Saved $500 on Car Insurance, But That’s Not The Story

Changed from Captive Insurance Agent To A Broker

Our story begins with new client to our brokerage. It's a couple with 3 cars and full coverage on two of them and liability on the third. They have been with their captive agent for almost 10 years and never questioned the cost of insurance they were paying. The captive insurance agent can only sell for one company.  It's a company that uses a log that would make you think they are the hero of our story.  Read on...

Normal Business Hours from the 1960s

The hero of our story, we'll call him Alex, is a very busy man. He has homeowner’s insurance and three cars insured through the company that uses a "shield" as their symbol. It's Friday at 1:05pm and our hero has a few minute to ask about the renewal notice he just got from the company. He calls his agent's office and gets a recording saying he has not called during "normal business hours". He has an option to leave a message. This is not the first time Alex has had the experience. He knows he can call the big company’s call center, but he'll have to Google it. Lucky for him, his search takes him to us!

Hometown Insurance Agent Takes Calls 24/7

Our hero reaches us on a Friday afternoon and by Saturday, after some analysis, we have saved him $500 on his annual car insurance cost. He now has a "partner" in his life he can count one to be there for him. His coverage is actually better, and if we find a better company with lower premiums, we will contact him.

Next Stop.. Homeowners Insurance Savings

OK, we are too excited to share this story of car insurance savings in Fresno. We haven't yet, finished quoting Alex's home policy because his wife has about $50,000 worth of jewelry. On a homeowner’s policy you have to get each piece of jewelry appraised to get it covered for the actual value. Otherwise, there is a set maximum in the standard home policy that won't cover all of Alex's wife's jewelry. In fact, if each piece is coverage for only $3,500 as it is in some Homeowner's policies, Alex and his wife would lose over $17,000 on her wedding ring alone! Don’t worry if you’ve got bling, we'll tell you how to get your jewelry appraised and how to schedule your pieces with your independent insurance broker so the insurance company covers your jewelry if it gets destroyed, stolen, or (sigh) misplaced. Chances are good that Alex will save money on his homeowner's policy when we get his appraisals. His Fresno home will then get him the multi-policy, home-car discount with the company he is with through us. Their symbol is an umbrella.

Google And A Cell Phone Made Alex A Hero

What did Alex do to be the hero of this story? He searched for insurance or something relevant on Google and simply dialed the phone, or probably touched the link on his cell phone screen, to reach us. We're not the heroes here. What we did for Alex we can do for anyone. Do we have other clients that don't move all their business to us? Yes! If we can't save you money or improve your coverage, we advise you to stay put, but keep us in your contacts. Because whether you are with us or not, you will always be able to reach a Real Person... Always. We are not afraid to answer questions or give information. At Monson Insurance we compare your needs to many different companies and work with you to find what is right or affordable or both! Because being captive sounds so constraining.


Long Term Care Insurance Success

Overwhelmed with Choices

Let's talk about Thelma.  She is a teacher.  Almost two decades ago she was confused by all the information coming at her from all sources.   Long Term Care was a big concern in the early 2000's.  Her mailbox was full with sales pitches.  Magazines targeting seniors were writing articles about how to plan for that day when you can't car for your self.  Financial experts were writing and speaking out about the need to plan.  Many organizations including Thelma's own CalPERS was coming to the school where she worked and selling Long Term Care Insurance.  She had a friend who purchased a policy with the "Christian Science Rider" because her friend's religion was focused on spiritual healing and Long Term Care Insurance is a medical disability policy.

The Decision Is Made

Thelma had no personal experience with Long Term Care, other than her mother in law who voluntarily gave up driving at age 96 and ended up in care from age 98 until she passed away at 101.  Still, it was obvious to Thelma that now or in retirement she would not have the money needed to pay the $6,000 to $15,000 per month it would take to pay for her care when she needed it.  She read about the California Partnership for Long term care policies, she looked into the Christian Science Plan her friend had, she finally settled on a $120 per day policy.  When buying LTC insurance, you buy the daily benefit and then pick how many years it will last.  Thelma chose $120/day for a three year period with a compound interest benefit increase.  

Long Term Care Decision: Part 2

After choosing a benefit plan - $120 per day, three years, compound interest benefit increases - there were still decisions to make.  Not every company offers every plan.  Further, some companies had histories of rate increases on existing policyholders and some did not.  By the time Thelma got down to choosing an insurance company, several companies had stopped selling LTC insurance for good.  It seems many companies including the one with the Christian Science Rider had failed to adequately consider the cost of claims many years after setting the price on LTC policies.  Thelma chose a policy with a company that was very big with lots of underwriting experience.  Her LTC insurance policy was issued after she had a paramedical exam in her home and after the company received copies of her medical records from her doctor.  Her monthly premium was an affordable $153 per month

News You Don't Want to Hear

Thelma was diagnosed with moderate to sever cognitive impairment (dementia) when she was almost 79 years old.  In the years leading up to the diagnosis, she had stopped driving at night,  She missed her mortgage payment and was having trouble remembering how to cook.  The family asked her family doctor who referred her to a neurologist.  The dementia diagnosis was made and within two weeks the DMV asked her to give up her driver's license.  

Losing Everything

In different times and different cultures, Thelma would move in with her kids or they with her.  Family would take care of her as she lived out her days slowly losing herself and her memories.   Over the years she will forget how to brush her teeth, maybe how to eat, or talk.  There is no place for her to go to be with family.  One adult child is near retirement and would have to cut her own career short to take care of mom.  She would reduce her own retirement for decades to come.  Another adult child is working constantly.  To Thelma in to his home would mean hiring in-home care which costs as much as 3 times what the shared expenses of a facility run.  She has to move to an assisted living/memory care facility.  In her home state of California, these are licensed as Residential Care Facilities for the Elderly.  Expenses incurred for this type of care are covered in Thelma's Comprehensive Long Term Care Policy. 

Long Term Care Insurance Math

Thelma took out a Long Term Care Insurance policy about 12 years ago and paid $153 monthly for it.  When her plan of care was approved by the Insurance company her family was notified that the benefits payable for her care was pool of money just under $250,000.  Her facility is charging about $4,000 per month for 24 hour room, board and assisted living care.  At that rate she will have about 5 years of care covered,  Nothing in this post is good news except for the obvious fact that over 12 years Thelma paid about $22,000 and we she had cognitive impairment there was over $248,000 available for her care.  

Change Is The Only Constant

Thelma is not her name, but this is a true story that is still being written as "Thelma" slowly deteriorates mentally and now, unfortunately, physically.  Monson Insurance has substantial experience in every aspect of planning for Long Term Care and Medicare Plans.   We've been there when claims were paid.  Long Term Care Planning has evolved.  Policies like the one discussed here are not necessarily available now.  There are asset based plans that aren't as risky for you or the insurer. Call or email us for a discussion of this topic to see if it's appropriate for you.

Story of Cheap Car Insurance

Young Men Want to Pay as Little as Possible for Car Insurance

Any of us who have been young men between 18 and 24 years old or who have had young drivers like that in our family know this:  They pay more for auto insurance than any other group.  That's because they have a higher rate of insurance claims than any other group.  Like the two Fresno, California men in this story, we are about to learn that sometimes the cheapest is not the best.

I Got This Cheap Car Insurance, You Should Get It Too!

This is the story of Philip, a successful young man who found a great deal on auto insurance.   He drives  a new Subaru WRX which is a sports car.  The premium payment was reasonable for a young male driver in California and since he had no assets like a home, driving with the minimum amount of insurance in California seemed like the way to go.  He took out a policy with a broker who sold cheap car insurance out of an office in Clovis, CA and didn't really explain the details of the auto insurance policy on the WRX.  Philip drove around happily paying as little as he could get away with.  His friend Steve bought a used 2004 WRX blobeye and asked how Philip was able to afford a car payment and monthly car insurance payments.  Philip suggested his insurance broker.  Soon both pals were driving their cars all over central California with affordable car insurance premiums to go with their new cars.

Four days later....

It was an exciting time for both young men.  Philip was getting married and Steve was going to be one of the groomsmen at the wedding.    Four days after Steve bought his WRX, Philip had his wedding rehearsal dinner.  Philip doesn't drink much.  He had a beer about 6:30pm.  His friends however partied long into the night at the party which was held in the banquet room of a popular bar and restaurant.  About 10 o'clok or so, it was decided that maybe Steve had a bit too much to drive.  So his friend - the host of the party who had one beer almost 4 hours ago - drove him home in the car Steve bought four days earlier.  This is important:  Philip was driving Steve's "new" car, the 2004 Subaru.

Years of Karate Pay Off on Highway 168

​On the way home, a Honda cut across two lanes and cut-off Philip, driving Steve in Steve's car.  Philip retained his quick reactions and slow-motion view of high speed events from martial arts training he had for many years in the Shou-Shu discipline.  Philip had two choices: 1) Collide with the Honda coming form the left or 2) swerve to avoid the Honda and deal with a big-rig in the right hand lane.  The choice was made in milliseconds: swerve to the right.  

I Feel Pretty

​The result?  Steve's car (driven by Philip) clipped the back corner of the big rig trailer and there was an accident, totaling Steve's' "new" Subaru WRX as it slammed into the cement wall on the highway.  The trucker pulled over, the Honda did not.  An ambulance was behind it all and both people in the ambulance witnessed the whole thing.  They pulled over and luckily no one was hurt. The ambulance driver made it clear that Philip had no choice in the accident and from what they ambulance crew witnessed, he made the best possible choice.  Philip later bragged that he could actually see the airbag deploy in slow motion thanks to his martial arts reflexes.  He actually turned his head and blocked the airbag with his forearm because all he could think about was the wedding pictures! 

Good Thing We Both Have Car Insurance, Right?

Nobody was hurt in this accident, except the poor 2004 WRX.  Steve was relieved he had purchased the same car insurance that Philip had.  Each knew they had uninsured motorist on their policies.  Since the driver that caused the accident took off, One of their policies with the same insurance company was going pay for Steve's smashed car.  

"...and no other person on Earth..."

Steve was sober real quick.  He was on the hook to a bank for $10,000 and he hadn't made one payment yet.  He was scheduled to make years of payments on what was a crumpled mess sitting on the shoulder of a highway in Fresno, California.  Surprise, surprise, surprise!  The bargain insurance policy was not going to pay for his totaled car.  The driver of the car when it got wrecked, Philip, had the exact same policy with the same company.  That company was not going to pay for the damage through Philip's policy either.  Why?  The very front page was the same on each of the young man's policies.  It was a full page of text, with one sentence in bold type:  "This policy covers this person driving this car and no other person on earth..." was pretty easy to read when you scanned the first page of the policy document.  This meant that since person A (Philip) was driving Person B's car (Steve) that there was no coverage in existence that would pay for poor Steve's four day old (too him) car.

What Went Wrong?

​This is a true story.  These young men did a lot of things right.  Most importantly, making sure the sober guy drove.  Getting insurance was a smart thing too.  Too many California drivers have no insurance at all.  We could question the wisdom of buying only the bare state required minimum amount of insurance to  be legal.  It's unfortunate, but that's what a  lot of young people do.  There are very good reasons to have adequate insurance.  we post more about that later.  As with most problems in society, this was poor communication.  The boys were trying so hard to get cheap insurance that they ended up with insurance that barely covered things that most people take for granted, like covering a permissive driver.  The worst part of this story is the failure of the broker who sold these policies to explain the limitations of cheap auto insurance.  Both of these young men have since graduated to "big boy" car insurance and they don't pay that much more.

So What Did Steve Do?

​Steve was very lucky.  He made a good decision when he purchased his WRX.  He bought what is called GAP insurance.  GAP stands for "Guaranteed Asset Protection".  This is coverage you can buy from the car dealer where you buy the car or sometimes from your lender or auto insurance company.  This insurance pays what you owe on your car loan, if your car is a total loss and it is worth less than you owe.  Many people buy this when they buy cars with no money down.  In those situations, you are adding sales tax and DMV fees to the price of the car so you are financing over 100%of the value of the car right from the start.  Steve got another car and Philip is driving his second new WRX, on a lease that includes GAP!

So What Can You Do?

The moral of this story is that it is possible to think you are doing the right thing when you buy insurance and still do the wrong thing.  Onereason people don't like insurance is complications like this.  Work with us, talk to a REAL PERSON and you won't have a misunderstanding like this that can cost you tens of thousands of dollars and maybe put you in bankruptcy even when you HAVE insurance.  At Monson Insurance we sell the same insurance everyone else does. We offer companies for preferred, low risk drivers through companies like Travelers and  Safeco.  We offer bare minimum policies through Aspire and Western General.  We even have companies like Kemper that offer car insurance  for both young drivers or experienced drivers.  Other brokers and agencies offer them too.  At the same price.  When you work with us, you will have a full explanation of the policy you purchase with a thorough discussion of the risks and limitations. We're not in a hurry to make the sale.  We want happy customers who want to be part  of the family.  Well informed customers who have a real person they can count on when they need them.  You don't have ot pay more for that kind of first class treatment with us.  We look forward to bringing you into the  family. Email, call or text when you're ready for big boy insurance 😉


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