Why you need an insurance policy
"Hope for the best, Plan for the worst, and Take what comes," so says my cheeky father, but that only half gets at insurance. Past the skin and muscle, to the bone of the matter, well, insurance is a philosophy, a belief in the unexpectedness in life, the importance of being prepared. I never got to join the boyscouts since, being born female, I was relegated to the league of Girl Scouts, with all those Saturday sleepovers in some troopmember's backyard where we'd pass the can opener round the barbeque, take turns opening our cans of Campbell's soup and dumping them into the collective stockpot, adding a can of water each and taking turns stirring the mess with a wooden spoon. But I always wanted to be Bobby or Kevin down the street, have a pocket knife, wear khaki, face some sorta danger, be prepared and triumph against it. But I was stuck in Mona Gleason's backyard, huddled around the dying embers of a barbeque, singing stupid girl songs, wishing I were camping or hiking or anywhere else, proving I was loyal and trustworthy and above all, prepared.
According to California Insurance Code, insurance is really "the substitution of a small certain expense for a large uncertain loss." In other words, there is an unequal exchange between policyholder and insurance company: for a known premium, the policyholder transfers onto the insurance company the potential for a loss many times greater than the premium paid.
I've spoken to a lot of people who view insurance as something they "have to have," something required by the mortgage company on their house or maybe even a state's requirement prior to legally operating a motor vehicle. I think the reason people resent buying insurance is that most insurance professionals have failed to do their job, which is to inform and educate their clients, to put in plain language what it is they are paying for, and what their options are. Insurance should do two things: provide peace of mind and protect against catastrophic loss. Now, if people don't know what they have, how can they have peace of mind?
I started in insurance twenty years ago when I was nineteen, and my boss then told me "there is no competition out there." And he was right. Sure the phone book might have three dozen listings for agents selling similar products, but really there is no competetion for an honest down-to-earth insurance person who believes in doing a job right and making sure the client leaves the office with some idea of what they've just purchased. They will remain loyal and you will insure their children and friends. That is the secret of my success: I don't try and sell anything. I present information and options and let the clients decide for themselves. Sometimes I'll just talk to a person and not write any new business, and then six months, a year later, I get a call from that person saying they'd like me to rewrite their policies. All this because I offered something they could not get from their own agent: time, explanations, and plain talk.
I was talking to a friend's mother last week and she was telling how her little Shitzsu bit a child a few years ago and how they paid close to $1,200 in medical bills for the injury, and I said, "Well, what about the liability coverage under your homeowners policy, didn't that take care of it?" and she had no idea that her insurance would cover such a thing. This is what I mean by some insurance folks not doing their jobs. Someone should have told this nice, bright lady, in simple terms, what it was she was buying so she'd remember it when the occasion arose. Instead, she was $1,200 bucks out of pocket and the claim filing period was over, so there went her recourse.
Let me not be misunderstood: I say insurance agents have done a lousy job generally (though there are some great agents out there) of educating folks on their insurance purchases, but I also believe consumers need to be more involved in understanding their insurance affairs so they can best determine how to protect their interests. So I am going to be your friendly insurance agent right here, your insurance guardian angel, for free. I'll explain the fundamentals of insurance to you in plain language with examples that can be easily related to. I will not speak insurancese. And you can go to your own agent and verify what I say. I want you to do that. The subject matter will depend on interactions with my clients and just things I think folks ought to know about coverages, claims and money-saving tips. I want you to be aware so that when so when a little toddler pulls on your aged dog's ear and she nips the kid on the chin, you're not out of pocket a grand and some change like my friend's mom. Insurance is fascinating to me, and I'd like to share that enthusiasm with you. It costs you nothing and you might learn something of value.