Tag wind and hail

There are so many insurance providers in the marketplace today that searching for the right fit can become overwhelming to consumers. Not only is securing the right coverage for your home, car, or business an important process, but selecting who will assist you with obtaining that insurance coverage is just as critical. Many consumers are unaware of the difference between independent insurance agencies and captive agencies, but knowing what each can provide is very important.

Independent insurance agencies are just that – independent from any one specific insurance company. This means they can provide you access to a variety of insurance products from numerous insurance carriers. Independent agencies can shop the marketplace and choose to partner with the insurance carriers who offer the products their customers need. For example, an independent agency may have access to five different carriers for homeowners insurance. What does this mean for the consumer? Simply put, it means they can provide more choices. By shopping coverage through multiple carriers, independent agents can seek out the carrier that offers their customer the best coverage, premium, and payment schedules.  An independent agent will often provide the customer with multiple options for their coverage.

The independent agent is often a one-stop-shop for multiple types of insurance – everything from homeowners to life insurance to auto coverage. And since insurance isn’t a one-size-fits-all industry, having more choices allows the consumer to make the most of their time by having their agent search the best options for them. It’s like having a personal shopper!

Captive agencies typically sell for a single insurance provider – you often see their national advertisements on TV. These providers offer a variety of insurance products; however, these products are only those underwritten by their parent company. The downside to this arrangement is that captive agents don’t have multiple insurance carriers from which to seek coverage. Think of captive agencies like a big box store that only carries one specific brand. They offer great products, but only from their own brand so there isn’t as much variety.

Independent agencies serve an important role to property owners along the Gulf Coast. Many standard carriers cancelled all of their coastal policies and stopped writing any new business after hurricanes Ivan and Katrina, which made it difficult for consumers to find coverage. However, many independent agencies were still able to offer coverage as they had a much larger pool of carriers at their disposal.  Many of the standard markets that are currently offering coverage in our area are doing so without coverage for wind, thus forcing the homeowner to seek out an additional Wind & Hail policy from another carrier.

As an independent agency, South Shore Insurance Agency prides itself on not only finding the correct coverage for our customer, but also educating the consumer on the policy details with words one can understand. An insurance policy is not all about the bottom line premium, but rather the coverage that you will or won’t receive when the unthinkable happens. Simply put, the loyalty of the independent agent lies with the consumer, not with a big box captive agency.

SSIA is a Trusted Choice®Independent Agency – click here to learn more about how this partnership can benefit you.

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choosing-homeowners-insurance-deductables

The deductible is one of the most important elements of your insurance policy and the term is the most widely understood by the insurance consumer.  It is defined as a specified amount of money that the insured must pay before an insurance company will pay for a claim.  Since most consumers carry automobile insurance, they are accustomed to the deductible being the amount that they’ll have to pay out of pocket before the insurance company will step in.  Let’s say for example that you’re in a car accident and the damage to your vehicle is $1000, and your deductible is $500.  You – the policyholder – will pay $500 of the $1000, and your insurance company will pay for everything over that $500 deductible up to your policy limits.

The homeowners insurance deductible works similarly to auto insurance; however, there are many different types of deductibles available, and sometimes your policy can contain more than one type.  Knowing the types of deductibles that your policy contains, what they are based on, and what that means for you after a claim, is extremely important, as this knowledge will allow you to properly prepare for a loss.

COMMON TYPES OF DEDUCTIBLES

  • All Other Peril (AOP) Deductible: any peril covered under the policy except those that are listed separately.
  • Wind & Hail Deductible: this is the deductible that will apply to any event that results in damage caused by wind and / or hail.  This type of deductible is often expressed on your policy as a percentage of the covered dwelling amount, or a percentage of the TIV (Total Insurable Value – the full value of the insureds covered property including dwelling, other structures, personal property, and loss of use).  These deductibles are often higher than AOP deductibles.
  • Named Storm Deductible: this is the deductible that will apply to any named storm event like a tropical storm or hurricane.  These deductibles are also typically expressed as a percentage and higher than AOP deductibles.*
  • Hurricane Deductible: applies only to damage caused by a hurricane.  These deductibles are also typically expressed as a percentage and higher than AOP deductibles.*

*An example of which deductible might apply:  If a hurricane is downgraded upon landfall to a tropical storm and the insured does not have a named storm deductible, the insureds AOP deductible would then apply sense the damages were not the result of an actual hurricane.

It is important for the consumer to be educated on which deductibles are included in their policy.  It is even more important that the consumer have that deductible amount set aside in case of a claim.  In the event you have a percentage based deductible, you will want to be sure to understand what the percentage equates to in actual dollars.  Here’s an example:

Your home is insured for $200,000

Your contents are insured $50,000

Your AOP deductible is $2500

Your wind and hail deductible is 5%

If the deductible is based on dwelling only, the deductible equals $10,000.

If the deductible is based on TIV (total insurable value including contents, other structures, personal property and loss of use, the deductible equals $12,500.

Click on either of these links to view actual quotes from the same carrier, but each with different deductibles. These illustrate how deductibles influence the annual premium.

2 Percent Wind Hail 1000 AOP

5 Percent Wind Hail 2500 AOP

Our coastal market was once dominated by 5% wind and hail deductibles; however, there are now many carriers offering Named Storm and 2% deductibles, so be sure to ask your agent what is available in your area.  Given the same carrier, lower deductibles often mean higher premium costs, and vice versa.  Many consumers find that paying a slightly higher premium is more financially feasible than risking a large out of pocket expense with higher deductibles after a loss.

The examples we’ve given are common types of deductibles for our coastal areas.  In other parts of the country, deductibles for earthquakes, landslides, and other natural phenomenon are common. Deductibles for theft are common in commercial policies.  Talk with your agent to determine what deductibles are right for you – not just in terms of your yearly premium, but also in terms of what that deductible could actually cost you after a claim.

 

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