Teachers, are you missing this insurance coverage? [VIDEO]

Insurance is a funny thing. No-one likes paying premiums, but everyone is sure glad they have it when the need arises. But insurance comes in different shapes and sizes – the insurance you have may not be the right type for your neighbor. Additionally, the insurance a near-retiree has in place may be different than what a new teacher needs.

In this video, I talk with an insurance broker / expert about the three things teachers should think about when it comes to insurance:






Dave:               With me today is a gentleman called Matt Backe. I don’t bring regular Joes on here. Matt and I know each other personally. We live on the same street. We are part of the same Homeowners Organization on the Board. Our kids go to the same daycare. Our wives are teachers. I mean, we’re almost like brothers, just from different mothers.

So, I’m going to let Matt introduce himself professionally and give you an insight into him. And, we’re going to cover the three tips that teachers need to follow with their insurance. So, if you’re thinking of, “Do I have enough? Do I have the right type?” we’re going to cover that today, and also give you some pointers as well.

Matt:                Thanks, Dave. My name is Matt Backe. I am an account executive with Lundstrom Insurance here in Elgin, Illinois. I specialize in both personal and commercial insurance, and I’ve been with Lundstrom for about three and a half years. Aside from that, I have been in the insurance industry since college. So, it’s all I’ve ever known from a professional standpoint.

Dave:               What do you think is the top thing that retiring teachers need to think about with insurance?

Matt:                It’s a good question. Particularly for retiring teachers, I would think that, at that stage in life you’re accruing assets; you’ve put a lot of money into pension plans, perhaps other retirement accounts in order to have your nest-egg ready. I would say that as you’re doing that and accumulating wealth is to make sure that you’re personal insurance grows in step with that.

In particular, a personal umbrella policy is a really nice (and typically in the grand scheme of things) an inexpensive way to be sure that those assets are there, and not going to be potentially taken away should something happen – be it either very bad car accidents, or some sort of an accident at home because lawsuits happen. This is a good way to add layers of protection to your overall insurance portfolio.

Dave:               Okay. I’m going to throw a wild one at you.

Matt:                Sure.

Dave:               Is there a certain, I guess, sweet spot where someone would consider that type of insurance?

Matt:                You know, most insurance policies, really every insurance policy, both auto and homeowners, does provide some liability coverage. It’s just that sometimes you just have to do some self-monitoring to be sure that it’s enough. Typically, a rule of thumb in insurance speak, is just you want to have enough liability coverage to protect your net worth.

Dave:               Okay. What is one thing that you see in homeowner’s insurance that people overlooked?

Matt:                Good question; really good question. It really depends, because each person obviously is different. Each one has their own needs and exposures, and things that they care about. But I mean, what I see consistently underinsured more than anything would be water back-up.

There are coverages that are built-in and each carrier does it differently. However, there’s coverage that is available called sump-sewer-drain back-up which gives protection should that exact same thing happen. And oftentimes, especially folks with finished basements or perhaps they store a bunch of things in their basements event if it isn’t finished, it just tends to be a point that’s very, very underinsured often. And it’s a good speaking point to just simply bring it up to inform people.

Aside from that, I would just say, too, it’s a matter of almost doing a constant review on folks. Again, as you go through life, you tend to accumulate kids and their have stuff. So, you just want to make sure that your insurance program grows with you. Again, you want to be sure and guard against over-insuring because there’s no sense in paying money for something that you perhaps don’t have. However, it is something to monitor closely.

Dave:               That’s good because we know, we’ve both got kids and they’ve got expensive stuff!

Matt:                From their grandparents.

Dave:               Of course, of course.

Now, tying in to that. Something that—you know, I’ve looked into personally just due to some inclement weather we’re having in Illinois. How does flood insurance work with homeowner’s insurance? Is it all tied to one, or is it different? I mean, how does it really work?

Matt:                That’s a great question. Again it, to a degree, ties into what I mentioned as far as the backup of water sewer. There tends to be a high level of differences and what not because, oftentimes, when there is a bad weather event and people get water, they start to ask these questions. Unfortunately, it’s after the fact that they ask these questions.

But, flood insurance is something that’s typically excluded in every single homeowner’s policy. It’s a separate policy that is purchased. However, (a) it’s expensive, (b) it tends to come with high deductibles, and (c) it doesn’t give you the best coverage; it’s really there to kind of give you something in the event of something catastrophic.

Most homeowner’s policies will give you, as I had mentioned, a degree of water backup, something like that. However, that’s not for surface water coming in, which would be deemed as flood. That’s going to be simply for, perhaps let’s say there’s such an inundation of water that the sewerage system can’t handle it and it backed up, or your sump because your power went out, failed, and now water is coming up through there. Up to a certain limit, that could be something that’s potentially covered, depending on the homeowner’s program.

Dave:               That’s why you’re the expert in these kinds of things because that is something that people don’t think about. Like you said, they think about it when it happens when they go look at their policy and say, “Oh, shoot. Maybe this wasn’t covered and I should’ve looked at this during the summer when I had no risk of it at all.”

Matt:                Exactly.

Dave:               Okay. Well, glad you’re here.

Alright, my final question for you, and you touched on it when you were talking about umbrella insurance. Over my career, a number of people, teachers and lots of executives, this seems to be the thing that people overlook the most, in my opinion, from working with people. What’s your take on umbrella insurance and why it’s so important?

Matt:                Yeah, I would echo your sentiment that it’s often overlooked. Certainly, it’s a talking piece that I have with everyone—even folks that are just first-time homebuyers up to folks with high degree of net worth because it’s still worth at least a discussion.

Now, again, it goes back to simply providing additional layers of protection to protect your assets. At the end of the day, that’s sort of what an umbrella policy is. It’s giving you additional layers of coverage because, you know, you don’t want to have to start over. That’s kind my point that I make with folks – if something bad happens. You know, there’s a bad accident, or something happens in the home, someone slips and falls, really injures himself badly. Lots of things happen, unfortunately, especially in the United States, and you don’t want to have to start over. That’s what the umbrella coverage is there to do: to provide you the ability to not have to start over.

Dave:               Great! Like you said, no one wants to do that.

Matt:                Correct.

Dave:               You got to keep what you got.

Matt:                Absolutely.

Dave:               Alright. Well, my aim today was keeping it short and sweet, and you’ve done a great job of covering those three points.

I’m going to put your contact details along with this video if anyone has any further questions on this, they can reach out to me or they can reach out to you as well.

Matt:                Absolutely.

Dave:               So, I want to thank you for your time, Matt. I know that your time is valuable, so I appreciate you coming and spending some time with me today.

Matt:                You’re welcome.

Dave:               I’m sure that we’ll see you in the future.

Matt                 Absolutely. I know where you live.