Money Rehab with Nicole Lapin - What Do You Need to Insure?

Episode Date: November 30, 2021

Why stop the good insurance times from rolling? Today Nicole calls up her insurance guru Nichole (double Nicole trouble!) and asks her what people should take out insurance policies for, and what to do if you lose jewelry your ex gave you (asking for a friend). Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. Why stop the good insurance times from rolling?

We've tackled health insurance in recent episodes because tis the season for open enrollment. But your health isn't the only thing you should protect. To help you decide what else in your life you should insure, I'm bringing on my own insurance guru, also named Nicole, on the show. Yes, this episode has double the Nicole, double the fun. Nicole, I'm so excited to have you here. Welcome to Money Rehab. Thank you, Nicole. I'm excited to be here. So would you introduce yourself to our listeners and tell them a little bit about what you do? Absolutely. My name is Nicole Salzman, and I am a personal risk advisor.

And what that means is that I do personal insurance. I work in the entertainment, sports, and high net worth arena. The most important question is who's your favorite client? You. And you are my most favorite insurance. I don't think I call you a broker, though. Like a consultant person, anyone I've ever spoken to about insurance, basically. Well, thank you. Yeah, you definitely go above and beyond. Like you are cool. I mean, you and I text in the night. Like, I mean, we have more of a, you know, conversational relationship than I've ever had talking about insurance, which is typically,

you know, quite boring. And so I thought you've given me so much insight for my own policies and my own insurance life that I wanted to share that with others. Well, thank you. Thank you. Well, on the show, we've talked a little bit, not necessarily about insurance life, but life insurance and health insurance. But that's really just the tip of the iceberg. What are some of the other common things people come to you to insure? We typically do homeowner's insurance, which is, it's the talk of the town right now in California. We've been hit with wildfire seasons over the last five,

six years. The Thomas fire kicked that off and kind of got us into a position where insurance carriers are more looking at risk as far as homes and close proximity to brush. These are things that they would kind of accept in the past. And, you know, the insurance carriers are out there to mitigate from paying a claim and kind of making the best circumstances for themselves, but also insuring you properly. So in the past, insurance carriers were taking all of these homes in these brush areas, and now they've kind of looked at that type of stuff and gone, okay, well, let's start looking at it and determining, are we putting ourselves at risk here to pay a claim? And not only is it close in proximity to

brush to experience a fire, but you've got smoke damage, which travels. So we've hit a very hard market as a result of this. So those are some of the things that we touched on. A lot of people think that a homeowner's policy is going to cover all perils, and it doesn't. You do have exclusions and you do have things such as earthquake and flood that are excluded on a homeowner's policy. One of the big things that people don't realize is that you have sublimits and limitations on policies, a homeowner's policy for jewelry. So some people think, oh, I have a homeowner's policy. It covers personal property, my engagement ring included. Well, it might be included, but it's going to be included for a very low, low, low amount. So you've got, depending on the insurance carry, you might have a $1,500 sublimit for jewelry, and they go on up to about $5,000.

Oh yeah, girl. I know a lot about jewelry insurance. Yeah. So you can actually obtain a separate policy, a collections policy. Which I have. Which you have. Thank you. And that you can schedule your items out and get it insured for what's kind of considered

an agreed value. And the insurance carrier will list it out and you'll have a schedule and then you'll have your agreed value for each item that's insured. So that's one way to do it. The other way to do it is blanketing the coverage. And when we talk about limits and sublimits, you're really talking about things of value when it comes to personal property. So you've got your jewelry. You also have a fine art. You have jewelry. You have China, anything of value and anything that can kind of be picked up and walked away

with easily. The insurance carrier is going to put a limitation too. So when you have items of value, collectibles, baseball cards, stuff like that, you do want to separate that out and kind of include it on a collections policy. And you can schedule it out or you can do a blanket limit, which when you have that blanket limit, the insurance carrier is saying, okay, we don't know exactly what we're insuring, but we'll provide you, you know, $100,000 in jewelry coverage. And then you'll have a sub limit to that where they'll say you only have X amount per item. So you have $100,000 in blanket coverage and you have a $5,000 per item limit. So with that, and because they don't

know what they're insuring, sometimes they'll have, well, most times they'll have an onus of proof clause on the policy that in the event of a loss, you have to provide proof that you owned it and proof of the value. Yeah. And sometimes they ask to talk to your ex-boyfriend who bought you certain jewelry, and then you freak out. I'm just saying I've heard this somewhere. I heard a story on the internet. So there's obviously a lot of stuff that you should think about insuring, especially when it comes to valuables. There's all sorts of different kinds of policies, of course. So for any listeners thinking, shoot, I should probably sign up for X, Y, Z insurance policy. What should their next steps be? Next steps, you have to contact a trusted advisor so they can kind of have that

discussion with you to determine what you have. Do you have a home? Do you have cars? Do you have a collector card? Do you have jewelry? What are your assets as a whole? Because then you go in and your underlying policies, your home and your auto policies, they have limits on their liability. So they're only going to pay so much in the event of a loss. In order to protect yourself properly, depending on your assets, you should have an umbrella policy. And the umbrella policy goes above and beyond those limits on that primary policy to ensure true value of your assets and to protect you for current and future earnings. Hold on to your wallets, boys and girls. Money rehab will be right back. Now for some more money rehab. And when you say find a trusted advisor, sometimes I suggest to go to the CFP

website for financial advisors. Is there anywhere you should go to find somebody legit or good? You do want to do your research. You do have brokers and you do have agents and you do have direct rider policies. I can't really throw out some examples there, but sometimes you have somebody that is really selling you premium and not selling you coverage. So as a consumer, most people are thinking, okay, I want the cheapest insurance out there, but sometimes you get what you pay for. And you have insurance contracts that aren't as broad as other contracts. Every contract for an insurance carrier is completely different. So you want to make sure that you have someone that knows those contracts and how to become creative. There are certain discounts and things that each insurance carrier will provide you. And

so those are the types of conversations you want to have. You want to have the conversation of your asset. You want to have what mitigation features you have on your home. You have to have somebody that you can talk to and that has the conversations when you and I have conversations and listening to every word you're saying so that I can, yeah, thank you. So that I can kind of pinpoint, okay, this is what's going on now in her life. What has changed and what do I need to move forward with as far as insurance is concerned? You know, when I'm talking to clients and they say, oh, I recently got engaged. Okay. Well, here's the conversation for your homeowner's policy has limitations in regards to jewelry. We need to start looking

at a collections policy. And when you say do your homework and do your research, what do you do? Do you just type in Google agent or broker? And also what is the difference? You can Google. You can definitely Google. Or ask your friends, I guess. Yeah. You can reach out to me directly. I am more than willing to help anybody who needs the help.

There's a lot of brokers out there and you really do have to do your homework. Talk to them. If you get the sense that they're knowledgeable, there's questions that you can ask them what carriers they work with. There's a ton of them out there. Some of them have broader contracts than others. Yeah. I've definitely sent you messages about some very exotic things like my face or my voice to ensure there would be an insurance policy for basically everything. In my new book, I talk about Dolly Parton has insured her boobs and all of different athletes have insured their

body parts or their fingers if they're a pianist and things like that. So you can get really creative. And also, I'm not paying you. You guys are getting paid from the insurance companies, right? Correct. We don't not charge a broker fee. We obtain a commission. Most insurance carriers, their rates are filed and approved by the Department of Insurance. So when they file and approve those rates, those are their set rates and we get a percentage of that. So it's not something that's increased on the back end from the insurance carrier or whatnot. But just to be super clear, like I've never given you money. I've never sent Nicole a check specifically. That's not how it works. Yeah. There are brokers out there that do charge broker fees. And that's another thing that when you're shopping for a broker that you might want to ask, do you charge a broker fee? Because some brokers either charge a set fee or they charge a percentage of the premium. And that can be costly.

There's so much jargon in this world. Like I remember just even listening to you talk as you're throwing down umbrella policy and all these things. Now I know what this is. But I remember a time when I had no idea. I was like, wait, what umbrella? That's the thing you use when it's raining. Right. Right. You know, who learns this stuff in school? Who teaches us this type of stuff? What is what are like some of the jargon things people should know as a quick cheat sheet? There is a lot because like you said, the insurance language, it's a different language when you're looking at an insurance contract and you do have to have somebody that can kind of break that down into, it's not even layman's terms. It's just normal terms. Your most important, as far as terminology is concerned, and you can look at your insurance policy and kind of look at it and ask your agent questions, but a dwelling is the main structure

of your home. Anything detached is going to be other structures. And this is, these all kind of are line items and they go in that order. So you've got your dwelling, which your most important asset, and then you've got your other structures, which is anything detached could be a guest house or garage. And then you've got your personal property. Your personal property is anything that if you pick your house up and turn it upside down, anything that falls out of it, your bedding, your clothing, your shoes, furniture, appliances, electronics, all of that is your personal property. And then you've got your sublimits to that personal property, which is anything of value, your jewelry, fine arts, collectibles.

And then you've got loss of use on an insurance, on a homeowner's policy. And that provides you the cost in the event that you are put out of your home, your home is no longer, you're not able to live in your home anymore. And you have to rent a hotel, that loss of use is going to provide you with hotel expense, laundering meals. So that all goes into that all plays into that limit. And that limit is typically a percentage of your dwelling limit. And it sometimes can be increased. In this market, we're finding that a lot of insurance carriers, they will write homes that might experience smoke damage, but they're going to provide you

really little loss of use. Because if you're evacuated, they have to pay that claim, that loss of use claim. So they're limiting that. So be careful with that. And then you've got your personal liability and your personal liability is going to, a lot of times you hear the slip and fall. So if you invite somebody over to your house, you put your coffee table because you liked it in, but the insurance policy will defend you and take on those fees to go through the process with you, defend you in the event that you're found liable, then your liability pays. And that's where you have your limitation on your primary policy. And if it exceeds that, then you dip into your umbrella policy. And it works like we would use our health insurance with deductibles and premiums. It's the same thing for all kinds of insurance, right? Correct. There is typically a deductible on insurance policies, and that is your responsibility in the event of a loss. So you're responsible for the first amount in order for the insurance carrier to kick in. So an example would be if you experience

a loss on your auto policy and your vehicle is damaged and it is your fault, you have a collision deductible and typically they're $500 to $1,000. So you pay the first $500 to $1,000. Same thing with a home. If you have a homeowner's policy and you experience a covered loss, you're going to pay the first, you know, homeowner's policy deductibles are typically higher because you're not going to report a small claim on your homeowners policy. And that's another topic that I'd like to discuss is be very careful when reporting claims. You don't want to report a bunch of small claims on your insurance policies. They're all looked at the same. If you have a $10,000 loss on your homeowners policy, or you have a $200,000 loss on your homeowners policy,

you now have a claim on your homeowners policy. And in this market, you want to avoid those really small losses. Same thing with your auto policy. You don't want to have five window losses, glass losses. They're small losses. Sometimes they're a hundred dollars, but when you have five glass losses, you have insurance carriers that will say, we don't want anybody that has more than three claims, regardless of fault or how they happened. So you limit yourself and then you're being charged for them, where if you just paid that a hundred dollars out of pocket originally, you actually would have saved yourself money because in the long run, and the insurance carriers are going to charge you for those losses for three years.

It's one of the most frustrating things. I'm not going to lie that I think about when it comes to insurance. And you and I have talked about this where I'm like, wait a minute, this is why I have insurance. Like, what do you mean I'm not going to report a claim? That's why it exists. That's why I pay these things whenever they take money out of my account, whenever I'm supposed to. But really, you should look at it as catastrophic insurance across the board. Correct. You're, you're, you're saving your insurance for a large loss. You don't want to, you don't want to use it up on these small little losses.

You want to protect your insurance policy and have it as long as you possibly can, or you have a big loss and then you report a small loss, you now have two losses. So it's, it's best to kind of, and that's another thing, that's where a trusted advisor comes in. We assess the situation, we determine, is this the best way to go about this? Do we want a second claim on this insurance policy? If it's catastrophic or a significant amount of money, then absolutely. But if it's a nominal amount, you definitely want to assess that and decide, okay, maybe I should pay this out of pocket because I'm going to be charged for it in the future. And then I might lose my insurance policy

and have to pay more with another carrier. For today's tip, you can take straight to the bank. At the end of each year, I like to update an inventory I keep of my assets. Around New Year's Eve, we're all really nostalgic anyway. So why not reflect on the updates in your financial life? If you don't have a personal inventory, you should start one now. That's the first step in deciding which of your assets you should insure. Why not start 2022 with new year, new you, new peace of mind. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team,

Michelle Lanz for her development work, Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.