There seems to be a bit of confusion among non-insurancefolk about the difference between “agreed value” policies and “stated amount” policies.  Don’t worry, it’s probably done by design when the insurance underwriters (rarely) get together with the insurance marketers.  Anyway, let’s clear things up.

When a piece of property is covered, whether it’s a boat or classic car, etc., insurance companies charge a rate that corresponds to the value of the piece of property.  In most cases, values are well-known and can be verified by independent 3rd party sources like the National Automobile Dealer’s Association (NADA) or Kelley Blue Book.  However, when you veer off the beaten path into special interest items, market values are not so clear-cut, and insurance pricing becomes more difficult.  Enter Agreed Value and Stated Amount.

Here’s the main difference between Agreed Value and Stated Amount.  Stated Amount policies are priced based upon what you say the item you’re insuring is worth.  If you have a loss, the stated amount is the ceiling (maximum) the insurer will pay for that item.  At the time of the loss, if market data determines that your item was worth less than you say it was, you will be paid less unless you can convice your insurance company otherwise.  Agreed Value, on the other hand, is an amount that you and your agent/insurer agree your item is worth ahead of time.  The rate you pay is based on this amount, and if you have a total loss of said item, that is the amount you’ll get for it.

Generally speaking, Agreed Value policies are more carefully underwritten to prevent the obvious fraud potential.  But, from a consumer’s point of view, I’d have to say they are a superior policy.  If you’d like a quote on an Agreed Value policy for one of your special belongings, give one of our agents a call at 1-888-348-3337.

Losing your job is a traumatic experience (even if you didn’t really care for your job in the first place!), and it will trigger an enormous list of of things you need to do to adjust to your new reality, from coordinating your COBRA benefits, buying replacement health insurance, and maybe getting that resume out on Monster.

One thing you should add to that list, although maybe not with the priority of the above examples, is reviewing your Car and Home Insurance.  First, you want to make sure your paid-up on all your policies.  The last thing you want to do is experience some kind of loss with your insurance in a lapsed state while you’re least able to absorb it yourself.  Then, you want to see how your new situation might impact your coverage and the rates you pay.  For example, if you’re not commuting anymore, ask your agent to re-rate your auto policy to reflect “pleasure use” instead of “commuting use”, which could lower your rates significantly.  And, maybe you’re going to do work out of your home for a while until you find that perfect corporate job again.  You’ll want to know that most business activities are excluded from your home insurance policy and ask your agent to make recommendations accordingly.  Finally, if you shop your insurance around, make sure you do it before you get behind on any bills as most insurance companies factor your creditworthiness into the rates they charge you.

Good luck with your hunt for a new job, and give us a call if we can help you with your insurance.

Millions of RBAMs (Red-Blooded American Males) have “toy” cars stashed away in their garages.  Many of them are insured on an ordinary personal auto insurance policy.  Why?  Probably, it’s because it’s easier for an insurance agent to treat these “special” vehicles just like any other car.  If this sounds like your situation, you’re probably paying about 4x what you should be paying and getting inadequate coverage to boot.  Our collector and antique insurance program can insure your special interest vehicle typically for 1/4 to 1/2 what it would cost on a normal insurance policy.  And, in our Classic Car program, you get what’s called “agreed value” coverage that recognizes the special value these vehicles hold.

So, if you meet these general qualifications, give us a call to improve your coverage and save a lot of money:

1) drive <2,500 miles annually
2) primarliy used for pleasure/show and only driven occasionally
3) stored in a locked, enclosed garage
4) have another insured vehicle for regular use
5) vehicle is at least 10 years old and of special interest

If that sounds like you, give one of our agents a call at 1-888-348-6337 today!

This is a running list of car and home insurance terms that you may have questions about.  Disclaimer:  these are meant to be general definitions and don’t override any language in your actual insurance policy.

As this page becomes longer and longer, just use your browser’s “search” function (find on page) to locate the term you are looking for.  Don’t see a term?  Just post a comment below with your question.

Liability – something for which you can become legally responsible

Indemnity – pays you back

Insured – the owner of the insurance policy

Bodily Injury Liability Coverage – coverage that indemnifies you if you cause injuries to someone else

Property Damage Liability Coverage – coverage that indemnifies you if you cause damage to someone else’s property

Comprehensive Coverage (also called Other than Collision Coverage) – provides coverage for your vehicle for damage not caused by collision with another object (except wildlife)

Collision Coverage – provides coverage for your vehicle for damage caused by collision with another object or upset (rollover)

Full Coverage Policy – usually refers to an auto insurance policy that includes liability protection coverage as well as comprehensive and collision coverage.  May also include additional coverages for towing, rental, etc.

Deductible – the amount of any covered loss that the insured must pay him or herself, usually expressed in terms of a dollar amount

Co-insurance – a percentage of coverage  that the insured self-insures.  Unlike a deductible, though, under coinsurance provisions, the insurer and the insured share in the loss from dollar one (unless, of course, there is a deductible that applies, too!).  For example, the insurer would pay nothing on a $100 loss if there was a $100 deductible.  With a 20% coinsurance provision, the insurer would pay $80 and the insured would absorb the remaining $20.

Dwelling Coverage – coverage to cover the cost of repairing or rebuilding your house due to damage from a covered loss

Other Structures Coverage – coverage for structures not attached to your house.  examples include sheds, barns, detached garages, fences, etc.

Loss of Use Coverage – reimburses you for alternate living or rental car expenses incurred when your auto or house isn’t usable because of a covered loss on your policy

Actual Cash Value – this is a method of valuing claims based on fair market value to repair or replace an item with one of similar quality and condition (i.e. cost new minus depreciation)

Replacement Cost – this is a method of valuing claims based on the cost to replace an item with a new item of similar quality

Guaranteed Replacement Cost – refers to a home insurance policy that will pay for the replacement of a house in the event of total loss regardless of the cost to rebuild (rare nowadays)

Agreed Value – means that the insured and insurer agree on the value of something to be insured at the time insurance is placed rather than waiting for a loss to occur and then trying to determine the appropriate market value. Agreed value is typically used in specialty insurance like boat, historic home, and collector car insurance where the value of the insured item may be difficult to determine using standard cost guides.

A question I’m often asked is “do I need to buy the coverage they are pushing at the rental car counter?”.  The answer, as it unfortunately often is with insurance, is “it depends”.

However, I’ll try to boil it down and make it pretty easy for you by sharing a couple of principles.  First is that coverage generally extends from your personal auto policy to “non-owned autos” that you use for less than 30 days consecutively.  Second is that there are two main parts to your auto policy – liability coverage (see our insurance definitions) and coverage for damage to your car.  For liability coverage, if you’re happy with what you’re carrying on your own car, why buy extra coverage from the rental car agent? 

So, that leaves coverage for damage to the rental car itself.  If you’re not carrying coverage for damage to your own car, you need to find alternative coverage.  One way is to buy it from the rental car agent, but this can be costly $10-$15 per day, usually (you don’t pay $3,600 to $5,500 per year for your car insurance, do you?).  Another way is use the FREE coverage that’s probably provided by your credit card.  See Visa’s rental car coverage benefit as an example.  If your card provides this benefit, make sure you pay for the rental using that card.  The main drawback with going this route is this coverage is usually on a reimbursement basis, meaning that you have to float the cost of repairs and/or loss of use for a short period of time until the card issuer reimburses you.  But, hey, it’s free.

If you’re renting a truck or moving van, be sure to check your policy or ask your agent because there are typically size limitations above which your personal policy coverage will not extend to the rental (typically 10,000 or 12,000 lbs. gross vehicle weight).

You’ve heard the commercials – go to freecreditreport.com (can you hear the annoying, yet memorable jingle?) and get your free credit report.  Oh yeah, the “small print” says you have to enroll in something called triple advantage; I’m sure that has to cost something, right?

Anyway, most insurance companies are using your credit report as part of their rating process.  We can argue whether or not that’s a good thing for society, but the fact is that there is a strong correlation between credit responsibility and future insurance losses.  I know because I did a lot of research in this area over my career.  But I digress, my point is most of you probably don’t read all the stuff that you get from insurance companies (don’t worry, few of us do).  In the package, there’s probably something called an “FCRA notice”.  FCRA stands for the federal Fair Credit Reporting Act, and it basically says that if your credit isn’t in the absolute top tier of credit scores, it may have had a negative impact on the price you were quoted; so, bingo, you get a free credit report without having to sign up for a costly credit-monitoring service.  There’s no time limitation like one per year, and no purchase necessary!

There will usually be a toll-free number you can call along with a case ID or something similar, and it’s easy to call and get a copy of your reports just to make sure everything looks OK.    Here’s an example of our FCRA notice.  I recommend you quote your insurance about once a year and take advantage of this truly free credit report.