I was an Insurance Agent for over 20 years before retiring, and I am going to teach you how to win at the game of insurance. You CAN beat the insurance company at their game!

First let me tell you the biggest mistake most insurance consumers make. They look for the best deal they can find (and this is good), but when their policy arrives they throw it in a draw and forget about it until they need to file a claim. And I have to tell you insurance companies love it. Why? Because as along as you forget about it they will be making more money than they need to, even if you are happy that you found a cheaper price.

There is a better way. A way to have better coverage for even less cost. Interested? Keep reading. You can win!

The name of the game is not only having an insurance policy; it is managing your risks with the policy you have. If you will take the time to learn how to manage your risks, you can have better coverage at claim time without paying more in premiums and without seeing your money flying out of your pockets to cover the cost of your high deductibles.

Managing Homeowners Risk

Let me show you how to do this with an example. Let’s assume the replacement cost of a home is $396,000, and that we have it insured for that amount. Using the rates for the state of Texas where I live, the premium for this policy is $1,825 per year. The deductibles chosen were 1%, or in this case $3,960 (most chose 1% now because it keeps the premium down, but this is painful at claim time). Further, let’s assume that we live in a hurricane prone area and hurricane season is just around the corner.

How can we get better coverage for less cost, or better, for no additional cost? Is it possible? Yes!

Here’s the game plan. On June 1st we call our insurance agent and instruct him/her to lower our windstorm deductible from 1% down to $500 or even $100 if it is available. He/she informs us that the cost will be a $600 increase in annual premium. Don’t worry about it because we know something the agent doesn’t. We don’t want it for one whole year. We just need it for the next four months. Why? Because the hurricane season will be over then and on September 30th we will be calling back to adjust the deductible up again. And when we do the premium will go down $400 if we go back to our 1% deductible (but we will not and I’ll show you why in a minute), but if we do our pro-rated bill will be only $200. In just a minute we will eliminate this $200 also. Stay with me, and I’ll explain later.

For now let’s ask ourselves what are the two things that can happen during the upcoming hurricane season? We will either have damage or no damage. Of course we would prefer the latter; but if the former is the case, guess what? We are better covered with our $500 or $100 deductible. Let’s see how much better.

Let’s assume we had roof damage to the tune of $15,000. Without risk management our settlement would have been $15,000 minus our 1% deductible of $3,960 or $11,040. However, by managing our risks our settlement is $15,000 minus either $500 or $100 whichever deductible we could get so that we will get either $14,500, or $14,900. And this means that we will have an extra $3,860 dollars for our vacation! (See? - $14,900 minus $11,040 is $3,860 dollars)---but what about our poor roofer? Well he’ll just have to get his vacation money elsewhere.