Your Cheapest Policy Could Be Your Most Expensive Mistake

Is your cheapest insurance policy quietly setting you up for financial disaster? In this episode of the Tall Oaks Podcast, Branden DuCharme sits down with Latham Jepson — a property and casualty insurance broker based in Utah — to break down the gaps most people don't know exist in their home and auto coverage, and the surprisingly inexpensive fixes that could save you everything.

This isn't a sales pitch. It's the honest conversation your insurance agent should be having with you — but probably isn't.

Here's what we cover:

• The difference between protecting an asset and protecting your liability, and why most people are only thinking about one of them
• Why Utah's state minimum auto liability coverage of $30,000 is dangerously low, who it's actually appropriate for, and what happens when you rear-end a "Lamborghini" with it
• How insurance carriers quietly shift their risk appetite and why your rates can go up even when you've done nothing wrong
• Captive agents versus independent brokers and what that difference actually means for your options and your premium
• The cheap endorsements most homeowners never add, including service line coverage and sewage backup, that cost almost nothing and cover a lot
• Why maxing out personal liability on your homeowner's policy to $500,000 is one of the easiest and most overlooked moves in personal finance
• How umbrella policies work, why they're more affordable than most people think, and how having one changes the insurance company's incentive to actually fight for you
• Scheduling jewelry, firearms, collectibles, instruments, and high-end gear that your standard policy sublimit won't fully cover
• Why renter's insurance is almost always a no-brainer, including the one thing it covers that most renters never expect
• Personal injury liability coverage and why it matters, especially if you're in financial services, make content, or have strong opinions in Facebook comment sections
• Branden's framework for every risk you face: insure it, retain it, or mitigate it, and when the right answer is just being a better driver

The bottom line: pull out your declarations page, write down your assets, and honestly ask yourself whether your coverage matches what you have to lose.

Find Du Charme Wealth Management here:
https://ducharmewealth.com

Phone: 
(435) 288-3396

DISCLAIMER: Information presented on this program is believed to be factual and up-to-date, but we do not guarantee its accuracy, and it should not be regarded as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but are limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented. Encompass More Asset Management LLC is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC) and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.

Transcript

Intro and Welcome

Branden 0:00

Like the way insurance is supposed to work, right, is I want to pay a little bit of money to insure something that has a really little probability of happening. But if it does, it has a really big impact.

Latham 0:09

If someone trips and falls on your property and decides that they want to sue you, a lot of people have $30,000 or even $100,000 in coverage for that kind of incident. And to increase that to $500,000 is so cheap. It's a couple dollars a month.

Branden 0:25

I always have the saying, right? Like no products for everyone. Yeah. Right? But there's generally not a product that's for no one.

Latham 0:30

Information presented on this program is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be regarded as complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but are limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented. Encompass More Asset Management LLC is a registered investment advisor with the U.S. Securities and Exchange Commission and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.

Branden 0:56

Hey everybody, welcome back to another episode of the Tall Oaks Podcast. I'm your host, Branden DuCharme, joined in the studio today by uh Latham Jepson, uh, who is a uh a property and casualty insurance agent here in uh in Utah. Um Latham uh has had the uh misfortune of actually being in our office the last it's been like a year and a half. Uh yeah, I think almost two years now. Yeah. Um uh so yeah, it doesn't work with us necessarily, but uh next door neighbors. Yeah, next door neighbors in the in the building. And uh so you know, he's who sometimes I tug on his ear for a quick question. Um and I thought, you know, as we roll into uh quarter three, um, I always think it's a really interesting time of year to just revisit insurance stuff. It's the time of year when um people are moving and shaking for the summer, right? Yeah, that's when like the accidents happen. Um and that's what insurance is always kind of for worry about fire season, homes burned down. Yeah, oh man, the poor cottonwood fire. I know. Uh that's the heartbreaking to think about. Um, but it's uh it's so there's kind of the reminders in the environments around us that hey, it's it's something to think about. There's also not really much else going on right now, right? So you're kind of not doing the tax planning, yeah, the initial tax planning after tax season. You're not doing end-of-year cleanup or planning. So it's kind of just in between and quarter three. Yeah. Um uh but a lot of times when people come talk to us, they think life insurance, disability insurance, long-term care insurance, annuities, uh but that's what they, you know, thinking a lot of times when I'm saying let's review your insurance, I'm thinking all of it, right? Now we don't always help people with all their insurance stuff, but we love reviewing it as financial planners. A good financial planner um can still review it. And one of the things that I find in lathe them is that people just don't really understand what their home and auto does or doesn't cover, right? And so they just think like I have insurance and it's expensive. That's what most people think. Like I have insurance and it's too expensive. Yeah, for sure. Um but what's the point of insurance,

What Home and Auto Actually Cover

Branden 3:23

anyways? Like what's the point of home and auto?

Latham 3:25

Yeah, so good question. I mean, most people they'll get a renewal notice in the mail, and sometimes it's as you know, sometimes it's every six months, with depending on your carrier. So they're they're just paying the premium, not really knowing what's going on, what their money's going towards. But um, when it comes to property and casualty insurance, I like to substitute the the word casualty with liability. So you're thinking about your property and your liabilities with home and auto insurance, and then umbrella insurance potentially. So, but for an auto policy, you are covering, you are protecting um an asset, which is your vehicle, and then you're also protecting your liability, which is your exposure on the road and liability um in the terms of you know what you could the the kind of damage you could do to someone else's body or someone else's property, you know, with a moving vehicle. So um your auto policy is protecting the asset, which is the vehicle, and your liability, your home policy is the same thing essentially just with your home. So you're protecting the structure of the house that you have invested um substantially in. And then also there are different liability exposures that a homeowner's policy can cover as well. Um, and so essentially, yeah, you're you're that's what that's the value in the home and auto insurance um policy. And I mean, there's a lot to it, but that's kind of the gist of it.

Branden 4:58

Yeah. So I call up and I say, hey, Latham, I'm looking for the cheapest insurance. You know, I've got uh I've got this truck and I I need the best, the best deal possible. I need to pay, and by that I mean the least, the lowest amount of premium. Hook me up, Latham. Um, what's the what's like the problem that people face if that's the the framework that they go into it?

Latham 5:21

Yeah, so if someone comes to me and is just asking for the bare minimum, um what I typically do is I try to um have a conversation with them and hopefully educate them on a few things. So the bare minimum, if you really want the bare minimum in in Utah, the state minimum minimum liability limit, um, which is uh 30,000 in auto insurance, 30,000 per bodily injury, um, sorry, per uh individual for bodily injury liability. So in other words, um you're you have coverage up to 30,000 if you are liable for someone else's injury. So if you hit someone and put them in the hospital, 30,000 is going to be depleted really quick, you know? Um, so I let people know that right off the bat. And if they are insistent upon getting that kind of coverage, I tell them politely to go somewhere else because that's not the kind of um I I don't sell that low of coverage just because there's I'm putting them at risk, I'm also putting myself at risk. Um, so that's that's the the minimum liability. I I do not recommend that. What I recommend usually is a hundred thousand in bodily injury liability, essentially that with a three hundred thousand dollar limit on an accident.

Branden 6:46

So per occurrence is the people would typically see on their statement.

Latham 6:51

Right. Yeah, you're right. So essentially that means that the policy will pay up to $100,000 per individual that you injure and uh with a $300,000 limit per occurrence. So if you if there's multiple individuals that you are injuring, you know, in the other vehicle, that's kind of where that $300,000 would come into play. Um, and then $100,000 in property damage. So you know, think about the other person's vehicle that you are now responsible for, you're liable for their for totaling someone else's car. So you basically owe them, you know, a car. This this policy would pay up to $100,000.

Branden 7:27

So so who might uh like a a minimum uh uh minimum liability policy be the right fit for, right? Like I always have yeah, I always have the saying, right? Like no products for everyone, yeah, right, but but there's generally not a product that's for no one. Right. So like sure there's probably someone that's a right fit.

Latham 7:46

Who's who's the right kind of fit that you were like, okay, you could probably get away with the kind of people that come to mind are maybe students, um, you know, undergraduate students, uh unmarried, no kids, um, a renter, you know, someone who's a renting, uh, you know, I typically would recommend hey, if you want that kind of coverage, there are some online options where you can get that kind of coverage. Just be aware of what you're purchasing. But yeah, go for it. And then maybe consider bundling it with the renter's policy if that works. But yeah.

Who Minimum Coverage Is Actually Right For

Branden 8:18

So let's put it put in the renter's policy thing and make sure we come back to that.

Latham 8:21

Yeah.

Branden 8:22

Um, what I'm basically hearing is hey, the person that could get minimum coverage that way and have it be probably the right fit for is a person, like, listen, if you get in an accident and you really hurt some people and you have some real financial liability exposure here, it's gonna be not that big of a deal to you to probably just declare bankruptcy. Like you don't have anything, right? So, like if you have that liability, there's really nothing for them to come take.

Latham 8:45

Right.

Branden 8:45

Because they you will have that liability, right? Yeah. Um, and those thresholds are pretty easy to um, you know, break, especially nowadays, right? So, you know, I share the story, you know, like an eye-opening experience for me that I just went one day when, like, whoa, like hold on, I need to make sure I have like full coverage as much as possible and all my stuff. And I added actually more umbrella coverage for myself at that time. Was um there was a Lamborghini. So at the time I drove a F-350, when I was kind of back in the um construction world, and um like a Lamborghini slams the brakes on in front of me, like stopping at a yellow light. I must rear-end a Lamborghini with a F-350. Yeah, right. Like I would have driven up over the top of this thing. And like, listen, if you have $30,000 in coverage, like I would have just done, I would have just ruined assuming I don't kill the person, right? I mean, that's like a real like listen, that is such a horrific accident to even think about.

Latham 9:45

Yeah.

Branden 9:45

But just from a property damage perspective, right? Like, you know, it's like whatever, two or three hundred thousand dollar car, like yeah, hey, if there's only thirty thousand dollars in liability coverage, like I'm on the hook for two hundred and seventy thousand dollars, right? Like, well, if you have any kind of net worth, like they're gonna come after you exactly to make sure that they are are are made whole on that, right? The attorneys, right, you know that they hire will. And uh so if you don't have anything, then you don't really have anything to insure.

Latham 10:11

Yeah.

Branden 10:12

But as soon as you have something to insure, right? Yeah.

Latham 10:15

The question is, you know, what could you lose? And you know, if if there was a catastrophic incident, if you killed someone, uh, you know, essentially anything's on the table, um, your net worth, even future earnings potentially. So what could you lose? Well, that's the kind of that's the kind of coverage limit you should be considering when it comes to liability. And then also just you know, on the Ferrari note, so you know, driving around your your city, your town, how many of those kinds of vehicles, those higher-end vehicles, are you are you seeing on the roads? And that that's also uh you know indication like you should be you should be considering that. If there's if you're driving in an area with you know Lambos, you know I just live here in St.

Branden 10:59

George, like there are there's a lot, yeah.

Latham 11:01

You know, plenty of high-end vehicles here in St. George, yeah.

Branden 11:05

Well, I mean, nowadays just like you most, I mean, a lot of vehicles, if it's uh even just sort of you know, an air quote here, regular-ish vehicle, but it's you know a luxury brand of any kind, probably up in the you know, a hundred thousand dollar vehicle. Yeah, you know, yeah.

Latham 11:19

Um another thing to just consider, you know, you mentioned you had a an F-150. So the kind of V the kind of vehicle matters because what kind of damage can that vehicle deliver? So, you know, a Tesla Cybertruck, uh it's right, re reinforced steel. Uh yeah. It's uh it's I I haven't I don't own one, so I don't really know, but it's pretty heavy duty. And that kind of that kind of vehicle can deliver quite a bit of damage. So that's also something that the underwriters of these of the insurance companies are, you know, they're considering that for sure.

Branden 11:53

Yeah. Um I think I remember hearing at one point Honda Civics were actually unusually uh expensive to insure at one point because they were like the most commonly stolen vehicles in America. Yeah. Right. So there's also like not even just the damage that can be done, but what what vehicle still matters for like these other ancillary things. I think like yeah, remember back uh in I want to say like 2020, 2021, like COVID kind of era, there's a problem with um Kiyas. Right. Really, really easy to steal.

Latham 12:21

People figured out how to hijack them and take off easily.

Branden 12:24

Yeah. And uh I can only imagine that probably made the insurance rates go.

Latham 12:28

Oh, there's some carriers that that wouldn't insure those kinds of vehicles.

Branden 12:32

So that's a pretty big deal once insurance, once insurance carriers pull out of a certain market. Um, we run into this conversation quite a bit in like term the term life insurance space where it's pretty standard for carriers to offer like a 10, a 20, or 30 year option. But sometimes people are like, well, the planning, if you kind of really like our timefusing it against their life, they're like, what I need is 15 years or 25 years. And there's carriers that offer that, but what you oftentimes find is like the selection gets so tight that you really lose the competitive nature. And so you look at and you go, like, well, it's so uncompetitive in a 15 or 25 year that a lot of times you're just only a couple bucks more and you can get the lecture like five years, right? Right. Um of coverage going to this the standard option of like a 20 or a 30. And so I can imagine it's the same in like vehicles. Like if there's only a couple carriers that cover a certain thing, it it does get dramatically more expensive because there's less, there's less competition in the marketplace competing for your business, right?

Latham 13:30

Yeah, yeah, definitely. Yeah, less, I mean, less supply so for a particular type of risk. So yeah.

Branden 13:37

Yeah.

Why Your Carrier Raises Rates (It's Not Personal)

Branden 13:38

Um one of the things that's interesting in the insurance world is there's um there's captive agents, right? Um, just pivoting a little bit here. Captive agents that work for a um like one particular insurance company, right? So like for example, um, you know, I have my insurance through Farm Bureau. And so my agent like works for Farm Bureau, all he really does is Farm Bureau with maybe some minor exceptions for first off that Farm Bureau works with outside of that, right? Um and uh and then there's brokers, and that's like you know, your broker. Yeah. Um, and so you guys have access to maybe a bunch of different uh companies. So you're kind of looking at you know, what is what does the customer or the client have and what do they need and who's kind of offering the best deal on that? Um is it one of the things I've seen over time in like the life insurance um end of the insurance spectrum. Is that companies have a consistently changing like risk parameter that they're looking to bring on and so their risk appetites change? Have you seen that brokering stuff where like, hey, maybe you've been with a certain company for a long time and their the deal was really great, but now like they kind of really don't like your risk profile, but you know, XYZ other company does, right? And so you can change companies, and it's really not that the underlying company change or that they don't you did something wrong, it's just that they needed to rebalance their portfolio of risk that they have on their books, yeah. And so they had to raise your price in doing that, and then there's another company that it can lower their price in that demographic or that you know underwriting capacity to just be more attractive because they can more readily accept your type of risk right now.

Latham 15:24

Yeah, for sure. So their appetites are are always changing, and I'll give you examples. So we've been talking about personal insurance, but I also do commercial insurance and um I've been working with uh an auto shop in American Fork, Utah, and they've been with the same carrier for a while with great rates, and they're a good risk, they're considered a good risk in that space because they haven't had losses. Um, their claims history is really clean. Um, you know, the owner of the business has years and years of experience, he knows what he's doing, he hires really well, good retention. So that type of risk is among the commercial insurance carriers, that's that's a desirable risk. You know, they they want to insure this kind of business, but their carrier just non-renewed them um starting in July. So, and it has nothing to do with them, it's all to do with the appetite of the carrier. They're just moving, they're moving out of the auto shop space. And so I'm able to find them a new carrier um that was cheaper on premium and much better coverage, actually. So um that's a it's it goes the same way with personal insurance as well. So there are carriers that decide that you know what we don't love this particular side of hurricane or leads, you know. Um, they're making those kinds of decisions frequently, actually, more than more often than people realize, I think.

Branden 16:55

So like uh it sucks so much when you get a notice that, like, hey, your insurance is going up, right? Like I I feel for people, it it sucks. Yeah. Um and so I think it's really easy to take it personal, right? Like, hey, the insurance company is trying to just rob me of more money, right? I mean, I yeah, like I get it. Like it's it's a really crappy business transaction where you're like, hey, the I want to give you money, like the way insurance is supposed to work, right? Is I want to pay a little bit of money to insure something that has a really little probability of happening, but if it does, has a really big impact for sure. And you know, the just what I've observed uh, you know, over the decades is the more common insurance has become, the kind of crappier people's behavior almost comes, becomes. And so insurance in a lot of spaces has become less like insurance and more cost share program. I kind of joke sometimes, right? Like, you know, everyone has to buy insurance, and everyone says, well, my insurance will just take care of it, so I'll just drive recklessly, or you know what I mean? Or I'll you know, like health insurance is a great one. Like I'll I go to the doctor for for anything. Anytime I have the sniffles, I'll, you know, I'll go into the doctor. It's like because I I I have good insurance, so it doesn't cost me you know much of anything. Right. It's like, but it costs the insurance company, so now the insurance company has to like spread that cost around, yeah, you know, the whole thing because everyone's mandated to buy it and everyone goes, now it's like health insurance isn't much health insurance, it's really like I it's I jokingly say it's like it's just a health share program, right? Yeah, um, and it's really expensive because there's a bunch of middlemen because everyone's required to buy the health insurance, right? Right. There's this touchy subject always for sure. But the reality is it's still a business on the other end, right? And it's not that they're greedy, it's that they have shareholders and they just want to run a business, right? Like just like any of us wants to run a business, right? Like I don't think the guy that owns Culvers in town is greedy because he wants to charge me more for a two scoop custard than a one scoop, right? Like um, and uh just has a business to run. So what's interesting is the insurance companies in this pursuit of like business have to look at all this underwriting stuff. And so you're saying, like, we don't like that side of hurricane. Like they're literally looking at stuff like hey, those houses are too close to a fault line, or hey, we know that there's soil that runs bad in that area, or look at how close these homes are to a fire line, right? Like, and so hey, it's three blocks over, but like it makes a difference to us. Like, just we don't want that risk on the books, yeah. You know what I mean? Like it just in whatever it is, like, and sometimes as humans, we just look at it and we go, like, I'm low risk, I'm a great client, I'm a great customer, like I am, you know, I'm not gonna, yeah, I'm a responsible homeowner, I take care of my place, like none of the you know what I mean? Like the insurance company has to play the law of large numbers. It's the only way insurance works, right? Because otherwise, like your peril becomes their complete peril, right? And so that doesn't really like it, doesn't work, right? So, like I would never be able to insure your life, like I would never be able to give you life insurance privately, right? Like, because you would say, like, I'll give Brandon, I'll give you 50 bucks a month, and and if something happens to me, you give my family a million dollars. Yeah, like I can't, you know what I mean? Right, like it's way too much. I can't like for 50 bucks a month, that would never work for me. That is not, you know what I mean? Like, yeah, so that would be so risky for me to do. But an insurance company can do it because they know how to underwrite it and say, Well, out of thousands and thousands and thousands of people, we kind of know what that rate looks like, right? So, so like that trade for me would have worked out really, really good because I would have gotten 50 bucks a month free for you for 30 years and been totally fine, right? Right, or I would have gotten completely wiped out. Yeah, there's that complete dichotomy. When you run the law of large numbers, you get to average everything out, and it can kind of work. But you have to be sort of non-emotional, pretty cutthroat about it. You know what I mean? Like they just so it doesn't matter that you're a great homeowner and you're a great part of the community and you do all the things right in your life. Like you're just if you're too close to the fire line, it just is what it is. You know? Yeah. Um for sure.

Latham 21:03

And you know, that's not to say that another carrier is not gonna be very happy to have your your business. So it yeah, I mean, these carriers, they're hiring actuaries who it's their job to run all these numbers and to figure out to kind of crack the code on the law of large numbers, to figure out what their appetite is and who exactly they want to insure, yeah, where they want to insure, what, what kind of individual, what kind of family. Um, so yeah, I mean, I would say, well, what I see is you know, they'll they have the right to non renew someone based due to um various different reasons. Um or sometimes, unfortunately, they will price you out, price their c their customers out, and and they're kind of doing that understanding that you probably will go shop your insurance and go switch over to someone else. Um and they're kind of okay with that because they're uncomfortable with your risk profile. So yeah, I would say definitely um, you know, if you've been with a carrier for a long time and they and they do that to you, it it is tough to to hear, you know, people develop that relationship. Um, but yeah, try not to take it too personal. Um, and then I would say, yeah, I mean that's that's why I chose the independent route, is because I I'm able to have a few more options with with our carriers. You know, there's definitely that's not to say that you know, the captive side, they are really good too, you know, and they've got um their markets that they're really competitive in. It's just kind of a matter of finding the right carrier for the right client, for the the insured and the insurer, finding that match.

Branden 22:48

So not everything's, you know, nothing's for everyone, and but there's typically not something that's for no one.

Latham 22:53

Yeah.

Branden 22:54

Hey, it's no secret to us. We look at the demographics of this show. We know that a lot of you listening are actually other financial professionals and other investment advisors. We want to go ahead and invite you. If you're looking to do something different in your career, go ahead and reach out. We're always looking to bring on high quality people that understand how to do the planning process, align with our values, and are looking to deliver high value to their clients. Please just go ahead and reach out to us. You can get us on our website, disharmwealth.com, and we look forward to talking

Cheap Endorsements Most People Skip

Branden 23:21

to you. What do you think the you know, biggest mistakes you see people make when you're reviewing their insurances? Like, what are the biggest gaps that you are finding? So if somebody brings you their statements, hey, Latham, I want you to take a look at my insurance and you know, give me some new quotes or whatever, right? So now you're looking at their deck pages, their policies, like what's the stuff where you're like, man, people get this thing wrong a lot. Yeah.

Latham 23:47

So we kind of touched on it, but the most common thing I feel like I see is is too low of liability limits. Um, and you know, it's easy for an insurance guy like myself to think that everyone is underinsured and to say, hey, you need more insurance.

Branden 24:04

Yeah, guy, people don't want to hear that.

Latham 24:06

Yeah, yeah.

Branden 24:06

Yeah, guy with a hammer, everything looks like a nail.

Latham 24:08

Yeah, exactly. You know, I get a I can get accused of that, but unfortunately it's kind of it's true. You know, I people are underinsured. Um, that's probably the most common. And then besides that, I would say different endorsements on the home. So an endorsement on a homeowner's policy is it's like an addition, additional coverage to the homeowner's policy. So one example is um a service line endorsement. So the service line endorsement will cover up to $10,000 or $15 or $20,000 on an underground utility line that connects your house to the city. And it's really cheap. It's it's like kind of a no-brainer.

Branden 24:52

Um, I think I pay like $15 a month for that under my policy. And you know, different carriers, I think $15 a year.

Latham 24:58

Yeah. Yeah. No. Um, and so things like that, uh I'll just bring that to their attention and kind of walk people through that and they'll make the decision themselves. I I don't really feel like I'm selling too much at all. Yeah. I'm just hopefully educating people and saying, hey, you know what, this carrier is offering a sewage backup coverage of $25,000 and it's a hundred bucks for the year. It's like that's a pretty good deal. And so things like that. And then um I would say on the homeowner's side, also, similar to the auto, you know, you might as well just max out the personal liability on the homeowner's insurance policy. And what that means is if someone trips and falls on your property and decides that they want to sue you, a lot of people have $30,000 or even $100,000 in coverage for that kind of incident. And to increase that to $500,000 is so cheap. It's a couple dollars a month difference in premium. And you're getting, you know, $500,000 instead of $300 or $100,000 in to protect you. And so if you're a homeowner, you need to at least max out that. Um, you know, we might talk about umbrella coverage, but the first step before an umbrella policy is to max out your homeowners' yeah, underlying liability limits. It's so cheap. So yeah, I'd say that.

Branden 26:28

Yeah, and I think like that's the stuff people forget is like again, hey, I'm a pretty low-risk person. It's like, yeah, but the Amazon delivery driver slips on your front step. It had nothing to do with you. Yeah, you know, your property just existed. You had hadn't you had invited them onto your property to deliver a package, right? You know, from a legal perspective, right? Yeah. And now they they slipped and you know, tripped on your, you know, uh wood chip that had gotten on the sidewalk and broke their leg, and now all their you know, miss wages and emotional pain and suffering, and you know, everything is like your your your problem to deal with, right?

Latham 27:05

Yeah, they'll go and yeah, they'll grab an injury attorney and blow you out of the water. I mean, yeah. Um I you know, I know someone who painted their sidewalk leading up to their door, like you know, in their porch, um just I guess to make it look nicer. And when that when it gets wet, the paint and the water is really slippery. So that that's a liability that you know people don't really think about, but those kinds of things, like, and obviously this is you know, worst case scenario. Hopefully this never happens to any of us, but we live in a world where stuff like that does happen, unfortunately. And so yeah.

Why You Need an Umbrella Policy

Branden 27:45

Um but you mentioned umbrella policies, and I want to just highlight I I'm generally a pretty big fan of umbrella policies. Um, you know, that is one where it is pretty, pretty cheap. And the reason why is because it has to blow through the usage of all the underlying insurance that you already had to, you know, you're you already own, right? Um but um the reality is I think like as problems become bigger and bigger and things become more and more expensive in today's world, the odds of getting through that, like I mean, in Utah, the upper limit on like homeowner liability, you know, like liability insurance on a homeowner policy is half a million dollars, right? Like 250, 500.

Latham 28:21

Yeah, some will have a million as an option, but most is 500.

Branden 28:25

500. So like if you have a pool or a dog or a trampoline or kids or you know what I mean? Any of this stuff, like listen, if somebody falls on your property and gets like seriously hurt, like the odds of that being more than a half a million dollars, like I perceive it to be relatively high should something happen, right? So like the problem you for people forget is they think, like, well, I have really good insurance. Like, yeah, you have really good insurance all the way up to $500,000.

Latham 28:52

Yeah, yeah.

Speaker 2 28:53

Listen, if it goes to $501, you owe a dollar. Okay. So like if it goes to $750,000, you owe $250,000. You know what I mean? And you got to deal with all the court proceedings and all the hearings and all the, you know what I mean?

Latham 29:04

Yeah.

Branden 29:05

Because your liability is still clearly on the line. So, like, my quick opinion on it is like if you have an umbrella policy, A, not only do you sleep better at night, B, it's really, really cheap because the insurance companies perceive the the risk of it being used um really, really low. Okay. Um, but if you do need it, you absolutely need it. Yeah. And then and then B, like, hey, if the insurance company has half a million dollars of liability, they'll they'll probably fight pretty hard. You know what I mean? Yeah. Um, but at a certain point, like they're like, no, like, well, if it this is clearly gonna be a million dollar case, like, how hard do we want to fight it? Because we're just gonna have to pay $500,000 either way. Right. Like they're they have little incentive to continue to look out for like sort of limiting that liability once they know they're gonna be maxed out. Um, if you have a two million dollar umbrella policy that puts their liability to two and a half million dollars, more incentivized, right? Right. Like um, if they know they're holding the whole bill, right? They'll kind of they're gonna, or or potentially they're holding the whole bill, like they're gonna they're gonna work a little bit harder, is my theory. Yeah, yeah, right. Just my theory. Um so umbrella policies I'm a big fan of.

Scheduling Jewelry, Firearms, and Collectibles

Branden 30:15

Um one of the other big things that I s I see um, especially a little bit older people, um I say older, like not old, old, but um older than myself, uh get wrong is uh um not having things scheduled that need to be scheduled. Right. So expensive jewelry like around St. George, like you know, Rolexes, um uh watches, um, collectibles, um uh firearms. Yeah, guns. I was gonna say, you know what I mean? Guns is a big one that I a lot of people in Utah probably way underinsured on. Probably, yeah. Um what's uh what yeah, give it really quick. What's the what's the deal with guns? Oh, I mean This is gonna go up on a bunch of social media, so I think you have to say a different word. Caleb, what's like the word right now you say on social media instead of uh instead of firearms, firearms? I don't I don't think you're allowed to say that either. Bang bang sticks. I have no idea. Yeah, what's uh what's the deal with boom sticks? Lay them.

Latham 31:21

How do we what's it what's the deal with insurance around boom sticks? Um like what's the deal? Like, what do you mean like how do you insure it? Or uh because you know, you so a homeowner's policy. Well, like yeah, they have a built-in yeah, it has a built-in sub limit. And so basically, if your whole house goes down in a fire and your guns were in there and now they're lost as well. Boom boom sticks, dude.

Branden 31:45

We're gonna get we're gonna get canceled on social media. I'm kidding.

Latham 31:47

Boom boom sticks.

Branden 31:49

Um okay, so your whole house burns down, your boom boom sticks are melted to piles of.

Latham 31:54

So the insurance company is gonna pay a sublimit amount for the uh boom boom stick. And oftentimes, you know, that it just depends on the carrier what um what they offer. Some have higher limits, but essentially, if you have a lot of guns or if you have really nice guns, um it's likely that the sub-limit is not going to be quite enough. And so you might schedule that specific item. It's called scheduling. It basically means they make a little note and they say, hey, Brandon has this item that is worth this amount of money, and we're covering it that that to that much. So you can list the coverage amount, and you can even have a separate little deductible for the item, and then they'll pay out in that case, and then also some carriers we'll charge you a little bit more for that coverage, by the way. Yeah, there's a little bit more premium. Um, you know, it's usually worth it though. Yeah, it's usually worth it, it's usually not crazy. And then also there are endorsements that you can get that will expand the risks that the coverage will apply to. So what I mean by that is that now your your item is has more comprehensive coverage. So if it gets stolen, if it um you know, if something crazy happens to it and it's destroyed, basically anything you can you can get at open perils is what it's called, open perils um coverage. So essentially anything that happens to that item is gonna be covered. So yeah, it's pretty good deal. I would, I would say, if you especially if you're a collector of these items.

Branden 33:39

So yeah. Uh yeah, comic books. I mean, I mean, there's people with Pokemon card collections these days that are you know what I mean, getting pretty up there in valuation.

Latham 33:49

For sure. Yeah, instruments, you know, piano, violin, that kind of stuff. So sports equipment, like fishing gear. I know that gets interesting.

Branden 34:00

Um you know what I had actually never thought of insuring fishing equipment. I think people do that. They probably have a little bit more expensive uh rod and reels than my bass setup, but uh yeah. Yeah, yeah. How many, how many uh Gary Yamamoto Senko worms do you have to own on a in a tote in your garage before you need a schedule it? Yeah. Just asking for a friend. Uh anyways, that that's that's all

Renter's Insurance Covers More Than You Think

Branden 34:25

good stuff. Um I think the last big thing that I see people miss on is renter's insurance. I think that's the other one that I'm always like, just a it's a bit of a head scratcher. Like, please just get some renter's insurance, right? Um what's the deal with renter's insurance? Who, aside from the obvious, who needs renter's insurance?

Latham 34:46

So renters, you know, if you're renting an apartment, a house, um, a dwelling, you know, anything, a renter's insurance policy will cover a number of things, but the b two big things are your personal belongings. So it's called personal property, and you list that amount. So the kind of the lowest I go is around $20,000. You know, you can go even lower, 15, 10, I think, for some carriers. But essentially, if if your apartment were to burn down, um that policy is gonna pay out to just get you all new stuff. So clothing, furniture, electronics. Um, you know, we were talking about guns and firearms, you know, that kind of stuff, you can schedule those onto a renter's policy. The other thing that um is important is your liability. Again, you have liability risk, um, even as a renter.

Branden 35:42

Yeah.

Latham 35:43

And that liability coverage follows you around. So um if you are golfing and you hit a uh your swing goes awry, I know this would never happen to you, Brandon, but your drive flies out into a neighborhood next door, and you strike you strike someone on the head and now they're coming after you. Um, you know, that would be that could fall under your renter's insurance policy to to help you in that situation if they want to sue you, you know. So and those are that's for a non-homeowner. So for homeowners, that is your personal liability attached with your homeowner's policy. For renters who don't have to have a homeowner's policy, you don't usually have to have a renter's policy. Some landlords require it. So if that's you, you know that you're you probably know if you have to have one, but typically it's not enforced. Typically, most renters don't have them, so that's when it would be nice to have.

Branden 36:44

Uh I find that they're like really, really inexpensive, actually.

Latham 36:47

That's uh that's the other thing. So it's a couple hundred dollars, and when bundled with your auto policy, it essentially pays for itself. Um, you know, sometimes it's it's cheaper to bundle the renters and the auto together than just have our auto policy because they'll give you a discount on the auto. And the reason they do that is they're they're thinking is that with more lines of coverage with this individual, they're gonna stay with us longer. So it's a retention game that the insurance company is playing, so they'll incentivize you to have a renter's policy. So interesting. Usually it's it's a no-brainer. Sometimes it's more, but it's never crazy unless you have a ton of personal property, unless you, you know, are insuring a ton of um scheduled items.

Branden 37:32

So yeah, I I mean, obviously, I haven't needed a renter's policy for quite a quite a while, yeah. But um uh it's you know, I just always remember being like super cheap. And I did have to use it one time. Um really yeah. Somebody when I was uh when I was in the army, somebody broke into my car and stole a bunch of stuff. Which was like federal government property, which like really sucked while they're not at the renter's policy, let me tell you. Because everything, it doesn't matter how cheap it actually is in real life, it's like replace it. It's always more yeah. What the army's gonna charge you for it based on what they pay for it is outrageous.

Latham 38:08

Um I'm glad you brought that up because yeah, it's your renter's policy that would protect your items in your car. So your phone that gets stolen with the vehicle. It's actually not your auto policy that's gonna cover that. That those covers the car, not the stuff in it. Right, yeah.

Branden 38:22

Yeah. Um, so the renter's policy covers the stuff in the car. Yeah. No, it's a good call out. Yeah. Um well, uh as exciting as insurance always is. Yeah. Uh Latham, I appreciate you sharing some of your insights. Yeah, of course. Look, guys, anyone listening, this is the time of year. I I really encourage you, like, pull your statements out, um, take a look at them, see what you're covered for, see what you're paying, right? Like, um, and you know, listen, a great way if you're trying to understand, like, what am I do I have enough here is to draw a net worth statement, right? So just draw out all your assets and and compare them and say, like, look, this is what I have to lose. Like, is my insurance matching what I have to lose here? Right. Like, and um and and if you're going, I really would not like to lose these assets, right? That would really, really significantly set me back, then you know, like look at adjusting your insurance appropriately. Yeah.

Latham 39:18

Let me say one

Personal Injury Liability and Risk Mitigation

Latham 39:19

more thing. So along those lines, so um let's see, personal injury liability. So personal injury covers for if someone were to sue you for libel slander, um social media misconduct, or I don't know the, I guess off the top of my head, I can't remember, but you know, if you're in social media, if you're posting a lot, if you're making podcasts, if you're in the financial industry, and a lot of your listeners are financial planners um in that space, you need to have personal injury liability attached to your homeowner's policy. It's pretty cheap. Again, it's a it's an endorsement. Um, so that'll pay out if you're sued for those kinds of things. So you're not injuring someone's body, but you're injuring someone's name and they're coming after you for that.

Branden 40:06

So let me uh counterpoint that a little bit with uh a key part of the financial planning when you get to like when you get to like the risk management module, I call them modules, right? Okay, uh pillar of financial planning, right? I like it. Listen, so um insurance is all about like you have risks, right? And so you can insure a risk, you could you can retain a risk, okay. Um, so you gotta choose what you're gonna retain, you gotta choose what you're gonna insure. Okay, but then you gotta still try to mitigate where you can, right? For sure. Because it's always gonna save you more money. So um if you're in the business of making really edgy content, you probably want to buy the, you know, buy buy the extra policy coverage. But like a great way to not get sued for slander is to just make sure you don't slander people. For sure, for sure. Yeah, you know, like you can just no, yeah, right. And so there's like percent. Now, obviously, everyone knows that, right? But my point is, is like when it comes to insurance, like sometimes a great way to just save money in insurance is to just mitigate risk too, right? Like be aware of your risk in life. So yeah, like hey, hey, how what's a great way to not make your insurance go up more? It's like don't go get speeding tickets. Could be a good driver, you know what I mean? Like mitigate the risks around you, yeah, but making some good choices on a day-to-day basis still, instead of just saying, Well, I can buy insurance for that, and I can act cool.

Latham 41:22

No, 100%. I totally agree with that. Um, I think my point was just yeah, go get a quote from your from your agent. Um, it it's pretty inexpensive.

Branden 41:32

But for those that like to run their mouth on Facebook, those are really, really loud. Yeah, especially here in St. George, there's no shortage of people getting wild in the comments, especially about politics.

Latham 41:42

Yeah. But uh your point about driving, everyone thinks they're a great driver. Well, I talk to people who have had at fault accidents multiple in the last three years, and they're asking me why there are premiums going up. It's like, be a good driver and you'll you will be rewarded. So, anyways.

Branden 42:04

If

Final Takeaways and How to Reach Latham

Branden 42:05

you're feeling upset right now, you're probably not a good driver. Um, anyways, thanks everyone for tuning in. Uh again, Latham, appreciate you taking your time. Um, if anyone ever had uh some more questions and wanted to reach out to you, Latham, what's the easiest way to find you?

Latham 42:24

Yeah, I would say uh, I mean my email address, Latham, that's my first name, L A T H A M at millstoneins.com. Send me an email.

Branden 42:36

Okay.

Latham 42:36

And uh yeah.

Branden 42:38

There you go. All right. Hey, uh once again, appreciate it, and we will uh see everyone out there.