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What am I Paying For Anyway? Apr 30, 2017
With some things we purchase everyday little thought goes into the components of price. Why are apples 99 cents a pound when they literally grow on trees? Can I buy those peaches without the can to save money? How much of my purchase at Walmart goes to simply keeping the lights on in there? We get used to a standard price for a good or service, regardless of its justification but I think it's important to sometimes look a little deeper.
The price you pay is more than premium but is actually made up of a few things: premium, fees, and taxes.
Premium is a rate, usually a simple % of something. The 'something' depends on the type of business you are in or the type of policy. For example, a cleaning company will probably pay a premium based on a % of payroll while a retail store would probably pay a % based on sales. The rate itself is filed by each company with the state Department of Insurance, who has to approve it. This moderates insurance prices and profits statewide to protect the consumer.
Inside that premium are several components: expenses, losses, and profit. The goal is to minimize expenses, guess the losses, and thus make a profit. Expenses refer to company expenses such as keeping the lights on, paying the customer service people, postage for all that paper they send you, and so on. Profit is what's *hopefully left over once the losses are realized. The loss number is the real unknown here but insurance companies have it down to a science, called Actuarial Science, which is an actual thing that employs thousands of people.
Actuaries and their departments are employed right now trying to predict the claims an average driver will have in any given year. They have gotten so good that they can predict the likelihood of a driver getting in an accident based on age, gender, credit, relationship status, employment, and more with extraordinary statistical accuracy. Your insurance agent asks you all those questions on the application because it actually matters, go figure right?
The same logic applies to all lines of business, not just teenagers and car accidents (which is more of an inevitability than a likelihood). The age of a commercial building, the year the roof was put on the house, the size of your dog, and years experience of a contractor are all taken into account. It may feel creepy but it also ensures you don’t pay more than you need to protect from the risks in your life. In that sense, insurance is a very personal product that applies to all people differently.
Your insurance agent is the packaging, the safety label, and instruction manual for your insurance products. There are so many agents they  can seem to grow on trees, but I believe they still provide a vital function. Sure it could be cheaper to one day lose the packaging on insurance products and buy directly from the company but consider the risks: there would be little guidance on what is covered and what isn't, no warnings on potential gaps in protection, and no help if something goes wrong.
Flood, homeowners, condo, contractors, and business insurance are all unique, shouldn't the service you receive be unique to you? We strive to do more for you and give you the individual attention you deserve while choosing the right insurance product to protect what's important to you.
Distracted Driving Mar 31, 2017
Distracted driving is a relatively new term but has actually been around quite a while. With so many noisy passengers in his ark, Noah probably wasn’t watching where he was going either and if there were more things to run into, he probably would have hit something. Cars themselves originally had few built-in distractions. If you owned a Model T in 1913 you would have found absolutely nothing interesting to look at on the dash. It only had a temperature gauge and key entry and that stationary temperature needle would get old real quick. What did kids DO in cars back then?
Dashboards now are cluttered with gadgets and dials from touchscreens to coffee makers. I'm sure the intent of adding things to the dash was to help keep us on track and safely get where we wanted to go but dashboards have a new and much more frivolous purpose: entertain and impress. The gadgets we really need are the ones that protect us and others, such as the emerging lane-correcting and automatic braking features. But will more safety features like these just make us more complacent to do more distracting activities?
I heard a story once of a retired couple who decided to buy an RV and travel the country. Their new RV was very fancy, it had a full working kitchen, two bathrooms, and auto-pilot. The couple happily bounced into their seats and set off. Once on the freeway, the driver set the auto pilot and got up to go to the bathroom. The RV drifted over a lane, then to the shoulder, then to a complete stop in a ditch. Car insurance and RV insurance can't always protect us from ourselves.
Turns out, that auto-pilot was really cruise control. Cars can now accelerate, steer, brake, and navigate without the driver doing a thing, with more advances to come. As we move closer towards replacing the human element in driving a car,  are we opening the door for more and more distracted driving until we finally reach full automation?
As technology replaces more and more of the things that keep us involved in the driving experience, we will be free to spend more and more time focusing on things OTHER than driving. Innovation is born of necessity and it appears that a large number of people have already decided that texting while driving is a required part of life.
There are 253 million cars in the US with more cell phones then there are people (including children). Texting is involved in roughly 25% of all car accidents today  with distracted driving as the #1 cause of accidents in the US. As convenience technology advances, our attention span wanes.
We are trying to solve the problem of distracted driving by removing the driving part out instead of the distractions. Maybe we should refocus our efforts on making driving itself more enjoyable and maybe even preferable to texting. Simpler communication technology (I'm looking at you blutooth), easier to use dash technology (so many freaking buttons), and more encouragement of safe practices behind the wheel from an early age will go a long ways to bringing us closer to the future without the painful lessons learned along the way.
How strong is your insurance company? Feb 28, 2017
I grew up with 4 siblings and sometimes getting my favorite foods wasn't easy. Craving a glass of milk just to find my brother left a teaspoon's worth left in the bottle or forcing myself to eat one extra cookie because I knew the box would be empty tomorrow  was pretty maddening. Girl Scout cookies were especially valuable and I used to hide a box in the piano to make sure I got some. Those morsels became worth their weight in gold a week later when those roadside stands disappeared.
The concept of saving for a rainy day is familiar to most people, but is much easier with cookies than large sums of money. Financial advisers are a valuable resource in determining how much your individual family might need, taking into account fixed income and fixed expenses. But what about those one-time things: the unexpected vehicle repair, medical bills, vacations, etc? Combine all that together and you can come up with a number to lay-away for the future but sometimes only insurance products can protect from the truly disastrous events.
Companies run much like families and insurance companies have to make the same decisions: how much should we stow away for a rainy (maybe a VERY rainy) day? Reserves and Policyholder Surplus are basically a very full bank account based on a % of the total written premium, used to pay for claims as they arise. Liquidity is an important factor in getting the money out to you, the policy holder. Once the Girl Scout cookies run out, it takes a whole year to get more!
Companies are rated based on their ability to pay claims using their reserves, policyholder surplus, and reinsurance. Some companies are better prepared, with more money in reserve, than others are. The top companies are given A++ ratings and the weakest are given an F. The state wont even allow a company to sell insurance in its state if it doesn't meet certain require requirements. These proactive actions keep consumers safe in case a major event comes along.
Several insurers in Florida are in danger of soon losing their A ratings because those companies don’t have enough in the rainy day fund. Homeowners insurance, auto insurance and business insurance companies are all affected. Make sure the company protecting your dreams isn't one of them, contact us today for an A rated quote from one of the best agencies around!
Housing Trends for 2017 Jan 31, 2017
As technology seeps its way into every facet of our lives, look for more smart-home technology in 2017. With Amazon and Google battling for the crown of complete home integration with their services, the consumers stand to gain most. Eventually the convenience will just be too great to pass up, so start looking for ways you could benefit from this technology.
There are an incredible array of options now available to the custom home builder, with everything from Egyptian sandstone fireplaces to Tibetan faucets. Variety and affordability should allow you to find a pleasing balance of textures to fill your home with a feeling of greater expanse and depth than ever before.
The average (mean) annual temperature in Florida is just above 71 degrees, 3 degrees higher than the next closest state, Louisiana and people are embracing the warm weather in Florida more than ever. Many homes now feature exterior walls made entirely of glass that slide or fold away, allowing seamless transition from couch to pool. Greater use of outdoor space is facilitated by these type of walls and they help expand living space to accommodate a greater number of people.
In the 10 years since our last major hurricane, homebuilders have been vigilant in maintaining standards. Homes are being built out of solid concrete, or raised several feet to avoid tidal surges, and with the highest quality siding and roofing products available. Metal roofs are nearly standard in new homes in the area, but don’t discount the importance of building everything to last.
Pools are becoming part of the whole house design, making it easier to dip your toes in the water. Sun shelves, infinity edges, spas, water features, and decks adorn pools in homes up and down the Emerald Coast. Simplicity and elegance are to be expected for 2017.
Trends rise and fall as the tides but some things should always be there when you need it. Consider your homeowners insurance company as a protector of the things you hold dear and rely on them as you pour your heart and soul into your coastal home. Many companies have online accounts and great customer service, don’t be left behind as other companies move into the future. Call your agent today to find out how your company stacks up with the pack for 2017.
Resolutions and Change Jan 1, 2017
The hardest part about change is change. It's easy to decide to change but actually following through can be a real challenge. Some changes are easy, like moving the milk to the fridge door instead of shoving it to the back. A new year brings a great opportunity to make positive changes to your family or business finances.
When insurance companies make profits they are more willing to compromise on prices, leading to what we call a "soft-market" or buyers-market. I believe we are diving into the softest market in years after another profitable year for insurance companies. The only notable large-claim events were Hurricane Hermine and Matthew. Out of over 19,000 claims for Hermine, only 38 were in Walton or Okaloosa Counties, with another 61 in Bay County. Hurricane Matthew brought even fewer claims to our area: 42 total from those three counties. Statewide losses reported by insurance companies were under $1 billion, but considering Florida has nearly $3 trillion in coastal property vulnerable to hurricanes, it was another quiet year.
The result  is insurance companies are increasingly willing to negotiate prices on coastal property insurance, especially high value commercial buildings such as multi-unit condo buildings. Homes that have traditionally been difficult or expensive to insure, such as those built before 1985, in flood zones, or beachfront, are in some cases now being written nearly on par with their inland counterparts.
We recently saw two commercial buildings receive 25% decrease in their premium over last year. If you haven't quoted your property in a while, now is the time. Our agency has access to dozens of companies and options and have had success negotiating prices to beat expiring policies. Our quotes are free but could save you thousands. Make it a goal this year to test the insurance market and see if we can't save you some money. That's pocket change to be happy about.
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