offer better discounts for youthful drivers than others. Don’t you want to have that option? Do you have a home, 4 autos, boat and vacation home? There are companies out there that specialize in households with multiple assets to insure. Don’t get caught trying be a square peg in a round hole.

Independent insurance agents not only get to review your insurance program annually or whatever you decide with your agent, but we also can shop your policies around under one roof. No need to call 3 or 4 different agents and spending precious hours getting quotes. We can do all of that under one roof with plenty of well respected, highly rated insurance companies. You no longer have to feel like the insurance companies are doing you a favor by insuring you.

There is a better way to do insurance and using a local independent agent is that better way.

Call your Trusted Choice Independent Insurance Agent today and let him go to work for you!

 

Should I reject the insurance at the rental car counter?

Another question I get quite often is whether you should accept or reject the insurance offered when renting a car. Depending on the insurance company it might be a good idea to accept the coverage offered. Below are a few things to consider before making the decision.

1.) Does your personal auto insurance policy have comprehensive and collision coverage? These coverages will allow coverage to kick in on the rental car if it is damaged due to collision or “Acts of God”.  Even if you have a personal auto policy, but you only carry liability, you will need to accept the physical damage coverage offered by the rental car company. Comprehensive and collision coverage should transfer to the rental car within the United States, but if you are renting in another country make sure to check with your insurance company.

2.) Does your personal auto insurance policy cover loss of use for the rental car company? Depending on the insurance company, some do not provide loss of use. This can leave a fairly substantial bill you would be responsible for. For example, you run off the road while in a rental car and collide with a tree. If you have collision coverage then the repair of the vehicle would be covered. However, if it takes 4 weeks for that repair to occur, the rental car company is going to expect to be compensated for not being able to rent that particular vehicle out while it is in the shop. Make sure to clarify this with your agent because it can get pricey quickly.

3.) Don’t depend on your credit card to offer rental car coverage. You hear customers throw this option out from time to time, but don’t count on this coverage being primary. Also, if you don’t use that particular card to rent the vehicle, you might be out of luck.

4) Lastly, if you are on a business trip and you rent a car, then your personal auto insurance isn’t going to help you. Make sure to elect coverage or check with your business to see what coverage is available.

If you can answer yes to 1 and 2 while keeping mind of 3 and 4 then you more than likely will be in good shape if you chose to decline the insurance offered at the counter. As always, remember that each policy is different so make sure you check with your agent.

 

Do I need flood insurance?

With the recent flooding in south Louisiana and Mississippi, flood insurance has been a question brought up to me recently. If I am “not in a flood zone”, do I need flood insurance?

I guess the first thing I would say is that everyone is in a flood zone. Flood zone X, the one that is commonly referred to as not in flood zone, simply means that the area has a less than 1% chance of flooding during a 30 year mortgage. The risk is low and not in immediate danger of flooding  caused by overflowing dams or hard rains. However, many property owners in Baton Rogue learned the hard way that just because you are in a low risk area, doesn’t mean you can’t flood. According to FloodSmart.org, 20% of all flood claims happen outside of high risk areas.

Flood insurance for those not in federally required flood insurance areas isn’t as expensive as you would think. The National Flood Insurance Program offers Preferred Risk Policies for these low to moderate risk areas that reduce the price significantly.

Lastly, if you have a home valued at more than $250,000 make sure that you get a quote on excess flood insurance. The cap on flood insurance for residential buildings is $250,000, but there is an excess option that will provide the coverage that you need.

Do you need flood insurance? My response would be, why not? Your home is your most important asset, so why take the chance even if you are “not in a flood zone”.

Things to do in Flowood this weekend

With 1 weekend until college football returns and weekend schedules get busy across the south, this weekend is the perfect time to get out and enjoy your community. Below I’ve listed three places in Flowood where you can get outside and enjoy some sun and fresh air.

Winner’s Circle Park – This community favorite offers multiple acres of green grass, walking trails, playgrounds and tennis courts. Everyone in the family can find something to do here.

The Nature Park – Walk through the hardwood forests on the walking trail and bring a picnic lunch. You won’t be disappointed with beauty of The Nature Park.

Crystal Lake – Fishermen this place is for you. Just off Flowood Drive you have access to a boat launch and 2 piers. Also, another great place to pack a lunch and have a picnic.

 

About the author: Scott Sims is an agent with Insurance Protection Specialists in Flowood, MS. He’s been in the insurance business for the past 9 years and enjoys assisting families in protecting themselves. Scott has spent the last 20 years of his life in central Mississippi and is a committed member of the communities that surround the Reservoir in Rankin and Madison counties.

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