End of year or New Year's Eve Party Plans?

Hey everyone, amazingly enough another year is coming to a close and it is time to finalize the plans for either this weekend or Monday night. (Or for some, the party through the entire thing!) These times are always great for celebration with family and friends and can typically be completely enjoyable without incident or tragedy with a little thought and preparation.

First of all, be smart with who you are serving alcohol; I know that many times parents feel it is okay to serve alcohol to minors in their own home but my personal advice is this isn't a great practice, not considering the legal aspect but also from an insurance aspect as if an incident may occur due to the illegal service, most, if not all homeowners policies exclude acts that are performed illegally that result in liability claims.

Secondly, be smart with the amount of alcohol served! If you are allowing someone to consume more than their fair share of alcohol, it may cause problems with their attitude first off, but then it may create liability issues as well! If someone does happen to drink too much at your home, make sure to help arrange a designated driver, taxi or even let them spend the night.

This time of  year is meant to celebrate the past and be excited about the future, make the right choices so that it is purely a celebration!

From the staff at Advantage 1 Insurance, have a SAFE and Happy New Year's Eve and get ready for an exciting 2013!

Winter driving troubles! (Especially around the holidays!)

Last weekend South Dakota and Minnesota experienced a snow storm that reminded me of ones from my childhood! Lots of snow and wind and many nearly impassable roads.
Now, we all know the dangers of driving during these storms, but what about afterwards? This week has given us mild temps to induce slushy roads and large gravel and sand covered snow piles along roadways and in the middle of intersections, along with people driving the speed limit or greater to get all their holiday errands done. This creates a large number of a really ugly color tan vehicles with very minimal visibility driving at high speeds with visions of sugar plums and credit card bills in their head! It is a disaster waiting to happen! So please take extra care of keeping your windows clean and extra caution watching out for others and their bad habits!
Stay safe this holiday season and arrive at your destinations safely!

Are we paying too much for insurance? Part 2

So, last week I started with the discussion of the price of homeowner's insurance and it's increases in the last couple of years. This week I wanted to see if I could help adjust perspective even more and possibly take a new approach to where the trouble may be.

In 1970 the median income was $7,630 while a new car was $3,900, the average cost of a new home was $23,400 and the average cost to insure that home was $104. Meaning the ratio of income was 32.6% of the average new home value and the insurance expense to insure that home was 1.36% of the annual income. While the ratio most related to our focus of discussion, insurance to home cost was .45%.

In 1980, the numbers changed to $16,523, $7,210, $64,600, and $179 respectively. Bringing the ratio of income to home cost down to 25.6%, the insurance expense to income to 1.08% and the insurance to home cost ratio to .278%. This 10 year gap has created basically a double in income and care value but a triple in home price and only a 75% increase in insuring that home. Now, I understand that as time goes on and the underwriting process and the law of large numbers comes in to play, insurance can get better about predicting the process and actuaries are able to set a most reasonable rate for the insurance, but if the gap of building a home and the gap to protect the home in case of needing to be rebuilt gets too wide, eventually it will cause trouble somewhere.

Skip ahead 30 years, 2010, incomes are $48,340, cars are $29,217, homes are $221,800 and insurance is costing $807. This now means the ratio of income to home cost is 21.8%, insurance to income is 1.67%, and the insurance to home cost is now up to .365%, (at a time when some of the largest natural disasters have accumulated across the nation and world). So, here in lies my question, are we paying too much for insurance or is something else out of balance creating the perspective that we are paying too much for insurance?

For most people, the purchase of a home or car does not happen monthly or even yearly, and no matter how money they are being paid, the checks never seem to be enough or the increase of that check from year to year is not enough. Although, they typically see an insurance bill monthly or at least annually and the reminder that the rate changes is more visible. In reality though, looking back at these numbers, most things are on a somewhat even pace, where insurance lagged behind in cost at one time it has had to make up ground to keep companies in business for those who have their policy with them and those future needs. But, home costs have seemed to increase at a greater margin than these other expenses, and additional 200% increase in the past 40 years. And in that timeframe, lending institutions directed by the governments plans have helped people purchase those homes at a much lower income to home value ratio.

So, where is the problem truly at, who is continuing to push it forward and how can we resolve it to help keep things in balance for the future growth and development of our economy and nation? I would love to hear your thoughts and discussion on this matter!

Until next time, remember, at Advantage 1 Insurance, every policy comes with an agent!

Are we paying too much for insurance? Part 1

In the past year or so have you received your homeowners insurance renewal and felt flabbergasted by the increase? If so you are not alone and I hope to share some information I have dug up to hopefully provide a new perspective into the situation rather than just telling you that, "the insurance companies are losing money due to recent disasters and need to increase premiums." Although this may be true, many people feel the same as this lady who says,

"I don’t care what anyone says I should not have to pay more because of someone else in Florida or elsewhere! The rate we each pay should be directly tied to the services we actually USE! If we had no claim – then there is NO increase! If we have a claim then we receive an increase with a regulated max increase amount based on a sliding scale rate. The higher the claim is the higher your increase will be. The insurance industry needs a major overhaul in their premium structure. I am from Minnesota and with American Family. I started with them in Dec. 2010 for $1500 and now I just got my premium notice and it’s $1787 with no claims! I say B.S. I will start shopping and I will do it every year if I have to."

This although sounds great to the person who does not have a recent claim, to the person who has a claim it then becomes a burden because the sliding scale of premium would need to be so drastic to cover the costs of the claim that no homeowner could pay the premium resulting from turning in a claim.

The mere definition of insurance is the transferring of risk from one party (the homeowner in this case) to another (the insurance company) in exchange for payment. The insurance company utilizes the law of large numbers in their statistical analysis by pooling premium money together to minimize premium cost as much as possible so that they can pay out possible claims and in the event that the statistics create a shortfall of premium written to expenses paid for they are required by government to maintain a reserve of funds to make good on their promise of payment.

In reality, if the government didn't regulate reserve funds, and if your insurance company is paying out large sums of money to pay for others within the "pool" and they don't raise the rates to maintain funding for future claims, at the time you do have a disaster occur to your home there very well may not be funds available to make that payment to you. So, although you may not have been the benefactor of an insurance payout recently, if the rates don't increase some, there may not be money available when it is your time of need.

Now, being an independent agency, we definitely agree it is worth taking a look at your situation and making sure you are covered well for the most reasonable premium, but it's possible that the rates need to be increased to protect you in your future insurance needs. I will expand further on my research and thoughts in future postings so please share any questions or thoughts you may have so I can address those as well.... until then, remember, at Advantage 1 Insurance, every policy comes with an agent!

Do you ever have time to work "on" your business?

For years my passion has been small business and entrepreneurship. I have always admired the business owners / farmers / self-employed who have taken great risks to grow a business while supporting a family and maintaining as sane of a lifestyle as possible. For those of you that are business owners or have worked closely with one, you understand that although you may be able to take off on a Tuesday afternoon to enjoy one of your passions but then you also may get a call at 1 AM because your client / customer needs you right then and there and beings each and every customer is your livelihood, you drag yourself out of bed and take care of the issue. (Not saying that all business owners are available at 1 AM for clients, but the fact is they are always on call 24/7 working, planning and worrying about their business!)

The problem though is something I hear over and over in talking with business owners, there is never enough time to work "on" your business, as you are always working "in" your business, making sales, solving problems and just handling the daily activities. Meaning that many times business owners spend so much of their time making today happen they rarely have time to plan and lay out their future needs and goals along with ways to adapt to those needs.

Due to this, and the experiences we have had at Advantage 1 Insurance in the past two weeks: 1.making a physical move to a new office in our Sauk Centre location and all that has come with that as far as bumps in the road, 2. implementing a new client management software system so we can work more efficiently for our clients, which too has some hiccups in just the learning curve of a new way to do things internally, I have to wonder, does this saying not only mean there are difficulties planning for the future but also in taking care of the details that, although effect business, aren't direct correlations to the business itself?

For example, in our move from one location to another in Sauk Centre we moved from a building lease to a building owned, well obviously that changes the need for a multitude of things but being I think about insurance constantly it made me focus there. No longer can we just insure the property we have inside we have to make sure the building is insured as well. Yet, being involved in the transition of moving everything over, and just making sure we didn't forget anything, I was able to see how easily we could have forgotten to notify our agent about that major change.

Secondly, in regards to our software change, this time it was minimal cost for local equipment, but still very time consuming in making sure everything was / is set up properly. If this would have been a purchase of equipment / property to make our efficiency increase, it may have increased our need for insurance coverage again and with all that has been on all of our minds, it again could have easily been overlooked to make sure that happened.

What am I trying to say? To all of you, business owners, farmers and everyone out there, life is busy, and as you make changes in your life / business, they will take up your time and make it easy to forget about the details of making sure you have insurance coverage for all of your needs that have changed, so please, contact your current agent, or if you just want another opinion, give us a call, we offer a free no obligation consultation with respect to your time to help you work "on" your business!

By the way, make sure you check us out on Facebook to see pictures of the new building and also please share this and stop by on October 11, 2012 from 4-6:30 PM for our open house in Sauk Centre.

Insurance premiums can increase, but what can you do about it?

A common phone call to one of our offices is that of either a current insured or someone looking for quotes who mentions that in the past 4-5 years their homeowner's insurance premium has increased dramatically.
I could explain all the differing reasons that the rates have increased but what people really want to know is, "what can I do to keep my premium as low as possible" so I would like to pass along some tips.

Get the Coverage You Need Without Paying More Than You Should

Have you noticed that the cost of your homeowner's insurance coverage has increased significantly over the last several years? Policies that cost $325 just a couple of years ago are often two to three times that amount now, putting the squeeze on many homeowners' budgets. Here are ten ways to minimize the cost of your homeowner's insurance.

1. Raise Your Homeowner's Insurance DeductibleYour deductible is the amount of risk you agree to accept before the insurance company starts paying on a claim. With the cost of homeowner's insurance escalating, it no longer makes sense to let the insurance company assume all the risk. If you have a low deductible of $50 to $100, consider raising it to at least $500 to $1,000. You could save up to 25% on your premiums. Some companies are offering deductibles equal to 1% of the insured value of your home ($1,000 deductible on a $100,000 home). It that seems like a lot of money to pay in the event of a claim, consider this: the trends in homeowner's insurance are for insurance companies to severely penalize customers who file one or more small claims. Often the premiums are jacked way up or the policy is cancelled, and when the customer looks elsewhere for coverage, they may find it costs them three times what they were paying. We should change our perception that insurance of any type is intended to cover all of our expenses when we incur a claim. Those days are over. Think of insurance as risk sharing. How much risk are you willing to assume?
   
2. Combine Your Homeowner's Insurance and Auto Insurance PoliciesConsider buying your homeowner's and auto insurance policies from a company that offers both. Some companies offer discounts of 5 to 15% if you buy both types of coverage from them. Check around and make sure the price is lower than buying the two policies from two different companies before making this move.
   
3. Ask About Other Homeowner's Insurance DiscountsMake sure you're receiving all the discounts for which you're eligible. For example, discounts exist for smoke detectors, deadbolt locks, security or fire alarm systems, fire extinguishers in the home, etc. If you're over 55 and retired, you may qualify for an additional 10% discount.
   
4. Don't Buy Homeowners's Insurance Coverage You Don't NeedIt makes no sense to buy insurance to protect yourself against risks you are unlikely to encounter; for example, earthquake coverage in a non-earthquake zone, or a jewelry floater to your policy if you don't own expensive jewelry.
   
5. Make Your Home a Better Insurance RiskAsk your insurance agent what you can do to make your home less expensive to insure. Making changes that reduce the risk of damage in windstorms and other natural disasters is one example. Another is updating old wiring or heating systems, which may reduce your risk of fires and therefore reduce your premiums.
   
6. Know What Your Homeowner's Insurance Policy CoversYour home is your biggest investment. Make sure it's adequately protected from risks you cannot afford to cover yourself and that it covers any home improvements you've made, major purchases, and increased costs of rebuilding.
   
7. Keep Your Insurance Coverages Up To DateOnce a year, before your homeowner's insurance policy is due to renew, dig out the current policy, read through all the details, and call your insurance agent to discuss any changes in your situation that occurred during the year.
   
8. Avoid Risks That Insurers ShunInsurers are shying away from some risks. For instance, owning certain types of dogs (Rottweilers, Doberman Pinschers, Pit Bulls), can limit or void your policy. Owning a swimming pool or a trampoline can increase your cost of coverage. Read all the fine print in your policy under the "Conditions and Coverages" sections so you know all the things that are excluded from coverage. You may opt to buy additional coverage to protect yourself from certain exposures.
   
9. Improve Your Credit ScoreInsurance companies are increasingly using credit information to price insurance policies. Don't have too many open credit accounts, don't charge close to the limits on your credit cards, and pay all your bills on time to keep your credit score healthy.
   
10. Shop Around for Homeowner's InsuranceShop around for homeowner's insurance rates but keep in mind that you may be receiving a longevity discount if you've been with your current insurer for several years. Typical discounts are 5% if you've been with the company for three to five years, and 10% for six years or more. Get quotes from three agents, and take any longevity discounts with your current insurer into consideration when you compare prices. Your state insurance department may have rate comparison information available for your state. See www.consumeraction.gov/insurance.shtml Before you switch insurers, check out their financial health at www.ambest.com or www.standardandpoor.com.
 

My advice is to speak with your agent; if you don't have a local agent, give one a call and dive into your situation.

Insurance agents typically get flack for their careers but are truly professionals looking out for the best of the client, if yours isn't doing so, it is time to find one who will!

But, just to show we have a slight sense of humor too, here is some at our expense!


A woman was in the hospital after feeling very ill. The doctor says to her, “I have some bad news for you. You only have three months to live.”
“Oh that’s terrible,” the woman sighs, “what am I going do?”
The doctor replies, “Marry an insurance agent.”
“Will I live longer?” asks the woman. ”
No,” replies the doctor, “but it will SEEM longer.”

Why go independent?

It became obvious to me today at our Saint Cloud Chamber Connection meeting that many times when I introduce myself I say that I am "an independent insurance agent working for Advantage 1 Insurance" and I realized it didn't sound that great and also meant very little to most people I tell! So, what do I mean by being and independent agent and what benefit is that to you the insurance customer?  Here is a great article that I felt explained it quite well!



Some people think it doesn't really matter where they buy their insurance. But this misconception could be costing them money, service and protection. Buying insurance isn't like buying bread or milk. Insurance is an important safety net for your family, your home, your car or your business. Don't treat the purchase lightly!

There is a difference in where you buy your protection. Many people don't realize there are three sources for insurance:

1.	Captive Agents, who can sell you the insurance of only one company.
2.	Telephone Representatives, who can offer you the insurance of one company, and only on the telephone.
3.	Independent Insurance Agents, who represent an average of eight insurance companies, and research with these firms to find you the best combination of price, coverage and service.

Your Independent Insurance Agent:

• Is a licensed professional with strong customer and community ties.
• Gives you excellent service and competitive prices because your agent can access the insurance coverage from more than one company.
• Unlike other agents, is not beholden to any one company; thus, you don't need to change agencies as your insurance and service needs change.
• Assists you when you have a claim.
• Is your consultant, working with you as you determine your needs.
• Offers you a choice of insurance plans and programs.
• Is a value hunter who looks after your pocketbook in finding the best combination of price, coverage and service.
• Offers one-stop shopping for a full range of products-home, renters, auto, business, life and health.
• Can periodically review your coverage to keep up with your changing insurance needs.
• Treats you like a person, not just another number.
• Customer satisfaction is the key to an independent agent's livelihood. So, serving you is your independent agent's most-important concern.

There Is A Difference!    

At Advantage 1 Insurance, we want to be YOUR agent, so give us a call and see what WE CAN DO FOR YOU!