Insurance: Answers From An Agent

National Insurance Awareness Day happens every year in June. What better time to check in with an insurance agent to get answers to a few of our burning insurance questions? Mike Cazalas from Brazzell Insurance Agency in Gulf Shores, Alabama took some time to answer a few of these questions for us.

If I file a claim on my insurance, how is my policy affected? Will my rates go up? Is this tracked? Is there a limit to the number of claims I can file?

‍Claims are tracked and those with excessive claim history will have problems getting a good rate in the future. Rates would not normally be affected by a small claim of less than 10,000 but it is tracked and recorded so no matter where you buy a policy from the claim history will follow you.

What do I do if my claim is denied and I feel it should have been covered? Assume I have already been as far up the chain of command as the insurance company would allow me to go and still nobody is listening!

I have not had a situation where a legitimate claim could not be resolved with client satisfaction. A good agent is valuable in this situation. It would not hurt to buy a policy from an Agency Owner that happens to have an adjuster license and experience working with other adjusters. After all, avenues have been exhausted and your claim is not being resolved satisfactorily your last option is to hire an attorney to represent you in a court filing.

My vehicle is in the shop and I am borrowing someone else’s car, does my insurance still properly cover me in another person’s vehicle?

Insurance follows the car. If you borrow a friend’s car his insurance is the one that will pay the claim if there happens to be an accident that you are liable for. Also, if you rent a car and you have full coverage on your car that coverage should extend to the rental car. Most carriers work that way but I would suggest you check with your agent to make sure your policy covers you in a rental.

If I am outside of a flood zone, do I still need flood insurance?‍

Outside a flood zone does not protect you from flooding. Your agent can check your property on a FEMA website to see how close you are to a flood zone. Even that is not a guarantee you will never flood. Look at Google Earth and see if there are any creeks or streams nearby that could overflow. Check with neighbors to see if they have ever seen high water in the area. A flood policy for a dwelling in an X zone is very inexpensive. Better safe than sorry!

I just had a baby—do I need life insurance on my baby? What advantages are there to getting a policy now? Do I wait?

Life insurance for a child is less than $10 a month if you are buying a whole life policy. The policy can be converted to a whole life policy that cannot be canceled should you discover the child has some birth defects that would prevent them from buying a policy of their own later on. If you are just starting family money could be tight and a policy would provide you with the funds for burial without having to ask for help during this tragic time.

How can I tell if my insurance agent is a good one?

A good agent should be able to explain the policy coverages and offer the coverages you need. You should get several quotes and ask your agent to go over the coverages and why they are recommending the coverages on the quote. We run a rebuild cost estimator from MSB to make sure you have the correct valuation on the house and enough coverage, so you do not have a coverage penalty for not being insured to value.

With the option for policyholders to quickly buy coverage online, how are agents adapting?

Most people prefer to buy from a live person as opposed to an online quote. A small percentage of people are comfortable purchasing with the help of an agent. I could run a quote and bind a policy in less than an hour if needed. When you go to one of the online quote sites, your phone is immediately overwhelmed with unsolicited phone calls from agents.

What’s changed, if anything, in the insurance industry since the lockdown?

Since the lockdown, my agency has gone to an office model where the office is closed to foot traffic. We have set up a table outside to sign forms and collect payments in order to reduce the chance of any employee contracting the virus. For several years we have utilized ACH payment options and DocuSign for application signatures. There is little need to actually have an office visit if the client has a smartphone and a checking account.

Are there any major trends you’re seeing in insurance?

My agency specializes in coastal insurance with policies in Mobile and Baldwin Co accounting for the majority of the policies on the books. For several years increased competition drove premium prices lower. That trend has reversed and I am seeing premium increases on coastal properties in the 10–30% range. Homes older than 20 years are seeing big increases in premiums. More Gold-fortified homes are being built which can have premiums that are significantly lower than a regular policy on a non-fortified home. The other trend is private flood carriers are offering very competitive products vs FEMA dwelling and GP policies. You can get coverages not available on FEMA policy such as loss of use, other structures, and business interruption coverage.

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