Insurance

For this podcast I sat down with Rey Rivera, Sales Manager with Allstate Insurance.  During our conversation we discussed homeowners, condominium, and rental insurance, as well as umbrella policies and rider policies.  If you want to learn more about insurance and how it can protect and benefit you this podcast is for you.  I hope you enjoy the podcast and find it informative.  Please also share with those who may find it useful.

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Feel free to ask any questions via the comments section below or to email either Rey or myself.  Also if you have any ideas for future podcast topics you would like to see let me know!

You can connect with Rey on Facebook and LinkedIn.

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Transcript of the Podcast

Paul Sian:             Hello! This is Paul Sian with HER Realtors, realtor licensed in Kentucky and Ohio. Sitting here with me today is Rey Rivera, insurance agent with Allstate Insurance. He’s my guest on today’s podcast. Hello, Rey, how are you doing today?

Rey Rivera:          I’m doing just fine, Paul, just fine.

Paul Sian:             It’s nice to have you here. So everything is going well for you today. And why don’t we start into our question and answer session and let’s get things rolling.

Rey Rivera:          Sounds good.

Paul Sian:             First question I have here for you, Rey, is would you tell us how insurance premiums are determined for individuals?

Rey Rivera:          Well first for the homeowner side, location is very key. There are pretty much how far the fire department is from your house. And the second part is whether your house is stick built house or modular house, and all the components like the wind to that particular house or it’s brick versus vinyl, solid brick, square footage. All those things determine what the homeowner premium is. And one of the big things though is the deductible.

Paul Sian:             Okay.

Rey Rivera:          As a prime thing. That’s probably the most expensive thing on your policy when you look at it with any company is that the deductible’s the most important. A lot of companies now, the big boys, Allstates, State Farm, Nationwide, Geico, they only offer a thousand dollar deductibles now.

Paul Sian:             So that’s one deductible, no other options?

Rey Rivera:          Right. Now you can go higher obviously but most homeowner, a thousand dollars is still a lot of money but most homeowners stick to that area.

Paul Sian:             I guess part of the theory behind the deductible is that you’re putting some of your own money into the taking the money out of your own pocket for that deal.

Rey Rivera:          Right. Insurance is pretty much made to interest coming to take on 90% of the actual risk, and that’s the beauty of homeowner’s insurance is that if you have a loss whether it’s a fire or wind, hail, lightning, your ground will only be responsible for a thousand dollars of that which is good because obviously if you need a new roof, everyone knows those are anywhere from 8 grand on up. So you’re only paying a thousand dollars to get brand new roof or for these siding or for your house to be repaired. That’s a pretty good deal.

Paul Sian:             Okay, that’s good information to know. I know insurance also has premium discounts I’ve heard. There are certain things that you have in your house. Tell me about premium discount and what sort of items give you premium discounts.

Rey Rivera:          Absolutely. One of the main ones is multiple policy. A lot of companies really like you to bring their cars over that is huge. And that’s the biggest one. Also you get a discount if you have sprinkler system in your house, if you have a monitored alarm system in your house. Also, you get discounts too with seeing how many claims that you have or none. Allstate gives big discounts if you have no claims, no claims and you bring your policy over, your auto policy over, it’s going to be cheap.

Paul Sian:             Okay. That’s interesting to note. So then I think we said fire systems, alarm systems. Is there any type construction effect to the type of premium you have?

Rey Rivera:          Yes. A stick built house is going to have a better premium than a modular or mobile home. Mobile home premiums are usually very high obviously because they can easily be moved. Wind can take those so the type of house is important. Now, there are some homes that are prebuilt in factories that are like two-storey houses. Those are like considered stick built houses, so generally, the mobile home or the modular home.

Paul Sian:             Okay. And then I know with the flood insurance usually that depending on the area, sometimes the government will step in and offer flood insurance. Can you tell us a little bit about flood insurance, how that works, and where that works?

Rey Rivera:          Absolutely. Flood insurance is only offered by the United States government. Companies like Allstate, State Farm, we can provide or just a broker for it.

Paul Sian:             Okay.

Rey Rivera:          All the prices are determined through the FEMA website which agents have access to.

Paul Sian:             Okay.

Rey Rivera:          Anyone can get flood insurance even if you’re not anywhere near water. It’s available to everybody. Obviously if you’re in the middle of a corn field and unless there’s a huge flood, if you’re in the middle of a corn field, you’re pretty much probably $100 a year if that. Now once you start getting into flood zones, the government rates it by A, B, or C. And when you’re obviously next to the Oahu River, depending on how close you are, you’re going to be A or B. And banks require you to have flood insurance. And now let’s say your house is paid off, let’s say you don’t have insurance, the government will make you have insurance for that particular house because they want you to be protected even though you want to be or not.

Paul Sian:             Yep. That’s one thing the government likes to do.

Rey Rivera:          Yes.

Paul Sian:             Well let’s talk about credit scores. That’s one of the bigger things we hear recently. Do credit scores impact your insurance premiums? Can you explain a little bit about that how they impact?

Rey Rivera:          I can. They do impact your premium however the way I can personally speak for Allstate, I’m pretty sure every other company does this too. We don’t see your credit score.

Paul Sian:             Okay.

Rey Rivera:          What we see is called an insurance score. And insurance score is comprised of your credit, how long you’ve had insurance, how many losses you’ve had. All those things get put into an insurance score. So a lot of people wondering of buying a house say well how much are you checking credit because I’m trying to buy a house and I’m supposed to be doing anything about credit. Well, it’s a soft hit so it will not even show up on your credit report at Allstate. Not in here because we’re not pulling your insurance score. Well not your credit score. We have no idea what your FICO credit score is, but we get insurance score. That number determines where your rates are.

Paul Sian:             Okay.

Rey Rivera:          But obviously if you have substantial credit and you’ve had insurance for years and years and years, your price is going to be better than someone who has not so good credit and had insurance that last a couple times because obviously those people are higher risk just naturally.

Paul Sian:             Okay. And you mentioned like an insurance score. Well how long of a history is that take into account?

Rey Rivera:          That only goes back five years.

Paul Sian:             Five years, okay.

Rey Rivera:          So five years on any type of claim. It doesn’t get speeding tickets or anything like that or just whatever claim, whatever loss it would have to be.

Paul Sian:             Okay. And then let’s say somebody’s a new home buyer, they’re getting ready to purchase a home and then need to figure out insurance. What sort of minimums do they need to look for?

Rey Rivera:          Minimum’s obviously their loan amount, make sure that’s covered, and then the bank also helps you determine what you need but enough to cover the whole loan, enough liability depending on how much land you own. Some people have a quarter acre.   Their liability could be a little lower if they want. I’ll suggest that when you got acres upon acres of land where a lot more chance of stuff could happen, your liability limits need to be raised. And of course, personal property is derived from your home value. So that’s what it is 10% all the way up to 75%. Those in fact don’t affect the insurance price that much. Those are really the minimums, making sure you have your loan covered. Now if you go over that, that is absolutely fine too because you’re entitled to all that money if you have a total loss.

Paul Sian:             Okay. I know most policies provide like a standard coverage. They don’t cover anything exotic or if you’ve got a $200,000 home and you go buy a $500,000 Lamborghini, it’s a different type of policy there and they’re called rider; riders usually, right?

Rey Rivera:          Right. There’s different things you can insure. Most policies include everything but only limits. If you have gun, $5000 limit.

Paul Sian:             Okay.

Rey Rivera:          Jewelry, $5000 limit. If you schedule those things if you have a lot of jewelry and there’s a value to them, they appraised, it’s $50,000, you can schedule that on your policy and set your deductible for that particular item which could be $0 up to $5,000. And then that particular item is covered no matter where you go in the United States. So let’s say you have an engagement ring that’s worth $20,000, you lose it in California whether it’s stolen or diamond falls out or you just lose it in the hotel room, you can claim that. And most people put a $0 deductible so you can claim that and get your appraised value.

Paul Sian:             So now that’s for if that item was on a specific rider like you said on the schedule so that would be covered. Now what if I had something stolen—and this actually happened to me—some jewelry was stolen from my wife while we’re on travel. And I believe the insurance company was saying they would only pay 10% of the value at that time.

Rey Rivera:          Right because there, a specific policy also gives you a dollar amount of $1500. They actually gave you 10% of what your home value would be which is not that much. But policies normally have standards like that and a good insurance agent will run down all the things “Do you have guns? Do you have jewelry, fishing equipments on there, golfing equipments on there?” Special things like that are not covered. I mean they’re covered just at a very low amount like some people have 18 sets of golf clubs. Only 800 bucks of golf clubs will ever be covered.

Paul Sian:             Okay.

Rey Rivera:          So a good agent will let you know what these [inaudible 10:53] are. On your policy jacket, it tells you what you did not purchase. For Allstate especially, they tell you “This is not purchased. This is not purchased. This is not purchased.”

Paul Sian:             Okay.

Rey Rivera:          So a good agent will ask you the key questions. Guns and jewelry are like the number one two things that are scheduled.

Paul Sian:             Okay, so these are mainly losses that happen in the house like in this case, my wife’s jewelry was stolen somewhere else, we’re in a foreign country at that time. Is the coverage just depending on whether it’s a ride or traditional coverage than you get full coverage?

Rey Rivera:          Right. If you were in a different country, there’s also a rider for that.

Paul Sian:             Okay.

Rey Rivera:          And that would be a premium on top of the actual premium for the jewelry itself because at least with Allstate, when you put a rider for jewelry for example, it’s covered Canada, United States; pretty much North America.

Paul Sian:             Okay.

Rey Rivera:          Now when you go out to South America or anywhere in Europe, there’s another rider for that and it’s not very expensive but it covers you when you will leave the country.

Paul Sian:             Okay. It’s advisable even if it’s just a temporary trip if you know you’re taking something valuable to talk to your insurance agent.

Rey Rivera:          Just put it on there, yup.

Paul Sian:             Okay. That’s good to know. So talk about the reimbursement amounts. I know there are different ones in my own experience in the realty, we used to do full reimbursement versus a depreciated depending on the type of claim it was. So what can you tell me about the reimbursements?

Rey Rivera:          Allstate in particular, all our policies are accorded standard with replacement cost. Replacement cost being getting your item placed for what it would cost today, no depreciated value. There’s no depreciation.

Paul Sian:             Okay.

Rey Rivera:          So if you have a TV, 50-inch TV costs $2,000 ten years ago. That TV, if it’s lost, you’re getting another 50-inch TV whatever price it is, $3,000, you’re getting it for $3,000.

Paul Sian:             Okay.

Rey Rivera:          So that’s replacement cost. Actual cash value, ACV, is exactly what it says. It’s actual cash and that does put in deprecation. So most banks, if you’re financing, the banks kind of protect the consumer by they look over the policy and say, “Okay, this can’t be actual cash. It has to be replacement cost” so that they kind of protect you for that. But if your house is paid off and you’re getting insurance on your own, that’s a very important thing to ask because that’s definitely a premium change obviously. Actual cash is way less expensive than reimbursement or replacement cost but you’re going to want replacement cost. And there’s also different terminology for replacement cost. I know that some people who are not lawyers but there’s a statement in there that says like kind and quality. So for example, if you have a solid pine door in your house, your house is on fire, it burns up, Allstate will replace a solid pine door. There you go.

Paul Sian:             Okay.

Rey Rivera:          It’s all said and done. Although some companies will do like kind and quality so it will not be a solid core door, it will be a pine outside pine slab but not solid.

Paul Sian:             Hollow core inside.

Rey Rivera:          You’re absolutely right. And that’s like kind and quality. And you can’t say court in for that because you signed the policy saying I understand it’s like kind and quality. That’s how some insurance companies “get away” with not putting you back where you were.

Paul Sian:             Okay. So it pays to ask questions and read all the language.

Rey Rivera:          Yes.   And it’s very boring and honestly if you have an agent and they’re good, you can come up with any question and they do share responsibility answering honestly like if they say “If my house burned down, I have solid core pine doors, am I going to get solid core pine doors replaced?” It’s the insurance agent’s job to say yes or no, or say it’s like kind or quality. At that point, you as consumer says, “What’s like kind and quality?” Then it could be explained.

Paul Sian:             Okay.

Rey Rivera:          Allstate sticklers all that they actually underwrite our policies very meticulous on replacement cost because they want to know what’s in a house, granite countertops, is it a custom kitchen?” All those things they want to know because they’re putting that in their replacement cost so that God forbid your house burns down, they know “Okay, this is a custom kitchen so now they’re going to allow you to have whatever custom kitchens cost right now.

Paul Sian:             Okay.

Rey Rivera:          You’ll get your granite back, your name brand…

Paul Sian:             Refrigerator.

Rey Rivera:          Refrigerator.

Paul Sian:             Appliances.

Rey Rivera:          Yes, cabinets, tile, all that stuff will be replaced.

Paul Sian:             Okay. That’s good. So in the case, let’s say like God forbid somebody’s house does burn down, I mean what’s the best way for that person to document what they had?

Rey Rivera:          What I tell a lot of my customers is every once in a while, take video of your house. You don’t have to have any noise on. You can turn off the mute and just kind of scroll through your house. We have a technology now that will take a second, and put it on a fire-proof box like if it’s a jump drive, a disc, or something. Just put it somewhere where you have it. That’s the best way because when you have video or photo evidence of what you had, there’s no debating on what needs to be replaced or what brand something was. 9 times out of 10 Allstate is very easygoing when you have 20 pairs of pants because when you have loss, you got to pants, socks, silverware, plates. They’re pretty easygoing as far as making sure the customers take care especially when you’re in a loss that catastrophic where you don’t have a house. And that’s also where you coverage for loss of use comes to play. There is certain coverage in all policies that is like loss of use, so when your house does burn down, this coverage will put you at a hotel, pay for your food, clothing so that it’s not coming out of your pocket.

Paul Sian:             Okay. And most policy, I guess you generalize I mean from Allstate’s perspective but a lot of the policies are like that. They cover…

Rey Rivera:          Yes. Usually, that’s included on every single one.

Paul Sian:             Okay. Well we talk about rental insurance now. Can you tell me about rental insurance, what does it cover? Does it cover the building, the outside of the building, inside of the building?

Rey Rivera:          Rental insurance covers your stuff, your personal property, and liability. What a lot of people don’t know is when someone walks into your apartment and they somehow break their leg or ankle wrestling around or anything, they can sue you. It’s not the property owner’s fault that it happened in your apartment.

Paul Sian:             Okay.

Rey Rivera:          So your liability would cover that. But obviously, let’s say the upstairs neighbor has a leak and their bathtub leaked through the walls and ruined your computer or even made the wall cave in and just really bad stuff, you will get your items replaced at replacement cost.

Paul Sian:             Okay.

Rey Rivera:          So if your computer got ruined, obviously minus whatever your deductible is, deductibles for renter’s policies are $500. Still, I will suggest that if you have one that happens. But as far as the structure, the property owner’s policy would cover all that. Now when we get into condos and things like that, condo associations have certain declaration on what they cover. And 9 times out of 10, they cover the exterior where you’re responsible for the stuffs in.

Paul Sian:             Okay.

Rey Rivera:          So on your policy, you have to make sure that there is [inaudible 18:48] and to replacement carpet, your sheeting on the floor, cabinets, [inaudible 18:55], whatever that you have. Of course, that affects the premium too.

Paul Sian:             Okay.

Rey Rivera:          But condos, you have to really get the declarations of the condo association’s policy that they bought.

Paul Sian:             Okay.

Rey Rivera:          So that you know exactly what you’re liable.

Paul Sian:             Okay. And you talked about liability, we can go back to the homeowner’s insurance. I mean is there personal liability coverage in there? Somebody comes and trips and falls on my sidewalk or something happens in the house to them?

Rey Rivera:          Absolutely. It’s usually set. Allstate as a standard, I personally put $300,000 on that like someone slips on your steps, decides to sue for their medical bills, your homeowners are liable for anything that happens on their property whether it’s their fault or not. So if kids are playing in the yard, and they’re climbing a tree and they fall out of the tree, and they’re really hurt, you’re responsible. And a lot of people don’t realize because it’s obviously it’s someone else’s kid pay the bills or whatever but if that parent decides to take it to court or send you their medical bills, you’re entitled to pay. And that’s where you can file the claim.

Paul Sian:             Okay.

Rey Rivera:          Obviously paying a couple stitches, $200 bill, no, but if the kid gets really hurt, and God forbid dies, you’re going to be glad you had that type of coverage at that point.

Paul Sian:             Okay. And that even brings back a little question too. We talked about the prices you pay for insurance. I mean something like say having a trampoline in your yard or pool in your yard, I’m sure that’s factored in the insurance cost.

Rey Rivera:          We take pictures of trampolines and always ask that there’s safety precautions taken. There’s a fence around the yard or there’s a fence that they put around it. We actually send inspectors before we can clear a policy to be insured. We have an inspector that goes out. It’s actually free. It doesn’t cost anything.

Paul Sian:             Okay.

Rey Rivera:          That they look for liabilities on a house: broken windows, missing shingles, trampolines, pools that don’t have gates around them, things like that, and then that comes back to us and we call the customers and say “Hey, you have a pool but there’s no lock or gate. Do something to lock that gate or put on a lock or when you put a gate up.” So those are kinds of things that before you sign the policy, everything’s good, you’re going to know what liabilities there are if there is any.

Paul Sian:             Okay. That’s good to know. I’m sure a lot of people with pools and trampolines would like to know that. Now one topic too, some people might be familiar with is umbrella insurance policies that’s kind of like people understand the concept of an umbrella. It protects you from the rain, from getting wet. But tell me what’s an umbrella insurance policy from your perspective.

Rey Rivera:          Umbrella insurance is extremely important. I say that because it covers your house and home and any other properties you may own. If you’re a landlord, whatever houses you have. It’s very important because when you’re driving on the road, you’re carrying all of your assets in the trunk of your car. If ran in somebody and there’s four people in that car and they all got to go to the hospital, you are paying the bill.   And your insurance is only going to pay what they’re liable for. And at that point, you’re on the hook and your 401K could be tapped into, your equity on your house, cars, your wages, all those things can have it if you don’t have enough insurance. And when you own a lot of things, you have a healthy 401K, you and your wife have a healthy 401K, your house could be paid off, you have a lot of cars. And you can’t really predict what can happen but if you cause a wreck cars hurts people, all those things are in the air if you don’t have enough liability. What an umbrella does is, in Allstate’s case, we can add another $1.5 million on top of the half million dollars you have covers in your car so that in a loss of, there’s a chain reaction, you’re responsible for a six-car pile-up, which we don’t hope to do but those things could happen, your cover once your liability runs out on your car, your personal umbrella takes over.

Paul Sian:             Okay. So an umbrella’s like a completely separate one. It’s not attached to like your home policy or your car policy.

Rey Rivera:          Absolutely. It’s completely separate policy, different policy number and everything but it covers as soon as your homeowner’s liability limits have been exceeded, it’ll kick in.

Paul Sian:             Okay.

Rey Rivera:          Same with the car. It’ll work if you have landlord policies. Once those liability limits are extinguished, you got an umbrella policy, it kicks in. And a lot of people also think that you’d only go and have an umbrella policy if you don’t have it. You can rent an apartment and have an umbrella.

Paul Sian:             Okay. What if you say leave the house or apartment alone. What if you’re an investor, you buy rental properties, you fix them up, and does umbrella cover that or there’s different insurance for that type of work?

Rey Rivera:          There’s different insurance when a house is going under renovation. You have to specify what’s actually going on. But it would cover that like if that landlord house is sitting empty waiting for a renter, and someone gets hurt in that property, that will cover that.

Paul Sian:             Umbrella will cover that?

Rey Rivera:          First your landlord policy will cover it. If those get extinguished, your personal umbrella will kick in. It just helps with the liability and if you see all the lawyers on TV, they say, “Hey, call me when you get in a car accident.” That’s exactly what they are going for.

Paul Sian:             Okay.

Rey Rivera:          They know what to write the insurance company and the insurance company pays right up to the policy limits.

Paul Sian:             Okay. That’s great information. Did you have any other final thoughts before we sign off?

Rey Rivera:          Actually, just when you look at insurance, no one likes to pay insurance. Two days, “Oh man, it’s something I’m never going to use. I’ll flush the money in the toilet.” The best thing to think of when you’re buying insurance is you’re also paying for your comfortability, you’re paying that…

Paul Sian:             Peace of mind.

Rey Rivera:          Right. Peace of mind. If anything, your family’s protected. No one’s going to be able to go after your 401K or whatever savings that you guys have because no matter what happens, even though you don’t want to happen, if you’re liable for something even the biggest lawyers, you’ll be just fine. You can sleep at night and everything is good. So liability is a huge think that no one thinks about when you’re looking at premiums and things but that’s what insurance is. It makes you comfortable to drive out there because that’s what insurance is for.

Paul Sian:             Okay. That’s going to give me pause and make me go and find insurance policy again after we’re done here.

Rey Rivera:          That’s what I encourage everyone to do. Once a year, sometimes they call, sometimes they don’t but just look it over and just make sure because your life changes too throughout the years. And if your house is worth more than the coverage, you’ll want to have it written down when you’ve done a lot of renovations and then it’s not covered because it’s not so.

Paul Sian:             Yes, insurance wasn’t there.

Rey Rivera:          So always update and of course, we do at the [inaudible 25:51] agency for Allstate, we do free consultations even if you’re not an Allstate customer. We can look at everything and say, “Hey, this is what your policy says.” You have no problem doing that. We have two occasions: one in Amelia, Ohio and one in Milford, Ohio.

Paul Sian:             Okay. And how can anybody get in touch with you if they want to give you a holler?

Rey Rivera:          They can get in touch with me with email. It’s ReyRivera@Allstate.com. That’s R-E-Y-R-I-V as in Victor-E-R-A @Allstate.com and also my office phone number’s 5137184774. We can look over policies and we’re also doing a promotion now that if we cannot beat your homeowner’s rate, we will give you a $10 gift card if we cannot beat your rate. Rates are extremely aggressive.

Paul Sian:             Are you licensed nationwide? Are you local Cincinnati areas, Kentucky area?

Rey Rivera:          Yes, at Allstate, we can insure Kentucky and Ohio and any [inaudible 26:53].

Paul Sian:             Okay. But if somebody does give you a call, then you could still set them up with some Allstate nationwide. You can set them up with someone in there.

Rey Rivera:          Absolutely. If they’re in Indiana, I don’t have my license there but I can definitely get them hooked up there. Someone in Florida wants a good home policy, they have a bunch of losses down there. We can definitely get them with a good agent. So we are everywhere.

Paul Sian:             Alright. Well thanks, Rey, for being on my second podcast here and it was good speaking with you.

Rey Rivera:          Excellent, Paul. Thanks!

About the author: The above Podcast about “Insurance” was provided by Paul Sian. Paul can be reached at paul.sian@herrealtors.com or by phone at 513-560-8002. With over 10+ years experience, if you’re thinking of selling or buying, I would love to share my marketing knowledge and expertise.

I service the following Greater Cincinnati, OH and Northern KY areas: Alexandria, Amberly, Amelia, Anderson Township, Cincinnati, Batavia, Blue Ash, Covington, Edgewood, Florence, Fort Mitchell, Fort Thomas, Hebron, Hyde Park, Indian Hill, Kenwood, Madeira, Mariemont, Milford, Montgomery, Mt. Washington, Newport, Newtown, Norwood, Taylor Mill, Terrace Park, Union Township, and Villa Hills.