While I can’t predict what the stock market or real estate markets will do in the coming year there are several trends that will affect your insurance programs. As the saying goes “being forewarned is being forearmed” I hope this outline will be helpful for your protection.
Car Insurance –
- Safety at a cost: The automobile industry has made tremendous improvements in vehicle safety. Warning systems such as lane departure, collision avoidance and blind spot detection together camera systems have greatly reduced the potential for accidents on the road. Curtain airbag systems have improved the safety for the occupants. But all of this comes at a cost. The bumper of your car used to cost $300 to $400. The addition of sensors and cameras has increased this seven-fold. Windshields now contain rain sensors, cameras or their provisions, heating elements and radio antennas. All of this means much higher costs to repair a car after an accident. I expect to see car insurance costs continue to climb through 2019.
- Improvements in coverage: We all know the adage of our new car dropping in value as we drive it off the lot. Because of cars being a depreciating asset, insurance pays a depreciated settlement when a car is considered a total loss. A new coverage available is New Car Replacement or Better Car Coverage. While exact details vary between carriers, the coverage generally allow you to replace a 2- or 3-year-old vehicle with a current model year. After 2 or 3 years of age this coverage will provide you with up to 120% of the depreciated amount. This can be a great help when you go to replace that totaled car!
- Diminishing deductibles: Are you a safe driver with few claims? Consider higher deductibles with diminishing deductible provision. For every year you don’t have a claim, your deductible drops by $100. This can be a great strategy for controlling your insurance costs.
Home Insurance –
- Pre-fixe vs Ala Carte – Historically home insurance has been sold in bundles providing you with many coverages you may not know you have. This trend has caused many buyers to expect broad protection at the time of loss, and they are correct. A new trend in the market is to allow the consumer to pick and choose the coverage limits and protections they want. While in concept this it attractive to help control costs, I don’t believe it is adjusting consumers expectations of coverage. If you decide to change your insurance program to an ala carte coverage selection, make sure you have a thorough conversation with your agent. Over the years, I have seen many people cut coverage to save money only to forget they had done so when a loss occurs. We have a written agreement with our clients when they want to restrict or reduce coverage to save money. This document becomes an important reality check at the time of a claim.
- Underground Service Coverage: it used to be that if an underground utility line leading to or from you house was damaged, you had to pay for this out of pocket. I clearly remember a call from my mom, who lived in Allentown, after she was told by the water authority that there was a leak from the water pipes under her yard. It was an uncomfortable conversation with her agent (me) when I explained her insurance wouldn’t pay for the $9,000 bill to excavate, repair the pipe and restore her yard. This new product is in response to such claims and can be a real help when this arises.
- Loss Prevention – Many carriers are beginning to work with their clients in the use of water detection monitors. Some of these devices will detect if your water is running too long while others sense if water is accumulating. These can be a real help in warning you of a potentially serious condition. Speak with your agent as some carriers are offering these devices free or at a discounted rate while others are providing discounts to their rates.
Cyber Crime –
- This is the fastest growing area of crime. If you have never had a credit card compromised, consider yourself very lucky! With my business clients we have a broad range of Cyber & Data Security insurance programs that EVERY business should have. For the purposes of this article I will limit my comment to protection for consumers. Check your home insurance policy and see if you have Identity Recovery or Identity Protection This inexpensive can be a lifesaver if your personal information is compromised. Your insurance carrier is typically partnering with a third party who is equipped to walk you through the necessary steps when this happens. Talk to your agent about your specific coverage.
On-Line Offerings –
- Does Amazon sell insurance? Not yet! But there are several companies offering almost instant coverage on-line. Many of these use Artificial Intelligence (AI) in their on-line portal to interact with you. Consider the fact that you will be buying important protection coverage from someone (or a machine) that knows little about you. Will they take the time to review options or strategies to manage your cost? A good insurance agent can work with you to develop a protection plan that addresses your individual needs and meets your expectations.
In 2019 I expect to see a continued growth of technology in the retail insurance marketspace. Some of it will help reduce your risk of loss while some will improve our ability to better service your insurance needs. As with any technology there is a learning curve. Speak with your agent to develop a plan to better protect yourself and your family.