Why are my auto insurance rates going up?

One of the questions we get all the time is some variation of “My cars are getting older; I have not had any accidents, why are my premiums increasing?”  Well I am going to do my best to explain to you now, what is happening with auto rates and what the future may hold as far as your auto insurance and the industry as a whole.  While I hate to be the bearer of bad news, you can expect auto rates across the industry to go up noticeably unless one brand or another chooses to buy market share.  This is a practice fairly common in the industry when a company takes a loss to gain market share. GEICO and Progressive are known for that.  Not a big practice here at Farmers which is a very conservative company.

Which brings us to the aforementioned question, WHY?  If you are like most people your gut answer to this question is “because they can”.  It’s certainly an easy explanation and as a people don’t we always want the easy explanation? Like in most situations the problem goes deeper and is a touch more complicated than the answer above may suggest.  Several factors are challenging our industry at the moment.

Have you been enjoying the lower gas prices? Of course you have, as have the rest of us.  As a result we are driving more than we have in years.  While that’s great and reminds me of the old cruising days (and a whole lot of fun memories) more driving leads to more accidents. More accidents leads to more claims. More claims leads to higher prices. Higher prices leads anger and anger leads to the dark side of the force. Insurance is a pool of risk shared by all and even though you may get out of the pool when needed; plenty of others pee in it. These recent ice storms have not helped matters either.

Unfortunately it doesn’t stop there. I wish it did. The severity of those more frequent accidents have increased dramatically.  The increase in severity is driven by increased costs to cover injured parties as new technologies have become more expensive. Much like a K-Tel commercial from the 70’s “but wait there’s more”.  Traffic fatalities have been steadily increasing since 2012. Illinois experienced over a 50% increase in litigated claims in 2015 when compared with 2014.

There are two final things that are also contributing to this increase. The first is the increase in new car sales which sold in record numbers in 2015. The last is the cost of repairs, along with claims and litigation increases we have to factor in the cost of repairs.  Enjoy those back up cameras and sensors? Have a radar cruise control or accident avoidance built into the car? How about wifi and blue tooth?  While we all enjoy the technology they make the cost of repairs go up significantly.

"So, what can I do?" I can hear the question emanating via the blogsphere as you are reading this.  I will preface my answer with what not to do.  DO NOT SHOOT the messenger. Please guys your agent doesn't control any of the pricing nor does he / she have any influence on rates short of reporting what the competitors rates are.  Do not leave your agent for a few dollar savings. You are putting his / her kids through school and feeding their family and they are working hard for you.  As long as that is the case please  have a heart.  Do shop every 3 - 5 years just to keep your toes in.( As an agent I hate saying that...)   If there are multiple hundreds of dollars in savings your agent will understand.  Just take their call at renewal time.

While all states have different laws (we are based in Lombard Illinois), we will do what we can to answer your insurance questions, or direct you to the appropriate answers for your State of residence. Write us at bfidlow@farmersagent.com  or Tweet us using the hash tag #ProtectionPros. You can also follow us on Facebook. If all else fails we even have an old fashion land line. Which is 630-297-1407 We look forward to talking with you soon.

Building our agency one friend at a time,

Barry Fidlow

How can I avoid zero dollar claims?

As an agent, one of the things that I hate the most is zero dollar claims. Zero dollar claims cause your insurance to go up, including quotes when you are shopping. They make it harder to find new insurance, and in the most egregious cases make you almost uninsurable. So, how do we avoid having zero dollar claims on our record? The simplest way is to have an agent who cares for you and will look out for your interest. (Something an 800 number will never do.) We always tell our clients to call us first. We have an answering service that will call us on every number we own, every five minutes until we acknowledge it. This means that, even at two in the morning, we are available to you. Though we appreciate you not calling that early, unless it's an emergency. Does your agent provide this level of service?

Most zero dollar claims come from someone jumping the gun and calling the claims department before they’re sure there really will be a claim. A perfect example of this is a client who had a tree branch fall through his roof. Like most people, the client believed that this was a claim and, to be perfectly frank, I probably would've thought so too. But as we ask all of our clients to do, this client called us before he called claims. He was really glad he did. You see, the total roof repair was only $600. The client had a $1500 deductible. Thus, by calling his agent, instead of claims, he avoided a zero dollar claim on his record.

Another way to get a zero dollar claim on your record is to call claims to ask a question about a potential claim situation. This is the one that boils my blood the most. It works like this for every single insurance company. You get into a fender bender type situation. You're not sure what to do, so you call the claims department figuring they'll have the answer. The claims department tells you it was the other person's fault;  go ahead and put in a claim on that person's insurance. Believe it or not, this will equal a zero dollar claim on your record. Almost anytime you call claims they will open a claim with that question. A zero dollar claim that, as mentioned above, can raise your rates at renewal time, can make any quotes you get a higher price, and even make you uninsurable with some companies.

It is essential that if you have a claim, or think you have a claim, that you call your agent first. Very few of us (agents, that is) have this type of arrangement with their answering service. Even less would receive a call or be there for you in the wee hours of the morning. Providing this level of customer service is one of the few things in this business that are under our control. But at BnB insurance we think that this is one of the places where an agent can add value. As agents we have absolutely no control over what our companies do for pricing. The only thing that we can control is the service we give you. Our level of knowledge and advice during insurance reviews and quotes, and the peace of mind of knowing your agent is in your corner.

While all states have different laws (we are based in Lombard Illinois), we will do what we can to answer your insurance questions or direct you to the appropriate answers for your State of residence. Write us at bfidlow@farmersagent.com or Tweet us using the hash tag #ProtectionPros. You can also follow us on Facebook. If all else fails, we even have an old fashion land line, which is 630-297-1407 We look forward to talking with you soon.

Building our agency one friend at a time,

Barry Fidlow

Have you covered your gap? A bit of protection prose

As #Farmers latest ad campaign points out, most people have no clue what they are and are not actually covered for.  As professionals, it is our job to correct this.  Today, insurance is viewed much like a commodity.  It's easy to fall into the “price” trap.  But, as good agents, we are the #ProtectionPros.  It's our job to examine and educate to ensure our clients understand their current coverage and what we are offering them.  

One of the things that differentiate agents from an 800 number is how much we care and the insurance advice we can give those people and their families that protect them when the worst happens.  Daily we hear "I am fully covered".  But the few who allow us the privilege and trust of reviewing their insurance inevitably learn something—a benefit that is rarely spoken about.

I need to preface this next bit with a disclaimer. In any profession there are good and bad practitioners.  Too often as caring agents, we see consumers with gaps in their coverage or even a lot more coverage then they really need.  Sometimes these mistakes are glaring holes in coverage; other times they are more subtle. This time it was a HUGE gap.

Two weeks ago, a woman came to us very distraught. She said she had just remodeled her condo and had been trying to get in touch with her agent. For two weeks? (I’ll refrain from a rant here and leave that for another day).  He had failed to return her calls, and she was worried that if something happened she would not be covered. Oy! We asked her to fax over her coverage and assured her she could block out the price.  

The first thing we noticed was that her "Condo" was a million dollar little thing just off Michigan avenue. For anyone who isn’t familiar with the business, when you are in a condo all the things attached to the walls or floors: light fixtures, cabinets, counter-tops, upgrades need to be covered by "building property."  Guess how much building property she had for her million dollar condo? If you guessed $100, that’s $100 more than she had.  When her condo insurance was set up, neither the agent nor the mortgage company caught this. What that means in non-insurance jargon is if she had a fire, not one dime of coverage was present to replace anything aside from her personal possessions. When we finished, she had just over $300K in building property coverage.  Admittedly, this is a more egregious gap then most we find, but we find them every day—day in and day out.  

I implore you to call your agent, and schedule a review. Understand your coverage's and let an insurance professional help you with his/her expertise.

While all states have different laws (we are based in Lombard Illinois), we will do what we can to answer your insurance questions, or direct you to the appropriate answers for your State of residence. Write us at bfidlow@farmersagent.com  or Tweet us using the hash tag #ProtectionPros. You can also follow us on Facebook We look forward to talking with you soon. 

Building our agency one friend at a time,

Barry Fidlow

Does my auto insurance cover me in my rental car?

We are here today to ask one simple question. Does my auto insurance cover me in my rental car? This is a question we get asked most often as agents. Well this and "why do my rates keep going up?" Unfortunately, simple questions often give birth to complicated answers and the answer to the rental question is "It depends".  You (of course) do not want to take coverage that you do not need. Oh, and that smiling manager/employee who is gladly helping you gets bonuses (in some cases) for selling you that additional coverage.  But I digress.

The first thing to do is to check your own auto policy or call your agent. Does your insurance provide coverage for collision? What's your collision deductable?  Auto insurance is designed to be a flexible product that can move as you do. If you do have collision coverage then the coverage follows you to the rental car. If you lend your car to someone who is not insured then your coverage follows your car.  Also are you putting your payment on your credit card? Because then you might want to check with the credit card people, some cards provide additionalcoverage's when you are renting a car or traveling.

So if you get into an accident with that nice shiny new rental car, your collision coverage will pay to fix the car and you will be responsible for your deductable and a "loss of use" fee. Some states / Rental companies enforce this fee more than others do but in its simplest form it means this... I cannot rent this car while it is being fixed from your accident so I am going to charge you daily while it's in the shop.  It really is fair, but it's NOT covered by your auto insurance.  This is the piece a lot of agents miss when talking about this subject.  

So what else is and isn't covered?  Perhaps now would be a good time to see it from the rental car company's point of view. I took a moment to call my local Enterprise  location. As you can imagine being the #protectionpros affords us some contact with the local managers.  Farmers Insurance uses Enterprise almost exclusively and we get great rates. So if you have Farmers and need a rental car, I can usually get you a much better rate then you can get on your own.  Even though it's not needed for a covered accident. (Little money saving hint from your Uncle Barry)

I am  assured that while the location profitability is certainly watched, and the insurance sales plays a part in that profitability, there is no bonus or spiff for an Enterprise sales person/manager  to provide you with additional coverage's. They do this as a courtesy to their clients. So let's take a look at the coverage's rental car company’s offer and what they cover.  You notice I am carefully refraining from calling what they sell you, insurance. It really isn't, it's more like a loss waiver(s) since they mostly self insure.  IE: have deals with local body shops etc to get the dings & repairs fixed fast and inexpensively.

The first coverage they offer is Collision Damage Waiver (CDW)/Loss Damage Waiver-As mentioned above this is not insurance. It's a waiver that moves the fiscal responsibility of an accident from your shoulders and places it squarely in the lap of the car rental company. Some (if not most) of these waivers have clauses that also take care of the loss of use mentioned above. It pays to read the fine print anytime you are buying a contract.  Why would you take this coverage if you are already covered by your auto insurance? Well, some people do not want to have to pay a deductable, have a claim on their record or have their rates go up if they got into an accident with the rental car.  All possibilities that are alleviated by this damage waiver.

The second type of coverage offered is Personal Accident Insurance - This will cover medical expenses should you get into an accident.  Most people carry $5,000 or so "medical" on their auto insurance or adequate health insurance or both.  If so you can turn down this coverage.

Next we have Extended Liability Insurance. -This gives you a one million dollar temporary liability if you get into a crash with the rental car.  If you have adequate liability limits on your own car you can turn this down as well. Like any decision when it comes to insurance, it boils down to where you want to place the risk.  If you want to carry the risk if something like this happens, then you turn it down. If you want to have the rental car company carry this risk you take it and pay the fee. Is the risk worth the investment is the central question for both you and the insurance company. 

Lastly, they offer Personal Effects Coverage - much as the name implies this covers your things should they be stolen or get damaged in the rental car. Most Renters, Condo and Homeowners policies cover items off premise. Check your documents or check with your agent to make sure you’re covered for this loss. If you are, then you can turn down this coverage.

As with most insurance decisions the most valuable resource you can have in your corner is an experienced, knowledgeable and caring agent who will take the time to make sure you understand and have the facts to make an informed decision.  Should you take the optional coverage's? That's a personal decision based on your situation and the risk you want to incur. But two of three managers I spoke with for this blog claimed they do take the Damage waiver whenever they rent a car. Personally I was a road warrior for many years and never took the extra coverage.

While all states have different laws (we are based in Lombard Illinois), we will do what we can to answer your insurance questions, or direct you to the appropriate answers for your State of residence. Write us at bfidlow@farmersagent.com  or Tweet us using the hash tag #ProtectionPros. You can also follow us on Facebook. If all else fails we even have an old fashion land line. Which is 630-297-1407 We look forward to talking with you soon.

Building our agency one friend at a time,

Barry Fidlow

The unlikely insurance agents.

January 1, 2010 my mother died and that pretty much set the tone for most of that year.  Not being enough tragedy to start the year on a properly sour note, my father-in-law passed in March.  Never being one to be left out, Uncle Seymour left us in April. Believe it or not, this is how we started our journey from the most unlikely insurance agents to the #ProtectionPros .

As you can imagine, 2010 was a pretty tough year for me and mine.  Between Mom passing and Dad passing, I lost my job. Mom had no resources of her own and I wasn't going to see her in a home. My father-in-law was a CPA and a child of a depression.  His ducks were so in a row that you would have thought a team of engineers lined them up as part of a MIT graduation project. He had life insurance, long term care insurance, home care insurance, even a prepaid funeral.

So, I began desperately throwing my resume out on the street. You know how it is; you throw that thing out everywhere. I wasn't about to let my family go hungry. Furthermore, I had grown rather attached to my home and thought I might personally miss eating. 

As my job search continued, I was called by a life insurance company for an interview. (Well, they call it an interview but it was really a sales presentation.) I came home sold and explained to my better half how we could open our own business, help people avoid what we went through with my mom, and earn a good living all at the same time. Damn, I was excited!

So, like most people we set off to do research.  Our bubble popped when we saw that this company had a “B” financial rating and one of the highest complaint ratios in the industry. Ok, all insurance companies have complaints. But a quick Google on these guys showed us how bad it was. There was no way could I work for a company I didn’t believe in.

Not to be deterred. I continued to interview with other insurance companies and ended up with three offers. One of those was with Farmers’ Insurance. We took Farmers’ offer for many reasons. Matt Bennett was one of them. Always positive and supportive, he seemed willing to help us every step of the way as our district manager. In my estimation he had the knowledge and experience to do so.

Farmers’ philosophies were another reason.  Farmer’s provides free educational courses to schools. They had just finished a “Thank a Million Teachers” program and offer many teachers and educationalresources free of charge. They encourage agents to get out and meet their customers. They also had a pretty good contract Etc. (I will refrain from including the whole list.)

The last reason we joined Farmers’, and not an insubstantial one, was that during the interview process they didn’t ask us for a list of our closest two hundred friends. You see, our biggest reservation about becoming agents was that our friends and acquaintances would end up walking the other way when they saw us in a crowded room. (Ok, not that this doesn’t happen naturally, but we didn’t want to exacerbate it.)

We are very gentle with our prospects, and even gentler with friends, no hard sell stuff. We make sure our friends know what we do, and we hope they will trust us enough to allow us the privilege of reviewing their insurance. Rarely would we ask them directly. It’s a quandary because we know that no one will care for them or be more concerned for their interests than we will. Yet you do not want to turn anyone off. It’s a delicate dance and we are still taking lessons.

Thank you for taking a moment to get to know us.  I am your author (blogger?) Barry Fidlow. I am half of a dynamic duo. Together over the last five years, I and my wonderful wife and business partner, Barbara have gone from being the most unlikely insurance agents to becoming #ProtectionPros.  We invite you to join us in our journey by allowing us the privilege of reviewing your insurance program. We would love to be your agents.  Write us at bfidlow@farmersagent.com  or Tweet us using the hash tag #ProtectionPros. You can also follow us on Facebook and, if all else fails, there is always the land line 630-297-1407. We look forward to talking with you soon.

Building our agency one friend at a time,

Barry Fidlow