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September 18 2014

Contact: Amanda Edwards
I & E Insurance Agency



When Cheap Home Insurance becomes Expensive


As a Full Service Independent Insurance Agency we are constantly seeking out highly qualified Insurance companies to offer our customers better alternatives. This writer has been in the financial services and insurance industry for over 35 years, and after writing thousands of policies for customers, I have had some experience in knowing what company offers the best suited program for particular customers and their homes.
Variables that can determine this are usually the location of a customer home, the size of the home, credit score and extras people want. Yet when I speak to a customer I am always amazed when the first words out of a prospect’s mouth are “I want the cheapest policy available!”

In today’s economy we all want to save money, but in a world where people think nothing about $5 dollars for a coffee, $100 per mouth for cell phones, and $10 bucks for a hamburger, its incredible that most people look for cheap insurance and care little about the coverage…Some people spend more money on a bar stool but to protect their home auto , fgamily or business finding a few dollars per day seems to be too much ?--- until they have a problem that is. Then it’s always someone else’s fault-- not theirs! Most people fail to see their insurance for what it really is—I consider it like a pre-paid asset. Some day, some how, you will be filing a claim- SO  the coverage better be right, but some consumers see it as a bill, a waste of money, and that viewpoint can casue them long term pain.

New Jersey Homeowner’s and Auto Insurance can be purchased with varying amounts of coverage, low property coverage and low liability amounts. On the home Insurance side, one can have lower liability amounts, lower coverage at stated value or replacement cost. Stated Value is cheaper, but it means your home is only insured for what you originally asked for, and in some cases less depreciation.  If the home is lost you will only be covered for the amount on your policy not the replacement cost. Two years ago we had Hurricane Sandy hit our shores, a few weeks later we see story after story in the press about homeowner getting the shaft by those Big BAD Insurance companies, yet no where, were the stories of how unprepared people were and how homeowners failed to recognize the risks they face. If you own a house on or near the water, common sense says be prepared, you need Flood Insurance, but not these people in the press, they blamed others for the lack of coverage they wanted. They complained that their homeowners didn’t cover flood damages. No matter that the Federal Government through The National Flood Program has been advertising for over 30 years that Flood losses are not covered by home owners insurance. These people are blaming every one else but themselves.

Now I mention this as a Real example of learning from others mistakes. A few years back we had a famous sports figure and his wife come into our office on route 88 in Point Pleasant looking for Home Insurance on their Mantoloking NJ Vacation home. They bought a multi-million dollar ocean front home and needed homeowners insurance because they had a small mortgage. The sports star was blunt, rude actually, and he didn’t believe in Home Insurance and was outraged when he needed to pay $8000 for the insurance on his $3.3 million dollar property. The Mortgage Company wanted insurance, so he paid for it, despite his belief that it was a waste of money. But to me it seemed a small cost considering all the other polices I wrote fro similar properties. and to this multi-millionaire sports fogure, a seeming small amount of money to an individual whose audacious spending habits had been clearly documented on several magazine covers. Not that he should pay more, but the yearly coverage we got him was quite frankly an incredible value if I do say myself; I was surprised it wasn’t more money. Additionally we offered Flood Insurance and the customer refused coverage and signed forms documenting his denial.

Three years go by, in the fall of 2011 the annual renewal goes out and the customer declines coverage, he paid off his mortgage of $1.3 million and now the $3.3 million dollar home was mortgage free, and the sports figure didn’t want to waste any more money as he stated. I point out the obvious risks, to property and liability, he and his wife reply, “No problem we’re well taken care of, we own several properties we have an advisor, and have no need for your services anymore.”  So, we wished him and his wife well and that was the last we heard from this guy. Over a year goes by, and then Hurricane Sandy hits. Our office lost power, we operated our business out of our cars with cell phones and helped clients file claims for over two week, then in late November 2012 we get a phone call from an attorney.

Seems the sports star’s attorney is looking for the flood and homeowners insurance. I explain to the attorney that coverage was declined, no payment was made and the policy canceled back in 2011, as per the request of the homeowner. Guess what! Our former customer, the sports figure lost his home to Hurricane Sandy. Now, the attorney wanted to know why his insurance was gone. I explained to the attorney that coverage was canceled and that the sports star refused coverage. The attorney was adamant that this isn’t true and I must have made a mistake and how can I live with myself. I commented sorry it wasn’t my fault your customer refused coverage and I couldn’t make him take a policy. The attorney replies, they would look into this further, I interrupt the attorney and tell him I have signed letters that the customer wanted his coverage terminated. The attorney states that’s impossible, so I faxed over the letters to the attorney.  Conversation ended.

It’s been almost two years since then, and that was the last time we heard from the attorney and Sports figure. Recently, I drove past the house a few weeks ago, the lot sits empty with a for sale sign on it. I do some digging, seems the player was cut from his team. Don’t know what happened, but I guess he decided without a job, that rebuilding a multi-million dollar house was out of the question.

The point of this reality, no matter who you are, no matter how large your resources are, if you can’t afford a complete loss and the liability that follows a loss, you need the Right Insurance and the right amount from the start. Why tempt fate?

At I & E Insurance Agency, we understand your home and property. We know that your home can be the largest possession you own and that’s why it needs to be protected correctly. We know the best companies available especially if your home or property is close to water. That’s why when you need New Jersey Home Insurance contact I & E Insurance Agency  your Trusted Choice® Agency  experienced Advisor.

Call us for more info at 732-295-5584





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