My very first clients have long ago retired to Naples, Florida. They are kind and adventurous and after 24 years together I consider them the dearest of friends.
During Hurricane Irma the lanai pulled off their home in the wind, tearing off the rear wall of the home and exposing the house to rain water and flooding for three days. The house and everything in it was a total loss. A true tragedy.
They have a trusted insurance agent in Florida, and their coverage levels were fairly up to date. But the cost of tearing the remnants of the current structure off the lot and rebuilding a new home up to current code was considerable.
Their homeowners policy paid out up to its coverage limit, but despite the full disbursement they were left with a considerable shortage in the cost of the project. Fortunately for them, the federal government, through the Small Business Administration, is making emergency assistance available in the hurricane zone in the form of very attractive loans, and so I think they will be OK. But the whole experience got me thinking about the importance of keeping insurance coverages up to date and in line with current pricing trends.
We often give advice to our retiring clients, that while they are paying attention to finances while getting their retirement started, they should meet with their insurance agent and bring their coverages up to date, and potentially save some money in the process. So with the Naples experience fresh in my mind, I decided to take my own advice and sit down with my property and casualty insurance agent for a review.
My goodness, what a mess I was. I had been taking my insurance for granted for a long time. As we had remodeled the house over the years, it never occurred to me to call my agent to discuss the upgrades, and as the cost of building a home like ours has gone up considerably since we built the home in 2001, there was no way we could replace what we have now in the event of a catastrophic fire or tornado with the coverage limits on our policy.
Furthermore, homeowner insurance policies themselves have evolved considerably over the past 20 years. Using new pricing practices and very specific underwriting techniques, insurance carriers are able to tailor coverage much more specifically to a homeowner's needs, potentially reducing costs to the homeowner as well.
Now, I have to admit, I have messed with my auto insurance over the years. As teenagers came and left our pool of drivers I have jumped carriers online to save money here and there. In retrospect, that may have been a mistake as well. An in-person agent was able to bundle and optimize our coverage.
The net result is that I was able to raise the coverage limits on the home, reduce deductibles on the autos, update the umbrella policy and save almost $3,000 a year. I left the office on cloud nine.
So please, take the advice I finally took myself. Property and auto insurance need to be reviewed and updated on a consistent, timely basis. Next time your agent calls for a review, call back.
Or better yet, make it your summertime resolution to call them.