Are some insurance policies a waste of money?

I sell insurance but try to focus on the policies that people actually need and use – auto, home and life insurance.

However, there are some types of policies that may actually be a waste of money. Here are a few examples:

Flight Insurance – does anyone sell this anymore? Air travel is safer than it’s ever been. If you desire to leave money to loved ones you need basic life insurance. Insurance that pays for a specific reason, like dying from a plane crash, are usually not worth the money.

Extended Warranty on consumer products – we have all been asked by a sales clerk if we want the one year, two year or lifetime warranty on that new computer, dvd player or other electronic device. If you are buying a very expensive flat screen television you may consider adding a warranty. But for most of the consumer goods, the warranty is a bad buy because they almost never are needed.

Flood Insurance – unless you live in a specific flood zone this is a coverage you want to avoid. It may give you peace of mind but empty your pocketbook in the meantime. While we have read many stories about flooding I bet if you check those areas are known flood risk areas.

Unemployment Insurance – sounds good. You get money coming in if you are laid off. And in today’s economy that is a genuine concern, especially for certain industries or fields. However, most households would be better served by becoming disciplined savers. You not only keep that unemployment premium in your pocket but better yet in your savings account.

Accidental Death Insurance – Deaths occurring by accident are small compared to people who die from ill health. You need life insurance that pays your beneficiaries for all risks, not just for accidents. I remember consulting one lady who had something like 7 accidental death policies. She believed they would pay a benefit no matter how she died. When informed she had to die in an accident for her beneficiary to receive money she promptly cancelled them. We found coverage for her that paid a death benefit whether she died from an accident, cancer, heart attack or any other reason.

When you need to talk with someone about your life insurance, please contact us today!

The Auto Glass Endorsement

It is mandatory in the State of Arizona that companies must offer a zero-deductible glass endorsement. That means you do not incur any deductible when your windshield is replaced or repaired.

Arizona House Bill 2464 will change that.

Arizona Insurance companies will no longer be required to offer coverage for the repair or replacement of auto glass without a deductible. Insurers will now be able to offer auto insurance policies that carry the glass endorsement WITH a deductible. So if your windshield is cracked and needs replaced you will have to cough up a deductible to do so.

Keep in mind that this only gives insurance companies the “option” of offering the endorsement that makes you pay a deductible for a replacement or repair of your auto glass. They can still offer the no-deductible glass endorsement.

One benefit to consumers is this – they may now have another option from their insurance company to buy a policy with glass coverage that includes a deductible but at a lower monthly premium.

Would you opt to buy the new glass coverage where you have to pay a $50 or $100 deductible if it meant your monthly premiums were a little less? That is likely the new choice you will have to make when this house bill goes into effect.

Glass claims absolutely can affect the bottom line of an insurance carrier. If a client has two glass claims per year those can total $600 – $900 in cost to the carrier. If an insured has two vehicles and is paying roughly $1,800 per year in auto insurance those two glass claims can wipe out nearly 50% of the premium received before the insurance company pays out of pocket for any other types of claims. And they still hope to make a profit.