While speaking with other insurance agents our there I’ve heard many saying this is a great opportunity to switch clients from AIG to another ‘safer’ insurance company. In fact, I can see a lot of people falling victim to scams and lies based on fear. The fear that money in annuities or life insurance products issued by AIG is unsafe and ‘needs’ to be moved.

From everything I’ve read and found on this issue, the insurance side of AIG is completely solvent. AIG has more than enough in reserves to pay its claims and continues to pay millions of dollars each day in claims.

If you have a policy with AIG, what are you to do now?

Well, in my opinion, nothing.

AIG owns 71 US based insurance entities. They’re all solvent. Not one is related to the financial problems they’re experiencing. And, the best part, the money inside these companies reserved to pay claims is protected by law.

So, you can relax and put the anxiety medication away for another day.

If you don’t believe me, check out the AIG Consumer FAQ put out by the National Association of Insurance Commissioners .

If you’re ever in doubt or have concerns or complaints about your insurance company, contact Arizona’s Department of Insurance and check up on them. It’s your money and security at risk.

I often think most stay because of “The devil you know may be better than the devil you don’t know” attitude.  It’s kind of like election time.  You always hear how nobody likes any candidate but they’re voting for the person they dislike the least, the lesser of the two evils.

Well, when you finally do decide to switch insurance carriers, you must remember to cancel your old policies especially if you switch at anytime other than your renewal.  If not, you’ll continue to receive billing notices and the previous insurer will think you still want coverage.  Generally they’ll continue to provide coverage for about another month before they cancel you.  And, if you ignore their bills and don’t pay for their coverage you can end up in collections.  Not a good thing.

If you switch at your policy renewal it’s a bit different.  Most policies will continue to provide coverage only if you continue to make your payments at renewal.  So, if you don’t pay, they’ll flat cancel the policy effective the renewal date.

However, your best choice is to always notify the previous insurance company and give them the exact date you want it cancelled.  In our office we do it for you to make the transition easy.  Most agencies let you take care of this on your own and don’t walk you through the entire process.

I heard a quote once from someone I think applies.  “The will to survive is not the strongest will in humans.  It’s the will to do what’s familiar.”  (If you know where it came from, let me know)  Maybe that’s why so many people don’t actually look around.  It’s familiar and easy to just keep paying those same payments and assuming all is well.

At the National Insurance Crime Bureau website they list the top 10 cities by number of vehicle thefts per capita for 2007 (2006 ranking is in parenthesis).  They are:

1. Modesto, CA (#5)
2. Las Vegas/Paradise, NV (#1)
3. San Diego/Carlsbad/San Marcos, CA(#11)
4. Stockton, CA (#2)
5. San Francisco/Oakland/Fremont, CA (#12)
6. Laredo, TX (#22)
7. Albuquerque, NM (#13)
8. Phoenix/Mesa/Scottsdale, AZ (#4)
9. Yakima, WA (#9)
10. Tucson, AZ (#10)

If you haven’t had a discussion with your agent in a few years, it’s time to look at your coverage.  Access the Home Replacement Cost Estimator Form.  Then, get your policy and check the value against what’s listed on your policy.

Let us know what you think.

The traditional home insurance policy (which most people carry) has the following special limits on these common items (these can vary from one company to the next but this is a good guideline to refer to):

• $1,500 for theft of jewelry, watches, furs, precious and semi-precious stones
• $2,500 for theft of silverware, gold ware, platinum ware, pewter ware
• $2,500 for theft of firearms and related equipment

There are eight other items with special limits but these are three the most common we find people inadequately covered under.  And, the most common of these is the wedding ring! 

If you have items worth more than these there are a couple ways to increase coverage.

The first is to schedule the individual items.  When you schedule an item you are separating that one piece out for its own coverage.  You can give it its own deductible and it is covered for “all risks.”  This increases the coverage not only for theft but many other risks that would traditionally be excluded in your homeowner policy.  Most companies require an appraisal less than two years old in order to schedule the item.

The second way is to increase limits for that class of coverage.  When you increase the limits you’re simply doing just that, increasing the limits of coverage.  However, it doesn’t always change the coverage unlike scheduling (read your policy because this varies from company to company).

How do you decide which is best?  It’s almost always better to schedule because of the appraisal and “all risk” coverage.  However, if you have many smaller items that exceed the limits above and don’t want to appraise all of them you can increase the coverage for a small fee and have the peace of mind knowing you have better and adequate coverage.  And, for some people we’ve done a combination of the two by scheduling a large item (wedding ring and band) while increasing the limits to increase coverage for the many smaller jewelry items that didn’t have appraisals.

If you live in a suburb like Queen Creek, South Chandler, Surprise or Buckeye your car insurance rates can be drastically less than someone who lives in Phoenix.  One factor that plays into this is the number of accidents in a zip code.  So, if you live in downtown Phoenix where thousands of cars travel every hour there’s a much greater chance of accident than in the fringe of the East or West Valley where only a thousand cars pass every day.

With your home insurance it can be the same too but for different reasons.  When you live in the center of town, the homes are generally older.  Insurance premiums are more for older homes.  In the suburbs most of the homes are less than 10 years old.  Insurance companies love ‘safer’ new homes.

If you’re considering moving and debating between buying two homes, call your insurance agent to get quotes.  I’ve seen differences as much as $900 per year for auto insurance rates.  Would that make an impact in your budget?

Every home insurance company wants to know if you have pets and what type.  Why?  If your dog decides to eat the neighbor’s kid for lunch, they’re going to be the one defending you in the liability lawsuit.

According to DogBiteLaw.com here are some statistics.  In the US:

• Dogs bite more than 4.7 million people annually.
• There are over 30 dog attacks per year that result in death.
• Almost 800,000 bites per year require medical attention.
• 2,851 letter carriers are bitten each year. (had to throw that one in)

While the family pet is generally docile and loving, they do have natural instincts to protect the family and their home.  There are some breeds (Pit Bulls and Rottweilers are two common breeds) that are considered dangerous and vicious to some insurance companies.  If you own these dangerous breeds they won’t insure you.  If they do, there’s an exclusion that completely excludes coverage for animal liability.  If you have a dog, you want to make sure you have a Homeowner insurance policy that covers you correctly.  You’ll also want to seriously consider an Umbrella Liability policy for extra coverage because these lawsuits can go into the millions of dollars.

What happened to the dog that bit me as a child?  My mother told me it was put to sleep.  My parents didn’t sue the owner because this was long before the litigious disease spread through society.  It wasn’t a vicious dog.  It hadn’t bit before.  The man said it was a very loving and gentle pet.  I was in wrong place and the dog did what it instinctually understood.  Bite.

As much as I’d like to attack Allstate I won’t.  There are bad apples in every company and in every industry.

What can you do to protect yourself?

The Arizona Department of Insurance has great resources available to help consumers online.  Here are a few things you can find online at their site:

• Find insurance company complaint ratios
• Find information on insurance fraud
• View information about licensing on companies and agents
• Learn more about individual (personal) insurance
• Learn more about small business insurance
• Read a report on Arizona Health Insurers
• File complaints

As we become more crunched for time in our daily lives, it’s difficult to sift through the mountain of information available to make a decision.  It’s important for you to have an agent you view as a trusted advisor and looks after you.  You don’t want someone just pitching the lowest price or the product of the day.  Your business and personal financial health and well-being depend on them.

I love the human ability to try to find wiggle room.  Here’s the best, most clear way, I know how to say it…

ATVs, boats, jet skis, motorcycles, etc. aren’t covered unless you have a separate policy for them…period.

It’s that simple.  There are some very small exceptions in a home policy for certain items but 99% of the time, you won’t fit the exception.  Maybe your cousin Billy’s-friend’s-sister’s boyfriend’s ATV was covered when it was stolen off his farm in Wisconsin.  But that’s not you or your situation.

If you don’t want to pay for coverage, that’s fine.  Just don’t cry to your agent when it’s stolen, or you’re being sued for hitting a jet skier with your boat.  And, don’t complain to your friends how the insurance industry isn’t fair and they’re cheating you.  It’s your responsibility.

Well, personal car insurance physical damage coverage is broken down into two categories:  Collision coverage and Comprehensive coverage (also known as Other Than Collision coverage).

• Collision coverage pays for damages resulting from a collision or upset of your car. 
• Comprehensive pays for loss to your car caused other than by collision, including fire, wind, flood, vandalism, theft and ‘acts of God.’

So, good news for you.  While hitting a deer is technically an accident, under your auto policy it’s considered an act of God.  This means it falls under the Comprehensive coverage and shouldn’t affect your rates.

Now, take that same scenario but instead of hitting the deer, you were able to swerve out of the way and avoid the deer.  Good news for the deer.  However, you swerved off the road and hit one of the large, beautiful pine trees.  Again, I hope you’re okay.  How does this affect rates?

This is not good.  It is a Collision and would be considered an at-fault accident.  Most likely you would be surcharged for the accident. 

(I apologize if I offend any animal rights activists out there now. Be angry at the insurance policy language not me, I didn’t write the policy.)  If an animal darts out in front of your car and your only options are to hit the animal or hit something else, hit the animal . . . if you want to save your rates.