The Value of Coverage and The 3 Little Pigs

One of the biggest things we are seeing in the industry is people not taking their insurance coverage seriously and trying to save money without thinking about the consequences. All of the commercials about "15 minutes could save you 15% or more on car insurance" and our coverage is the lowest around... How low is low? Of course, if you cut coverage you will save money but what happens if there is a problem? That is when people start worrying about how much they should have versus how much coverage they actually have.

The 3 little pigs refer to the 3 types of homeowner's policies available. Actually, there are more but the 3 popular ones are the most important. People say they want cheap! So they get a Dwelling Policy 1 (DP1) which only covers the home for fire and nothing else. No contents, vandalism or wind coverage but the price is cheap so in the beginning they are happy. Much like the playful straw building pig that didn't work hard.

The second policy is the DP3 policy which covers more than the DP1 but still leaves a lot uncovered. This policy can be enhanced with personal property coverage but excludes theft. The home itself is covered at Replacement Cost but the carpet, appliances and other equipment is covered by Actual Cash Value. Basically, if you have an older home with older things, you are not going to get a lot of money back to cover everything you lost.

Then there is the Brick building Pig, the one working hard while the others play because he knows protecting his family is important. A Next Generation policy with Farmers is the most comprehensive policy the company offers and it comes as a package deal so very little is left out in the event of a loss. Replacement Cost Value is on the dwelling and the contents so a person can feel safe in this home policy.

Bottom line, saving money is important but don't let the Big Bad Wolf blow away everything you have. With the fires, tornados and recent flooding of the Mississippi, protection is important and you want to be the Brick Pig to protect yourself.