Long Insurance Services of Kernersville, NC


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All posts by Duane Long

Guaranteed Replacement Insurance

What is Guaranteed Replacement Cost?

Guaranteed Replacement InsuranceThere are few things in life worse than losing your home to fire or a natural disaster.

Except, that is, discovering in the aftermath that you don’t have enough homeowners insurance coverage to rebuild the house back to the way it was before trouble struck.

If you get guaranteed replacement cost coverage, that is unlikely to happen. Why? Because guaranteed replacement cost will pay for the full cost of rebuilding your house back to its previous size and specifications* – right down to the granite countertops, custom bookshelves, and gleaming hardwood floors that you so love.

“Guaranteed replacement cost gives you peace of mind,” says Bob Buckel, vice president and product manager at Erie Insurance. “The reality is that it’s almost impossible to estimate to the penny what it’s going to cost to rebuild a home. We take that worry away from you.”

In fact, the vast majority of ERIE’s homeowners insurance policyholders opted in to guaranteed replacement cost coverage to protect their most valuable asset – their home.

Keep in mind that guaranteed replacement cost isn’t available in all states. In North Carolina, ask about Enhanced Replacement Cost. For specific questions or a personalized estimate for your home, talk to a local insurance professional like an Erie Insurance agent.

How Much Coverage Should I Have on My House?

When you purchase a home and start thinking about protecting your investment, this is often the first question. The answer is often: More than you just paid for it, Buckel says.

“People naturally gravitate to how much they paid for the house, but we’re not insuring it to buy it from you – we’re insuring it to rebuild it in case something happens,” Buckel says. “The question you need to be asking is, ‘How much would it cost if a builder needs to rebuild it?”

See also: How Much Does Homeowners Insurance Cost?

This is why replacement cost is often more than market value for your home, or even what you might be able to sell it for.

Figuring out rebuilding costs can be elusive, as a range of factor contribute to what that actual cost might be. Guaranteed replacement costs takes the guesswork out, assuring that you’re covered – even if you need to rebuild your entire home*.

As A Homeowner, You Have Choices

Guaranteed replacement cost is one of a range of choices – called “loss settlement options” in the business – which insurance companies offer to homeowners. Common loss settlement options include:

  • Replacement cost
  • Extended replacement cost
  • Actual cash value
  • Guaranteed replacement cost

Each one works a little bit differently. Different insurance companies offer different things, too. (For example: ERIE does not offer actual cash value loss settlement for the dwelling on your primary home – it’s only available for secondary homes and contents. You’ll learn more about actual cash value below.)

Here’s a breakdown of some of those key differences:

Replacement Cost vs. Guaranteed Replacement Cost

That one word – guaranteed – makes a big difference if you’re facing a total loss of your home.

When you’re issued a policy with just replacement cost, the insurance company works with you to project how much it would likely cost to fully replace your home. You can see the replacement cost and the specific limit for your policy on your declarations page. Replacement cost is provided up to the limit shown on the declarations page.

The replacement cost amount usually gets increased annually – usually by 2 to 5% based on inflation in your area.

Yet, if your home is destroyed and a builder actually estimates that the cost to rebuild is more than that replacement cost figure… then you, as the homeowner, are responsible to make up the difference. That’s why it’s important as a home owner to make sure you know and are comfortable with how much your home is insured for.

Here’s an example: If your home is insured at a replacement cost of $200,000, and in reality it is going to cost $250,000 to rebuild, then you either need to come up with an additional $50,000 or find ways to reduce costs… which could result in a smaller, less-appointed house than you originally had.

The premium amount you pay for replacement cost compared to guaranteed replacement cost is typically about the same, although some factors unique to your situation may make one or the other more expensive.

Extended Replacement Cost vs. Guaranteed Replacement Cost

With extended replacement cost, your insurance company assures that a financial cushion exists in the event that cost of rebuilding is more than the estimated replacement cost.

Specifically with Erie Insurance, that cushion is 25 percent above the dwelling amount, as shown on your declarations page. So for a home insured at $300,000, extended replacement cost would give you an extra $75,000 to work with. Yet again, if costs go beyond that extra $75,000… you are on the hook to make up the difference, or rebuild a smaller home. While 25 percent may seem like a lot, there are often circumstances that cause costs to soar well beyond that.

“When a hurricane or tornado does a lot of damage in a specific area, the cost to rebuild skyrockets,” Buckel says. “Everyone is trying to rebuild, and the cost of lumber, labor and building supplies all go up. If you don’t have the right coverage, you are not going to have nearly enough to rebuild.”

            Related: How Named Storms Affect Your Insurance Coverage

Premium costs for extended replacement cost are generally comparable to guaranteed replacement cost, although some factors unique to your situation may make one or the other more expensive.

Guaranteed Replacement Cost vs. Actual Cash Value

In simple terms, actual cash value is basic coverage. While there’s no doubt that actual cash value is typically your least expensive option, there is also truth in the old saying, you get what you pay for.

With actual cash value, you get coverage for a pre-determined set amount, and no more. Further, some policies also factor in depreciation of things such as an aging roof – so you may end up with even less than the policy states.

Compared to guaranteed replacement cost, actual cash value often offers the least attractive option as you will likely be required to pay out-of-pocket costs if you aim to restore your home to its previous design and condition.

As we mentioned above: ERIE does not offer actual cash value loss settlement for the dwelling on your primary home – it’s only available for secondary homes and contents.

Better Safe Than Sorry

Of course, the ideal scenario is that you will never need to use guaranteed replacement cost coverage. That’s why it’s so vital to be proactive in protecting your home.

Yet, if you do need it, you can rest assured that guaranteed replacement cost coverage will provide the money necessary to rebuild without requiring you to shell out additional cash.

“If it’s a covered loss and costs run high, we will pay whatever the difference is,” Buckel says. “It’s on us, not you.”

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Small Business Insurance

6 Tips to Track Your Small Business Expenses

Small Business InsuranceIf you’re a small business owner, chances are you didn’t start your company out of a passion for bookkeeping. But as you grow, financial management becomes an increasingly important responsibility.

For many, it’s an unfortunate truth. We all know that running a small business takes long hours and a lot of hard work. And this often means tasks like tracking expenses can easily fall by the wayside. But this important job plays a critical role in successfully managing your cash flow.

If you don’t keep tabs on how much money is going out, you can quickly find yourself in a difficult situation. Keeping an eye on your expenses will not only help you reach financial goals, it can also provide some extra deductions come tax time. (For specific advice about your individual tax situation, remember to always consult a tax professional.)

So how can you make sure you’re tracking your costs wisely? Use these six tips as a guide:

  1. Keep business and personal expenses separate. One of the biggest mistakes many small business owners make is mixing their personal and company expenses. Not only is this difficult to track, it can also be problematic in the event of a tax audit. Always use separate bank accounts to pay your bills and carry two separate credit cards – one you use for personal purchases and one that’s just for business expenses.
  2. Know what qualifies as a business expenses. According to the IRS, a business expense is one that’s both ordinary and necessary. Taking a client out for lunch? That will likely qualify as a business expense. Taking your client out to a baseball game afterwards? New changes in the tax law have made most entertainment expenses no longer deductible. Consult your tax adviser for further clarification.
  3. Log expenses immediately. We’ve all gone through a credit card statement and found purchases we didn’t remember making. For this reason, it’s important to record your purchases as soon as they’re made. Taking this diligent approach will help reduce the risk of an accounting error. And there are plenty of technologies that make it quick and easy (see No. 6).
  4. Organize your records. It’s time to ditch that shoebox full of crumpled receipts. Instead, keep all your receipts in a folder according to their month. Or better yet, scan them or snap a picture on your phone to store the images digitally. For recurring payments like utilities, create a notification on your calendar so you can remember to print and save your bill.
  5. Review your expenses regularly. Now that you’re tracking expenses, be sure to take a routine look at where your money’s going. Check your books every week to ensure expenses appear in good standing. This will help reduce the risk of bounced checks or unpaid invoices. Then, at the end of each quarter, look at your expense trends. This can help you identify areas where cuts can be made.
  6. Use technology to your advantage. Keeping a written ledger or updating an endless spreadsheet can be exhausting. Luckily, there are plenty of mobile apps and online tools that can do the job for you. If you’re already tied to an accounting software, major players like Concur and QuickBooks may be a good solution. But there are plenty of other great (and often low-cost) options available. Some other popular options include Zoho ExpenseExpensifyRydoo and Shoeboxed.

As a small business owner, you’ve got a lot on your plate. So when it comes to protecting everything you’ve built, you need someone you can count on.

https://www.erieinsurance.com/blog/how-to-track-business-expenses

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Teen Driver

Help Teens Drive Safer

This Program Uses Brain Science To Help Teens Drive Safer

For many teens, getting a driver’s license is a prized rite of passage. But with drivers age 16 to 19 involved in more accidents than any other age group – it’s also a risky and nerve-wracking time for parents.

So, what’s a safety-minded family to do?

Enter teenSMART®, an award-winning crash reduction training program from ADEPT Driver®. A new partnership between Erie Insurance and ADEPT Driver offers special discounted access to the program to teen drivers covered by ERIE policies in Wisconsin and Virginia.

Read more: What To Know About Insuring a Teen Driver

Using advanced behavioral science and research, teenSMART offers youthful drivers realistic and challenging driving simulations. Teens that complete the computer-based course learn skills proven to dramatically reduce teen driver crash frequency and severity.

Even better? Teens who complete the program may be eligible for an auto insurance premium reduction when they’ve finished.

HOW DOES IT WORK?

The teenSMART training is divided into short 30-minute chapters that teens can complete at their own pace on their home computer. It takes about 8 hours to complete. The program is designed to address these six behavioral and social factors that cause 90% of all teen car crashes:

  • Visual Search
  • Hazard Detection
  • Speed Adjustment
  • Space Management
  • Risk Perception
  • Lifestyle Issues

The curriculum is reinforced with in-car driving exercises and other activities for parents (or another licensed adult, age 25 or older) and teens to complete together. Learn more about the curriculum on the teenSMART website.

ADEPT’s teenSMART program has been proven to reduce crash frequency by up to 30% and bodily injury by over 50%. Read more about the research in this whitepaper from the Traffic Injury Research Foundation.

ABOUT THE NEW PARTNERSHIP

“ADEPT Driver incorporates cutting-edge behavioral science to improve driver behavior and reduce teen drivers’ risk of collisions,” said Jon Bloom, vice president of personal auto, Erie Insurance. “One of the key components of ERIE’s mission is to provide as near perfect protection as is humanly possible. Offering our customers proven tools to protect their new driver, when they are at the greatest risk of injury, helps us fulfill this mission. We encourage all teen drivers to complete teenSMART training.”

“We are delighted to partner with Erie Insurance to reduce teen driver crashes,” said Dr. Richard Harkness, CEO of ADEPT Driver. “ERIE is a premiere brand and insurance industry leader. We are proud to join with them to improve safety on our roads and highways by making teenSMART available to their customers.”

HOW CAN I SIGN UP?

This program is currently available to ERIE customers in Wisconsin and Virginia. If you’re an ERIE customer, contact your local ERIE agent for more details or visit the teenSMART website.

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Business-Insurance

Business Risks You May Not Think About

Risk control consultants are the preventative care professionals of business insurance. They can help you detect potential hazards to your business’s well-being and help you understand what actions you can take to keep things healthy.

Good news: Qualifying customers who have business insurance with ERIE have access to customized risk control services. That’s just one more way we’re looking out for you.

Learn more: How an ERIE Risk Control Consultant Can Help You

Bob Kupris, a commercial insurance veteran with more than 30 years in risk control, leads ERIE’s team of risk control consultants. We asked him for an insider’s perspective on what consultants look for – and the surprising things they find.

RISKY BUSINESS

To get things started, let your ERIE agent know that you’re interested in focusing on risk control for your business.  ERIE’s professional consultants can offer many resources to help, including a walk-through for  businesses who qualify. . They’re looking for ways for you to mitigate risks by identifying potential loss exposures and providing information on solutions to control and/or eliminate them.

ERIE’s consultants have specialized areas of knowledge –property, commercial auto, workers’ compensation, products liability and construction/contracting – to better meet customers’ needs.

Their keen eyes are quick to spot things you might expect, such as fire protection. However, there are a few less obvious risks Kupris says are equally as common and – in some cases – on the rise.

SURPRISING CULPRITS

You know the ins and outs of your business better than anyone. So, what might a risk control consultant be able to see that you might not?

Here are a few surprising trends risk control has noticed:

  • Lack of commitment from management. Maintaining a hazard-free workplace is the law, according to the U.S. Department of Labor. What’s more, it’s more likely to happen if owners and managers make it a priority. A recent OSHA study found that non-fatal workplace injuries cost businesses more than $125 billion a year.With that in mind, Kupris says the first thing he notices is management controls to determine the commitment to workplace safety. “It’s one of the most important things we look at,” he said. “Companies that have management support tend to have better safety records and also tend to be more productive.”
  • Data breaches caused by your company. According to the Insurance Information Institute, credit card fraud and employment-related fraud are two of the top five ways consumers fall victim to identify theft. It’s the area of risk Kupris says he’s seen grow the fastest. Having iron-clad cyber security safeguards against hacks and the right coverage is the best way to prevent your company from experiencing, or potentially causing, a data breach.Related Reading: Is Your Business Data Secure?
  • Employees distracted behind the wheel. In ERIE’s 2018 distracted driving study, it was discovered that in fatal car accidents caused by distracted drivers, 61 percent were generally inattentive. Kupris says drivers of commercial vehicles are no exception to this scary statistic and he’s seen a spike in commercial auto claims, which can affect your insurance rates and everyone’s safety. Does your business employ a no cell phone policy for your drivers?If your drivers have to use GPS, is it hands-free?

THE ERIE APPROACH TO RISK CONTROL

Providing preventative plans to these risks and more is where ERIE’s risk control consultants shine. Here are some examples of the most unique support in the industry they provide to commercial customers, at no additional fee:

  • All the tools in their toolbox. For qualifying ERIE customers,consultants offer a wide range of risk control services, including OSHA Outreach Training Programs, customized written safety programs and disaster planning resources from The Insurance Institute for Business & Home Safety.

  • Support that isn’t just for the big guys. ERIE offers follow-up consultations to help businesses, regardless of whether they’re the biggest fish in the pond. “Many insurance companies won’t go out on something small,” Kupris said. “But at ERIE, we don’t operate that way.” If you want follow-up assessments or training for your business, ask your agent how ERIE can help.
  • A close working relationship with your ERIE agent. “It’s really a joint effort,” Kupris said. “ERIE agents really take a genuine interest in their customers and our team of consultants. That’s something you don’t always see at other places.”
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JD Power 2019

ERIE Earns Top Ranking in J.D. Power Shopping Study

The results are in: Thousands of people shared their experiences about shopping for auto insurance in a national study, and Erie Insurance was awarded “Highest Satisfaction with the Auto Insurance Purchase Experience.”

Erie Insurance earned the highest score among auto insurers in providing a satisfying purchase experience in 2019, with a score of 917 on a 1,000-point scale. The industry average was 852.

ERIE has ranked highest in the study consecutively since 2013.

JD Power 2019

“This recognition speaks directly to the importance of an insurance agent in the shopping experience. The guidance, insight and personal attention ERIE agents give to their customers is not something that can be replicated online,” said Tim NeCastro, president and CEO of Erie Insurance. “To receive this distinction for the seventh consecutive year is a tremendous honor.”

The U.S. Insurance Shopping Study measures auto insurance shopping, purchase behavior and purchase experience satisfaction among customers who recently purchased insurance. Satisfaction is measured on three factors (in order of importance):

THE STUDY METHODOLOGY

The J.D. Power 2019 U.S. Insurance Shopping Study SM provides an in-depth look at the auto insurance policy selection process. It explores why customers shop, their attitudes toward and perceptions of auto insurance brands and how they make their final purchase decision.

The study is based on responses from more than 14,400 insurance customers who requested an auto insurance price quote from at least one competitive insurer in the past nine months and includes more than 38,800 unique customer evaluations of insurers. The study was fielded in April, July and October 2018 and January 2019.

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