Episode #005 - Does homeowners insurance confuse you? In this episode we visit with Art Brucks with State Farm Insurance located in Burleson, Texas. Join us as we get to know Art and learn about homeowners insurance, deductibles, policy amounts, coverages, and much more (with a few laughs added in)! (https://youtu.be/GV5mwsFMiPY)
Art's Bio: Focus on Auto, Homeowners & Renters Insurance Call our office for QUICK & EASY Auto Insurance quote Meeting Life Insurance needs of our customers Helping solve Health Insurance complexity Focus on relocation to Johnson & Tarrant County Easy to find location in Burleson, Texas State Farm Insurance Agent Since 1980 Life long resident of Tarrant and Johnson County Graduate of the University of Texas at Arlington Board member - United Way of Johnson County Burleson Area Chamber of Commerce - Past Chair Burleson Rotary Club - Past President Crowley Chamber of Commerce - Past Chair CLU ChFC
Links from this episode
Coffee purchased from Dwell: http://www.dwellcoffeeandbiscuits.com
Art Brucks Insurance Website: http://www.artsmyagent.com
Transcription
Episode #005 REN Podcast Transcription (Art Brucks)
Jason: Alright, good morning, everybody. This is Jason Reynolds, with the real estate podcast. I have the one, the only Art Brucks, with State Farm.
Art: Good. I’ve got my cup of coffee. As long as we don’t have to sing karaoke -
Jason: Well, we do. I lied. Art is with the State Farm here in town, I’m going to highlight a little bit about him, and then we’re going to get in. Art, you’ve been an insurance agent since 1980?
Art: With State Farm since 1980, well, 1978 to be exact.
Jason: Okay, so where were you before?
Art: Equitable Life. They’re still around, but I’m not.
Jason: How old were you when you jumped into the insurance business?
Art: 22.
Jason: 22? What made you get into -
Art: Started with State Farm when I was 24. What made me get into it? A job posting at UTA.
Jason: Simple as that?
Art: Yeah. If you can knock on doors and talk, and they’d hire you. I sold all my family and friends, didn’t anybody else to sell so I got out of it. With State Farm, everybody needs car insurance.
Jason: Another fun fact about Art Brucks - he’s a notary club Paul Harris fellow, three times. So what does that mean, to be a Paul Harris fellow?
Art: That just means you’ve donated money to the rotary foundation. They give you a medal and call you a fellow of the Paul Harris foundation. You’ve got money, you can be one yourself.
Jason: Art has also, in 2015, even though he doesn’t remember, he was the chamber of commerce citizen of the year.
Art: I am in the 60s now. So...I don’t remember real well. My wife can remember the first time she got mad at me. We will be married 40 years now on May 20th. She has a great memory, and I’m the opposite, I like to forget.
Jason: Next interesting fact, you ran the 2016 Dallas Marathon.
Art: If you want to call it running; it felt like running, looked like walking.
Jason: Did you say you beat Mayor Ken Shetter?
Art: No, Ken ran this year and beat me by 10 minutes, but he’s got 20 years on me, so let’s see him be 60 years old and beat my time. I’m challenging anybody who’s 60 years old, has three surgeries, and flat feet. Beat my time. In fact, I beat your time, because you haven’t run one.
Jason: I want to learn a little more about, Art. How long have you been married? You got some kids, grandkids?
Art: I’ve got two daughters, four granddaughters. Surrounded by women, but that’s okay, I like women. I’ve got a lot of them. Between the wife, two daughters, and four granddaughters. One of my daughters is an attorney in Fort Worth, Rachel. And my other daughter is a State Farm agent in Lockhart, barbecue capital of Texas.
Jason: Gary Louis just said, Love you, Art.
Art: That’s a strong word, Gary, but, like you too!
Jason: Any other interesting talents, besides running with knee surgeries at 60 years old?
Art: That’s not much of a talent, and not interesting, either, but-I have started to learn to play the guitar, and me and a couple friends from church, we’ve got a couple guys that are pretty good, and the rest of us are pretty bad, but they’ve helped us learn how to play. We’ve done some nursing homes, church events, and entertain the old folks, which is really good because none of the can hear anyway.
Jason: Do you play the good old 50s tunes that you love?
Art: We play mainly old church tunes, and stuff, praise and worship type songs.
Jason: Okay, awesome. So then, I wanted to ask you, I saw a picture on Facebook, talking about the car you sold in 1980. It looked like a Corvette.
Art: 1969 Convertible Corvette, yes.
Jason: And you sold that to start your business, right?
Art: To help start my business, yes. And it wasn't a very reliable work car. I traded it in and got a Mazda LGC, which is a little mini car back then, but very economical. It worked, and I got around.
Jason: What’s your most favorite car you owned?
Art: Probably my 1952 MG Replica Kit car I built in my garage.
Jason: When?
Art: 1981.
Jason: Still have it?
Art: No. I wish I did. Had to sell it to pay more bills. My wife and I didn’t have any beef in our spaghetti till about five years later. It takes a while, just like any business.
Jason: What’s the most favorite car you’ve ever insured?
Art: Probably the one with the most premium value attached to it, we do get paid on commission. The higher the premium volume, the more I love that car.
Jason: What’s the most exotic car you ever insured?
Art: Probably the 1952 Replica MG Kit car.
Jason: Your own car. So what you’re saying is you need a few Ferraris, Lamborghinis to add to your collection?
Art: There’s nothing like that around here, it’s not Hollywood. The people who have wealth typically don’t flaunt it. The average millionaire drive a Ford F-150 pickup truck. That’s an interesting car there, I know not all of you can see it.
Jason: Let’s jump into the insurance side. I’ve got a few questions that we’ve talked about. When Art and I were talking, maybe give a live example. Would you recommend to get homeowners insurance, although you’re required with a loan. Would you recommend it anyway? (8:30)
Art: Technically, the home is the most valuable asset that a typical person owns. So, yes, I would highly recommend getting something, protect the most important investment you have in your portfolio, if possible.
Jason: I’ve got questions about deductibles, and stuff like that, but rather than going into random questions, can you give an example of a client that had a total loss, and what that process was like for them, and as soon as it happened for them they say, ‘Art, my house burned down?’ (9:06)
Art: We did have a total loss this year. In our book of business, we probably have one or two total losses a year, in our agency. It’s a very traumatic experience, and if I’m able to, I’d like to visit with the homeowner while the fire department is still there, and give them comfort, and let them know what’s covered and what’s not covered. State Farm allows us to hand them a check to help with additional living expenses. In this instance, they weren’t able to leave with any clothes, furniture, anything. They need some money to go to Walmart and buy some t-shirts, jeans, and a little extra money comes in handy at that time. I definitely recommend getting homeowner insurance. Most policies have extra living expense coverage on them. Not most insurance agents are able to go visit you at the side of your loss, and I’m not always able to myself, but when I can, I will.
Jason: In that scenario, you have a deductible that has to be paid. When they’re processing that claim, how long does it take for State Farm to process that, and the deductible that is due, does that come out of the check, or are they due to come out of that themselves? (11:03)
Art: Each client is different - in the event of total loss, the house is on the ground, it didn’t take long to give them some money and settle the claim, but the final claim isn't settled till the house is built, because we don’t know what it’ll cost to rebuild, and the final nailed is nailed, and the paint is on the house. They can come up with an estimate, and offer that to you, but there will be supplemental checks, probably, as you work with contractors, and all that.
Jason: In that situation, you’ve lost jewelry, electronics, a lot of items. Me, working with you, I know you’ve recommended keeping an inventory of the items in your house, is that necessary to do with the claims? (12:07)
Art: Again, it depends on what you have in your house. You know? If you’ve got some hard to adjust items, collectibles and paintings, antique furniture, and things that are a little out of the ordinary, it helps to video document those items, and keep those safe, either in the cloud, or the safe-
Jason: What’s a cloud?
Art: For you, get a little CD, and record it on the computer.
Jason: What’s a CD?
Art: Okay...that documentation certainly helps. The adjuster to look at that item, explain what it’s worth, why it’s worth more than the typical the dining room table, or something. It’s not required, but it does help everybody in settling the claim. If you’re happy with the amount of money you get - most insurance companies really want to pay every penny they owe, but at the same time, they don’t want to pay any more than they owe, so the claims adjuster's job, whether it’s State Farm or any other insurance company, is to make sure they’re fair to the customer, but then also fair to their employer, that they’re not overpaying for things they shouldn’t have to, because you want to stay competitive at the marketplace, but at the same time you want to have a good reputation of paying what you owe. Sometimes it’s a dance, you know?
Jason: One question on there, if you have jewelry, you can actually get a jewelry policy, but if you didn’t have that, and you have jewelry in your home and it’s destroyed, is there something that can still help? When do you recommend getting a jewelry policy? (14:09)
Art: Great question. There are limitations under almost all standard homeowners policy under cash, guns, jewelry, things like - usually the limitation is based on theft, not with fire. If you did have a gun collection, typically, you’re going to have $2500 worth for theft of guns. If you desire more coverage than that, then, yes you need a bigger policy; get each gun insured.
Jason: That would be covered under something other than theft as well? (15:10)
Art: Yes, once you get separate for a policy, it’s covered for all risk of accidental loss, including mysterious disappearance, breakage, if you just dropped the gun on the floor and broke it in half. For jewelry it’s important as well. Someone will have a diamond ring with 10 diamonds, and they look down one day, and one is missing. That’s not covered in homeowners policy, but if you have a separate policy that covers mysterious disappearance, yeah, that individual stone would be covered, you know?
Jason: Say you have a total loss. Does that - is that the same as vehicle insurance, where if I’m driving, and I get in a wreck, and it’s my fault, then my premium might go up, because I’m a higher risk. If there’s a total loss that’s not due to the client, like a fire, or a storm, does that affect their premium in the future? (16:00)
Art: Fires are often due to the insured’s fault. You left the pan on the oven, you did something else to catch your house on fire. A lighting strike wouldn’t be your fault, but more often than not, it’s your fault. It’d still be covered. The only time where they wouldn’t cover is if it’s an intentional loss. They call that arson, you go to jail - but accidental loss caused by the insured is covered. Now your question was, does it make my rate go up? Every insurance company has a different pricing formula. Some give a great big discount if you haven’t had a client in five years, but it’s if you have any kind of claim, regardless of it’s your fault or not, the rate’s going to go up. Maybe other companies don’t give you a greater up front price, but if something happens, the price didn’t go up any. It’s hard to speak to that, but the general rule, the more claims you have in your history, the more you’ll pay for that premium. It’s all statistics.
Every time you have a loss, you’re more likely to have another loss. That applies, even if it’s not your fault. You might have five claims in this car, and they all rear end the claims, which are never your fault, but you’ve had five claims. Eventually, the statistics will say, you’re more likely to have an “at fault” accident if you’re that kind of driver. Maybe you have a hail loss, and then you have a vandalism loss, then a rear end loss, none of them are your fault, but cumulatively, it’s going to make your rate go up.
We have clients that have been with us for 30 years, and they haven’t had a single claim in the last 10 years, but they put 20k miles a year on their car, and haven’t had any claims. We have others that seems like, once a year, they have something going on. They have a broken windshield, then they have a towing claim, then somebody rear ends them, somebody keyed their car, and it’s never their fault, but they’re going to end up paying more, whether they like it or not. It’s not just State Farm, I speak for all the companies. The more claims you have, the more your company is going to charge you. It’s the same with credit reporting. All companies use some sort of credit reporting, in coming up with a rate. That may not seem fair to some people, because they don’t understand the reasons and statistics behind it. Those folks that tend to take better care of their credit are more careful with their property, with their car, and their homes, and tend to have fewer losses than those with low credit scores. It’s important to all our listeners out there, to keep that in mind; your credit will definitely impact your insurance premium. Take care of that financial part of your life, and you’ll end up with a lower insurance premium. It doesn’t matter if you’re with State Farm, or a worthy competitor, you’re going to pay a lower rate if you have a great credit score.
Jason: Bringing it more at home, many deal with wind or hail damage on their roof. People who are maybe thinking, is it important to know your deductible? What I find is that most don’t know their deductible? 1,2,3%. I don’t know, does it go higher than 3%? (20:25)
Art: You can go up to 5%, but most mortgage companies won’t accept more than 3%. If you have a mortgage. Back when I started in 1980, you could have a $100 deductible, but the average home price was $25,000. Nowadays, I speak for most insurance companies, most minimum deductible is 1%. That’s what we find on most of the policies out there; you probably have a 1% deductible. If you live in a 250k house, you have a $2,500 deductible.
Jason: Maybe clients that have a higher income can handle a higher deductible if they have lower risk? (21:29)
Art: They don’t have a higher deductible, because they have a bigger house. They’re going to want the 1% if they have a $6,000 deductible. That’s one way of controlling your insurance premium, with your deductible. The more you can bite off, and self-insure, the better. You self-insure the small losses, and let your insurance company take care of the big losses, yeah, that can help with your premium. Another way you can lower your premium: a lot of real estate agents and mortgage companies will refer you to a company that’s the cheapest price, because, first of all, if you’re a mortgage company or real estate agent, the lower you can get the monthly premium, the bigger house you can sell, and you’re on commission like I am, so the bigger house you sell, the more money you’re going to make. If you can get a cheap insurance policy, they’re going to get a bigger house. The mortgage loan officer is going to get a bigger loan.
What you have to be aware of is, a lot of times, they’ll be selling you - first of all, there’s a reason it’s cheaper. You’ve got name-perils policy vs. all-risk policy, you’ve got actual cash policy vs. replacement cost policies, you’ve got policies that depreciate your roof if you’ve got hail damage on it. All that speaks to a lower premium, but it also speaks to a lower payout, come claim time. While I’m not speaking about Jason Reynolds, some real estate agents and mortgage brokers, they don’t care about claim time. They care about sale time. Today, our monthly premiums are lower, so I can sell you a bigger loan. We can do the same thing by giving you a higher deductible, but still have replacement coverage, risk coverage, but in 2003, the state of Texas deregulated the homeowner’s policy. Prior to that, the insurance companies were required to sell the same insurance form, so we all covered the same risks for the same things, and everything was replaced in the cost.
In 2003, when they deregulated the homeowners policies, companies can sell you all different kinds of policies that may or may not have you covered the way you want to be covered. Some companies, I’ll ask someone, you don’t have the same coverage that you do as you would with State Farm. They’ll say, ‘Yeah I do, I have $200,000.’ it’s not the 200,000 I’m talking about, it’s the - they’re going to depreciate your house should it burn to the ground, and we’re going to pay replacement costs. The average person who doesn’t try to educate themselves, either doesn’t care because they’ve never had a claim, so they don’t know, or the other insurance agent hasn’t explained it to them because they just want to make a sale. Anyway, you can control the price through deductibles. Usually, if you match up auto and home together, you get a bigger discount, you get a monitor alarm system in your house, in case there’s a break in while you’re on vacation, it calls the police, and they can monitor it so there’s not people camping out in your living room, drinking your beer, and eating your pizza. That speaks to a lower premium, along with a credit scoring.
Jason: So say you leave for vacation, or work, and you forget to set your alarm. Say that day, someone breaks in, but you’re getting a discount because you have an alarm system. Is there any kind of clause, for where you didn’t set it that day, does it affect what you’re going to receive? (25:47)
Art: No. The assumption is you’re going to make every effort to use the alarm, and the fact that you didn't and got broke in that one time doesn’t affect. Good question, though.
Jason: I’ve seen this on our policy, but I’m just more curious about it. Say you have a friend over, or maybe they brought their kid over, and they’re playing on your trampoline, and they fell off and broke their leg. And they say, ‘They fell on your property.’ What does that typical policy that you have; is there a coverage for that? (26:30)
Art: Most policies have personal liability coverage. There are a few companies that exclude trampolines, liability from trampolines. They won’t tell you unless you ask, because they want to sell you a cheaper policy. Most do, as well as dog bites. Some exclude dog bite liability. If you’re considered - if you can be sued in a court, and found liable for that person being hurt on your property, whether it’s a swimming pool accident, trampoline, dog bite, then your insurance company will pay up to a specified amount, which is up to 100,000-300,000. We recommend that a person gets an umbrella policy, which will extend that liability up to a million, or five million, depending on how much you want to pay, or how much you think you need.
That also covers you in a car accident, as well. Some folks don’t realize that in your policy, it says how much the insurance company will pay for in the event that you’re in an accident. They think, if I go out and kill two people, and total four cars, I’m not worried about it. I’ve been with x insurance company for 10 years, they’ll take care of me. They probably will, up to a certain limit, which could be as low as 30,000, which amounts to six hours in the emergency room, and maybe one car. How much is this car worth?
Jason: Probably between 35-40.
Art: Okay. 40k car we’re driving now. Someone could hit you; total it, and maybe you’d only have 25k of coverage, because they haven’t educated themselves on how much coverage they have. They say, ‘Hey, I want to get this the cheapest I can,’ so the agent sells them the minimum liability, which is 30 cc 25, 30,000 per bodily injury, no more than 60,000 per the other car, and no more than 25,000 property damage. You can raise that up to 250-500,000 and also add on a personal liability umbrella policy, which will cover you up to 5 million, if you need that much. A lot of high income people that have a lot to protect have minimum limits of liability, because their insurance agent hasn’t bothered to tell them, ‘Hey, if you get in an accident, we’re only covering 25,000,’ and you make a quarter of a million dollars a year, and you live in an $800,000 house, and you’ve got this tiny bit of protection.
That speaks to, you need to sit down and speak to your insurance agent. We ask each client to talk on the phone, about every three years. We want to offer all the discounts to you. We’ve got low driving discounts, we put a device in your car that monitors your driving habits, and mileage, which can give you a lower rate, which - I already talked about the discounts with homeowners insurance, defensive driving, we’ll give you a discount, good grade reports will give you a discount, for your kids, so we like to review all those potential discounts every couple of years, and make sure they’re taking advantage, yeah, my kid’s an A+ student, get that grade report, we can give you a discount.
We also give them a report about liabilities. If you want a report, here’s how much it’ll cost to go up the next step of liability. Can you afford an extra five dollars a month, we can give you a little better coverage. If you can afford an extra 100 a month, we can give you the 5 million. Whether it’s Allstate, Geico, or state farm, have a sit down conversation and go over coverage, discounts, and make sure you’re properly covered.
Ask them, do you have everything covered? Is anything depreciated, or is it all replacement costs? If you have those cheaper policies, how much more would it cost to upgrade? If you still want that cheaper coverage, that’s fine, but educate yourself on the cost to get a better policy, and make that decision - do I want to pay an extra x a year, or am I happy paying lower and not getting as good coverage? Again, making an educated decision, not just keeping your eyes shut, and the mortgage guy said, get this policy, because it’s cheap. It might be cheap, but there’s usually a reason for it. Call them up, and ask them why it’s so cheap. That’s fine too, close the loan with a cheap policy, and then upgrade it. You’ve got the loan now, they can’t take it away from you. Same with the real estate agent, you know? You’ve qualified for a bigger house, now you’ve got the loan, and check to make sure you’re covered.
Jason: One question we’ve had and I was going to interview you today: Ray Jackson said, “Please have Art explain that staining offense makes it easier to final a hail claim.” (33:05)
Art: Certainly, if it’s a stained fence, you can see the hail mark. It knocks the stain off, so it can tell if it got damaged or not, whereas if it’s an unstained fence, you may not be able to see it.
Jason: Visit with your insurance so you can make sure you’re covered properly. Art, if listeners are insured by you, you recommend them to call you and check their coverage. Or if anyone is interested, how can they get in contact with you? (35:58)
Art: Certainly, you can email me at artsmyagent.com, and even if I’m not your agent, you can still email me. Google State Farm Burleson, and our name will pop up with all our contact information, all that. When you call the office I’ve got eight professionals that work in my office with me. They’re good at screening my calls. Tell them, I want to talk to Art about my policy. If I’m doing a podcast with Jason, leave me a voicemail and I’ll get right back to you. If I’m not available, my licensed team members are very well educated in the different discounts that you might have coming to you and analyzing your policy to see just exactly what you have and where your gaps would be.
Jason: Perfect, thanks for joining!
Art: You bet, thanks for the cup of coffee