There are many things business owners worry about each day, and employee injuries are at the top of that list. Even in the safest of workplaces, an employee can get injured very easily. You can make yourself crazy trying to create the best environment for your employees, but unfortunately, you can’t prevent every claim (i.e. slips and falls or car accidents).
Selecting classes, buying books, and choosing a meal plan are just some of the steps students take to get ready for college. Parents, on the other hand, are worrying about how to pay for school, the safety of their child while away, and maybe even beginning to experience a little bit of empty nest syndrome. With all that hustle and bustle, making sure your child has adequate insurance coverage when going away to college can be easily forgotten. Don’t worry, we’ve got you. At Berry Insurance, we guide many clients through this new transition every year. In this article, we’ll review all the various scenarios that could apply to you and your college-bound kid, and let you know how to best navigate changes to your insurance. Your Kids’ Belongings If your child will be going away to college, and living on campus, they’ll probably be packing a lot of stuff to take with them. I remember filling up two car loads when I headed off to school! Fortunately, most Massachusetts homeowners policies will cover any lost or damaged items belonging to students while away from the primary residence. While many insurance companies will cover your student for the full limit on your policy, some may limit this extension of coverage to a maximum of 10% of your personal property limit. Let’s say that you have $25,000 of personal property coverage – that means that only $2,500 would be available to your child while away at college. There is also an additional wrinkle in this coverage. In most cases for coverage to be extended, the student must live on campus, maintain a full-time schedule, have previously lived at the insured home before leaving for school, be under the age of 24, and must be a relative of the named insured on the homeowner insurance policy. A change in that status could put their coverage at risk. For example – dropping a class halfway through the semester could change their enrollment status to part-time,leaving them with no coverage. You’ll want to check with your insurance agent to find out how your insurance company will handle this. If coverage is limited to the 10%, you may be left underinsured for your child’s belongings. Now, if your child will be living off campus, you will definitely want to obtain a renters insurance policy to cover their belongings and to give them liability coverage. If your child will be renting, and having a roommate, you should make sure that everyone has their own coverage, as a renters policy will likely not extend to roommates. The average college student’s renters insurance policy costs less than $200 annually and includes coverage for personal belongings and personal liability coverage. Interestingly enough, if your child will be studying abroad, the same rules apply as if they were living on campus. So be sure to check with your insurance agent to find out how much coverage they have before they fly out. Your Kids’ Statements It’s true what they say – “kids say the darndest things” – and sometimes, that applies to our college-aged children as well. Inside and outside of their studies, kids are engaged in a variety of social media apps, chat rooms, video platforms, classroom learning applications, and a host of others. Many of these platforms include chat features, and while we never want to think our child would say something bad on the internet – it happens. Personal injury coverage on your homeowners policy (or on their renters policy) will provide protection against claims for defamation, libel or slander made by you or your children. Unfortunately we live in a technological world where even the best intended comments can be misconstrued very easily. Adding this coverage to your policy is very inexpensive and a must-have in today’s world. Your Kids’ Driving If your child will be taking a car to college, you’ll want to notify your insurance agent. In most cases, if the car is registered to you and listed on your auto insurance policy, it will be covered in an accident. But – you must notify your insurance company of the change in garaging location. If you do not do this, you could potentially have a claim denied. Now, what happens if your kid won’t have a car on campus? If they decide to drive a friend’s car, they would be covered as long as they are still listed as a driver on your auto policy, even if they’re not technically “regularly” driving your vehicle. The insurance for the friend’s vehicle would be the primary coverage, and your policy would be secondary. But what happens if you removed them from your auto insurance coverage since they were away at school? Again, the insurance on the vehicle would be primary, but if your child was found at fault, you may be without liability protection. When your kid goes away to college, it creates added complexity to your auto insurance needs. We recommend talking to your insurance agent about all the possibilities to make an informed decision when coverage is concerned. Your Kids’ Grades Good grades = good news! Once your child has a semester under their belt, their good grades can help you obtain a discount. Good student discounts are available from most Massachusetts insurance companies and could save you 10% on your auto insurance policy. Getting Covered Before Your Kid Goes Away to College Before you pack up the car and send your kid on their way, give your insurance agent a call to discuss your coverage options. This is a very exciting time for both you and your child – congrats from all of us at Berry Insurance! After your child goes away to college, and you’ve settled into your new routine without them home, you may want to consider reviewing your own personal insurance policies to make sure they reflect your current situation and you’re not missing any coverages or paying more than you need to.
With the new school year quickly approaching, many parents and families are finding themselves at a loss for how to handle the potential of online or remote learning this fall. I think we’d all agree that right now, we just feel utterly unprepared. And it’s no surprise. When schools shut down in the middle of March this year due to Coronavirus, we all hoped and prayed that this nightmare would be over by the new school year. But as we’re quickly approaching August, it is clear that we still have a ways to go. Many of us at Berry Insurance are parents, and are grappling with decisions for remote learning this fall. There are so many things to contemplate! Several of our clients have been reaching out for guidance, and I myself have been wondering what is best for my four young children. How will our children adjust? Will there be any social or behavioral effects? How will we manage our new roles as teachers, and potentially, as working parents? But there is also one more question we have to grapple with – will remote learning impact my insurance coverage? And the answer is, yes, it potentially could. Let’s dive in. Remote Learning and Homeowners Insurance If your child will be remote learning in the fall, whether it’s elementary school, middle school, high school, or college, there may very well be a few adjustments that need to be made to your Massachusetts homeowners insurance policy. Computer Equipment If you’re like me, you may have had to purchase a few extra laptops this spring to enable your children to work online. If not, perhaps your school district supplied you with a school laptop. Or, your child might be provided a laptop as part of their college tuition costs. Regardless, it’s likely that the number of electronics has increased in your home. If that is the case, you may need to adjust your computer coverage. Many insurance companies provide a sub-limit of around $2,500 for computer coverage. If this limit would not be sufficient to replace your existing devices, you may want to increase this coverage. Cyber Protection In my last count, our family of six has a total of 20 computers, wifi printers, laptops, smartphones, ipads and smart TVs in our home. And I could be missing one or two. These devices are part of our everyday life and in some ways, especially when concerning remote learning, they are essential. But they also create new avenues for cyber hackers to access our network and steal information. Many insurance companies today have created home cyber protection coverages that can provide increased liability coverage to defend against these types of claims. A limit of $50,000 could cost you as little as $50 a year, and may be worth consideration if you have an increase in devices on your network. Personal Injury Coverage Remote learning has children involved with Google Classroom, Zoom and a host of other online learning platforms. Many of these platforms include chat features, and while we never want to think our children would say something bad on the internet – it happens. Trust me… Personal injury coverage on your homeowners policy will provide protection against claims for defamation, libel or slander made by you or your children. Unfortunately we live in a technological world where even the best intended comments can be misconstrued very easily. Adding this coverage to your policy is very inexpensive. Pollutants You might be wondering what remote learning has to do with pollutants, and believe us, at first, we thought the same thing. But if you have a high school or college aged child, pollutants could become an issue for you. We’ve been hearing from some schools and colleges that lab kits will be sent to the students to complete at home as part of their remote learning requirements. If this will be the case for your child, there are some important limitations to your policy you should be aware of. Your homeowners policy contains a pollutants exclusion, which is most commonly applied to the discharge, seepage, release or escape of pollutants. The definition of what is considered a pollutant is: “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.” Now, let’s review a few examples. If a chemical reaction caused a fire, it could potentially be a covered loss. But on the other hand, if a pollutant leak causes damage to your property – say your son spills some chemicals that damage your new kitchen countertops – that would likely be excluded. It’s important to note that this could be a gray area for many insurance companies – as this type of claim has likely never occurred before. So it’s best to review your coverages and exclusions with your insurance agent, so they can work with the insurance company on the best coverage for your individual situation. Business Pursuits Another area of concern, specifically for college-aged students, would be if they are engaging in any remote work arrangements while home for the semester. If your college student has arranged remote work study, paid work, internship, or otherwise, there could be limitations in coverage should a claim occur. A standard Massachusetts homeowners policy will not provide coverage for anything “arising out of or in connection with a ‘business’ engaged in by an ‘insured’.” Unfortunately, this is another gray area. Whether a work study would count as a “business” would depend on the circumstances of the claim. Again, we recommend letting your insurance agent know if your child will have any remote work while at home. Remote Learning and Child Care It’s no question that a return to remote learning this fall will create some logistical problems for working parents. We’ve heard from several clients that they are considering hiring part-time or full-time caregivers for children, either to cover the before-school and after-school care, or to be home all day long. Some are hiring to simply handle drop-off and pick-up duties. And some families are considering hiring a teacher to hold in-home co-op learning for small groups of children. If any of these situations have crossed your mind, you will want to note that your homeowners insurance policy will not cover anyone caring for your child, or offering their teaching services. These individuals, even if only getting paid for an hour a day, would be considered your employee, and thus you would need to obtain a workers compensation policy to cover them. A Massachusetts Workers compensation policy with a $1,000,000 limit costs $293 a year. Hiring someone to help with child care is stressful enough as it is, so be sure you know what nanny insurance is, and what you need to apply for nanny insurance coverage. Get Covered for Remote Learning We know many of you are still waiting to hear from your child’s school on the decision of whether to return to in-school or online learning. And some of you, regardless of what the school decides, have made the choice to keep your child home and engage in remote learning. At Berry Insurance, many of us are facing these very same decisions. We’re sending you virtual hugs! If remote learning is one of your options, be sure to give your insurance agent a call today to discuss what changes you may need to make to your insurance policies. While you’re at it, ask your insurance agent for a complete review of all your insurance coverages so that you can be sure you’re back-to-school ready this fall!
COVID-19 aka Coronavirus is affecting us all in different ways. Some of us are continuing to work our regular jobs (either at the office or at home), having been deemed essential employees. Others, however, have been furloughed or even worse, laid off! These are certainly trying times for us all. For those of you who have been impacted financially, whether personally or as a business owner, you are likely trying to figure out how you will get through this time of uncertainty. “How long will I be out of work?” “How much money do I have saved?” “Which bills have to be paid? Which bills can be pushed off?” “How will my business survive this?” Att Berry Insurance, we know you are grappling with trying to find the answers to these and so many more questions. We know, because we’re going through the same turmoil as you. The government has tried to come through with several levels of assistance for individuals as well as corporations with the CARES (Coronavirus Aid, Relief, and Economic Security) Act. But is that enough? While we don’t promise to have all the solutions. We reached out to our tax accountant, Steven Thebodo, CPA, shareholder of O’Connor, Maloney & Company out of Worcester, MA to get some tips for everyone to use today. Personal Financial Tips during a Crisis As an individual, there are a few things to consider to help you get a better handle on your finances and reduce your expenses during the coronavirus pandemic. Tax Planning The April 15th tax deadline for filing personal tax returns has been extended to July 15th. This extends any amounts due with the tax return as well as any retirement contributions such as IRA and SEP contributions. First quarter individual estimated tax payments are also now due July 15th. Required Minimum Distributions (RMD) can be waived for 2020. (An RMD is the minimum amount you must withdraw from a retirement account based on your life expectancy after you turn 70 ½ .) If you are old enough to have an RMD, you can defer it for 2020. Individuals with inherited IRAs can also defer their RMDs this year. Retirement plan borrowing has been made much more flexible with the CARES Act. Individuals can now borrow up to $100,000 from their retirement accounts and repay it within a 3 year window without tax implications. This is typically not advisable by financial experts for several reasons. Most especially, if you borrow the money now while the market is so low, you may be paying it back after the market has recovered, causing the long term financial impact to be much worse. CARES Act As part of the new stimulus package, most individuals will receive a $1,200 rebate check. Married couples will receive $2,400. For each child dependent, you will receive an additional $500. Before you get too excited, there is an income limit. If you earned over $75,000 as an individual or $150,000 as a married couple (based on your 2019 tax return), your rebate will be reduced, possibly to $0. Note: If you have not filed your 2019 return, they will use your 2018 return to calculate your rebate amount. Check out the CARES Act rebate calculator to determine exactly how much you can expect. 11 Tips for Managing Your Personal Finances There are many ways you can manage your personal expenses right now. Here are a few options to consider, though this list is certainly not exhaustive. Figure out which bills are essential and which bills can wait. Reach out to the vendors to inquire about delaying payments or setting up payment plans. (Many insurance companies are offering extensions on policy payments right now. Be sure to call your insurance company to inquire!) If you are of retirement age and not yet collecting social security, you can opt in if you need the cash. For credit cards, be sure to make at least the minimum credit payment. Don’t skip a payment unless absolutely necessary! The additional fee charged and potential impact to your overall credit isn’t worth it. (It may be worth a call to the credit card company to see if they will defer payments. While interest will likely accrue, you can avoid the late charge.) Mortgage payments may be deferred up to 3 months by your lender. Call your lender and inquire if your loan qualifies or if the bank is participating. (But be careful of mortgage forbearances, as the costs could be devastating when payments begin again.) Car loans may also be deferred. Contact your lender to see if they are participating. Again, interest will likely still accrue. Utility bills can usually go a couple of months before being shut off. We wouldn’t recommend starting here, but if cash gets tight, it may be an option for a month or two. Be sure to call your utility company to inquire if they have any deferment options or to see if your state has enacted a law to prohibit them from being shut off during the crisis. Cut back on your retirement contributions. This will help with cash flow, but overall it’s not a great investment move. The market is at its lowest in years, which means if you continue to invest, you will be buying low and have a lot of upside if you can continue to contribute. (However, like you, if it comes to feeding my family or saving for retirement, I’m feeding my family.) Cut out non-essential spending. Do you really need to purchase that toy for your kid? In a time when it’s easy to overspend on things to fill the void (or childhood boredom), it’s better to take advantage of all the free tools and resources out there right now instead. Cut out non-essential travel. Just stay home and don’t waste the gas. Only go out for groceries, doctors, and necessary supplies. As part of the CARES act, for federal student loans, there is no interest, and loans are automatically put into administrative forbearance until September 30th. You do not have to pay and any auto debit payments won’t be taken (although, you can still keep paying them if you want to bring down the balance of course.) If all else fails, look to untapped home equity loans which could provide temporary cash relief. Remember, these are just options and may not be the best for your personal situation. Also, as you reach out to vendors for deferred payments, be sure to find out what the terms are. Some vendors may require you to repay all the deferred bills at once, or may spread out the payments, which could increase your normal payment over a period of time. It may be that you end up saving now, but creating a greater burden later. For more answers about how COVID may affect your personal insurance, check out COVID-19 FAQs: Business & Personal Insurance Coverages. Where to Cut Business Expenses During a Crisis As a business owner, you are not only worrying about your personal finances, but those of the business as well. Making sure your business survives this pandemic is a top priority for you. Here are few ideas to help you deal with cash flow issues you may be experiencing. Government Assistance There are several business loans/grants available: Economy Injury Disaster Emergency Relief Funding – $10,000 advance that does not need to be repaid if you qualify. This is to provide a quick influx of cash to cover immediate need for payroll and other expenses due to lost revenue. Funds may be available 2-3 days after approval. Paycheck Protection Program Loan (PPP): Will provide 2.5 times your monthly payroll costs. Must be applied for through an approved SBA lender. This loan is potentially forgivable and may not be required to be paid back. This is supposed to be an expedited process to get funds to you quicker. Economic Injury Disaster Loan Emergency Advance (EIDL): An SBA program that existed prior to COVID-19. You may receive up to $2 million in loans at a preferred interest rate. This process is more involved and takes longer. Employers paying employees while they are not working are eligible for a 50% refundable payroll tax credit, up to $10,000 on wages paid during this crisis. Local lenders like Massachusetts Growth Capital Corp offer Economic Disaster Injury loans at low interest rates. Keep in mind: you cannot utilize both the PPP Loan program and the EIDL Loan program. However, you can request the $10,000 relief funding and apply for the PPP and/or EIDL program. 11 Tips for Managing Your Business Finances While there is no perfect solution for expense management during this time, there are a few quick ways you can make an impact to your bottom line. Talk to your landlord about a rent reprieve. Keep in mind that each landlord is in a different financial situation and may or may not be able to help. Utilities can be postponed a month or two. Again, we wouldn’t recommend starting here, but if cash gets tight, it may be an option for a month or two. Be sure to call your utility company to inquire if they have any deferment options or to see if your state has enacted a law to prohibit them from being shut off during the crisis. Mortgage/loan payments may be deferred. Contact your lender and ask if it is possible and if there are any negative effects of deferring payments. Shareholder/owners reducing or eliminating their salaries for a period of time. For retirement plans with optional matching contributions, you may be able to opt not to match until the pandemic ends. Temporary reduction in salary for employees. We’ve heard of a few companies that have instituted company-wide pay cuts on a temporary basis during the crisis. Reduction in operating hours. Moving full-time staff to part-time, or to working from home completely may help reduce your overhead costs. Things like utilities and office supplies automatically decrease if your office is not occupied. Employee layoffs or furloughs. While it’s unpleasant to think about, it may be necessary to survive. Keep in mind however that many of the government assistance programs outlined above were designed to help businesses continue to pay employees and keep employees working. In addition, the CARES Act creates additional relief for unemployment benefits. Review your budget. Analyze all general ledger expenses for items that can be eliminated or cut back. Examine your service contracts, and speak to vendors to try and renegotiate terms where possible. Freeze company/employee spending accounts, requiring all purchases to go through a pre-approval process first. If necessary, reduce spending on company perks. (Be careful here though, as to not reduce employee morale in an already incredibly trying and stressful time.) Don’t forget to run a break-even analysis to plan for reduction in revenues. Knowing what your forecasted figures are for various reductions in revenue will allow you to better determine how extensive your cust reduction efforts need to be. What’s Next? Honestly, we have no idea. Our best advice is to take each day one at a time. Be sure to stay up to date on the latest government programs and be vigilant with your spending as best as possible. Also, check out “Business Insurance: Where to cut costs in a crisis (and where not to)” for more suggestions. But don’t forget, even during times of crisis, you may have to spend in areas where you weren’t planning. For example, my utilities and food expenses have increased now that we’re all at home all day. Be sure to plan for areas in your budget that may increase as well. Remember, the process of evaluating your finances, whether personal or for business, will continue to be a fluid process. Also, be sure to check out our COVID-19 resource page for a list of all the local, state, and federal coronavirus resources. Stay safe, stay healthy!
Editor’s Note: This is one of a series of reviews about shopping with online insurance companies we will be putting out in the next several weeks. To ensure a dynamic perspective and full, balanced review, both Kaitlyn Pintarich, President of Berry Insurance with 17 years of insurance experience, and Corin Cook, Content Marketing Specialist of Berry Insurance who is brand new to the insurance industry, separately reviewed Swyfft, making notes of their thoughts and impressions of the quoting process and results. In today’s technology-driven world, shopping online for insurance is an incredible convenience. And many times, shopping online, at least at the outset, can result in the appearance of some serious savings. I get it. I mean, who doesn’t want to save money? As a mom of 4 young boys, I comparison shop all day, every day, making sure that I stretch each dollar as best as I can. And as an insurance agency owner, I was curious. Is shopping online the best way to go? Could I save money for our family if I put my Massachusetts homeowners insurance with an online insurance company? I did my research. And today I’m going to share with you an honest review of shopping for homeowners insurance with Swyfft. I already know what you’re thinking: “Honest? Yeah right.” Hear me out. I know that shopping online has its advantages. I also know that working with an independent insurance agent might not be the right fit for some people. I totally get it. But, I also know that sometimes shopping online isn’t always as simple as it’s made out to be. I’ve seen first-hand how some of these online companies cut corners or neglect to provide clients with a full picture of their coverage, simply to get more sales. At Berry Insurance, we prioritize honesty and transparency, making sure our clients always understand the coverage they are purchasing, and why. We don’t undercut coverage, nor will we inflate coverage. No matter which way you choose to shop, we want to make sure you are adequately protected for your unique needs. So let’s dive in and explore the good, the bad, and the ugly of getting an online homeowners insurance quote with Swyfft. And once you’ve read through, I’ll leave the decision up to you! Who is Swyfft? First, let’s start with who Swyfft is not. Swyfft is not an insurance company. The homeowners insurance policies issued through the Swyfft website are actually issued by an insurance company called Clear Blue Insurance: a company we’ve never heard of, and can find very little information about. That being said, there are many insurance companies in existence. But as a Massachusetts agency, we recommend insurance companies that have a strong presence in, and knowledge of, our state. So then, who is Swyfft? Swyfft was founded in 2015 and acts as an MGA or managing general agent. An MGA is an insurance agent/broker that has been appointed by an insurance company (in this case, Clear Blue) to sell only their policies, but is also granted more authority than a typical insurance agent. This means that while Swyfft is not the insurance company, they are able to appoint other insurance agents to sell policies, underwrite coverages and settle claims on behalf of the company. This is not necessarily anything to be concerned about from a consumer perspective, but we do feel it causes unnecessary confusion. How Do I Shop for Insurance with Swyfft? To shop your insurance with Swyfft, you will have to visit their website. As of this publication, there is no app available for use. When I shopped, I went online, and found the website to be very nondescript. Advantages of Getting Home Insurance with Swyfft After shopping with many online insurance companies, I was surprisingly impressed with Swyfft. Their quoting process offers several advantages over their competitors. Speed Swyfft claims to get you a “homeowner insurance quote in seconds,” and if you are looking for something quick, they certainly deliver. It didn’t even take 10 seconds to get a quote using their website! Simplicity Quoting was simple. Literally all you need to do is enter your home address and you receive a quote in seconds. You do not need to answer a single question in order to receive your initial quote. Convenience Once you’ve received your initial quote, the system remembers any adjustments made to it. For example, when I initially quoted my home, it gave me a dwelling limit that was much lower than I currently have. After adjusting the value, closing out and revisiting the website later (from a different computer), it remembered the value entered for that location. No need to login or anything. (Some) Increased Coverages “Other Structures” coverage provides coverage for structures on your property that are not attached to your home. These could be things like a shed, barn, fence, or detached garage. Swyfft’s quote automatically provided coverage for just under 11% of the home value. This is more than the typical in the insurance industry – which averages around 10%, and should be more than sufficient for most consumers. I was also very happy to see that personal Injury coverage was automatically included in my quote, as many online insurance companies are not providing this valuable coverage automatically. Personal injury coverage helps protect you against bodily injury and property damage claims and lawsuits, and in today’s world, it’s a coverage we recommend for every policy. Disadvantages of Getting Home Insurance with Swyfft Yes, shopping with Swyfft seems easy. But will you be properly protected with the policy you buy? And are you sure you are even buying from a reputable company? Here’s where Kaitlyn’s 17 years of insurance experience sends up a few red flags. Fear of the Unknown The Swyfft website leaves a lot to be desired. There is absolutely no information about who they are, what they stand for, how they handle claims, etc. In fact, there is very little information online about Swyfft at all. This sends up a huge red flag in my mind. The reason we buy insurance is to protect ourselves and have coverage if a claim occurs. If I don’t know how the company will handle my claim, what confidence can I place in them? Insufficient Coverage Amounts Upon entering your address, you are given an initial quote highlighting just your annual premium, dwelling amount, and deductible. From there, you can customize your coverage or click to buy the policy. As an insurance agent, I of course wanted to know what I’d be buying first, so I chose to customize so I could review all the coverages being presented in the quote. The first part of your customization options with Swyfft gives you the basic coverages – those coverages that come standard with every home insurance policy. At first glance, these coverages may seem good to you. Unfortunately, they probably are not good enough. While they are considered “standard” coverages, the limits provided by Swyfft are in my opinion neither adequate or sufficient. Let’s review. Home Value Swyfft provided me with a replacement cost value for her home that is 68% of what her current insurance policy offers. According to Swyfft, “We think that’s an appropriate value, but if you feel the value shown is inaccurate or improper, you can change that value accordingly.” But how do I know where they got this value from? To get a comparable quote to my existing coverage, I needed to significantly increase this coverage. When I increased the quote to my current limit, my premium increased just over 14%. Someone who doesn’t have an existing policy to compare to, or doesn’t have insurance experience might not know how to tell if the value is “inaccurate or improper.” Personal Property The Swyfft quote automatically provided around 50% of my dwelling value for personal property. My current policy gives 70%. The percentage isn’t so much as important as the total value. As a consumer, you’ll want to make sure the value is equal to 100% of the replacement cost value of your home. (If you aren’t sure what that is, an insurance agent can assess your home’s features to give you an estimate.) After increasing my dwelling amount, the personal property limit was still not enough, but I was able to increase it to where I am today. That change resulted in an additional 9% to my premium or around $268. Living Expenses (also known as “Loss of Use”) The Swyfft quote provided for 31% of the home value here. My current policy provides 40%. This coverage provides for additional expenses, such as hotel, etc., if you have to temporarily relocate while repairs are made, as a result of a covered claim to your home. Obviously, more coverage is better here, and this can be increased with Swyfft. Personal Liability I was happy to see that Swyfft defaulted to their highest available coverage here of $500,000, but in my opinion, this still isn’t enough. Personal liability coverage is such an incredibly inexpensive coverage that helps protect you against bodily injury and property damage claims and lawsuits. If Swyfft offered umbrella policies, I wouldn’t have an issue here. But they don’t, which leaves me without the coverage I need. What if someone slips and falls on your property? What if a child gets hurt on your playground, trampoline, or worse, in your pool. What if your dog bites someone? We’d like to think it will never happen to us, but in our litigious society, it’s not a stretch of the imagination to see how $500,000 won’t get you very far. Additional Replacement Cost Many insurance companies offer what is commonly known as “extended replacement cost” coverage. This helps protect you if the value of your home is underinsured at the time of a loss, and will give you extra coverage needed. Many carriers offer 25% or 50% additional coverage as options. Swyfft’s quote defaulted to “None” meaning not only did they quote an extremely low home value, but then they are not giving me anything extra. An option for the additional 25% was all that was available, and when selected, increased the quote by about 5%. So far, Swyfft offers all the basic coverages. Unfortunately, the coverage limits they initially present will leave you significantly underinsured. As a consumer, it will be important for you to pay attention to these coverages, and increase as appropriate to protect your family and assets. No Automatic Water Backup Coverage The Swyfft quote does not automatically provide for any water backup coverage, which to me is a disservice to consumers. Having lived through two water backups, I know first hand how incredibly valuable this coverage is. Adding the maximum available through Swyfft of $20,000 resulted in an additional 5% of premium. Mandatory Wind/Hail Deductible Once you scroll passed the Additional Coverages, you’ll find your deductible options. Here’s another huge red flag for you to be aware of. My default deductible of $1,000 was fine. But I was also quoted with a separate $1,000 wind/hail deductible. I could lower this to $500, but I could not remove it from my quote all together. This was concerning to me. Many insurance companies will include a wind/hail deductible on our policy, usually if you live in higher hazard areas that are more prone to severe wind or hail storms – such as coastal areas. But I live in a little town, in the middle of the state, with no known severity to storms. Assumption of Your Home’s Construction and Risk Characteristics If you keep scrolling, Swyfft next shows you some of the data characteristics about your home that they used to calculate your quote. It is unclear how Swyfft determine’s your home value, and where they are finding the data about your home. So if its wrong, it could mean your quote could be too low, or worse, too high. You can make adjustments to some of these characteristics if they are inaccurate, which may have an effect on the premium quoted. What’s Not Covered Unfortunately, I have no idea. The quote did not outline any coverages that may not be included. The website did not ask me any questions about my unique circumstances that may result in me needing more coverage than quoted. For example, I have a dog. Is my dog covered? I have a playhouse structure in my backyard. Is that covered? What if I had a pool or a trampoline? Would those exposures prevent me from being covered? I don’t know. Only when you click to Buy are you prompted questions about animals and made to verify some building details, such as square feet. But I still was not prompted for more specific questions about my life, which left me unsure of my overall insurance protection with Swyfft. No Personalization Unlike many online insurance companies, who use artificial intelligence to incorporate personalization into the quoting process, Swyfft opts for a no-nonsense approach. Never once did the quoting platform interact with me. Heck, even after clicking to buy, I was prompted to enter my payment details before I even gave them my name! I definitely felt much more like a sale to them. Higher Overall Pricing Unfortunately, it doesn’t appear that Swyfft is that competitive for Massachusetts homeowners insurance. My initial quote, before any adjustments came out to $2,506 per month, which is about 51% more than my current policy! After making all the necessary adjustments to compare Swyfft as closely to my current insurance policy as I could, the new premium came out to $3,480 – a 110% increase! Even at their minimum recommendations, Swyfft just doesn’t match up to the competition. Don’t let Swyfft leave you unprotected and cash poor I’m not sure where Swyfft came up with its name. But if it was to be a play on “swift,” representing speed or something happening quickly, it does a great job. That being said, while their online shopping process is quick, simple, and uncluttered, it unfortunately falls short on protection, price, and brand awareness. Let’s not forget….we’re Berry Insurance, a local, independent insurance agent. We know we’re biased, and we obviously feel that shopping insurance with an independent insurance agent is the best way to go. While shopping online with Swyfft can provide convenience, ease-of-use and speed that can’t be beaten, the pricing and more importantly, the protection, just aren’t there. If you’ve bought online with Swyfft, and would like a no-obligation review of your insurance coverage, please contact us today. We’ll be happy to give you feedback on ways you can save and get better coverage. And while we may not be as swift to quote as our competitors, we promise to be fair, accurate, and always look out for your protection needs.
If you’ve ever bought a new car or taken out a lease on a new vehicle, you’ve likely heard of gap insurance. When you were filling out your loan/lease paperwork, you were told that you should buy this from the dealership, but may not have been given a good explanation of what it is. At Berry Insurance, we talk to clients every day about GAP insurance – what it covers, how much it costs, and when you should buy from the dealership versus adding to your Massachusetts auto insurance policy. (Yes, you read that right – we might want you to buy it from someone else!) GAP insurance is very inexpensive when added to your auto insurance, but is pretty costly when purchased from the dealership. However, there are differences between the two. Let’s dive in! What is GAP Insurance? Your Massachusetts auto insurance policy will pay the “actual cash value” of the vehicle if its involved in an accident. It does not pay to replace the vehicle. This is an important distinction to understand. As soon as you drive the car off the dealership parking lot, the value of your vehicle has depreciated. If you are involved in a total loss or your car gets stolen, the insurance company will pay you the actual cash value of the vehicle at the time of the accident. If that value is less than your loan or lease amount, you could end up still owing the bank. GAP (also known as “guaranteed asset protection”) insurance fills in this “gap” to pay that difference. Let’s look at an example: You buy a 2019 Toyota Sienna for $35,000 and finance it with Toyota Motor Credit. You finance the car with a 72 month (6 year) loan, plus 3.99% APR. Your monthly car payment is $548. After 2 years you’ve paid a total of $13,152. You still owe $26,304. You are unfortunately involved in a car accident that totals your vehicle. Your insurance company will pay you the actual cash value of your vehicle. Let’s say that is $23,000. Without GAP insurance, you’d owe Toyota Motor Finance $3,304. With GAP insurance, you’d owe them $0. GAP insurance is not automatically covered on an auto policy. It must be added via an endorsement to your policy, when eligible. Here’s a sample of what the coverage looks like on a Massachusetts auto policy: Who is eligible to buy GAP insurance? GAP insurance can be added to an auto insurance policy within 30 days of purchase of vehicle. But it’s important to note that if you have an accident before that 30 days is up, and you haven’t added the coverage yet, you will not be able to add it after the accident. You also must have bought the vehicle using a loan or lease, and the vehicle must be 5 years or newer to be eligible. Do I have to buy GAP insurance? No, it is not a Massachusetts state requirement that you purchase GAP insurance. But if you lease a car, you might be required by the leasing company to carry that coverage. You would need to review the terms of your lease to determine this. How do I know if I need GAP insurance? Unfortunately, there is no way to know what the value of your vehicle will be at the time you have a claim. You can check out Kelley Blue Book to do some research and get an idea of what the depreciated value of your vehicle might look like. Or if you put down a large down payment, you might never be upside down (owe more than the car is worth) on your loan if an accident occurs. How long do I need to pay for GAP Insurance? There is no set length of time for buying GAP insurance. Typically we see most clients having the coverage for the length of their car loan or lease. Basically, until the car is paid off. You can remove coverage at any time. Some clients choose to do this when they feel that the value of their car is more than what is still owed on their loan. What is the cost of GAP Insurance? If you add GAP insurance to your Massachusetts auto insurance policy, you can expect to pay an additional $25-$50 per year. If you elect to purchase the coverage through the dealership/finance company, the cost will vary depending on the MSRP, loan term, amount financed and APR. Typically it can run you $500-$750. Many dealers and finance companies will try to “bundle” GAP insurance into the cost of your monthly loan or lease payment automatically, so be sure you ask before finishing up your paperwork. Why is GAP insurance more expensive through the dealership? The GAP insurance offered through the dealership will likely provide additional coverage that is not available with your auto insurance policy. These additional coverages are what drive the costs significantly higher. For example, the GAP insurance from the dealership typically will pay your deductible expense when the accident was your fault. Your insurance policy would only pay the deductible when you are not at fault. In addition to this, the dealership’s coverage will pay up to a specified amount of negative equity. Negative equity is created when your car is worth less than what you owe on it. Many times, when trading in a vehicle to buy a new one, a dealership will let you add that negative equity amount into your new car loan. Let’s look at the following scenario: You buy a 2019 Toyota Sienna and finance it with Toyota Motor Credit. You traded in a 2017 Dodge Caravan, which still had $10,000 left on the loan. The dealership sets up your new loan for your new vehicle, and rolls in the balance of your old loan as well. If you are in an accident and your new Sienna is totalled, the dealership’s GAP insurance will pay for the difference in the actual cash value and the loan amount for the Sienna, plus that $10,000 balance on your old loan. Another thing to keep in mind is that when you buy GAP insurance through the dealer, it is financed with the rest of your car payment, which means you are paying interest on this coverage as well, for the length of your loan. Can you cancel GAP Insurance? When you buy from the dealership, not likely. You will be paying the cost for the insurance plus interest for the entire term of your loan. When you buy through insurance, you can cancel at any time you feel necessary to do so. Is GAP Insurance Worth It? Honestly, it depends. Even if you are the safest and most conscientious of a driver, others on the road might not be. Not having GAP insurance could leave you unprotected should you become involved in a total loss accident, leaving you with a large balance owed to your finance company. For that reason alone, we always recommend it. Conversely, if you do not have a loan or lease, you won’t need the coverage at all. GAP insurance is confusing, we get it. At Berry Insurance, we love helping our clients figure out what the best option is for their unique situation. Sometimes that is buying the coverage through us, sometimes its buying it through the dealership, and others, its not buying it at all. We’d love to chat with you more about your situation to help you determine what makes the most sense for you. Learn more about ways to save on auto insurance in Massachusetts in our latest blog.