2025 Episode 5: What You Need To Know About Insurance Coverage And Where To Go To Get Help

Have you ever had questions about your insurance coverage? What is legally required? What if you have a claim that you believe wasn't resolved correctly? Has your insurance company ghosted you after you filed a claim? Patsy Hughes with the Alabama Department of Insurance joins us to answer all of those questions and much more. Take 15 minutes and hear how this state agency can help you be ready when an accident or natural disaster strikes. To contact them visit https://www.aldoi.gov/ or call 1-800-433-3966. You can also email them at Insdept@insurance.alabama.gov. To request a speaker, email Patsy at patsy.hughes@insurance.alabama.gov. 

Have an idea for a County podcast? Contact the Director of Public Information, Helen Hays at haysh@jccal.org

Transcript

Speaker 0:18

All right, welcome everybody to the Jefferson County Podcast for the People. I'm your host today, Helen Hayes. I'm the Director of Public Information for Jefferson County. And with me today, I have a special guest. We have Patsy Hughes, and she is with the Alabama Department of Insurance, and she is the Outreach Education and Recruiting Coordinator. So, Patsy, thanks for joining us today.

Speaker 1 0:42

Yeah, absolutely. Thank you for having me. It's such an honor to be here.

Speaker 0:48

Well, it it's just that time of year when there's so much happening with the weather. We've had so much rain, there have been some flash flooding issues, there's severe thunderstorms, people have storm damage, and now we're getting into severe heat, right? So all the things someone may need insurance for, but tell me a little bit about what the Alabama Department of Insurance does.

Speaker 1 1:13

Yes. Most people don't even know that we exist. So the Department of Insurance is here for their sole purpose to serve the consumers of Alabama. What the Department of Insurance does is regulate the insurance industry. So uh one of the things we do is to review policy rates before they're put in place. We have a division that does financial examinations for insurance companies. Those are constantly ongoing. The main purpose of those is to make sure that those companies will have the money to pay the claims when the claims occur. So the insurance department gets ahead of that and monitors the rec the finances for the insurance companies that are in the state of Alabama. We also have a really great division that is, you know, a hidden gem. It's called our consumer services division. And what it's all about is to take calls from the consumers. So if a consumer has a claim, so let's say tornado comes through or just some severe weather comes through and damages your home, and now you're reaching out to your insurance company, and let's say they're they talk to you for a little bit and now they've gone silent and not even responding to your calls anymore. Or maybe they are responding to your calls, but they're saying no, it's not going to be covered, and you think the claim should be covered. We have a number, a 1-800 number that you can call and talk to a consumer specialist here. And on your behalf, the Alabama Department of Insurance will file your complaint with your insurance company and get it resolved one way or the other.

Speaker 3:01

Well, we will definitely in our show notes post that 1-800 number and a link to y'all's website that people may have questions about their insurance. And I have my insurance person and I love him, and he loves to call every year and review my coverages, right? Don't you always feel like you may be getting upsold on something that you may or may not need?

Speaker 1 3:28

Well, I think I think most consumers think that. But yeah, it's exactly how the consumer feels.

Speaker 3:38

But if somebody wants to make sure they've got the right insurance coverage, what what is what are the coverages that you maybe legally have to have? And maybe what are some good thresholds there to think about?

Speaker 1 3:53

Okay. So uh one of the main ones, which is the thing that we have the most frequency of losses for consumers, is cars. And so car insurance is required for anyone who has a car. So you have to get the coverage. Now, what coverages are required? There's lots of coverages. There's probably 10 or 12 coverages, but there's really only two that are technically must be on your policy, and those two are in relation to liability. So if you injure someone else through the use of your car, or you damage somebody else's property through the use of your car. So that's um that's bodily injury liability, that's injuring other people, or property damage liability. And the state minimums, this is we don't have long enough today to really get into the depths on these. I could certainly get into more depth on these later, but a the liability, the minimums that are required are 25,000 per person, 50,000 per accident for the body injury and property damage, the minimum required by the state is 25,000 property damage liability. And if you were to talk about it, you drive down the road and you run into um, let's say a really nice Mercedes. Maybe it's worth $85,000, but you wanted to get the cheapest coverage on your policy, so you got $25,000 property damage. That's all your insurance company will pay. And that vehicle was totaled at $85,000. The difference there is, if I'm doing my math right, $60,000, and that would be out of the insured's pocket. So it's really important to make sure you have the right limits on your liability.

Speaker 5:45

Absolutely, and that that is a really important point and something to think about now. What about um if you're a homeowner?

Speaker 1 5:54

Yep. So for a homeowner, that's to me is a little bit easier from a consumer standpoint because you don't really have the option to pick, there's all kinds of homeowner policies, but they're all designed to meet the proper type of home that you are trying to insure. So if you have a uh a small home that's in a rural area, you're gonna get a certain type of homeowner policy. If you have a really large home, maybe a million-dollar home in a certain area, you'll get another type of home policy. If you just have your, you know, I'm just gonna say average, let's say $100,000 to $500,000 home, brick home in a typical subdivision, you'll get another particular type of homeowner policy. So the insured doesn't have to decide so much on the coverages because the coverages are going to be based off of the value of your home. As compared to auto, you have to pick those.

Speaker 6:53

And so, and when we're talking about homes too, flood insurance is an entirely different animal, right? Absolutely.

Speaker 1 7:02

Yep. So flood insurance, flood is it is covered on an auto policy. So if you a flash flooding, and that happens a lot in neighborhoods where the drains get clogged and you got flash flooding and that rises up, that's covered on an auto. But flooding, a flood is not covered on a homeowner policy. So as you said, that is a different animal. You have to buy separate policy for flood.

Speaker 7:31

And I know I used to live in a floodplain, and so I had to purchase that separately through um FEMA at the time, and I had to do that annually. And I know some things are changing with FEMA, but flood insurance is definitely something to, I guess, caution citizens about that they need to think about that separately, um, depending on where they live.

Speaker 1 7:53

That's right. And most people think, oh, I don't live in a floodplain, you know, flood zone, so I don't need flood insurance. But as I just mentioned, the flash flood is the thing that could get anyone. So if you're in a neighborhood, um just a regular neighborhood, and if the if it has happened, it's happened. Um, I'm in Montgomery, and it's happened here in Montgomery, and the drains and then the uh water ditches, you know, the water drainage ditches also overflowed, and then it just started flooding people's homes and not covered unless you have flood insurance. And anybody can purchase flood insurance, you don't have to be in a flood zone, and it's sold by the government, but there are also a lot of um private agents at just regular insurance companies that you usually um deal with. They also can sell the flood, they just sell it through a carrier that sells um the government flood program. Makes it a little easier if you had a flood issue on who to come back, but it's the same policy.

Speaker 8:53

Well, that's all good to know right there. So while we're on that track and we're talking about floods, let's talk a little bit about weather preparedness, making sure your policies are up to date. What do you guys recommend?

Speaker 1 9:08

One of the key things is, and I think, you know, now with you know everything being on your phone and having apps to be able to access your policies, that is fantastic to be able to know what what's your policy, who's it with, what's the policy number. So if you have the app for your insurance company, you've downloaded that and logged in and set up your profile, you can easily if a disaster happens and you need to access your policy, you can easily look it up there. But if, you know, some people are not used to having it on their phone, so I recommend that you make sure you get a copy of your policy, make sure you know your policy number and maybe have a loved one take a picture of it. If you're not used to taking a picture of it and saving it, or make a copy of it and place it somewhere safe, like maybe put it in your car or give it to someone else, let them keep it if they're or take it to the bank, wherever, put it somewhere in a safe deposit box, just somewhere where you can get to it. Because if you put it in a file in your home and then something happens to your home, well, something also happened to the documentation of your policies.

Speaker 10:16

Right. I mean, like I have mine in a file cabinet, but if my house gets, you know, destroyed by a tornado or something, those files are gonna be all over the place. That's right. And you need to make sure those phones are charged too, because if we have a widespread disaster, um, that's gonna be really important. So, you know, and we talk some with the EMA about how to prepare for those disasters and they talk about making a kit. So I think that really is making sure your insurance is a part of that disaster kit, is really important. I want to go back to other types of homeowners insurance. Life insurance is something that you guys talk about. There are two different types, term and permanent. What is what is the difference there? Can you explain that?

Speaker 1 11:01

Yes, those are the two key, if you will, categories for life insurance. One's called term, and just like it says, it only lasts for a period of time. It lasts for a term. So you might have a five-year, 10-year, 15, 20, 25, 30. Those are the current terms. So if you bought a 10-year term life policy, and you bought a $100,000 policy, if you lived past the 10 years, if you didn't do anything else with it, that's it. The policy ends. But it is good to have because it's the least expensive, least expensive. Um, the other type is called permanent, and that depending on the policy, it will go all the way out to age 100, or now because people are living longer, they've changed the date to 121. What? Yes. So some policies go all the way out to age 121. And so when you buy a whole life policy, that's one of the basic permanent kinds. It lasts your entire life, goes out to whatever that age is, you know, 100 or 121, or whatever the policy list, you know, says, if you happen to be living at that time, you can actually get the face value of the policy. You can get that the death benefit while you're living. If you live all the way to the end, but they're designed to pay your loved one.

Speaker 12:22

Yeah. I can tell you my dad's 94, so he's going for that 100 mark, right? Also, he's going for the 121. Right. I'm like, I don't want to live that long. Wow. Okay. Yeah.

Speaker 1 12:38

Yeah. And I would take one other point. A lot of people get in the door with a term policy because it is very inexpensive, which is a great thing to do. But please know there's a feature in a term policy that will allow you within certain time frames to what they call convert it, convert it to a permanent plan. And when you do that conversion, you usually don't even have to prove your health condition unless you add more coverage. So get in while you're young and healthy, and it's a lot cheaper.

Speaker 13:08

Well, all right, good to know. Now let's talk about if you own a business, business insurance, what does that look like?

Speaker 1 13:16

Yeah, it looks a lot like a the agents will cringe when I say it, but it looks similar to a homeowner policy because it's going to cover the building damage, it's cover the uh personal property inside that. But one so it looks similar to that in the way of what claims it pays, as long as that's what has been covered, because you can piecemeal a commercial policy and pick and choose what you want covered. Um, whereas homeowners usually will come already pre-packaged. But um if I'm a business owner and I own my own building, I'm gonna want to make sure my building's covered for damages. I'm gonna want to make sure my personal property is covered, I'm gonna want liability coverage. Uh, but one of the key things to make sure as a business owner is you want to make sure that you also have business income with it, which means if there's a disaster or uh your building is damaged from some covered loss, and now your business has to shut down for a period of time, business income can pay for some of that lost income while your business is shut down. Wow, okay, good to make. And there's variations of that too, but it it'd be a good call if I'm a business owner to make a call to my agent and say, hey, tell me the different options that are available if something happens to my business and I have to shut down.

Speaker 14:33

Sure. Absolutely. And one other question, there's still one type of insurance we haven't touched on, but I think it's really important for an emergency or you know, for fires, for tornadoes, whatever, it's renter's insurance. Right. Apartments. Can you talk a little bit about the importance of that?

Speaker 1 14:53

Yes, that's uh one of the, I would say a lot of people don't have have a renter's policy. Usually a lot of times people that are in apartments are young, not all the time, but a lot of them are are young, and there's like, oh, I don't need anything. But what the renter's policy does, its main coverage is for uh lack of a better word, your stuff, your things, your sofa, your furniture, your dishes, your clothing, any of your items. So if that apartment is damaged due to a covered loss, then the building owner, they will have coverage for the building itself, the apartment itself, but you as the renter need coverage for the items on the inside. And it would also have coverage for, let's say you can't live there because of you have to move out to a hotel for a week while they make repairs. Most of the renters' policies have coverage for to pay for that hotel.

Speaker 15:49

And I think it's really important. I've had a lot of friends that have had a lot of loss when they were renters and they they wish they had had it.

Speaker 1 15:57

So another benefit to that, Helen, another benefit is let's say you have your car and you in an apartment, if you buy renter's insurance, a lot of the insurance companies will give you a discount for having the renter and the auto together, just like having a home and auto. And so a lot of people don't think about that too. So it's a win-win.

Speaker 16:17

All right. So one more question, Patsy. Okay. What about insurance um discounts? Uh, what do you guys regulate that?

Speaker 1 16:26

We do. We rate, regulate anything related to the rates. So it whether it's the rate itself or where it's uh corresponding discounts that are going to be applied for the policy. Yeah, that all of that comes through the Department of Insurance and they regulate the discounts also.

Speaker 16:46

Well, I really enjoyed talking to you today. I think this is a lot of valuable information for our citizens in Jefferson County. And again, I'm gonna link to um y'all's website and that 1-800 phone number in our show notes so people will have it. Is there anything else that I haven't touched on today that you want to add?

Speaker 1 17:05

Two things. One, okay, um, in reference to life insurance, one more thing. So if you currently have life insurance, one of the things that we get a lot of calls for here at the Department of Insurance is people loved ones don't know who your insurance is with if you pass away. So make sure your loved ones know that. But then also, while you're living, make sure that your beneficiaries that you have on the policy are the ones that you want on there. Because you may have purchased the policy, you know, 50, 60, 70 years ago and things change. So always double check that. And then the last things, I just want to just uh uh my last thing is just give a little plug that if anybody needs the department of insurance to come out and speak at an event or a conference or work a table or a booth or anything like that. Um my job is to try to promote the Department of Insurance, educate the consumers on what we do, and help the consumers of Alabama to understand their policies better so they can make informed decisions. And so just go to our website that you were gonna um share with them and reach out. There's a place to request a speaker.

Speaker 18:15

Absolutely. I just think it's really important that people know, and I'm always a big advocate for our citizens educating themselves right and knowing, you know, what their rights are, and then knowing, you know, if they have a problem, what agency is there to help them. So again, I really appreciate your time and we hope some people will take you up on that. And I want to thank everybody for uh joining us on the Jefferson County Podcast for the people. If you have suggestions for a topic that you'd like more information on, uh give me an email. My email address is Hayes H A Y S H at JCCAL.org, and we'll see you next time on the podcast for the people.