Houston Auto Insurance and What You Should Know!

The Way Your Texas Auto Insurance Agent Handles Your Texas Insurance Policy Could Financially Kill You and Your Family!

Karl and Summer were the ideal couple living the American dream. They got married the year they graduated from college. They both worked until they had their first child, and when Karl's career started taking off, they both felt it would be best for Summer to stay home to raise their kids.

Life was good! They recently bought their dream home to have plenty of room for the two little ones, and to make sure their kids would be in a good school district.

Yeah, life was good. Karl and Summer had been able to put a fairly good amount in savings, a big chunk of which became the down payment on their dream home, leaving them about $50,000 which they figured would be enough for any emergency that might pop up.

Life was going good at least until a  nightmare descended on them that was caused by their Texas auto insurance agent. They had been with the same agent for the last 10 years, ever since they got married, and they trusted him completely. They were totally confident he was capable of taking care of their Houston insurance needs in a professional and timely manner.

Their nightmare started when Summer was picking up little Reese and Graham from school one afternoon. Summer was always good about making sure their two kids were buckled securely in the back seat before she ever moved the car. Once they were securely buckled, Summer pulled out of the school parking lot and headed home. She got on the main road that would take them to their subdivision when little Graham started pestering his older sister.

This could happen to anybody!

This pestering eventually erupted into an all-out war between the two. When Summer had heard enough she turned partly around and told the kids if they didn't quit fighting immediately both of them would be sent to their room when they got home.

Just as she turned back around she saw a brand new top of the line BMW dead stopped in front of her. And with so little time to react, she plowed right into the back of the $75,000 car totaling it. That beautiful new car was no match for Summer's huge Excursion.

The police and ambulance were called and Summer obviously received the ticket, but that was the least of her concerns. The lady driving the other car was badly injured and taken to the hospital.

Summer felt just awful that she had hurt someone else, and even went to the hospital to regularly check on the lady and apologize in person. The lady was nice enough, and tried to help Summer not feel so bad, saying it could happen to anybody especially anybody with young children.

Summer felt a little better after several visits, and assured the lady, named Phyllis, that they had Texas auto insurance and everything would be taken care of by their Texas auto insurance companies.

Then the bad news hit them like a ton of bicks!

If only it could be that simple! You see, the medical bills for Phyllis totaled up to just over $150,000. She was going to need a significant amount of physical therapy to get back to where she was physically before the accident, and that was going to cost another $25,000.

Also, she was going to be off work for six months while she recuperated. That meant Summer, who had no disability insurance and worked on a commission basis, stood to lose another $75,000 of her annual $150,000 commissions income, even assuming she wouldn't have done better than she had the prior year.

That meant the total amount her insurance company was going to have to fork over to Phyllis was going to be $250,000 for her bodily injuries and $75,000 for the damage to her totaled car. She did not know it quite yet, but the financial structure she and her husband had so carefully put in place was about to come crumbling down around them.

The rude awakening occurred one evening when they received a letter from an attorney representing Phyllis stating that their insurance policy had only paid $50,000 of Phyllis' $250,000 medical bills and rehabilitation expenses and lost wages, and only $50,000 of the $75,000 they owed for the totaled new car.

They were shocked! They thought their Houston auto insurance would take care of it all.

The Agent fesses up!

The next day Summer called their agent and asked why the insurance didn't pay anymore than it did of the claim. He quite sheepishly replied their insurance was paying the maximum amount they could by contract.

Since their auto insurance Texas policy limits had been set at $50,000 per person, but no more than $100,000 for the injuries of multiple people, and no more than $50,000 per accident for the damages they might cause to someone else's property.

Summer then asked how that amount was determined, and her agent told her something that she will never forget. He said, That is the amount we copied from the policy you had with your prior agent when you took out your auto insurance with me ten years ago.

In other words, you just copied the other agent's work, and never asked us what we wanted or attempted to determine how much coverage we really needed? She asked incredulously.

Her agent was most apologetic as he spoke in whispered tones, I'm really sorry, Summer. You and Karl have been with me for some time now, and I can imagine how upset you must be.

Summer then asked him what her options were. How are we supposed to come up with this $225,000 shortage in our coverage? Karl has a great salary, but there is no way we can come up with that amount out of his monthly paychecks, even if we gave her everything we have saved up over the years. What could she do to us?"

The Texas insurance agent replied, Well, they could get a judgment against you and file a lien on your home and everything else you own until the money is paid out. The only way you can get around this is to file personal bankruptcy and let the judge sort everything out.

You will still probably lose your savings account, but at least they won't be able to take your house and other personal assets.

With tears in her eyes and a quiver in her voice, Summer asked her agent one question. Just out of curiosity, as the value of our personal assets grew and we had more to lose, why didn't you increase our protection to help us keep up? I mean we relied on you to protect our family, and never heard from you except for a Christmas and birthday card each year.

If you had picked up the phone just once to discuss our coverage's with us and explained our options, I feel certain we would have increased our Texas car insurance coverage to protect the things we have worked so hard to collect over the years. However, since you didn't take just a little bit of your time to discuss this with us we may lose everything.

The only thing their agent could do was lamely reply, you're probably right. I'm really sorry for not doing a better job.

What if it was you in Summer's shoes.?

Unfortunately, this story, is a composite of many similar stories we have encountered from people seeking our help over the years. This could have happened to anyone, including you. Every day we talk to people who have been insured with an agent whose goal is to provide many auto insurance Texas quotes to people as fast as he can hoping to write a few of them.

What about you? Has your agent been taking you for granted, and seldom if ever doing anything to make sure your texas auto coverage is up-to-date and adequate?

Is he or she asking about your financial condition and seeking ways to creatively protect the many assets you have worked so hard to accumulate, including your savings and the equity in your home?

If not, this is just one of seven ways an agent can kill you and your family financially. What if you had been Summer and your family had been suddenly stuck with a $225,000 bill stamped "Due immediately."

Would you be able to pay, and if not, how would it make you feel to either be hauled into court by the person you hurt or for you to have to voluntarily go to court to file bankruptcy?

How would it make you feel to know you had hurt someone and possibly bankrupted them by your inferior and inadequate auto insurance coverage?

Just imagine the embarrassment and humiliation you might feel when you find your name in the financial section of the paper under "Bankruptcies."

What should a professional Texas insurance agent should do?

That is what a professional agent is supposed to help you avoid. That is what a competent and caring insurance advisor will do for his clients, helping them understand the consequences of their actions or lack of actions, while providing them with alternative ways to protect the property they have worked so hard to accumulate.

If you haven not heard from your agent since the day he or she first wrote your policy, or if the day he or she first wrote it, he or she just copied what you already had or quoted you the bare minimums without really helping you understand what you were getting, do you still think the super-cheep rates they got you are that great of a bargain?

After all, if you have the cheapest rates in town, but the policy is so poor that you drown in the unpaid claims when you have even the smallest of at -fault accidents, how expensive has that policy really become?

Texas Auto Insurance Secret #2 - Failing to Review All Rating Factors Each Anniversary.

Coverage negligence is not the only way an agent can kill you financially. He can also hurt you by failing to annually review your rating factors to determine if you may have improved to the point that he can write you at a lower rate someplace else.

The questions a professional Texas insurance agent should be determining asking at each policy anniversary are -

• Have you eliminated a high-risk car that might have originally forced your policy into a more expensive company or rating class?
• If that high - risk car is now gone, why should you remain in that more expensive company or class?
• Have you moved into another zip code area?
  • Most insurance companies now base their rates to some degree on zip code areas instead of counties because by doing so they have been able to segment the rates and charge the highest rates to the areas that have the highest claim amounts while charging much lower amounts to those people who live in zip codes that have the lowest amount of claims paid out. If you moved out of a high -claim area into a low-claim area you should see your rates go down.
• Has your credit improved?
  • As a general rule, it has been proven that the better a person's credit score, the better their loss experience.
  • While the concept of credit rating may be debatable, and there are always exceptions to the rule, if you have had some negative credit go off your seven year history during the last twelve months, there is a good possibility your rates should be reduced too.
  • An agent that is concerned about your rates should regularly check this for you.
• Have you had some tickets or accidents come offyour three-year driving history?
  • Most companies look at your driving record for the last three years, although some look at it for the last five years.
  • If your record has improved, your rates should also improve.
  • Have you had some claims come off your five year claims history?
  • Having too many claims, even if they are small, can cause you to be ineligible for the best rates, even if your credit and driving history are spotless.
  • If you have had any claims exceed that five year threshold during the last year, there is a good probability, if everything else is positive, that you will be eligible for coverage with a company that charges lower rates.
• Has anyone in your family taken defensive driving or driver's education during the last year?
  • If so, with most companies you can receive an immediate 10% discount off select coverages.

As you can see by these five very volatile areas, a professional insurance agent that really cares about saving you money on your premiums, must contact you at least once per year to determine if any of these rating factors have changed.

If as a result of conducting this review, it is determined that your rates could go up if your new information was brought to the company's attention, any agent that is looking out for you will keep that information to himself, always looking for ways to help you instead of fattening his and the insurance companies pocketbooks.

To fail to take this important step with you year after year is to take you and your family for granted, and expose you to insurance premiums higher than you really should have to pay.

Texas Auto Secret #3 - Having Your Insurance Company Pay Too Much Of A Claim.

Another way an agent can hurt you and your family financially is by selling you deductible limits lower than you can afford.

A professional Texas independent insurance agent will help you determine, first of all, the maximum deductible you can tolerate. The deductible, as you know, is that amount you are required to pay toward the damage to your own vehicle before the insurance will pay anything.

The deductible is used by the auto insurance companies as a means of reducing the number of small claims that are turned in. And while small claims may not cost the insurance company as much as the amount actually paid to you is concerned, it can be quite expensive when the additional amount paid to adjusters and appraisers.

If you have not had a claim in a number of years, you might be amazed how much money you could save by increasing your deductibles. The dollar difference between the amount saved with a higher deductible and your present deductible can often enable you to save enough money to cover the difference in the deductible amounts in just a little over a year, depending on the company.

To determine how long it would take you to save enough premiums to equal the difference in deductibles simply divide the difference between the two annual premiums for the two deductibles into the difference between the two deductibles. The result is the number of years you would have to save this reduced premium to become self-insured for the difference in the deductibles.

At the end of that time, if you have placed in a savings account the difference in premium for the two deductibles, you will have the money to self-insure the difference between the old and the new deductible, and every penny saved from that point forward can be placed in your pocket instead of the insurance companies even If you have a claim.

If your agent has never used this simple strategy to help you save money on your texas auto insurance, you might want to ask him or her why. If he or she had been really looking out for you would not they have at least offered this money-saving option as an alternative?

Texas Auto Secret #4 - Providing Double Coverage For Damage To Your Car.

Once you have decided how much you want to self-insure on your deductibles, it is important to the attempt to eliminate a coverage that is a virtual duplication of coverage for practically everyone that carries both collision coverage and it.

That coverage is Uninsured Motorists Property Damage. It pays for damage to your vehicle only if it caused by someone who is operating an uninsured or hit-and-run vehicle.

The reason this is a duplicate of collision coverage is collision pays for damage to your car regardless of who causes it, whether it is you, an uninsured motorist, or a hit and run driver.

There are only two additional benefits you would gain by having Uninsured Motorists Property Damage coverage and they are:

• (1) a lower deductible when your car is damaged by an uninsured motorists (which is usually $250)
• (2) Reimbursement for the charges incurred for a rental vehicle comparable to your damaged car.

The question I would have for someone wanting to lower their deductible in this scenario is, "If you have already indicated you could live with the higher deductible, why would you want to again start spending more money for a lower one with this coverage?

And if you want coverage that reimburses you for a rental vehicle when your car is damaged, why not get Rental Reimbursement coverage instead. It pays regardless of whether you or the other part is at fault. If your car is damaged in an auto accident it will pay for you to rent a car for an agreed amount per day and for an agreed number of days.

Unfortunately, one reason most agents put this on the policy of everyone they write is because they are not in the habit of asking their clients what they want. They just assume they know what is best for them and consider the opinions and preferences of their client insignificant.

Another reason agents write this coverage combination is because the prior agent had it and their total interview consists of what do you have now and that will cost you this much at our agency." Real professional and helpful, huh?

Dirty Little Secret #5 - Often the less professional or inexperienced agents write policies without really thinking about the consequences of their actions.

We have already discussed the dangers of writing liability insurance coverage lower than what is needed. But another way this is done is found in writing coverages that are not a smart purchase for people for underwriting reasons.

One such coverage is an inexpensive coverage you can purchase for towing and labor charges. Let us assume you are driving down the freeway when your car suddenly lurches and sputters, and then just quits running. You manage to get your car onto the shoulder, but you have no luck getting it started. So you call a wrecker who tows your car to your preferred repair facility.

You turn the charge into your Texas car insurance company, just like you did last year when something similar happened on your other car, and, out of the blue, at your next policy anniversary date you get a notice the insurance company has decided to no longer write your coverage because you filed two claims in the last two years.

You check around for other companies with similar rates but when you tell them you were non - renewed and they discover it was due to claims frequency, you find the best they can do is write your coverage with companies that are about 50% higher than the rates you were paying.

So now your rates are $750 instead of $500 every six months. Those two claims for $100 are now appearing to cost you more than they did the insurance company.

This is what happens any time you take out a coverage that pays relatively small benefit amounts, even if the cost is small. The payment of the benefits can often result in a non - renewal with those companies that use claims counter underwriting.

Claims counters underwriting operates under the theory that small claims eventually lead to big ones. And they don't want to be the one insuring you when the big one hits.

So the next time they have to decide who they want to keep and who they want to let go, your name will be right at the top of the list of those that are going to be sent packing. And once you are non - renewed by any Texas insurance company, you go into a totally new rating class one that is much more expensive.

I think anybody would agree that receiving $200 in claims payments that results in you being forced to get insurance with another company whose rates are $250 every six months higher is not a good buying decision, regardless of how cheap the additional coverage is.

Most agents have alternatives for this type auto insurance coverage that are actually more comprehensive and easier to collect under than when it is written in an Texas auto policy. And the excellent thing about them is the companies that write them do not hold the usage of the policy against you like your auto insurer will.

How has your agent done on this? Has he or she included cheap coverage's that might affect your ability to get lower rates if you ever used them? If so, why would he or she put you in a position like that?

Texas Auto Secret #6 - Not Putting Your Auto and Home Insurance with the Same Insurance Company or Agency.

If you could slash your Texas auto and home insurance premiums and simplify your life by writing both policies with the same agent or insurance company, would you do it?

If you are not already taking advantage of this huge home and auto multi - policy discount, maybe it is time you did some checking to find an agent that can help you in this way.

Insurance companies will often reduce the premium on the Texas home insurance policy by as much as 20% and on the auto policy as much as 10% if both are written with them. They do this for a couple reasons:

• Loss experience indicates that, when written in tandem, the overall claims to premium ratio is much better than if remain on the books longer because of the reduced premiums produced by the discounts.
• Since Texas insurance companies typically lose money on new policies while they more consistently make a profit on their renewals its little wonder they want to write both policies when they can.
• Some agents do not offer this combination of policies because they have no companies with which to write both, but they may still be able to get you a lower rate if you write both policies with them, being willing to give up some of their commissions for the privilege.
• Other agents will not be able to sell both policies because they have no home insurance companies at all. In those cases you will just have to shop for another agent that can help you on both coverages and compare their combined rates to the rates you will have insuring them separately.
• One final consideration is the way having both policies with the same agency can simplify your life. Imagine if you have something stolen from your car. Who will you turn the claim into? Your auto agent or your home agent, and what will you do if they both deny the claim?
• Or what if you accidentally run your car into your house damaging both?
• Which agent and policy will you look to for payment of these damages?
• What will you do if both deny the claim? Such situations make it advantageous to have both policies with the same company.

The question then becomes which pile of money they will take the claims payment out of instead of whether they have to pay this claim or not. Sometimes, especially after a claim, wouldn't it be nice to know your claim is going to be paid, and all you have to do is wait to collect instead of sitting on pens and needles, wondering if you gave the right or enough information to each company to get a satisfactory claims payment from each.

Texas Auto Secret #7 - The Agent is not professional or concerned about you.

Everything that has been discussed in this free report points to the real problem in all these areas. The real problem is often the agent that is writing and servicing your insurance.

Many agents are quote and hopers. They sling out quotes like fast food hamburgers, either copying what you already have or giving their lowest liability limits, and highest deductible rates without ever determining what you want or helping you determine what you really need.

And once they write your policy they just let it ride, never checking with you again, and just hope the rates stay low enough where you will never shop around again.

Kind of gives you the warm fuzzies, doesn't it? Such care and concern for the client! Such ongoing effort to make sure you are kept adequately covered and informed.

The truth of the matter is a concerned professional agent will probably cost you a few more dollars than an unconcerned quote and hoper. But, just as a Yugo was cheap for a reason, this pathetic excuse for financial protection is cheap for a reason.

And just as the slight amount more you spend per month can result in a better, more durable and comfortable car, the right agent can simplify your life and help adequately protect you from lifes financial surprises that could land you in the poor house.

But how do you sort out the good agents from the bad ones? And when will you know you have found the one that can best keep you safe? Here is a list of the things you will find in an agent you can trust. And when you find him or her, I would suggest you make them an important part of your financial services team.

In the initial interview a professional and concerned agent will ask you a lot of questions about what you are looking for in a company, a policy, and an agent. They are trying to help you visualize what could happen to you with inadequate coverage, and what you can do to make sure you are adequately covered.

They will, finally, spend some time taking all this information and coming up with your own unique insurance plan; not a one size fits all quote they spit out for everyone. Those one-size-fits-all quotes are intended to trick you into thinking you are getting a cheap quote, when in fact you are getting a policy that is stripped of many of the valuable protections you really need. These stripped down versions can lead to some painful surprises should you have to file a claim.

Their prices need to be reasonable, although not necessarily the cheapest. Quality does cost something, although less than you might imagine. So if the only thing you care about is price regardless of the way the company or the agency treats you, does not waste your time looking for a professional agent.

They are in short supply, which means due to the law of supply and demand, they will cost slightly more. However, the small difference in price will more than be made up for in your peace of mind and the way they take care of you in your time of need.

They will try to write both your auto and home policies with the same company, if at all possible, and at least attempt to write both policies with them if they can not get both policies written with the same company. They do this because it is what is best for you and them.

Should you decide to do business with them they will make sure you understand what you are signing, have you sign a disclosure for any fees you are being charged, and have you sign a statement of understanding should you chose to decline certain coverages they feel you really need to be properly covered.

Insurance companies earn one days worth of premium each day they cover you. A good agency will gladly, at a minimum, cheerfully get you a prompt refund for any unearned premium you may have paid in should you express dissatisfaction with the way they are handling your business. The better agencies will offer to refund even more than that.

Once they have written your coverage they will keep in regular contact with you, to help you simplify other areas of your life and keep you up to date on what is going in the insurance world that might affect you.

They will contact you at least once per year, usually just prior to your original policies anniversary date to determine if anything in your life has changed that might necessitate a change in your policies or result in a reduction in your premiums. They will also recommend additional policies as they see the need for them through these discussions.

It is inevitable that from time to time every insurance organization is going to have some claims or service misunderstanding. The major difference between a compassionate professional agent and all the other agents is that the professional will be your advocate on every claim or service problem, and not a mouthpiece for the insurance company, trying to put a positive spin on the actions of a company that is acting unfairly.

Your agent should be on your side and see things from your point of view whenever there is a difference of opinion, or when some insurance company or agency employee treats you in an inappropriate manner. This is really where the rubber meets the road. I mean, what is the point of having an agent if he can't offer some support and assistance in your time of need?