Molly's Musings | Questions Addressed About Insurance

Molly's Musings

Questions addressed that may be a bit amusing.

What’s umbrella insurance? I use raincoats.

This is an insurance policy hopefully you will never need to use but when you need it you REALLY REALLY need it. I know this doesn’t make the case for purchasing one because generally people don’t buy things they don’t need unless it’s sitting on the shelves of a Wal Mart supercenter.

An umbrella insurance policy is an excess liability policy. If the liability limits on your primary insurance policies are exceeded (auto, home, boat, motorcycle, atv, segway…) the umbrella insurance will fly in like Superman and save the day.

Umbrella insurance can be purchased up to $10,000,000 or even more if you are super rich like me. (Namely because I sell so many umbrella insurance policies) Generally limits are purchased in the amount of $1,000,000 to $2,000,000. Say for instance you’re in a tragic car accident and you maim ten people because you’re on the phone texting to your twitter account stating how awesome your day is going. You are going to get sued big time and the liability limits on your auto insurance are not going to cover the damages of all 10 injured people and the guy on the side of the street selling flowers that wasn’t injured but suffered “emotional” damages. If you have an umbrella policy the umbrella policy would kick in covering you for up to the limits stated on your insurance policy.

Another example would be a liability claim on your homeowners insurance policy. Say you are on par with my golfing abilities and you hit fifteen people on the head with a ricocheting golf ball. These fifteen people sue you for more than your homeowners insurance liability limits. Guess what insurance policy is going to be the ray of sunshine in your dark, dark, existence?…That’s right your umbrella policy.

I’m of the opinion that everyone should purchase an umbrella policy considering the litigious nature of our society and to the sad state of my checking account. You need to consider not just the amount of money and assets you have now but what you will be worth in the future. Umbrella insurance is cheap. An approximate rate for one vehicle and a primary home or renters policy is $130 a year. That’s merely 35 cents a day on earth. On Mars you’re looking at 18 cents a day so some of you, including myself are going to get a great deal!


Why do I need auto insurance?

It’s a HUGE conspiracy with the sole purpose of lining the pocket books of evil agents like myself. The government wants to see insurance personnel prosperous so insurance requirements were placed in the law books. OK so some of that might be a little true. Every business needs to make a profit to succeed.

It’s actually a case of what came first…. The chicken or the egg. In the beginning there was insurance and then came the lawsuits. Or in the beginning there were lawsuits and insurance became necessary. That theory is up for debate. Either way if you slam your car into another car be sure that one way or another, unless you hit a happy nun or a Buddhist monk, you are going to be liable for the damages you created. If you don’t have auto insurance, your little house with the white picket fence may incur a lien. Your future earnings may also be subject to siphoning. Even if you are an underpaid peon with the debt the size of the nation’s GDP someday you may be making beaucoup bucks as a Doctor, Lawyer, Reality Show TV Tycoon, or the director of Goodwill Industries. Those hard earned dollars you will make could be sucked up into the hands of the poor little lady you ran into….. and her lawyer. However with the proper insurance coverage you could prevent this very scenario from happening.


Why won’t Huggins Insurance let me purchase the minimum liability limits that the state requires?

Let’s use some common sense here. The minimum limit the State of Oregon requires you to carry for property damage for the car you slam into is $10,000. Maybe it will help if I make that a little bolder. $10,000. New cars cost thrice that amount. You could meander into a car 7 years old and still owe a ton of dough after your insurance company pays out their measly $10,000.

I haven’t even started on bodily injury. Admit it. You’ve watched one of those hidden camera reality shows that run at 3:00 in the morning that show people faking falls in grocery stores so they can sue the store. Imagine rear-ending one of those people, and ta-da, they are injured. Really injured. Documented by a law-abiding doctor with awards for saving kittens out of trees in his exam room. Do you think that person will be satisfied with $25,000 which is what the State of Oregon requires? Let me write it a little bolder so you understand the gravity of the situation. $25,000.

Huggins Insurance recommends that you carry liability limits of at least $100,000 per person for bodily injury, $300,000 per accident for bodily injury, and $100,000 for property damage. We don’t care that it will cover the cost of your accident. We want the $5 extra in commission it will grant us with your higher liability limits. That’s right. Increasing your liability limits is generally a pidly little amount of extra premium. Oh and we also get added benefit of not getting sued by you when your policy limits don’t cover the cost of your accident.


What do I do if I’m involved in an accident?

Make sure everyone is alive and breathing. OK so those are mutually exclusive terms but don’t just sit in your car spewing epitaphs of rage until you know everyone is OK. Even then you should probably keep your rage contained. If someone is injured or if your accident is blocking traffic and causing other motorists to wield unfriendly hand gestures at you call the police. Once you have assessed the situation at hand garner the following information from the other party:

The names of everyone in the car, the name and policy number of said person, their drivers license number, the plate number of the car as well as it’s year make and model, addresses and phone numbers of at least the driver if not all of the occupants, and names and phone numbers of any witnesses that may have stopped.

Make sure to actually look at the driver’s license of the driver and the actual insurance card if you’re lucky enough to hit or be hit by someone that has insurance. If they spout of their policy number out of their heads you are either in the presence of the Rain Man or someone is trying to scam you. My bets are on the latter.

The number one item I personally ascribe to is to BE NICE even if the accident isn’t your fault. Chances are you have been in an accident that is your fault or you will be at some point in the future.


Why is my insurance premium so high?

The higher your premium the more commission I get. OK so that’s what you’re thinking. It’s OK, before I was an insurance agent I thought that as well. The great thing about Huggins Insurance is that we are an independent agency. We have several companies that we can shop with if you feel your insurance is too high. We like to keep you happy with lower rates because that will mean you stay around longer.

There are a gazillion different factors that determine rates for insurance policies. Each company uses their own rating factors imagined by little actuary elves that sit in enclosed offices without windows surrounded by typed reports with plenty of numbers but no pictures. Usually they wear wire rimmed glasses and own 10 of the same suit.

Some of the factors that influence a majority of the rates you will find in auto insurance are:

  1. Insurance Score: AKA Credit Score. I will extrapolate further on this later.
  2. Driving Record: If your driving record is 5 pages long take the bus.
  3. Age
  4. Gender
  5. Age, Make, Value, and loss experience of the car you drive

Those are just a couple of the big factors.