Check out these 4 pieces of advice that Dave Ramsey says about insurance!
Today I’m going to talk to you about the insurance advice that Dave Ramsey would give you. We are a Dave Ramsey endorsed insurance agency, or a Ramsey trusted agency. We worked really hard to earn that accreditation and that endorsement for them. We earned it because a lot of the advice we give at our agency really follows closely in line with the advice that he gives to his clients as well. Part of the equation there is to make sure that you’re able to stay on your path for financial peace.
We believe that, and we help you to see how your insurance comes into play with that. So if you learn about the advice that Dave Ramsey gives you about insurance, and how that comes into play with your desire to one day have financial peace.
Advice #1 – Get An Independent Agent
We are an independent insurance agent, we work in the states of Louisiana, Texas, Arkansas, Mississippi. And we are independent agents. That means that we work for you, you are our client, we don’t work for the insurance company.
We represent a lot of different insurance companies and we work for them as a contractor. But you are our client and we work for you. We talk to you, we understand where you’re coming from, what your life situation is, and what your insurance needs are. We then look through the different markets that we have to find the best fit for you. Our number one goal is to make sure that you get the best fit for you. And because we have a lot of different insurance companies, we could typically find the best rate for you as well. So, the number one thing that Dave Ramsey tells you to do, is to get yourself an independent insurance agent. That’s who he endorses, that’s why we are one of those agents for him. We work for you as an independent agent.
Advice #2 – Protect Yourself With Higher Limits
Many times other companies may just try to sell you based on price, and that may compromise you. You need to know that you need to protect yourself and your assets by having higher liability limits.
There are several different types of policies that you buy that you have now, or that you may need to buy. And the most inexpensive part of those policies is typically the liability part of it. Let’s talk about one policy for sure, if you own a vehicle, you have an auto policy.
Well, you could buy the state minimum limits inside of the state, but that’s not going to protect you. Because what’s going to happen is, if you have an accident where you’re at fault, whether you mean to or not have an accident. If you don’t have enough liability insurance, they’re going to come after your personal assets.
What does that mean? That means if you have a state minimum or even just lower liability limits, maybe a 100,000 liability limit. You have an accident and you’re deemed to be at fault, that policy pays its maximum of the limit, they’re done. Then you need to get your checkbook out.
And if you don’t have that, they’re going to come after your assets, which is like your home, your auto, and other things like that. Maybe your retirement, they may garnish your wages. To protect those things with a higher liability limit. The second part is your homeowner policy. We buy a home, and the thing that we think about is the amount of coverage we need to have on the house.
Why do we think about that? Well, because the mortgage company is going to say, “Hey, you’re buying it for this, you got to have at least this much on the house.” And you don’t even think about, “Well, what about the liability limit?” Well, the liability limit, I’m going to tell you, it’s probably more important.
Because if you have a claim, again, that comes underneath your homeowner policy as a liability claim. If they max out that limit, they’re going to come after your home. I see all the time, whenever clients come to us and that we help them, that they may have a $300,000 house, and they have $100,000 on their liability part. If they have a claim, they’re going to lose their house, don’t let that happen to you.
Advice #3 – Buy an Umbrella Policy
Here’s the deal, you may or may not have one now, but if you own anything, you need to have one. Typically, most auto policies and also homeowner policies, the highest limit they’re going to give you is going to be 500,000, and you may think, “Oh gosh, that’s a lot.”
And you may think, “There’s no way I would need any more than that.” Well, maybe you won’t, maybe you will. Stop for just a minute and do a little personal inventory and think, “Okay.” I want you to add up some numbers real quick in your mind, as I sit here and talk to you. I’m going to give you some different items and I want you to think about, “Well, how much are they worth?”
What is an umbrella policy, and do you need umbrella coverage for yourself? This post covers everything you need to know about having a personal umbrella policy. If you’re looking to make sure your liability insurance will cover what you need, look no further!
All right, well, how much is your home worth? Think about that. Well, how much are your vehicles worth? Add those to that number? How much money do you have in your savings account, your checking account, and your retirement account? How much do you think you’re going to earn over the next five, 10, or 20 years? I bet you that was over half a million dollars or over $500,000. I feel very sure that it’s over that amount.
If you have an incident that goes over your liability limit, they’re going to come after your personal assets, which is all those different things I just listed. You can protect them very easily with an umbrella policy. You can buy umbrella policies of a million, half a million, two million, five million, whatever you think you need.
Now, I’m not going to tell you you need to get your 10 million or five million umbrellas, you may or may not. But do consider at least increasing your liability on your auto, on your home to the maximum that you can get, which is about 500,000. Because the cost is so much less for that than it is for other things on your policy.
Typically, you can trade-off, going to the highest limits on your auto or your homeowner, by just taking a little bit higher deductible on your home or your auto for comprehensive or collision. It’s an easy trade-off. And umbrellas typically are going start at 100 to 200, maybe $300.
If you don’t own your home, buy a renters policy, you can get liability insurance under there. So make sure you’re protecting yourself and protecting your assets from being taken from you. Make sure you protect your dreams of one day having financial peace, or also may be providing for children so they can have a good education, by protecting your assets and your earning capacity.
Advice #4 – Ways To Save Money On Insurance
Well, the easiest way to save is, you pick a higher deductible.
Look, if you’ve got a $250 or a $500 deductible on your home, your comprehensive, or your collision coverages underneath your auto policy or under your homeowner policy, you need to increase those. Because you do not need to turn a claim in underneath those amounts. Really, you need to have at least $1,000 deductible, if not higher.
Look, depending on how much money you make in a year, there’s no reason for you to turn a claim in potentially underneath $2,500. Why? Because any of those claims that are in that category are underneath that. They’re going to cost you over the next several years by you losing a claims-free discount.
Almost all policies out there have a claims-free discount. And if you file a claim, you’re going to lose that discount, which could basically be equal to the amount of that claim that you just got paid. So it’s always best for you to not file those small claims.
Did you know that you can save money on your Auto Insurance? In this video, we will give you tips from Dave Ramsey that we agree with, and you will know how to make the most from your policy while saving money!
If you have an independent insurance agent like us, we’re going to talk to you whenever you turn a claim in, or you say, “Hey, I have this incident that happened.” We’re going to ask you some questions and make sure that you don’t fall into that trap, where you file something, that’s really just going to cost you anyway.
We’re going to help you to make sure that you make the right decision. One of the direct writers, or one of the 800 numbers, or one of those cubicle agents that don’t know you, they’re not going to do that for you. So we’ve developed a relationship with you, we know you, we work for you. Remember, we work for you as an independent agent. We’re going to watch out for you and make sure that you don’t file claims that you ought not to.
So that’s the four different things that Dave Ramsey will suggest to you about your insurance. Again, those things are, one, is get yourself an independent insurance agent, protect yourself with higher liability limits, get an umbrella policy, and number four, different ways that you can save on your insurance. You can trade-off, take a higher deductible, get higher liability limits, and it’ll work out better for you in the long run on your way to the financial peace.
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Beaux Pilgrim, CEO