This seems to be the age old question. This is also seems to be the questions we as agents get on a daily basis. So hopefully I can clear some things up with that. First and foremost you do not need insurance. Well that is of course unless a bank or mortgage company or landlord requires it. But for the sake of argument lets take those requirements out of the equation. Do you need insurance? The answer is no. Now that answer probably comes as a great surprise considering I sell insurance for a living.
Lets first explore what insurance is. Insurance is simply the transfer of risk. You have risk avoidance, which is simply avoid doing something that will cause a loss. You have risk reduction, which is simply do things to reduce your risk of loss. The other is to transfer risk. That is transfer the risk to an insurance company. Here is an example: You own a car. You can avoid risk by not driving it and leaving it parked in your garage. You can reduce risk by driving safely, following the laws, do regular maintenance on your car, etc. This wont stop you from having a wreck but it will reduce the chances of you getting in a wreck. If you are extremely careful, you may be able to avoid getting in a wreck and therefore you will not have to pay in the event of an accident. My best guess is, most people could not afford to total their car (and possibly someone else) and be able to pay for it. Most decent cars these days that are new (even a couple years old) are going to be $20k or more. Who has an extra $40-50k laying around they would like to use to buy them and someone else a new car? This doesn’t even take into consideration the liability that exists. Now of course there are people who can afford to do this. There are certainly people who have the means to pay for that out of pocket and not blink an eye. Even the liability portion. It may hurt, but they can do it. They are a prime example of you not needing insurance.
This is the part where we discuss why you WANT to have insurance. In the above example if you do not have the means to drop $40-50k on new vehicles then you want insurance to avoid the consequences that will follow. Possibility of bankruptcy (almost worst case scenario), being sued and having a judgement against you to pay it back or them seize assets to cover it, even simply having to take a loan out (if the bank will give you one) to pay for them. This also doesn’t take into consideration that you may have a loan on the first one that you still have to pay off. Simply put you insure what you can not replace. Let’s take life insurance. In simplest terms, life insurance is used to replace someones income in the event they die. For purposes of this example we are not going to get in to all the other things life insurance can do or be used for. If the breadwinner of a household dies, the remaining family still needs their income to maintain their lifestyle. You buy enough life insurance to make sure if they die, the lump sum could be turned into an income stream for the family. Simple. You want insurance so you can transfer the risk of loss of something happening to an insurance company. You pay them a premium in exchange for them taking on the loss in the event something happens. Insurance companies pool everyone’s money and they hope they have enough money when something does happen they can use other peoples money to pay the claim. Some people will have a claim while others wont. Think of the premium (and deductible and copay’s) as the amount of risk you are willing to bear. You are then transferring the rest to the insurance company. So why would you want insurance? Insurance is like a safety net. It allows you to predict what your worse case scenarios could be. You pay a premium in exchange for protecting you against the possibility of what might happen. In the life insurance scenario you use a small portion of your income to pay the premium so you can protect it. In the end it is all about risk management. How much risk are you willing to take vs putting it on someone else? Some will say that insurance is a waste of money. One could argue that if you never use it, you wasted all of that money on it and it never paid out. I do see that point. For me personally it is about peace of mind knowing that I’m protected just in case. But really no one likes paying for insurance until something happens. Then they LOVE it! Auto insurance is expensive, until you run into a Mercedes, life insurance is a waste of money, until someone dies, homeowners insurance is a monthly cost, until the house burns down, etc. I think you get the point.
Bottom line: If you cant afford to replace it on your own then you need to insure it. For those of you who think you cant afford to insure it, then you cant afford not to insure it.
Many people have thought about what would happen if they died too soon. That’s a simple solution, buy life insurance. What most people have not thought of or think it couldn’t happen, or worse think they have it solved when in fact they do not is what would happen if i go too sick or injured to go to work for an extended period of time? This is not about getting the flu or having a minor surgery that you may be out of work for a week. This is about getting in an accident that leaves you in a hospital for 3-6 months and doing rehab 5 days a week for another 6-12 months. What about a musculoskelatal disease or cancer that you may or may not recover from and it permanently disables you? Of course this would probably never happen to you. However i bet it wont take you more than 10 seconds to think of someone who cant work anymore because of something like this.
Here are some stats from Mass Mutual (that they got from various sources) about Disability:
- Just over 1 in 4 of today’s 20 year olds will become disabled before they reach retirement age.
- Only a small fraction- 5%- of disabling accidents and illnesses are work related. The other 95% are not, meaning workers comp does not cover them.
- The average monthly benefit paid by Social Security Disability Insurance (SSDI) for the beginning of 2015 was $1,165.
These stats really prove a couple of things: 1. The young people who are really just getting kicked off in their careers need to be aware. Between you and 3 of your friends, 1 of you will get disabled. 2. Thinking workers comp or social security is going to take care of you is not necessarily the case.
Here is an example of what a disability could do to a family financially: A 35 year old worker with a spouse, kids, mortgage, bills (a normal person right?) and a $50,000 per year salary get a permanent disabled. That household stands to lose (at minimum and not taking into account raises) $1,500,000. Yes that is 1.5 Million with an M. How many households could withstand that type of loss of income. That does not even include cost of care for the individual, additional expenses of them not working and being home all day or being transported to different treatments/therapies, the possibility of needing a caretaker, etc. I’m 99% sure you get the point now about the impact of a disability, so how do you fix it?
There are multiple ways to fix it. You could save enough money in a savings account to provide income if you were disabled. The only problem is most people cant save that type of money or at best they would only be able to set aside up to maybe 6 months of income. Some people sign up for short term and long term disability insurance through their employer. This could help tremendously and I do not want to discount the impact that insurance could provide. However, if you are a highly compensated employee or executive or even the owner, this will be your downfall. Group disability will never cover enough for make up for the loss of income if you are a doctor, attorney, or highly compensated executive that has a specialty a standard disability insurance policy may not even cover you. An individual disability insurance policy can provide specialized coverage for an individual to either provide the income necessary (up to certain limits) or to supplement other benefits in place. Also if you are in a highly specialized field (a doctor for example) would need to have very specific own-occupation definitions in place to cover a disability and get paid.
Click this link to see a quick 4 minute video (produced by Ohio National Financial Services) about disability insurance and common myths as well as what coverage’s look like. For additional questions please do not hesitate to visit www.aubertinsurance.com or call us at 985-892-3101.
In the simplest sense, Commercial Property Insurance Coverage is like that of a homeowners policy. Of course that is an oversimplification, but I will dive deeper. Commercial Property coverage covers a building, contents, and loss of revenue. Much like a homeowners policy covers your house, contents, and expenses to live somewhere else while you are getting your house repaired. Some might argue they do not need commercial property coverage because they lease space and do not own the building. This is not entirely true. Although you may not have to cover repairing or rebuilding the building in the event of a loss, you still have all of your stuff as well as the possibility of losing revenue if you are shut down.
If you own your own building you would insure the building in the event it was destroyed by a covered peril. You would insure it to be able to rebuild it, fix it, get it back to the condition it was in before the loss. If you operate your business in the same building you would also add all of your business contents to the policy to be covered as well. If you own the building as an investment and do not operate anything in it, you will most likely cover the building and LRO (Lessors Risk Only). This means if the building burnt down, you would receive the money to rebuild. However you would not have any coverage for any business contents (unless otherwise stated in the policy). However you would have liability coverage to protect you in the event something happened at your building and you were named in a lawsuit.
If you do not own the building, you would still have commercial property coverage but it would only insure your business contents inside of your office, warehouse, etc. In the event the building burnt down, you have no responsibility to pay for the rebuild of the building, however you would have to replace all of your things.
The third coverage, Business Interruption Insurance, is usually not the most prominent part of the policy, however it can be one of the most important. If the office or warehouse you operate out of suddenly burnt completely to the ground, how would you operate? In many cases you are completely out of business and have no way to make money. This coverage would pay for those losses of revenue (up to a stated amount or actual loss sustained depending on policy). This prevents you from losing money in the event of a loss and being able to not pay your bills.
If you are not sure what you need or would like to see if you can save money, we would love to talk to you. Click here to get a quote, Click here for more information on our website, or call us at 985-892-3101.
Many employers have their employees do things outside of the office and use their own cars to do it. Happens all the time, no big deal right? Hey they are just going to the post office to pick up mail or running to the local office supply place to pick up ink. What most employers fail to realize is that the employer is on the hook for the liability if the employee was to get in to some kind of accident and they are at fault. Your employee may just be running an errand and they get into an accident with another car or possibly hit a pedestrian or whatever the case may be and even though they are using their own car, because it is for business purposes, the business is responsible.
To protect the business from this type of liability, the company would purchase Hired/Non-Owned Auto Liability coverage. This type of coverage is usually included with your General Liability or Commercial Auto policy, but can be purchased as a stand alone policy. The hired auto coverage is to protect you in the event you rent a car or truck for business use. This coverage does NOT cover the physical damage (comprehensive or collision coverage), it only covers the liability portion. The non-owned auto coverage protects you in the event you are liable for something in a car NOT OWNED by the business. As in the example above, your employee is using their personal car to run a business errand. Once again you are not covering the physical damage of the non-owned car, just the liability.
This is an easy coverage to add or get, however it is also an easy one to overlook and it could be devastating to a business if you are sued for this kind of accident and do not have any coverage. You have all seen the TV commercials and billboards with attorneys looking for people who have been in accidents with business vehicles so they can go after the business assets. Not saying attorneys are bad for doing this, but with this being the case, why would you not make 100% sure you are protected from it.
For more information about Hired/Non-Owned Auto liability coverage, please contact us at 985-892-3101 or at www.aubertinsurance.com.
Photo from GeneralLiabilityShop.com
When it comes to business insurance, everyone knows they need general liability insurance and property insurance to protect them, however workers comp seems to always get put on the back burner. The question becomes, why would you put one of the most important insurance coverage’s on the back burner?
Most people have a misconception about what workman’s comp does or what it covers. Workman’s comp covers any and all injuries to an employee during the course of employment. It does not matter who’s fault it is (with the exception of a couple exclusions with the employee) or how it happened. If an employee is injured in an auto accident, THEY ARE NOT COVERED BY THE AUTO INSURANCE CARRIER. Now if the employee was not at fault in the accident, then the work comp company would subrogate (get reimbursement from the other parties insurance carrier to get the money back), but they would still handle the claim. Workman’s comp insurance will handle everything from paying for any doctor’s visits, emergency room visits, surgeries, rehab, lost wages, etc that the employee may need after the injury. This also protects the employer from any lawsuits from the employee that may arise. Work comp is the insurance of last resort. That means that as long as the employer has the coverage they are completely protected in the event an employee gets hurt.
The one main thing that employers need to remember is, you can help control general liability claims by being more careful around your business, you can help control property claims by being more careful around the building and making sure everything works properly to help avoid a fire or other disaster. The one thing you can not control is what employees do. Not to say they would do anything on purpose (although it does happen) but you may tell them not to do something and they do it anyway while trying to get something done and something happens. They may try to pick something up that is too heavy and hurt their back, they may be driving somewhere and get in an accident. There is nothing that the employer can do to protect themselves from an accident like this occurring.
In the end, work comp is one of the the most important coverage’s a business can have. Especially with the way the laws are written in the State of Louisiana, you want to make sure that you leave nothing to chance when it comes to protecting your business from a claim. I do know that paying for insurance is no fun and no one enjoys doing it, however would it be more fun to close your business and lose your life savings because of a claim that could have easily been protected?
For more information regarding workman’s comp insurance or to request a quote, please visit our website or call us at 985-892-3101.
Aubert Insurance Agency…..Protecting your business since 1910.
Life Insurance seems to be one of those insurance policies that gets put on the back burner because it is not required by law to have and no one makes you get it. However if you haven’t noticed by now, none of us are getting out of this life alive. Everyone will die at some point, that is a guarantee. However most people will argue that once you reach retirement or your kids are grown and out of the house, you no longer have a need for life insurance. That is certainly a valid argument, but we will cover why you need life insurance in retirement another day.
To simply put it, you need life insurance if you love someone or you owe someone money. Life insurance can be used to do many different things upon the death of someone. Most importantly you need it for income replacement of that individual. If the breadwinner is bringing in a certain income and the family depends on that income, then you need life insurance. We will discuss later how much that person needs. Other reasons for buying life insurance are: funeral costs, medical bills, debt, paying for a child’s education, leaving money to a charity or to family, keeping the family in the same house they currently live in, drive the same cars, and simply to maintain the same lifestyle the family currently enjoys.
Life insurance is literally the greatest gift someone can give their family. The financial security that it provides for a family is immeasurable. At Aubert Insurance Agency, we take this very seriously. Our goal is to make sure that what you want to happen, does happen. We take you through a process to determine how much coverage you want and then determine the best way to design the plan specifically for you and your family. This is not a 1 size fits all kind of deal. Calling a 1-800 number or going online to buy it and never sitting down with a professionally trained agent can literally cost you the lifestyle you currently enjoy. The best part? Buying from a local agent cost the same as buying it online or through a toll free number, yet you get to deal with a person who is here and trained to help you. Where we separate ourselves from the other agencies and online companies is we will be there when it matters most. If God forbid there is a tragedy, we will be right there to help you through the process of making the claim and getting everything done that needs to be done. We will be right by your side to help you through it. You wont get that from a 1-800 number.
If you have questions about life insurance or any other type of insurance, please visit our website or call us at 985-892-3101 x8. We are here to help you.
Protect your family today with life insurance.
Thank you so much for visiting the Official Aubert Insurance Blog Page. Here we will be writing about many of the different topics in the insurance world. We want to bring valuable information to everyone to help everyone better understand insurance and why you need it. Topics will cover multiple types of insurance and what they cover as well as other topics including loss control, risk management, coverage’s, new trends, and much more. We will be writing about homeowners insurance, auto insurance, flood insurance, life insurance, disability insurance, business insurance, and more. We are also looking forward to showing videos of many of the same topics which will sometimes feature company representatives talking about specific talking points that are of great interest.
We are very excited about this and hope you enjoy it very much. Make sure to follow us on Twitter and Like us on Facebook. You can also watch our ides on our YouTube Channel. Also please let us know if there are any specific topics or questions you have that we can answer.
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