ARE YOU DOING YOUR JOB ?
By : Doug Smart , KAIA President
When I debated the name for this article , I almost called it “ What Keeps Me Up at Night .” As professional Trusted Choice TM independent insurance agents , we carry a lot of responsibility toward our insureds . That burden is exceptionally high right now due to the inflation we have seen in many areas , thanks to COVID-19 . Let me share a few examples .
HOMEOWNERS // Lumber prices have gone out of sight in the last year . Yesterday , I reviewed a policy with a customer who is also a good friend , fellow church member , and local banker . He depends on me to take care of his insurance needs . His current homeowner ’ s policy carries a limit of $ 400,000 . I sat down with a local custom home builder and asked him to help me calculate an actual current replacement cost on the home . He came up with a new replacement cost value of $ 600,000 . My office staff went onto the insurance company website , upgraded everything on the cost estimator , and could only come up with $ 475,000 . The underwriter would not budge over the $ 475,000 figure . A guaranteed replacement cost value of 1.25 gets us to $ 593,750 , which is close to the current replacement cost value . Are you talking to your insureds about the current coverage on their homes ?
Should you be ?
FARM // Increased lumber prices have also created similar issues on farm policies . A customer was planning on building a new 8,000 square foot shed about 14 months ago . He planned on doing most of the labor himself and priced the lumber at our local lumber yard at $ 80,000 . In October , he finally had the time to pursue the project and repriced the lumber . Over time , the price had elevated to $ 140,000 . Are you communicating with your farm customers about their potentially underinsured farm buildings ?
Should you be ?
CROP // Crop prices have escalated significantly over the last several months . Recently , I reviewed crop coverages with a local farmer and discussed his corn crop . His MPCI policy guarantees him 97.5 bushels of corn at $ 4.58 a bushel , or $ 446.55 total coverage . Now , he estimates that with our excellent moisture conditions , his corn could make 180 bushels . As I am writing this in June , current harvest market prices are around $ 6.00 a bushel . That means his corn crop is worth over $ 1000 per acre . Are you talking hail insurance with your farmer to cover this coverage gap ?
Should you be ?
TRUCKING // Some attorneys have targeted commercial auto , especially trucking claims lately , to fill their pockets . Settlement claims on semi-truck accidents resulting in serious injury or deaths have become extremely costly to insurance companies . We recently had a trucking company claim in which a sub-contracted trucker killed an individual in a personal auto . The courts awarded the full $ 1,000,000 limit on the subcontractor ’ s commercial auto policy and the full $ 1,000,000 limit on his umbrella . They also awarded my insureds $ 1,000,000 auto limit , and
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