Home Care Insurance 101: What Every Owner Needs to Know

Insurance is one of those parts of home care that most owners know they need, but few feel fully confident about. In this episode, Paul and Joan sit down with longtime insurance advisor Joe Althaus of JA Price Insurance Agency to talk through the basics every agency owner should understand.

If you have ever wondered whether your agency is truly protected, this episode will give you a better place to start.

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Transcript

SPEAKER_02 0:06

Hello and welcome to the Home Care Millionaire Podcast, the show where compassion meets prosperity. I am Paul Tembund. Alongside my beautiful wife, Joan here, we're honored to be your hosts. Together, Joan and I have built a home care agency from a little$12,000 credit card loan. Okay, some people call it a gambler at that time. We've built it into an eight-figure business serving thousands of families over the years. And now we're here to share the lessons, strategies, and the strategies and the mindset shifts that help us get there so that you can too.

SPEAKER_01 0:42

We launched this podcast because the home care industry is often misunderstood. Too many people don't see the sacrifices owners and their caregivers make every single day, or the powerful impact agencies have on seniors and their communities. And truthfully, we looked around and realized there were not many podcasts out there shining a light on this industry. So we felt called to create the Home Care Millionaire Podcast.

SPEAKER_02 1:09

This podcast is designed for the purpose-driven provider, for those of you who feel called to care, but also want to build a thriving, sustainable business. Each week we're going to share with you real life stories, current strategies, and powerful mindset shifts that will help you move from just surviving to thriving.

SPEAKER_01 1:28

Absolutely. Our tagline says it best. Compassion is your calling, wealth is your reward. And here on the Home Care Millionaire Podcast, we're going to show you how to embrace both.

SPEAKER_02 1:41

So get ready for inspiration, practical insights, and encouragement you need to impact lives, build wealth, and create a legacy through your agency. So hit subscribe, folks. Join us on this journey to transform your business, your mindset, and your future. Welcome, folks, to the Home Care Millionaire Podcast. Juno and I truly honor to welcome a gentleman who've been working with for years. He's one of our trusted vendors, you know, Mr. Joe Alhouse, that we contact, reach out to whenever we need any insurance needs. And uh Joe has served us for many, many, many years. And uh he's helped our business really thrive. I say thrive because I learned pretty quickly that if you don't have insurance, you don't have protection, being as litigious a society as we are, because they're gonna sue you for anything, right? Especially when you're a business owner, uh, they're gonna see for anything. But Joe runs the government when he does, he's able to cover us so we're gonna sleep well at night and not worry about whether if an incident happens, God forbid, then we'll lose our business. I mean, I think that's the that's what most of us owners don't want to hear, right? So we're just honored to have uh Joe House take time out of his very big important busy practice really to spend some time with us and just kind of speak to us about insurance. Uh so what we so again.

SPEAKER_01 3:06

Yeah, so we are really excited to have you on, Joe, after so many years working with you. And um, you have like Paul mentioned, you we can sleep at night and also remain compliant, which is a major component of what we do. You cannot provide, like in our state, you have to be licensed, so you have to have insurance coverage. And besides, there are so many revenue streams that will open up to you if you have insurance coverage, and so we are really excited to have Joe here with us today. Without much further ado, let's welcome Joe to the Home Care Millionaire Podcast.

SPEAKER_02 3:40

Welcome, Joe Outhouse from the JA Price Insurance Agency. Welcome, Joe, to the Home Care Millionaire Podcast.

SPEAKER_00 3:49

Thank you very much. It's uh it's my pleasure to be here. And yes, uh, we have worked together for many, many, many years. And it um you hit it all uh correctly there, Paul, when you were talking about compliance and protection, and you know, what states are licensure states for home care, which ones are not. And that's my role to understand and know all that in terms of you know, what does the franchise require for insurance? What does the state require for insurance? When it comes to startup franchisees or home care agencies, a lot of them will have uh an SBA loan that will have all kinds of their own insurance requirements. So it is my job to manage that whole process and ultimately be my client's trusted advisor when it comes to both required and desired insurance because there is a difference. Uh uh certainly are people uh and agencies, uh home care agencies that um you know are comfortable just operating with the minimal required amounts of insurance, and that's fine. You know, it's whatever comfort level uh they have in terms of their processes, policies, procedures for risk management, and all those kind of things. And then there are home care agencies who are on the other side of the spectrum where they can't sleep at night unless they have uh uh huge uh buffers in terms of their insurance limits and different types of coverages. So that is my job to manage expectations uh uh for everybody involved and to make sure that people can't sleep at night and and that they have the coverage, uh, you know, God forbid, once something happens, uh, that the coverage is in place.

SPEAKER_02 5:47

Uh good deal. Good deal. No, that that that is important. I mean, that is important. I mean, it's you can't you really can't operate without the right the right insurance. And uh Joe, could you speak to you want to say something?

SPEAKER_01 5:58

No, I was just gonna ask how you got into healthcare, you know, home healthcare side of your business.

SPEAKER_00 6:04

Yeah, well, it uh that's an interesting story, at least it's interesting to me. Uh in a previous life, uh you know, I've been in sales for the the majority of my post-college life. And uh, I had a a long tenure with a uh a company that sold pagers. If you can look back 20 years and try to remember what those are.

SPEAKER_02 6:29

I know exactly, yeah.

SPEAKER_00 6:30

So I had uh you know a pretty significant uh client. Uh it was all commercial based, right? So I would sell pagers on a commercial level. Yes, but as you all know, over time pagers became less and less uh important, less and less needed until eventually they were phased out completely. Um, so I uh I knew I needed uh a career change, I wanted to stay in sales. Okay, actually, a childhood friend of mine has worked at JA Price Agency for 10 years longer than I have. So he's been here, yeah. So I just called him up and told him what uh you know my situation was, and he said, you know, hey, we're always looking for good people. I want you to come on in and talk to the owner. Um, so eventually, you know, I I uh was brought on, and it's an interesting industry in that my thoughts were like, hey, I have got a ton of commercial contacts from previous lives, and I'm just gonna call all of them up, tell them I'm in the insurance business now, and I'm just gonna be able to go out and write all this insurance. Well, it turns out that insurance is a very emotional product. And when uh a company or a buyer finds somebody that they trust and uh you know that they have built a relationship with, that is very, very difficult to pierce that veil. You know, a commercial, uh a business owner uh is not an expert in insurance, and they don't understand all of it sometimes. So when they do find somebody, it's like this is where I am, and this is where I'm staying, and this is what I'm doing. So thanks for calling, Joe, but no thanks. I love what you did for me in your previous life, but I'm staying where I'm at. Yeah, so this was a learning curve for me. It's like this whole insurance thing is so much different than widgets, you know, it's uh it's very, very emotional. Yes, it is. So I had to kind of recreate my process, and I'm like, okay, home care 20 years ago was uh an industry that was in its infancy, and honestly, the the insurance carriers, a lot of them, most of them were scared to death to write any kind of insurance in that space, they didn't know enough about it, right? And there weren't enough controls, you know, it wasn't a four-wall place where they could manage risk management and all that kind of stuff. Um, so I I just started uh rusing the home care agencies that were local to my home state of Minnesota. Okay, and uh the response was really astronomical. Wow, yeah, at that time most of them were insured through a state plan or had zero relationship with any kind of an agent or whatever. Yeah, and I was fortunate to have the backing of J.A. Price, who had some really strong relationships with some insurance companies that we could talk to about what this industry is all about. And uh so, you know, a couple of them gave us the green light to start quoting some of this stuff, and um, that's how I pierced through the uh that emotional attachment that business owners typically have with their insurance agent. Uh, they were more than happy to talk to somebody that would actually have something to offer them other than state plan.

SPEAKER_02 10:21

Yes, yes, and and I and I was gonna add also that um, you know, because we weren't as attached to uh at least most of us are not that weren't as attached to our insurance agents, it was much easier for you. And you you're a nice guy, Joe. So I mean I don't know how to turn you down. I mean, you you're very nice guy. I mean, you know, hey, you know your stuff. I mean, you really know your stuff. Now, let's talk to us about insurance, Joe. Um, you know, what lines of business do you uh you involved in? I mean, um, are you the broker? Is that what you do? Or how do we, you know, are you the broker? I mean, because I think you are the broker, but you know, so let us know what I mean. How do you has all of that? Because again, as you said, for a business owner, this is like a foreign language. Matter of fact, it's probably worse, you know, because if you try selling this stuff for a living, you know. There you go, there you go. So, so yeah, so so please talk to our audience out there that uh business owners may not know what uh what lines, what you they talk to you. How could they be intelligent? What do you write? I mean, what lines of business do you write that they can call you and talk to you if they wanted to at least to get what is needed at least to get going, that type thing. What do you do?

SPEAKER_00 11:28

Yeah, you know, from 20 years ago when I started uh with this home care thing, I've never looked back. 99.9 percent of what I do is home care insurance. Okay, really? Um, so I focus solely on that. Um and you know, with that, you're right, you know, you you learn to be an expert in any given industry when it's all you do, and you know, the the workers' compensation, all the liability products, uh, which includes auto liability, general and professional liability, abuse and molestation. And in recent years, uh the cyber liability has become a very hot topic. Employment practices, which is you know, coverage in the event that your employees sue you, alleging discrimination and all those different kinds of things. So there is overlap between the types of insurance between industries, right? I mean, all industries need workers' comp, they need liability, they need auto insurance and all that. But the actual specific coverages and forms that are within each of those liability policies can and are very specific to certain industries. So, yes, the liability package for your agency looks a lot different than the construction team down the road. You know, there's there's different stuff that's involved with all that stuff. Yeah. Okay. And, you know, so that has been my forte. And with that, not only do I understand the ins and outs when I'm talking to clients about the insurance coverages that are either needed, required, andor desired. Uh, but it's allowed me to build very strong relationships with the carriers that have appetites for home care insurance, and from there to the specific underwriters in those home care departments. So it's there's a lot of overlap and consistency between what I do and what any successful business does, right? You act uh uh with honesty, integrity, and decency, uh, and it helps build relationships. And uh which I learned the hard way in in year number one, that that is the most important thing in the insurance business relationships, because uh every agent can produce the same quotes to any given customer, uh, because most independent agencies have access to the same insurance carriers, particularly when it's a niche space like the home care space. So uh what sets you apart uh is not a piece of paper, it's how you treat people. That's right. That's right.

SPEAKER_02 14:23

And I gotta say, Joe, you're an expert at it. You you are. I mean, you you do a heck of a job, you reach out. I mean, I know that uh over the years for us, you've called me and uh called us, really. You know, uh, I'm usually handling that. That's why I said me. You know, you said, Paul, listen, this is coming due, this policy renewal is coming due. And you start working uh to for the renewal months ahead of time, too, so you can shop the market as it were and kind of find what's best for the for your client. I really, I really appreciate that about you.

SPEAKER_00 14:51

Well, yeah, and you know, that's part of the deal, you know. It uh um just because you earn the trust of a client doesn't mean you're gonna keep the trust of a client if you don't do what you're supposed to do every year. And not only at renewal time, but the the service level between renewals. Uh, you know, there there was a saying uh when I was first getting educated in the insurance industry that customers, insurance customers, a nagging question in the back of their mind is always well, what is this agent doing to earn my business for the other 11 months of the year when he's not working by renewal? That's a good one. That is a good one. And with that being said, I am so fortunate to have the team that I do at JA Price. Uh the backing of management. Uh well, you know Jeff Olsen, he's the owner of the agency, and he comes to the visiting angels conference every year with me.

SPEAKER_02 15:51

Yes, and of course, Stacey.

SPEAKER_00 15:53

Oh, yes, she is dynamite, she is dynamite, and you know it it's the same kind of thing that I was talking about before. We all work well together, treat each other well with decency and respect and honesty, and that just builds upon itself. And it it it I would be real surprised if our clients, meaning Stacy's and mine and Jeff's, don't feel that when they're uh when you know we're communicating and interacting. You know, we've got uh it is so much more than just an operational transactional thing, it's uh it's a culture that we have here, and it's a beautiful thing. And it's promoted my success uh significantly to have a team that I do here. So it's I love to take credit for everything because I'm very competitive, but I wouldn't be fairer if I didn't give the kudos where they belong.

SPEAKER_02 16:51

You know, you know what it said before Joan chips in here. You know what it said, Joe, they say teamwork makes a dream work. It takes a team, it does take a team. Go ahead, Joe.

SPEAKER_01 17:00

Yeah, I was just gonna say, Joe, it's more than 24 years now. Although I have a better understanding of a lot of the insurance policies, I'm no expert, but the one area that still throws me off is the auto insurance. And I'm working with some other, you know, um home care owners who talk to us time and again. Some of them don't see the need for auto insurance, right? They're like, okay, the caregivers have their own insurance and the clients have their own coverage. And um, I know one sticky area in our client agreement is talking about auto insurance. So, could you just shed a little bit of light as to the importance of having auto insurance and the difference between I think it's auto-owned and non-owned, I think it's owned and non-owned. Yes, you could just shed some light uh in that area for our audience, please.

SPEAKER_00 17:53

Absolutely. And I can tell you with certainty that of the 250 or so visiting angels franchisees that I insure, I have had this way to go specific conversation with each one of them multiple times. So I know that this whole auto thing uh is very, very involved and very confusing. In fact, I put together a um a summary, so to speak, of how all these different auto insurance things fit in to home care agencies with specific examples that uh because I've I've gone through it so many times. Yeah, yeah, of course. It's uh something that's um is always on the front of people's minds, but anyway, so specifically, Joan, what the bulk of what you were talking about is the hired and non-owned auto liability. So that is by the way, visiting angels corporate does require that you carry that in any visiting angels franchisee. So, anyway, that coverage is liability coverage. Uh that's important, is liability only for a given home care agency for exposures when an employee is driving a vehicle that is not owned by the home care agency. Okay, so that would mean you know the caregiver's own per uh, the client's vehicle, any vehicle that is not owned by the home care agency. Now, important things to know about that is uh it does not provide any physical damage coverage to the vehicle itself. So if a caregiver is using their own vehicle and you know, heaven forbid they get into an accident, their car gets total, their the insurance you have, uh the hired and non-doned auto liability, does not cover any physical damage to their car. So they would be responsible to go into their personal insurance agent to get coverage for their vehicle. And the same thing would apply with the client's vehicle. Uh, there is no physical damage coverage, it is liability only. Now, what does that mean? Let's go back to that example. A caregiver is driving their own personal vehicle with or without the client in the car. Uh, they get into a horrible accident and they total their own car, they total the car of the third party that they had an accident with. And there's also a half a million dollars in liability for injuries to the third party that was hurt in this accident. So, how does this all work? We'll start with the caregiver. The caregiver, if they were injured in the accident, their injuries and medical treatment would all be covered by a worker's compensation. Okay, so that has nothing to do with auto liability. The physical damage to the caregiver's vehicle would need to be covered by the caregiver's personal insurance policy. Now it's the third party that has a totaled vehicle and$500,000 in liability that needs to come from somewhere. So the caregiver's vehicle, whatever liability limits they have on their personal insurance policy will be primary.

unknown 21:14

Okay.

SPEAKER_00 21:14

So we'll just say, for example, that they have$50,000 in liability on their personal auto insurance. That$50,000 would be used up first to take care of the half a million in liability that we're looking at. Okay. And then your hired and non-downed auto liability would take care of the other$450,000.

SPEAKER_02 21:36

Wow. Okay.

SPEAKER_00 21:37

So a number of important things, right? There's been multiple over my 20 years of doing this, where a caregiver will get into an accident and then come back to the home care agency owner and say, Hey, I was working for you. I didn't have any comprehensive or collision coverage on my car, but since I was working for you, you need to pay.

unknown 22:00

For it.

SPEAKER_00 22:00

Oh, wow. And the coverage doesn't work that way. You can't insure something that you don't own. The important thing to take away from that is to make sure that you're advising your caregivers or any employee that's driving their own car on company time that they need to make sure that they have the right insurance on their personal insurance policy to cover them in the event of whatever happens. And the same thing with the clients. The client's personal auto policy is the only policy that's going to respond to any damage to the client's vehicle.

SPEAKER_01 22:36

Oh wow. Thank you so much. Even now, I just learned again, right? Yeah, yeah.

SPEAKER_02 22:41

Let me thank you, Joe. That was really helpful. Joe, let me ask you this. You know, um, I've heard sometimes that it's always good to have a policy. Let's say you have a home care agency, for example. Um, rather than have the agency own the vehicles and have the insurance on them, it's best maybe have a you know have an LLC entity. And I know this is not a legal thing, but just an insurance, you know, if you shed some light on that, have that legal owner, have a an LLC on the um the vehicle and then lease it to the home care company so that in case of liability, the hit is not directly on the uh home care agency. Have you any thoughts on that?

SPEAKER_00 23:23

Well, yeah, um you're certainly not the first person to bring that up. And uh the issue is is that the carriers, if any, that are interested in writing just auto insurance for a home care agency in that capacity is next to nil. So the you know, there aren't any issues with if you were to purchase a vehicle in home care solutions name, we could insure that directly with the policy that you have through me already. Uh okay. And it the you know, it's uh uh it's part of the bigger picture, right? You know, this auto is part of a much larger policy with all of the other coverages, so uh it's easier for the carriers to justify doing that. Just FYI, the automobile claims, the number one driver of insurance premiums in the home care space is auto accidents, both in terms of liability and severity with workers' compensation claims. So it is if you carve out the worst piece of the whole pie and expect an insurance carrier to only write that. Number one, they're gonna charge it through the roof. And number two, it's very, very difficult to get a carrier to entertain even makes sense. You know, selective handover, Philadelphia, all the the carriers that offer the liability packages, including auto coverage in the home care space, would love it if there was a carrier that did that because they could just refer everybody to get rid of all the auto exposures. Yeah, yeah, yeah. To see or find a carrier that wouldn't be, you know, wholesale surplus lines market that has very stringent underwriting and extreme premiums and high deductibles. I've never found a way to have that make sense for my clients to do a separate LLC.

SPEAKER_01 25:26

Wow, Joe, what would you say for someone you know getting into home care? What would you I know different states have different requirements and so forth, but what would you say are the bare bone minimums? Because sometimes we get asked that question, oh, I just need a professional liability and commercial liability, and I'm good, or general liability. What would you say?

SPEAKER_02 25:45

At least yeah, and I was gonna add also, Joe, Joe, that it may not be for a franchise, it may be uh uh, you know, a no-name, you know, somebody out there just getting into the business, they want to stay, but they want to protect themselves, protect their home, the businesses, you know, business. I mean, what would you how would you suggest they go about it? Which is what Jonas is asking.

SPEAKER_00 26:05

You know, uh, you know, as we talked uh already, you know, uh the there's certain entities that will have requirements, uh, you know, franchise or the state, SBA loan, whatever it may be. But if none of those apply to somebody, then by law they have to have workers' compensation, other than in Texas, you're not required to have workers' compensation. Oh, really? Okay, that's interesting.

SPEAKER_02 26:28

That's interesting.

SPEAKER_00 26:29

Wow, yeah, yeah, they got their own program there. They can they can fly without it. Um, but then from there, um, you know, the basic liability package that you would need would be general liability, professional liability, abuse and molestation, the hired and non-doned auto that we talked about, and then theft of client's property or bonding for lack of a better word. Okay. So those are uh and those all come in one liability package, by the way. Okay, which is a beautiful thing. Um, and then that would be the basics that you would need to cover, you know, the minimal amount of exposures that that could happen. And they're relatively inexpensive. Okay. Uh, you know, you start uh they're generally speaking, they're rated on the amount of payroll revenue, number of caregivers, all that kind of stuff. But when you're starting out and you don't have any of that, there's really nothing to rate against. So it's just kind of a flat minimum premium uh for a couple thousand bucks to get a standard liability package that will suffice, you know, at least suffice in the first year or so until you can get your get some traction, start paying some revenues. You know, generally speaking, the larger you get, the more exposure you have, and the more insurance you need. But that would be the basic package.

SPEAKER_02 27:57

Um that would be sufficient. Wow, wow. No, thank you, Joe. This has been uh, you know, uh you've this has been a wonderful uh podcast interview, Joe, because you've educated us, our audience, a lot of stuff we did not know about, you know, and we need experts like you because you guys are this is what you do for a living. I mean, and you can shed a light, whenever we have someone who can shed a light on on that this important piece of what we do, it's it's so it's so uh rewarding for us and our audience. So thank you so much, Joe. Thank you for your time today. Joe, would you would you mind just share just wrapping things up? Just share your your contact phone number or email or something so that if our audience has a need for your services, it can be reach out to you.

SPEAKER_00 28:39

Please, yeah, that would be great. So my last name is uh pronounced Althouse, and uh maybe to make it easier for you, my nickname in high school was Outhouse. So okay. In case you look at it, just think outhouse, and that'll maybe put it together for you. Uh and my direct phone number is 952-253-4320. And my email address is joe.althouse at japrice.com. Awesome.

SPEAKER_02 29:10

Would you repeat that phone number one more time?

SPEAKER_00 29:12

952 253 4320. And uh it's the JA Price Agency, and uh we're located in Minneapolis, Minnesota. Awesome. And yes, that is part of the United States. It still is. That's right.

SPEAKER_02 29:29

You're not you're not in Canada, you know.

SPEAKER_01 29:31

So thank you, Joe.

SPEAKER_02 29:33

Thank you so much, and thank you again for the good work you do. We're we use you all the time. I mean, we've used for many, many years, as we said earlier. We trust you, you know, we really do. You know, you you serve from your heart, you know. You're uh I think you're a good man, you're a good man, you're a good man because you look out for your customer. And I think that uh, you know, um that's so important. I mean, that's so needed in this day, is this age and day because a lot of folks are you're looking at the you know the shiny object, but uh you touched on it, it's relationships. I think you your and your your you know you and your agency exemplifies that, you know. I mean, uh as you know, as you know, we've had folks call us one in our business. I say, guys, I can't do it. I'm gonna have to talk to Jay Price, I'll talk to Joe. Joe and I look at him and say, No, we can't. You know, if Joe can do it, we'll stay with Joe. So that's that speaks to the respect we have for you, the value we see in our relationship, and the fact you served us, we've referred people to you, yeah, because of the work you do for us. And so we thank you again for uh taking the time out of your very busy uh uh day job to be here and educate us, our audience. So thank you so much, Joe.

SPEAKER_00 30:41

It has been my pleasure, and the feeling is mutual, right? I know I've known you guys long enough to know how you run your agency, so you get it, you understand what I was talking about. So thank you. Uh I appreciate this opportunity. It's uh a fantastic thing you're doing. Thank you, Joe. And uh, you know, if you if we want to do this again in six months or a year or every week, I'm up for it. There you go. Thank you, Joe. Thank you.

SPEAKER_01 31:05

Glad to have you back, Joe.

SPEAKER_00 31:06

Well, thank you, good Joe. Thanks, guys.

SPEAKER_02 31:08

All right, so thank you so much for joining us today on the Home Care Millionaire Podcast. We hope you found inspiration, encouragement, and practical tools you can apply right away in your own journey. Our mission is simple, folks, to shine a light on the incredible impact that home care owners and their caregivers make every single day, and to give you the mindset, strategies, and faithful wisdom to build both purpose and prosperity.

SPEAKER_01 31:40

Because here is what we believe compassion is your calling, wealth is your reward. If this episode spoke to you, we'd love for you to subscribe so you never miss an episode. And if you like more resources or have questions for Paul and I, just head over to askjoanandpaul.com. We'll be honored to connect with you there.

SPEAKER_02 32:02

Until next time, folks. Remember, you have what it takes to build wealth, create freedom, and live a legacy through your agency. We're here cheering you on every step of the way. Bye for now.