The Two Types Of Insurance Deductibles And What They Mean To You

Home, life and auto insurance consists of paying providers in premiums and deductibles. A premium is your monthly fee for the insurance. Without insurance, you are left to foot a huge bill for injuries, accidents and property damage if you are held liable. Premiums basically have you pay monthly so that when something serious does happen, you only pay a smaller, fixed amount of money, which is the deductible.

Deductible Title On Legal Documents

What Is An Insurance Deductible?

For those that need a better understanding of what an insurance deductible is, it is how much money that you would have to pay in the event of damage or a loss. Some examples of having to pay a deductible would be if you are responsible for causing a car accident, if you drive through somebody’s fence, etc.

You might have an insurance policy that costs 50 dollars a month, with a deductible of $500. That means you will have to pay just $500 with the rest of the expenses being paid for by the insurance company. For auto, this is to not just promote responsible driving, but to also spread the cost of damages evenly between drivers and their insurance providers.

You can buy insurance with a high or low deductible, but whatever type of deductible you get, you get a fixed premium that reflects it. If you, for instance, choose a low monthly payment or premium, the deductible goes up, meaning that you will have to pay more in the event of an accident or damaged assets. If you choose a high premium, and pay more each month for insurance, your deductible will typically be lowered. The relationship with premiums and deductibles has a teeter-totter effect to it.

When considering a high or low deductible, however, there are many factors to consider. Choosing your deductible is a pivotal personal and financial decision that should define what meets your needs the best.

Insurance plans are essentially based on risk, with both the provider and the consumer in an agreement to assume a degree of risk. Provider can have multiple insurance plans available, both that have high deductibles when an insurance claim is submitted, as well as high premiums.

The insurance plan that is best for you depends on a number of factors including your financial commitments and expected income. Before signing an insurance contract, it is important to be able to have the money available to cover deductibles, medical bills, rental cars, co-payments, and/or anything else.

High Deductible

High deductibles are more favorable to consumers thanks to the low monthly payments. Paying for a higher deductible might be worth it for people that avoid having to drive long distances and in high-traffic areas. High deductibles are also worth it for people that have the cash saved up in case of such an event.

Will the money that you save with a low monthly fee be worth the higher risk with a high deductible? High deductible are worth it for people who want to be rewarded for driving safely and have money on reserve in the event of an accident or damaged assets.

Low Deductible

Some people decide that it is worth it to pay more in premiums per month and get a lower deductible in return. If an accident or anything were to happen to your property, you would have to pay less out-of-pocket.

Low deductibles are ideal for young drivers who are still getting used to driving or are driving rather reckless. Low deductibles are also better for repeat offenders. People who drive recklessly are more likely to get into an accident than people who drive safely, so having an insurance plan with a low deductible will be the better of the two choices.

Choosing Between High And Low Deductibles

If you are still contemplating high and low deductibles, you should consider your current financial situation as well as your driving record to determine what sort of insurance plan you should go with. If your driving record is spotless and have been driving for longer than ten years, there is a chance that you can lower your deductible without raising your monthly premiums. When reviewing insurance policies, you should come across choices in deductibles such as 250, 500, 1,000 and 1,500 dollars. If you’ve never had an accident, it makes sense for you to choose a high deductible. Otherwise, you likely want a low deductible if there are a few blemishes on your driving record.

Conclusion

Both types of deductibles can be good to have, and we do not consider one to be better than the other. Both types of deductibles can be seen as advantageous depending on financial situations, security and driving habits, and the needs of either vary depending on the customer.  If you have questions about deductibles or any of your insurance plans, contact our team at Bieritz Insurance for an appointment.  We will be happy to provide the information and options you require for the best plan possible.

Read More

Don’t Go There; Four Reasons You Shouldn’t Choose Online For Insurance

Are you contemplating which direction to go in regards to getting insurance? Two general options that people take are applying for insurance locally or applying online. While some insurance buyers like the convenience factor of getting their insurance online, that is usually where the advantages end with online companies. Online insurance companies tend to be mainstream corporations that look to reach far and wide for as many customers as possible, whereas a local insurance company only works to cater to people who live around their area. 

If possible, we suggest to skip the online route and get your insurance from a local provider, and here are four reasons why.

You’ll Have To Make The Tough Decisions On Your Own

With a local insurance company, in order to find the best policy for you, you only have to talk to your agent and tell them about your situation. Well all know how to talk to people, so that is usually all it takes to find the best policy. While talking with an agent can take some time, talking with an agent is not known to be directionless and painstaking like applying for insurance online.

Menus, forms, articles, all sorts of web pages are things that you need to read, review, navigate through and fill out, and that doesn’t even include all the policy options that are available to you. You’re left to apply for insurance on your own with limited help available to you.

Any Person You Talk To Would Require Dialing A 1-800 Number

1-800 numbers are not as dreadful as they seem, but people often find it a nuisance to have to call the number, listen to an automated system and then wait for what seems like a long period of time before they have the chance to talk to a human being about their insurance. It will instantly remind you of customer service for any given mainstream corporation, and you shouldn’t have to experience this if you don’t need to.

When you have questions or problems arise, you would like to have a person talk to you, and to be available once you dial their number. With a local insurance agent, it is great to have this advantage, as if you were dialing a friend. That isn’t to say that they might not be available to respond to your calls all the time, but still having the agent’s number is a big decisive factor for many to choose local insurance over online insurance.

You Are Your Own Insurance Guru

Not everybody picks up on insurance at a rapid pace, but thanks to insurance agents, we don’t need to. With a local agent, you are able to talk and interact with a person who lives and works around you. This person known the ins and outs about insurance and are often hired as a guide to help a person or family find what is best for them.

With an online insurance company, you don’t have this. There is no agent available to help you choose the right plan or policy, which means you need to spend some time researching which insurance plan would be the best option for you. And even then, you could still have some doubts about whether or not the plan is something to pursue.

Alternatively, you can call the 1-800 number to get advice from a representative of that online company, but because you don’t have an assigned agent like you would locally, you will get paired with somebody different every time you call the 1-800 number. There are instances where the representative that you are matches with can be super helpful with you, and you wish that you can call that person every time you need help, but you can feel the same way all the time by opting to talk to a local insurance agent.

You Don’t Have A Human To Interact With In The Event Of Damage Or Disaster

Lost or damaged property means that you will need a claim to get filed. If you have local insurance, your agent can likely file your claim for you. If you have online insurance, you will need to file it on your own. This is important for a couple of reasons.

During a time of stress, having a trusted person to talk to is very important. Hearing a familiar voice talking to you, whether in person or on the phone should be very comforting and satisfying in a possible time of need.  But not only can a local insurance agent be good to talk to amid an unfortunate event, but they can file your claim so that you don’t have to. With your mind of many other things, you won’t have to worry about doing the paperwork. Just tell them what happened in detail, and he or she will handle the claim from there.

It’s great to have somebody in your own community to turn to, which is why local insurance is oftentimes the better choice over online insurance. Give us a call today and our team will be happy to review your options with you!

Read More

Umbrella Policies: What You Need to Know About This Clever Insurance Plan

The umbrella is known to be a reliable means of protection from hazardous weather, so it’s only fitting that there’s a useful policy named after it: The umbrella policy. You likely know the basic policies like auto insurance and homeowner’s insurance. Most customers know what they do, which is why they are the most sought-after. 

An umbrella policy is not as popular as auto or homeowner’s insurance, but it can still be a very prolific policy to have should you choose to pursue it.

What is an umbrella policy?

An umbrella policy covers you in situations where you might be held accountable for bodily harm or property damage to somebody else. Umbrella policies also offer coverage for losses that may not be covered by your typical homeowner’s insurance policy. This policy gets its name due to having higher levels of protection than your typical car and home insurance.

Insurance companies will tend to bundle umbrella policies with other auto and home coverage. An umbrella policy will typically add an extra one million or more dollars of liability insurance in addition to basic home and auto insurance at the cost of a few hundred more per year. Multiple policy discounts can also come into effect with the addition of an umbrella policy, so you could pay less to get a bundle than if you bought each policy on their own. 

A neat trick that insurance companies will also often recommend is to raise your deductibles on homeowners and auto policies and dedicate the money you save from premiums to pay for the umbrella policy.

When will an umbrella policy come into effect?

Liability insurance under homeowners and auto policies pay for expenses that you would otherwise need to pay out of your own pocket. The person who suffers a loss or an injury needs expenses to recover and would likely also want to receive their lost wages from missed work. 

The policyholder that caused harm to the person would be responsible for paying all of this, but this liability insurance would be able to cover it all so that you do not have to lose money or assets yourself. Liability insurance is also good for paying for court and defense attorney fees amidst a lawsuit or claim against you.

The likelihood of a driver, car owner, homeowner or boat operator to be considered responsible for the injury of another person or damage to their property is frequent. These people can also be held accountable for personal injury, which isn’t like bodily injury, but includes psychological trauma such as “grief” and “suffering.”

What is covered under an umbrella policy?

The “umbrella” serves as a security blanket that protects you from having to take money from your savings account or having to sell some of your assets in order to pay a claim or judgment. This policy can keep your personal, home and business assets from being taken by a claimant. 

For example, if a storm blows over a tree in your yard and it damages your neighbor’s car, this is one incident that can cause a financial loss. If your property happens to damage other property or injure another person, and it is beyond your control, that is considered an accident that can be covered with an umbrella policy.

Many policies, including the umbrella policy, have a list of incidents that they do not cover. These instances include malpractice lawsuits, workers compensation claims, damage that you intentionally caused (such as vandalism of other people’s property) or damage caused by a business (such as your business producing harmful toxins that harm people and the environment).

Who is an umbrella policy for?

Many homeowners, especially those that often participate in community affairs, should recommend getting an umbrella policy. When working for religious, civic, and even charitable organizations, there is always that chance that you could end up being subject to claims, conflicts, and even legal action. You still need to defend yourself, even if the court throws out a lawsuit against you. What umbrella liability coverage does, however, is to cover the costs of court and attorney fees, no matter if you are found liable or not. 

Getting sued is a very costly and unfortunate circumstance for you, even if it turns out you did nothing wrong. Whereas homeowner’s insurance will not be able to cover attorney and court fees, an umbrella policy will.

Should I consider getting an umbrella policy?

There are two factors that should influence your decision on whether or not to get an umbrella policy: The value of your assets and the likelihood that you might get sued. 

As an umbrella policy is meant to protect your money and assets from lawsuits, you should consider getting one if you do not wish to lose those assets. It is said that an umbrella policy is good for anyone that has more assets than they possess in liability coverage from their basic insurance policies.

If you also drive on the road or have guests over often, the odds of being involved in an auto accident or having an injury or property damage becomes greater. If either or both of these circumstances apply to you, then you would be a good candidate for an umbrella policy.

If you have any questions about whether an umbrella policy is right for you, just contact our team at Bieritz Insurance and we will be happy to assist you!

Read More

Insurance Terms Explained: Actual Cash Value VS Replacement Cost

It always pays to have insurance — that’s common knowledge. Yet sometimes trying to cut through the terminology and jargon can prove difficult. When shopping for insurance or preparing to file a claim, you may find that you need a little guidance on what some of these terms mean; such is the case with the terms Actual Cash Value, or ACV and Replacement Cost.

In some instances, a policy with one of these could pay significantly less on your claims than the other — it literally pays to know the difference. How can you know which? First you need to understand what the terms mean.

Defining the terms

In the simplest terms, Actual Cash Value refers to the monetary value of an item. Keep in mind that this takes into account depreciation. For example, a vehicle purchased five years ago will have a lower ACV now than when you first bought it.

Replacement Cost refers to the cost of replacing damaged property with a replacement used for the same purpose and made of similar material and of comparable quality.

A real world example of ACV

Let’s return to the aforementioned vehicle purchased five years ago. In this example you have taken great care of your vehicle, but it has still sustained minor scratches in the paint. It would not be unreasonable to assume that you have driven roughly 60,000 miles in those five years. So if that vehicle sustained damage requiring a replacement, your insurance company would not compensate for the price of the vehicle when purchased. Rather they would consider the vehicle’s current worth, or ACV.

How insurance carriers calculate Actual Cash Value varies from company to company, and these calculations often get incredibly detailed and complex. For this example, however, the insurance company would subtract the depreciation from the replacement cost to assess the Actual Cash Value. The level of depreciation itself can involve a complicated calculation involving an estimate of the length of time property would remain useful, and how long it had been used.

In most cases, this calculation is much more complex, but this example provides a useful summary of ACV and explanation of how insurance companies arrive at that figure.

An example of Replacement Cost

Most people find Replacement Cost a bit easier to understand — largely because it’s more straightforward. It simply refers to the expense of replacing damaged property based on current costs. In the case of the damaged vehicle, Replacement Cost would refer to the amount of money necessary to provide a comparable replacement. This doesn’t mean that an exact duplicate of the damaged vehicle, but a similar vehicle of comparable quality.

Actual Cash Value VS Replacement Cost

One the surface, these two seem incredibly similar — and they are. The only significant difference between them lies in the deduction of value based on depreciation. Otherwise, both terms refer to the cost of replacing destroyed or damaged property with new property.

In practice however, ACV might not help as much. In our vehicle example, the calculation for Actual Cash Value might not take into consideration the rising cost of vehicles. You might find it difficult to replace your totaled vehicle with one of comparable quality with ACV.

As another example, consider if you lost your house because of fire. The Actual Cash Value may not provide enough money to purchase a house in the current market, especially if property values have risen in your area.

Replacement Cost, however, addresses the real life cost of replacing your property. In the case of the vehicle, it would adjust for higher vehicle prices. In the example of the house lost to fire, it would allow you to rebuild your home based on the current costs of materials and labor.

ACV or Replacement Cost

For most property owners, an insurance policy that covers Replacement Cost offers a much safer option. Because of the reasons stated above, these policies will go a lot further to replace your property than those that cover Actual Cash Value.

This comes with a few caveats. Often policies with Replacement Cost coverage will have higher premiums than policies that offer Actual Cash Value. Additionally, some property owners who rent out homes will opt for lower premium ACV policies, and require tenants to insure their personal possessions via renters insurance.

In most cases, insurance policies that cover Replacement Cost will offer greater security in the case of damaged or destroyed property. Although no one wants to face the challenge of replacing a vehicle, home or other property, an insurance policy that covers Replacement Cost provides the better route to getting yourself back to the life you had before the loss.

If you have any questions about insurance terminology and what the factors can impact your rates, our team is happy to provide you with some guidance!  You can Contact Us at your convenience.  For additional information on insurance terms, visit our website page here: Insurance Terms & Definitions.

Read More

An Annual Review of Your Policies can Save You Money

Many people think of March and April as the time of year for Spring Cleaning.  The snow and ice begin to melt away and we start to think about spending more time outdoors.  We look at things that we need to to outside in our yards for annual maintenance, and we begin to prepare for tax season – where we look at our financial documents for the year and assess our financial ‘health’.   It’s also a great time of year to conduct an annual review of your insurance policies.

Our lives change on an ongoing basis, so it’s important that your insurance coverage changes as well.  How long has it been since you last assessed your policies?  Our team at Bieritz Insurance wants to make sure you are not overpaying for your policies and we also want to make sure you are not under-insured.  When you conduct a review of your insurance, you might find out that there are increases, deductions or discounts.

Things that can impact your rates are things like a new baby in your household, additions or improvements that you have made to your home, property that you may have inherited, recreational vehicles that you have purchased or sold, a college student who is renting an apartment, or maybe you have reached retirement age.  There are other things as well: new drivers in your household, real estate market changes, landscaping changes, etc.

Typically, we understand that our assets change over time. What we don’t usually think about is that the value of those assets change as well.  If your home has appreciated in value, you need to make sure that your insurance coverage allows for this increase in value in case of catastrophic loss.  If you purchased your home at $250,000 ten years ago, and the value has since appreciated to $300,000, you want to make sure that your insurance policy will cover you for a $300,000 loss in case of a catastrophic event.  In other words, if your coverage hasn’t been updated since you purchased your home, your insurance value might not cover full replacement if your home value has increased.  In this instance, a review of your policy might increase your policy payments, but you are assured of having the coverage that is right for you.

There are other instances where your policy payments might decrease.  Maybe you installed a home security system or an emergency battery backup for your sump pump or perhaps you have hit an age milestone that would qualify you or members of your family for additional discounts on your auto insurance policies.

A look through your policies on an annual basis can help you find these things and can ultimately save you money on your policy premiums.    Whether you are a current client or maybe just looking for some cost comparisons as part of your process, you can contact us in Cooperstown at  607-547-2951 or in Morris at 607-263-5170 to schedule an appointment for a review!  In most cases, we can save you money.  We work with over 20 companies so that we can find exactly the right products to fit your needs at the right price for your budget.

 

Read More

Cataloging your possessions for insurance

A homeowner’s insurance policy covers replacement value of your home and possessions in the event of a catastrophe, break-ins or other events. If you need to make a claim, you will need documentation of your household possessions to prove replacement value.  Our favorite tool to help you with the process of cataloging your possessions among several available is one called ‘Know Your Stuff’.

know your stuff

Important Note: Before you begin this process, it is recommended that you check with your insurance provider to see if they have specific reimbursement requirements so that you can be aware of them for your inventory.

Know Your Stuff is a free online inventory service provided by the Insurance Information Institute. The site will walk you through configuring rooms in your home and listing the specific items in each area, complete with photos and receipts for documentation. Because the site walks you through everything you need to enter, you can be sure you’re recording all of the right information. When you are finished with your documentation, everything is stored securely online, so you have easy access to your home inventory from anywhere you have an Internet connection.

Even though an online service makes things easier than keeping an inventory on paper, it can still be frustrating to have to photograph all of your possessions and attach those photos one by one to your inventory. To simplify things, Know Your Stuff also has a free app for both iPhone and Android phones. Using the app, you can modify or add to your online inventory—and easily add photos directly from your phone.

We think that Know Your Stuff has the most comprehensive toolset available on the web or your mobile device, which makes it our top recommendation for the best digital home inventory tool.

If you are not quite happy with Know Your Stuff, there are other tools available (also for free) including:

If you are looking for any additional information about cataloging your household, please feel free to contact us.  Bieritz Agency can help you with all your insurance needs.  Call us for a free quote – we can save you money!

Bieritz Insurance Agency, is proud to offer two convenient locations in Otsego County.

Your “Hometown” Insurance Specialists!

HOME • AUTO • BUSINESS • LIFE • FARM • BOAT • CYCLE & MORE

new header

Bieritz Insurance Agency
209 Main Street
Cooperstown, NY 13326
607-547-2951
FAX 607-547-4487
info@bieritzinsurance.com

Morris Insurance Agency
128 Main Street
P.O. Box 70
Morris, NY 13808
607-263-5170
FAX 607-263-5270
agent@morrisinsuranceny.com

Read More

Social Media Security for the Holidays

VacationSM2Social media is a great way to stay in touch with friends and family from all over the world, but privacy settings only go so far to limit what people can see and learn about you. Although this is not a new topic, we just want to remind our friends, clients and families to please be careful with the information that you share on your social networks.

According to AAA, over 46 million Americans will be traveling over this holiday season. Don’t make your home a target for break-ins by sharing details about your travel plans on your social networks, as your family and friends might not be the only ones watching. Avoid accepting friend requests and connections from people you don’t know, and make sure your privacy settings are set correctly for your security.

If you are leaving town, boost your home security by letting friends and neighbors know where you will be and ask them to keep an eye out on your house. Make arrangements for someone to pick up your mail while you are away or ask the post office to hold delivery for the time that you are expecting to be away. Prevent easy entry to your home by making sure all your doors are locked and your windows are secured. If you are traveling with your smartphone, make sure you disable “geotags” on the applications you use so that information about your real-time location doesn’t get shared publicly.

Holidays are special times to be with friends and family, and photos are a great way to record and preserve those memories of time together – but we suggest you wait until you get home to post those pictures!

Our Team at the Bieritz Agency wishes you all a Happy and Safe Holiday Season!

Read More

Why Shop Around for Insurance?

A client-contributed article from Susan O’Handley

I have been working with the Bieritz Agency over the last few years as a consultant for website and marketing support services. On occasion, I would receive a gentle reminder from Steve to consider switching to Bieritz, or at the very least letting them provide a quote for us.  Although I had meant to do this (I believe in supporting local businesses and my clients whenever possible), insurance is one of those things that’s easy to push off to a later date, and when our policies came up for renewal, we just renewed them and forgot all about switching.

moneyUntil recently.  On the heels of another gentle reminder (never a high pressure push), I decided to just go ahead and send our current policies over for a comparable quote.  I am very glad I did!  To begin with, we ended up saving close to $250 on our auto insurance policy with the same coverage – so we are already ahead.

Information that came back to us on our homeowners policy came as a bit of a surprise.  After reviewing our policy, we learned that we were underinsured for the replacement value for our home and were also paying extra money for a low deductible option.  Beth Spence, the Bieritz Agency Manager,  provided us with several options, all of which gave us better coverage and terms for literally a few extra dollars.

When we purchased our home as first-time buyers over 10 years ago, we never gave the insurance a second thought.  I don’t recall shopping around for quotes at that time (closing on your first home is what I consider a whirlwind experience), and since it is tied into our mortgage payment, it was something that just automatically renewed each year – never really needing attention.  I assumed that the coverage was complete and that it continued to meet our needs.

Thankfully, we have never had a claim on either policy (knock on wood), but I am glad that we found out about our home policy now instead of being surprised in a time of need by having too little coverage.  I encourage friends and neighbors to review your insurance policies and send them over to Bieritz for review!  Even if you don’t wish to switch companies/brokers, take the time to review your policy with your family and agent. Like us, you might find yourself in for a surprise.

The Bieritz team lives up to their reputation of first-class customer service, with responsive and helpful interactions – they are indeed ‘Your Hometown Insurance Specialists’! Give them a call today and see if they can assist you with your policies.

Read More

National Safety Month – Summer Safety

2014 GraphicJune is National Safety Month, so our team has decided to provide resources from the National Safety Council to help improve some general safety practices for all our friends and clients.

This week, we are featuring information and resources about summer safety.

Everyone enjoys a little bit of summer fun, but it’s always important to monitor the weather conditions in extreme heat—especially if you plan on being outside.

Read the Summer Safety Tip Sheet Here

Read More