A Fool And His Money Will Soon Be Parted

As tornado cleanup continues for thousands of residents of Oklahoma, the nation finds hope as stories of rescued individuals, recovered pets and salvaged possessions come to light.  A brief account about the surprising recovery of cash, (you remember cash?  greenbacks?  paper money?) caught my attention.   

Moore, Oklahoma resident Tom Bridges had $2,000 cash from the sale of his boat. The cash was in an envelope with a rubber band, on a windowsill of all places, before the tornado hit. The day after the tornado, he found that envelope with the money intact in his destroyed home.  No small miracle that paper money in a paper envelope was found after 210 mph winds whipped through town!

An oft quoted proverb says "A fool and his money will soon be parted."  By no means am I saying that Mr. Bridges is a fool but what if he and his money had parted... permanently? What if he hadn't found that wad of cash?  Furthermore, what if one of his neighbors had hidden away thousands of dollars worth of gold coins and the tornado deposited the coins in lands unknown?

Of course, the insurance addict in me got to thinking....  Do the folks know how insurance responds to claims involving money?  Inquiring minds want to know.

A standard home, renters or condo insurance policy places a $200 combined limit on the following valuables:

Money, bank notes, bullion, gold other than goldware, silver other than silverware, platinum other than platinumware, coins, medals, scrip, stored value cards and smart cards.

'Nuff said.  If you routinely or just by happenstance have a combined total of more than $200 worth of these items in your home, please be aware that if someone burglarizes you or your home burns down or a tornado blows through, the most you will recover from your insurance company is a whopping $200!  Please don't be confused. There is not $200 for money and $200 for gold and $200 for smart cards.  The TOTAL is $200.

As always, please talk to your agent about your particular policy and your specific needs.  As a perk on select coverage forms, some insurance companies will automatically increase this $200 limit to a $500 or $1,000 amount. Others will allow you to increase this limit to a $1,500 maximum or higher, for an additional premium charge.

No need to be foolhardy.  Now that you understand the insurance consequences of damage to your cash and coins, you can decide when to part with your money.

Sticks and Bricks

The horrific tornado that devastated parts of Oklahoma this week has been deemed an EF5. The National Weather Service classifies an EF5 as the strongest category of tornadoes, generating winds of up to 210 miles per hour.  Thankfully, the number of lives lost remains low but initial property damage estimates are at $3 billion.

The stories are heart-wrenching   The destruction is nuclear.  The remains are nothing more than sticks and bricks.

After a 25 minute reign of terror, the monster tornado left.  First responders began the search and rescue mission.  Now the cleanup and rebuilding begins.  Enter Red Cross, FEMA and insurance.

The good news is that, unlike Superstorm Sandy, this tornado has no complications of flood insurance.  A tornado is a tornado is a tornado.  Windstorm.  Covered by the vast majority of insurance policies.

The bad news is, just like Superstorm Sandy, many of the victims are renters. Renters without insurance.

According to a recent study, nearly 70% of renters don't have renters insurance!  WHY? Surely it is not the cost.  The National Association of Insurance Commissioners reports the average renters policy costs under $200 a year.  Less than $200 per year.  Let's break that down.

$200 a year

$16.67 a month

That minimal premium policy would likely provide:

$15,000 contents

$4.500 loss of use

$500,000 liability

Consider this:

The average single American's monthly cell phone bill is $71.

The average American's cable bill is $86 per month.

Personally, I think the number of uninsured renters is because renters erroneously think that their landlord is responsible for their property.  They think that the landlord insures their property.  Nothing could be further from the truth.

Unlike a smart phone or cable, insurance is not a "fun" product to spend money on.  The actual policy document, be it paper or electronic, won't give you a warm and fuzzy feeling.

What insurance can do is give you peace of mind.  Peace of mind, Renter, that when a tornado or fire leaves you with nothing but sticks and bricks, you will be able to replace your belongings, find temporary housing and begin the process of recovery.

Tornadoes and Windstorms and Hail, Oh My!

To steal a line from the Cowardly Lion in "The Wizard of Oz", "Unusual weather we're having, ain't it?"

Have you budgeted for increased home insurance premiums this year?  If you haven't, you darn well should.  Here are some staggering statistics from the National Oceanic and Atmospheric Administration regarding our favorite Commonwealth of Kentucky as of July 30, 2012.  (NOAA) 

·         Kentucky ranks 3rd in the nation for overall weather related events (combines, wind hail, and tornado activity)

·         Kentucky has experienced 63 Tornadoes – which also ranks 3rd to Texas and Kansas.

·        Kentucky is ranked 2nd in Wind events – behind Texas which is 268,820 square miles – compared to KY which comes in at a mire 40,409 square miles.

"Toto, I've got a feeling we're not in Kansas anymore."  

Insurance companies are raising premiums, increasing deductibles and, in general, being very picky about whose homes they even want to insure!  What can you do?

1. Talk to your Trusted Choice Agent.  With access to multiple insurance companies, the Trusted Choice Agent can compare policies and premiums for you.
2. Increase your current home insurance deductible to at least $1,000.  Ask for the savings to go even higher.
3. Do your part to minimize the chance of ANY damage happening at your home:
• Invest in smoke detectors, burglar alarms and dead bolt locks.
• If you have water backup problems in the basement, install a sump pump.
• Clean the lint filter in your dryer after each and every use
• Check and replace those standard rubber hoses on your washing machine with steel braided reinforced hoses.  

Kentuckians, your home is one of your most valuable possessions.  Use your brain to prevent claims, your courage to talk to your agent about your options and your heart to protect what you love.  "Oh, Auntie Em, there's no place like home."    

Yes, Virginia, There is Always Cheaper Insurance

Tornado Destruction March 2, 2012

While sitting in the rural beauty shop at Pendleton County, I heard residents speak of tornado damage from the recent storms.  "Now we have to deal with our insurance company."  The general consensus about insurance?  "The insurance company is not your friend."  "They are in the business to make money; they don't want to pay you for your claim."


Why is it that during times when our industry should shine we are frowned upon?  Lack of trust?  Bad press?  How can that be?  In any given hour of television, we will see 5 - 10 insurance company commercials.  In our daily mail, we are inundated with offers to save 15%, 20% or even 30% if we switch!  


We, the insurance industry, have created this problem.  Rather than educating the consumer about having the RIGHT type of coverage, we are teaching them that there is always a cheaper policy out there.  And you know what?  That is right - there is always a cheaper policy. 

Home ripped in half by tornado

How much to rebuild?

I guarantee I can save anyone premium dollars.  All I have to do is reduce coverage.  It's that simple - reduced coverage costs less.  Period.


No wonder recent tornado victims are upset.  Do they have coverage for the FULL replacement cost of their home?  Are they able to take up temporary residence somewhere else, for as long as it takes, until their home is rebuilt?  If the city or county ordinance requires certain modifications to their new home, will their insurance company pay for it?  Had the homeowner been advised to maintain an inventory of their personal belongings should such a claim occur?


Agents, do your due diligence by offering and explaining coverage options.  Consumers, do your due diligence by understanding what you are purchasing.  When the next disaster occurs, I would love to see and hear success stories about how insurance was ready and available to help.

How long before you can move back in?