I am one of those people that find the time to review things like cable bills, cell phone services, gym memberships, Mile Reward Programs and the like. I try to do the big ones annually and the smaller ones quarterly, because if you don’t ask they won’t lower your monthly bill!  You would be enormously surprised to see how much money you can save by simply reviewing a bill, calling customer service and reviewing line by line to find some savings. The trick is to find someone that is knowledgeable, service-oriented and smart enough to explain what you need and how you can get the same level of service for a lower price. Sometimes, it merely takes a bit of tweaking to saving hundreds of dollars. I like to tweak and find those that do too! 

 

I recently met Linda Rey, of Rey Insurance, at a small networking event in Westchester, New York. There was lots of small talk (and wine) but I did mention to her that I was reviewing my insurance plan and was not happy with what I was being told by my insurance broker or another person I had spoken to. The problem was that they were willing to tweak, but were cutting out what I needed rather what I did not need. I was also not comfortable with the explanations I was getting. Linda volunteered to review the proposals from the other agents as a favor and did such a great job tweaking and explaining that I gave it to her. Sometimes, you get business simply by taking the time to be nice!

 

Let’s face it, insurance is a waste of money- until you need it! Then you wish you had the best and someone to explain it to you. With growing costs and concerns on health care, I thought now would be a good time to get the skinny on the service. What better way than to interview my NEW insurance agent, Linda Rey of Rey Insurance.

 

Q. What exactly is homeowner’s insurance and what kind of protection do you get other than if your house burns down?

 

A. In the interest of time, Homeowners Insurance provides financial protection not only from physical damage to your property in the event of a fire, theft or vandalism, but also if there is water damage from a pipe bursting or sewer backup (under separate endorsement). There could be some windstorm coverage but could be subject to a separate deductible (depending on the carrier). There is liability coverage should someone injure themselves while on your premises, needs medical attention and/or sues you for personal injury. I can tell you what it doesn’t cover. Flood, Earthquake, Mudslide, wear and tear are not covered under a standard homeowners policy. Flood is available under a separate policy. Wear & Tear is not covered. This is part of the responsibility of being a homeowner and caring for the condition of the house to prevent damage to the property. One should always refer to their policy if they have questions and discuss those questions with their agent.

 

Q. Whether buying a home or renting something, some type of homeowners insurance is needed. How should someone shop for an agent and what are things they should look for from their agent?

 

A. Asking a friend or family member who they use and if they’ve had good experience with their agent is usually a good place to start.  If you like a particular carrier they will provide local agent information via their website. If you like to have resources local to your residence, you can search online and then call to talk with the agent and “interview” them to see if you like what you see and hear. You may want to check with the Department of Insurance if any complaints have been filed with the state due to unethical practices. The State Insurance website is: http://www.ins.state.ny.us/hpoffnos.htm

 

Q. What are the advantages of going with an insurance agent over directly to the carrier?

 

A. This is a great question especially with the ever-popular Geico and the new online insurance sites popping up.

It’s tough to answer this especially since I’m probably biased being an independent agency in business for 32 years now. It depends on experience and preference when dealing with customer service issues including claims. Sometimes having a local agency handling matters is comforting. Sometimes a carrier who is stable has reliable resources to handle the customer service needs of their customers. Besides, everything is great until something goes wrong, right? No one is perfect and sometimes not all needs can be met all the time. Deregulation can be your friend in that way in that you have alternatives when deciding with whom to entrust your insurance matters.

 

Q. Homeowner’s insurance premiums increase each year. Is it important to review your policy each year with your agent? What typical things do you look for to reduce the premium while still carrying good insurance?

 

A. Reviewing your policy every year is prudent, however, sometimes it’s merely the exercise of checking to see if there are any changes, and if so, what they are and how drastic is it from last year. The policy premium is just one aspect. The coverages may not have changed but something in your life may have changed. Renovation, real estate values, teenage kids, retirement, etc.  Life events have an impact on how and how much coverage should be structured. In other words, if you now have youthful drivers in the household, are they listed on the policy? Do you perhaps need to increase your umbrella liability coverage? Do you have an umbrella liability policy?

 

What we have seen is people haven’t looked at their policy in years and carriers may have revamped their products thereby restructuring how they price the policies.

 

Q. I heard that cutting personal property coverage and increasing the deductible can really save on premiums. Is this true or are their smarter ways to cut the premiums.

 

A. Increasing deductibles is a good way to save on premium but you have to do the math on how much you are increasing the deductible to save and how much is the reduction in premium. Sometimes it’s not worth it.

 

Assuming we’re talking about the dwelling value of the home, this must be a careful consideration before making any changes. Carriers will allow the property coverage to be reduced but only after a new replacement cost estimator is completed and there is proof the dwelling value is too high. Replacement cost is determined based on the specifications of the house. Always discuss, first, with your agent any questions regarding cost saving strategies and questions you have on any ideas or suggestions that have been made to you.

 

Insurance is not easily comparable to friends, family, neighbors just because you live near each other or drive the same car. I like to describe insurance as similar to DNA. Every risk is different and there are a myriad of variables to consider. Don’t assume your policy portfolio is overpriced just because your neighbor pays less.  That is one of the biggest myths we strive to overcome when people are trying to save money and/or complaining about money.

 

Q. Is it best to bundle the homeowners insurance with auto and other types? What are the advantages and savings with that?

 

A. It is absolutely advantageous to bundle/package multiple lines of coverage with one carrier. IF POSSIBLE. The terminology is called Account Credit. This credit could be as high as a 25% discount against the premium. Sometimes there are underwriting considerations that preclude someone to package auto/home/umbrella together. One reason may be the insured’s driving record or the location of the house/property such as coastal.  If it’s because of the driving record, the agent can queue the system on when incidents/infractions will be removed from the motor vehicle report (MVR) to then try to re-approach the carrier. Naturally, the few claims/tickets, the better chance you have to package all lines with one carrier.

 

Q. How does an insurance agent make money on selling homeowner’s insurance?

 

A. Insurance agents are paid a commission on a homeowner’s insurance policy which is a percentage of the premium. The amount of commission differs based on the contract with a specific carrier.

 

 

 

 

Q. What are some hidden fees that a person should look out for?

 

There are some fees that are built into insurance, for example, on auto policies; there is a motor vehicle fee $10 per year per vehicle insured. This is indicated on a policy. This fee is paid to the Department of Motor Vehicles (DMV).  The next fee could be installment fees. These are added onto each bill that is mailed out from the insurance carrier as well as late fees. These can add up quickly.  Electronic Funds Transfer (EFT) or Paid in Full (some carriers discount for this pay plan) would be a viable cost saving strategy.   Lastly, there could be a fee that an insurance broker charges for processing an application.  It is important that you are aware of these fees as some can be excessive.  Confer with your agent on any questions you have regarding potential policy fees.

 

Q. Can you cancel a policy half way into it if you find a better deal?

 

A. Yes, you can. Make sure you inquire with the agent, to whom you’re switching, if the carrier cancels on a short-rated or pro-rated basis. If pro-rated, then any unearned premium paid will be refunded. If short-rated, there will be a surcharge for canceling mid-term.

 

Q. Why does an insurance company drop people if they have legitimate claims? Isn’t that what insurance is all about? Is this legal and can the person put in a complaint if they were dropped?

 

A. This is a great question and one that exudes a lot of frustration for people.  Carriers usually don’t just drop someone if they have one incident or a couple. It is evaluated based on review of the frequency & severity of claims and of the risk itself (condition of property, driving records, etc).

 

Yes, the insurance company is in the business of paying claims but it is NOT a not-for-profit industry.  There are reserves that must be maintained with the State to pay claims and reinsurance contracts are negotiated to bear some of the risk on a carrier’s book of business.  The insurance company can and will evaluate their book to see if there is a possibility of a risk that could compromise the financial considerations. The unfortunate situation is the sometimes unawareness that insurance is about catastrophe, not about maintenance. Warranties are in place to contemplate maintenance. Small claims close to the deductible are more costly to the carrier than just the mere dollars that reimburse the policyholder. When there is a frequency issue, there are statistics and actuarial data that supports “the big one” is just a matter of time.

 

Q. There are good agents and bad agents. I consider your company an excellent insurance agency- which is why we are here today. What makes one agency better than others?

 

A. I struggle with this question because there are a lot of great agents and agencies out there. Even still, there are people that switch from them & switch from us because sometimes you just can’t please everyone. We are not in the business of pleasing people; we are in the business of helping to facilitate a sound insurance policy at an affordable price.  Then we hope that we can deliver great customer service thereafter.  Each individual has their own way of dealing with their financial affairs.  We can only hope that we provide a good product and great service.

 

Thanks, Linda for answering some of my questions. Insurance is confusing and expensive but a must-have for all homeowners! I believe that with any service industry, many of the third party providers (agents) will deal with the same large companies. The prices should mostly be the same; it is all about customer service. Even so, sometimes you don’t mind paying a little more, knowing you are getting great customer service!

 

Linda Rey is from Sleepy Hollow, New York and is a graduate of Pace University in Pleasantville. Linda has worked in the insurance profession since 1985 where she began her career working in the family business with her father, Frank J. Rey, CLU.  Linda also works with her sister, Laura Rey Iannarelli.  She is currently serving on the Board of Directors of the Food Bank of Westchester and the Westchester County Association.  Linda was most recently named 2010 Outstanding Member of the Year by the Sleepy Hollow Chamber of Commerce. Rey Insurance Agency can be contacted by phone: 914-631-7628 or by email: News(at)ReyInsurance.com or online: www.ReyInsurance.com