The Bailout Program?

July 8th, 2011  – UPDATE:  It’s been 9 months since I created the earlier post.  The economy has not gotten any better.  In fact; it’s my opinion it’s become worse.  The amount of policy cancellations for non-payment of premium is at record levels.  Our busiest day of the week is Friday.  No one has money till Friday. I read a recent article about Walmart and their shoppers.  Walmart recently reported their customer are now shopping every two and three days for food and other household needs.  Some folks are working 1 and 2 more jobs and using the extra money to pay for the additional cost of gasoline and other necessities.  People are cash poor.  Where in the past folks has extra money to carry them through the week, now their broke.  Let’s hope the upcoming presidential election will force a change in Washington.  Bottom line, whatever our law makers are doing is not working.

As an Insurance Broker for thousands of Car & Homeowner Insurance clients, I’ve seen first-hand how good and bad the economy can impact families across our country. As the many followers of my Blog know, I started in the Car Insurance & Homeowners Insurance business in December, 1992.

Sitting in my small 2 room office in North Wales, PA, I finally wrote my first Budget Car Insurance & Homeowners Insurance customer, Robert Hanney, in February of 1993.  Although I did not know it at the time, Robert’s future financial situation would help me help others keep their Car Insurance and Homeowners Insurance policies during hard financial times.

As you may imagine, I have spent a lot of time on the telephone with my customers. Not only do we talk about their insurance needs, we also share personal information about ourselves, our families and our jobs. Done the way it should be done, relationships form the foundation of this business. Bottom line; we get to know each other and in many situations become good friends.

In 1998, the economy changed for the worse and families nationwide started feeling the strain. This was about the first time I started seeing a trend of customers’ policies cancelling for Non-Payment of Premium. Our new business was slowing too, so we also felt the impact.

This is when I received a call from Robert. He explained that he had lost his job 4 months prior. Although he had some savings and had been receiving Unemployment Insurance, paying his bills including his Car & Homeowners Insurance on time was becoming difficult. He was concerned this would lead to his Car Insurance and Homeowners insurance policies being cancelled. Robert explained he had already lost his Health Insurance, Dental Insurance and Life Insurance when he lost his Job.

I assured him we would find a solution and explained letting his Car Insurance & Homeowners policiy cancel was not the answer. I told him it would be better to lower some of his Insurance Coverage and shift the savings to another obligation. Since he owned his home, I explained lowering his Bodily Injury and Property Damage limits to the State Minimum or Liability Only was out of the question. This was the coverage which protects his assets when a collision is determined to be an At fault accident. Lowering those would put his home in danger of being attached by a legal action.

Reviewing both his Car insurance and homeowners policy thoroughly, I showed Robert some Premium Savings Options which would still leave him with superior coverage to protect his assets. In the end, it was decided to drop the Collision Coverage on his 2 cars. One 8 years old; the other 7 years old. These premium savings alone totaled $800.00 a year. After lowering a few other items on his Homeowners Insurance, the entire savings came to $950.00 off his Car & Home Package.

The resolution of Robert’s story brings us to the present. About 18 Months ago, I noticed what seemed to be the same economic trend starting again. Little did I know though, that the situation I experienced 12 years ago would be nothing as severe as it would turn out to be today. The bottom line is, today’s economy is the worst I’ve ever seen and experienced. Unfortunately; the majority of the polices we’ve written recently are minimum limit policies. People can not afford more. Even if they wanted to attempt lowering their limits to save a few bucks – they can’t. The policies are already at the State Minimum with nowhere to go but to cancel.

Indeed, in this financial climate, the number of Car Insurance Policies cancelling is substantial. It upsets me that so many good people are making a choice between putting gas in their car or paying for their car insurance Policy. As a result; there is now a standing order in my office: NO ONE WHO CALLS MY OFFICE TO START OR RESTART A CANCELLED CAR INSURANCE POLICY WILL BE TURNED AWAY BY INSUREDIRECT.COM.

We receive at least 200 calls a month from people who have insured with another company and were turned away when their policy cancelled for Non-Payment. We will not turn those people away PERIOD. We will immediately rewrite any new or existing customer’s Car Insurance policy.

As a nation, we will only get through these tough, tough times if we work together to hold on to what we’ve worked so hard for. You have my word that Insuredirect will do everything it can to work with you to reach that light at the end of the tunnel.

– Mike

Michael E. Dortch
President &  Managing Agent
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602