Math and value and flood insurance

Woke up early and was immediately thinking about one of my last conversations yesterday.  Let’s start with some math;

If you spend $1000 and in return I lower the cost of something by about $3000 what could you consider your return on investment(roi)?  $2000 not bad.  Not bad at all.

So in the first year of this new product you saved $2000 by spending $1000.  Now in the second year(assuming current numbers stay the same) you actually save $3000 since you do not spend the $1000 again.  So you have now made $5000 by investing $1000.  500% return.

Time to make ABC into ABO

So in the iconic sales based movie Glengarry Glen Ross the scene emphasizing “Always be closing” stands out as a signature moment;

Although the scene itself(**Some language, not for everyone) is brief the message it portrays decades of sales attitude.  Good for the rest of us that those decades are over and people much prefer to buy then be sold.

Then, of course, there is this;

About all this line, made famous here **some language**  Coffee in my world is for OPENING.

Opening conversations

Opening relationships

Opening dialogue

Opening ideas for further development

Who uses the phone book?

So like a lot of people, a phone book shows up in a plastic bag in my driveway.  Seems like it happens a couple of times each year.  For whatever reason this weekend I decided to open the bag.  Yes, it is smaller than I remembered.  It is also apparently very eco-friendly addition produced by Hibu .

Now, I am sure somebody keeps them and uses it a few times a year.  My household does not, fortunately today is garbage day so it is now in the recycle bin.  I did learn about www.yellowpagesoptout.com and have now opted out of the three available books.  Now what?

The perfect crime, insurance edition

Just read this by Seth Godin; The Perfect Crime a very similar thing actually occurs in Insurance.  Thanks for the idea Seth.

I cannot factually speak on any of the lobbying or NAACP points.  Instead here is what I do know.

None of the insurance advertising you see actually shows you how to be a better consumer in the long term.  The companies only concern is on switching your insurance this year which, since the cost to acquire customers is high, is pretty stupid.  It takes several years to turn a profit on any individual, why would you only advertise for this year?  Because you are conditioning the masses.

Tried and True or

Tried and now false, yes I was reading this blog and the concept immediately related to how I view insurance.  Sometimes I like to say “bringing a little unexpected to the expected”  Here are some of may favorites;

  • I have been with the same company for over three years and think that gets me some sort of “loyalty credit.”  Just be sure to get this in writing and make sure you are not paying extra for this “benefit”
  • I am with the same company for twenty years, I’m sure they are doing good for me. Sure, a big corporation is making sure they are charging you a fair price.  If you are not reviewing annually you are missing out.

What professionals do you see each year?

So the obvious one for most people is the doctor, most insurance companies pay for an annual physical so hopefully you use it.  How about the accountant who does your taxes?  If you use a financial planner I hope you are checking in at least once if not twice or even four times a year.  You probably even see the dentist once a year as well.

Why not your insurance consultant?

How to take control of your claim

Step 1.Remember why you have insurance, it is not for the little annoying thing that you can comfortably afford to fix.  It is for the event that you need help paying to fix.  Filing a claim because  “I pay for insurance why shouldn’t I use it…” can get you in to trouble. **What is trouble?  Trouble is having rates on the higher side of the market for at least three years**

Are they really saving you money?

How can a carton character advertise “we’ll review your policy and make sure you are only paying for coverage you need….” Apparently this cartoon should also buy a lottery ticket because it can predict the future.

How is it that you will know the coverage you need or do not need.  Maybe you do not need coverage for a rental car if you already own three cars.  Maybe you have AAA and do not want to pay for towing coverage.  Ok, I understand.  But what about No-Fault coverage, do you really want to take only $50,000 in coverage because you may not “need” $175,000?  No thanks I’ll take $175,000.

Saving money is bad…sometimes

You hear it constantly on the radio and T.V. It shows up in your mail on a weekly if not daily basis, heck a banner ad probably popped up before you even got here.  Each insurance company quoting exactly how much money they can save you or how many discounts are available and rarely getting specific on coverage.

Yes, I think saving money can be bad.

If you have not taken the time to review your insurance plans on a regular basis you may actually be saving too much money.  Yes I just said too much money.

Are you overinsured?

I am aware of no way to ever say someone has too much insurance, the fact is you just never know.  There is just one circumstance you can say you may be overinsured when it comes to a home.  An insurance company is insuring the cost to rebuild your home.  They are not covering your tax assessment nor are they covering the market value of the home or even what you think your home is worth.