What Homeowners Need To Know About Rising Insurance Costs with Crosby Warren (Ep. 8)

Insurance costs have been rising fast, and many homeowners are wondering what changed. 

Why do policies feel more expensive, more restrictive, and harder to understand?

In this episode, Jon Meyer talks with Crosby Warren, Insurance Advisor and Partner at Cox Insurance Associates, Inc., about the recent shift in home, auto, and umbrella insurance. Crosby explains why premiums rose, how deductibles and roof coverage have changed, what policyholders should review, and why umbrella and uninsured motorist protection deserve a closer look.

Crosby covers:

• Why home insurance premiums rose sharply after severe weather, inflation, and carrier losses
• How the market is starting to level off after years of steep renewal increases
• What homeowners should know about wind, hail, roof, and percentage-based deductibles
• Why umbrella coverage should be based on exposed assets, not just net worth
• How policy changes can surprise families when they wait until a claim to review details

• And more!

 

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Watch us on YouTube at https://youtu.be/TSL-waX7TAk.

 

Connect with Jon Meyer:

• BGM
• LinkedIn: Jon Meyer
• Email: jmeyer@BGM360.com
• Schedule a Call

Connect with Crosby Warren:

• LinkedIn: Crosby Warren
• Website: Cox Insurance
• crosby@coxins.net

About Our Guest:

Crosby Warren is an Advisor with Cox Insurance, specializing in insurance solutions and risk management ideas for families who want to protect what matters most to them. His goal is to design insurance programs that offer clients strong value, thoughtful guidance, and reliable service.

Crosby believes Cox Insurance is a natural fit because its core values align closely with his own. At the center of his work is a commitment to building genuine relationships with clients and business partners. He takes great pride in his craft and is proud to call Cox Insurance his professional home.

With more than seven years of experience, Crosby brings the knowledge and skill needed to serve as a trusted resource in the insurance industry.

 

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Transcript

Crosby Warren: We’re on a footing now where even if Mother Nature does throw a curveball or two at us, the changes that have been made are putting us on such much more of a solid foundation than the house of cards that I kind of mentioned earlier.

Jon Meyer: Insurance is supposed to be for catastrophes, and I think we’ve all gotten a little bit soft thinking that it’s for everything, and I, I blame the health insurance market for this.

Crosby Warren: You know, we view the financial world, the financial planners as the quarterback, and we’re kind of that wide receiver that’s out there to say, “Hey, we’re gonna talk to Jon about this because we want to have a conversation to make sure the left hand’s talking to the right hand.”

Welcome to Mastering the 360 Mindset with Jon Meyer from BGM.

Join us as we explore ways to make the most out of your wealth, health, and time, unlocking opportunities for balance and lasting success. With insights from Jon’s years of experience and guest experts, you’ll gain the tools to design a life that works on your terms. Now, onto the show.

Jon Meyer: Welcome to our show today, everyone.

Jon Meyer: I’d like to warn you that we are gonna talk insurance, and sometimes people think, “Oh my God.” But today I have a great s- guest joining us. I have Crosby Warren. He is an insurance advisor and partner at Cox Insurance here in Minneapolis-Saint Paul area, specifically the Saint Paul side for those of you that know the difference And I’m gonna ask Crosby all kinds of fun questions about insurance, and everyone’s gonna be excited.

Jon Meyer: So Crosby, with that, welcome to the show.

Crosby Warren: Well, f- thank you, Jon. I appreciate it. Thank you for the invite to discuss this wonderful topic. I… Hopefully your listeners will get a couple of nuggets, um, about, uh, something that affects a lot of people, right? If you have something to protect, um, this is something that, um, is, is almost required and, um, again, impacts so many different households.

Crosby Warren: And, um, happy and looking forward to kinda covering all the bases with you today, and, uh, again, hopefully provide some good takeaways for, for the listeners.

Jon Meyer: Yeah. And for our listeners, when we talk insurance today, we’re not talking about life insurance and all the stuff that people sometimes equate with that.

Jon Meyer: We’re talking specifically about the risks around homeowners, car, umbrella, the things that a lot of people don’t really like, don’t understand, and they’re probably quite honestly not happy about right now. So with that warning, Crosby, let’s start on that front. Um, homeowners insurance over the last few years has felt like kind of a, a little bit of a chicken and an egg scenario, and it just keeps going up in price.

Jon Meyer: No one understands why. So let’s just start there and talk a little bit about why has this, uh, part of the world changed so fast, and basically feels a little out of control. But I’ll let you tell us if it is.

Crosby Warren: Yes. The consumer fatigue has been something that’s been significant for folks. Um, and that’s dated back maybe to about the last seven years.

Crosby Warren: Now, prior to that, Jon, um, we had some great decades of insurance in the insurance world, uh, meaning that for the consumer, um, the contract was for, as, in particular home insurance, was very, um, uh, consumer beneficial. There was replacement cost, uh, low deductibles, and if somebody had damage, they had a very, you know, small deductible and, and the insurance company wrote the check for, uh, whatever was at issue, right?

Crosby Warren: Um, it was a great run for a long time, but we started to see pressures onto the insurance industry. And so what started to c- uh, I would liken to kind of like a snowball rolling down the hill. It started to pick up steam. It started to pick up size, and really what these pressures were, uh, was a lot of inflationary pressures, um, whether it was building materials, uh, the COVID spike of, uh, the kind of the 2020 timeline where you’d go to Home Depot and see, uh, a two-by-four for $12, right?

Crosby Warren: Um, or Just a lot of those building materials were certainly impacted in, uh, during that timeframe. And also what we’ve also seen is the labor world. Uh, the cost of getting good people out to do, uh, work has gone up enormously. It is just, it, it has really exploded. And those decades that I mentioned where insurance companies were able to, you know, manage their profitability with the contracts that we’re offering, um, it became almost a house of cards where The, the co- the legacy contracts that were out there really started to, uh, i- i- impact insurability with these carriers because Mother Nature started to increase frequency with certain, you know, regions of the country.

Crosby Warren: In particular, here in Minnesota, we were kind of in a river of severe weather that, uh, over, you know, about, I’d say, five or six-year period that really impacted so many people, having new roofing, new siding, et cetera. And, um, we got to the point where there was a market correction that was needed. And so what that market correction — It took a couple of different forms, but over the last, I would say, six or seven years, um, it started with rate.

Crosby Warren: And so the consumer getting that renewal with their home in- home policy, those prices started to increase by 20, 30, even 60% increases year over year. That client who’s seeing that increase, there were no claims, no drastic credit changes, nothing at all. It was just strictly rate. And, um, so that was kind of first.

Crosby Warren: Second, we started to see companies adjusting contracts, and really what that led to was, um, you know, the convective hailstorms have really been the number one issue in this industry. So the hail, the wind, tornadic activity, stuff like that, um, really started to impact how insurers could insure properties.

Crosby Warren: Um, and so the actual cash value, um, endorsements were started to being a- or were added to home policies and then also, um, large wind/hail deductible requirements. So really, um, the consumer, uh, had to have that, uh, pit of self-insurance, right? They have, lack of a better term, uh, the homeowner really has that skin in the game now if there is, um, any damage to the home, whether it’s the contract or whether it’s higher deductibles.

Crosby Warren: So, uh, that’s been a shift because again, you know, Grandma and Grandpa’s policies were full replacement with that very low deductible. Um, but also the contracting world understood that as well. So you have many years of contractors — You know, a hail event happens in the Midwest, all of the sudden those contractors swarm the area.

Crosby Warren: And there are certainly people with legitimate damage, but storm damage can be very specific. So one street can get really pummeled by a, a hailstorm, and two blocks over Not so much. But again, the contracting world really, you know, the door-knocking world, uh, that, that so many people see after an event like that.

Crosby Warren: Um, also, so people were getting, uh, ro- roofing replacements when they truly didn’t need it. Um, and also, you know, we’d have a customer that would have three different quotes for the same damage, and thousands and thousands of dollars separating those quotes. So you, you get to price gouging, you get to, you know, the contracting world taking advantage of things, and unfortunately, changes needed to be made because we need that consumer, that homeowner as part of the claim equation to help with the contracting world to make sure that, A, we truly have damage, and B, that we’re getting a fair and honest estimate from them.

Crosby Warren: So, you know, that’s just kind of a, an overview of some of those, some of those impacts that the industry has, has seen and, and those changes needed to happen. The market needed to correct itself because otherwise, everyone would be looking at 10 to $15,000, uh, a year premiums for basic home insurance.

Jon Meyer: Part of the equation, just on the back end, is how the insurance company invests the money and makes a return on it as well.

Jon Meyer: And with interest rates higher, the insurance companies probably are making a little bit more on that money. So how has that… Uh, and maybe you can’t answer it, but how has that played into how fast premiums are going up?

Crosby Warren: Well, that has certainly helped, uh, at least solidify more of the numbers on the back end.

Crosby Warren: I mean, when we talk about insurance companies with loss ratios, uh, it, it, it, it’s still the, the, the… Whatever was happening, you know, w- uh, uh, to your point, investments and, and, and companies being as smart and effective as they can be on the back end, it still was these losses that It, it was almost, uh, impossible to try to level that out with what was, what was happening.

Crosby Warren: A, a, a quick example is, you know, from, from 1980 to, I would say right around 2020, Jon, we averaged about, uh, 7 to $8 billion events in the United States as a whole for– So you have one catastrophic event, you know, it- it’s– we would have, uh, y- again, 7 or $8 billion events. If you look at from 2020 to 2025, we average now $23 billion events in the United States.

Crosby Warren: So you can see how that frequency, um, has really accelerated, uh, beyond even what the actuarial world of the insurance folks could even predict. So it really, that snowball kinda smashed against the wall, and so many things had to change. Because what we saw as well, and I’ll just use Minnesota because obviously that’s something, a, a market I’m very familiar with, um, we had multiple insurance companies that chose not to do business in Minnesota anymore.

Crosby Warren: You know, those were the stories of the Floridas, the Alabamas, the Cala- Californias of the world, right? ‘Cause the hurricanes catch the, the headlines, the wildfires catch the headlines, but it truly is those convective storms that are certainly much more frequent and have just gotten to those cost points that they are on, on level with a lot of these bigger, you know, headline traditional events that can happen.

Jon Meyer: Let’s bring it down to the consumer ’cause- Part of this podcast is all about what’s going on with the intersection of health, wealth, and time, and this is a wealth question a little bit. At the consumer level, um, what should people expect over the next few years then as far as premiums go? Because… And, and the second part to that question really is everyone says, “I’m just gonna shop it around.”

Jon Meyer: But we’re finding that you can shop it, and yet a lot of companies aren’t gonna give you a better deal. So just talk about the next few years as you see them.

Crosby Warren: The good news is that we are emerging from the hard market- Okay … um, at, at where we stand today. We’ve got a– We, being as an independent bro- independent broker, we work with multiple carriers, so we’re having multiple conversations multiple times a year with these insurance companies.

Crosby Warren: And the good news is that with all of the changes that we’ve had to go through as, of course, as the, as well as the consumer, uh, we’re on a footing now where even if Mother Nature does throw a curveball or two at us, the changes that have been made are putting us on such much more of a solid foundation than the house of cards that I kind of mentioned earlier.

Crosby Warren: So consumer-wise, um, things are gonna start to level off. I liken it to we’ve been climbing a hill for quite a few years. We’re just getting over the top, and we’re s- gonna start to level off. Um, that means rates stabilizing and possibly reducing, okay? Will they get back to Pre-market correction? Absolutely not.

Crosby Warren: That’s just not how this, it works. But, uh, the good news is that, you know, that consumer fatigue that I mentioned earlier, I mean, we’ve been weathering 20, 25, 30% increases year over year. And so seeing actual flat renewals is a ray of sunshine. So a consumer can understand and, and, and start to, to maybe expect that.

Crosby Warren: Um, the other thing that they also have to do is, is start to, you know, consider a little bit more management on their end. And what I mean by that is, is, you know, there’s a lot of things that are involved in, uh, insurance pricing. Yes, it’s the experience of the carriers and the loss ratios and all the things that we discussed, you know, with, with mother nature impact, but credit’s a big part of it.

Crosby Warren: So someone, you know, just like if they’re looking to get a loan or whatever it is, credit is so critical to make sure that you kind of keep a good level there. Um, managing insurability is another thing. So I guess the question is, when do you make a claim and when do you not? When do you self-insure for small things, right?

Crosby Warren: So those are, those are parts of what a consumer can do to put themselves on the best premium footing moving forward. Um, insurance is this– I call it kind of a silly product, where it’s very expensive, right? At least this day and age it certainly is. And it’s Could be a negative if you actually use the product, right?

Crosby Warren: So if you make a claim on the wrong thing or a small thing, um, it can actually cost you more in the long run. And so that’s where education and really understanding, uh, and having resources to dis- you know, to go over scenarios, um, those are critical for people to actually be a more, uh, just a better educated and better equipped consumer as we’ve gotten into these very expensive, uh, price points for the coverage.

Jon Meyer: Yeah, but you bring up something that I find interesting. Insurance is supposed to be for catastrophes, and I think we’ve all gotten a little bit soft thinking that it’s for everything. And I, I blame the health insurance market for this because we think every time something happens, insurance should cover it instead of us just going to a doctor and paying 100 bucks.

Crosby Warren: Yeah.

Jon Meyer: And so what, what you’re bringing up is the fact that in homeowners and car insurance, the answer is it’s for catastrophes. So to that point, any tricks of the trade where you say, “Here’s the size of a catastrophe f- before I’d make a claim”? Everyone has a threshold, and it’s different

Crosby Warren: for every person or every household, right?

Crosby Warren: Uh, somebody with a $5 million house is going to have a little bit of a different threshold than someone who has a $500,000 home, right? Um, but with the changes that have been made in this industry, um, people have to understand that there is going to be a self-insurance component, right? And you brought up a good point where the consumer does have to change that mindset a little bit to understand that this coverage is truly there for the catastrophic, the big events, whether it’s a house burning down or a bad auto accident where we have injuries or lawsuits, right?

Crosby Warren: Of course, we’re gonna use the insurance for those bigger events. That’s what it’s there for. And the trouble that folks have gotten into is making these smaller claims because when an underwriter looks at pricing or eligibility, Jon- And there’s some claims. It’s not the dollar amounts necessarily, it’s the frequency, right?

Crosby Warren: And so that’s where you make a, “Well, I only made this claim for four– $4,200,” right? Well, it was a water claim, which is chargeable because there, there can be chargeable and non-chargeable claims, right? Um, and then all of the sudden, six months later, you have an event that we truly have the insurance for, right?

Crosby Warren: Like a $250,000 broken pipe, right? We’re gonna use the coverage then. But in this example, we have two water claims within a short period of time. All of the sudden, that client’s gonna get a cancellation letter at renewal. And then all of the sudden That’s they’re going to a surplus market. And so then they’re going to a non-admitted high-risk carrier where they’re paying triple what they were, and the contract is not as good.

Crosby Warren: So that’s where education comes in, and you gotta– As a consumer, there’s so many, um, there’s so many preconceived, you know, ideas about insurance, right? And it’s our own, it-it’s the industry’s own fault, right? Price, price, price, price. Um, everything’s a commodity, and you know, it’s all the same. And unfortunately, it’s not.

Crosby Warren: And there are certain rules that we try to have to play by to put ourselves on the best footing to work with the best carriers to get the coverage someone truly needs, again, at the, the best market pricing that we can find.

Jon Meyer: So you bring up the right question, which is let’s talk terms. So getting into what some of these contracts are saying, what do you see are the two or three things that people should really focus on where these contracts have really shifted in the last year or two?

Crosby Warren: Yeah. And, and again, I’ll be specific to Minnesota, but this is a, a large part of the country. Um, and what I would say is, is people definitely need to be aware of how, uh, uh, what their home policy is providing for them. And, you know, the main areas are, of course, roofing here in the Midwest. Um, understanding if I have damage, you know, do I have an actual cash value policy now?

Crosby Warren: Uh, meaning that the, if I have damage and my roof is 10 years old, is the insurance company going to depreciate that loss settlement, right? The money that the insurance company actually gonna write the check for. I try to frame it like a vehicle, right? You buy a new car, you drive it off the lot, it’s going to reduce in value, and the consumer has to understand that, um, that is how most of the policies in the Midwest are going to be structured.

Crosby Warren: So if your roof is 10 years old, the insurance company’s only gonna give you about 80, 84, 85% of the claim to replace that roofing. So that’s a big thing to understand. The other thing that has snuck up on a lot of folks are deductibles, of course. So, you know, the days of, again, a $500 deductibles for all losses, that’s, that’s kind of gone.

Crosby Warren: Um, now most people, for a home policy in particular, will have two different deductibles. Number one is a non-weather deductible, so that’s for water, that’s for fire, that’s for burglary, vandalism, stuff like that. And then we have a wind-hail deductible. So anything Mother Nature throws at us, uh, whether it’s straight line winds, tornado, uh, hail damage, then we have typically a higher deductible there, right?

Crosby Warren: It could be 5,000, could be 10. It could be also a percentage of what you insure your house for So if you have a million dollar home that we’re insuring for a million bucks, as an example, you have that 1%, it’s a $10,000 deductible. If you look at coastal areas, that deductible’s probably gonna be 2%, 3%, or even 5%.

Crosby Warren: We’ve got clients in Florida having, you know, significantly higher deductibles there, but that’s more of a hurricane specific risk. But it really does– And that’s been around for quite a few years, of course. But the Midwest, that percentage has really been a big change for a lot of, a lot of policies for people.

Crosby Warren: Um, so those are things to really think about. Um, you know, companies are starting to limit some water damage thing. You, you know, here in Minnesota, we’ve got quite a bit of basements, um, you know, type of water infiltration, you know, on a lower level. There can be some exclusions there. Um, so people really need to understand the risks, um, for their themselves.

Crosby Warren: You know, is your basement finished? Is it not? You know, do you have an exposure there? So those are things that people really need to start to, to drill down on and, and maybe flood insurance is something that they might wanna add on, because the big exclusions that are historical for home insurance are earthquake and flood.

Crosby Warren: So not going to, like a broken pipe, that’s covered, internal water. But water comes in from the outside, um, that can, can be something that can sneak up on people and, and all of a sudden they get denied a claim because it’s considered a flood from the adjuster, so.

Jon Meyer: Just out of curiosity, when you go to, um, shop a policy I’ve noticed when clients share that with me, if they have three or four insurance companies look at it, each one’s way different based on how much they wanna charge for homeowners versus auto.

Jon Meyer: So you might have one with high homeowners, low auto. The next one will have high auto, low homeowners. All the pricing in aggregate probably is close in, in gross number, but why do insurance companies do that? Which, you know, uh, is it some focus just on auto versus home and, I mean, just explain that to me.

Crosby Warren: It’s loss history. Um, where has an insurance company, um, you know, been impacted, uh, by claims, right? Where is their loss ratio, um, uh, higher than others? And that’s gonna be a little different for each company. Um, now some, a- and, and also different carriers, Jon, will, or insurance companies, uh, have appe- certain appetites for different things.

Crosby Warren: An example here, uh, some companies really like older homes, as an example, right? Uh, they f- you know, they have good programs, they have good loss mitigation practices, and they do better with older houses, where there can be other carriers that like newer homes, or some like the city, others will do rural properties better.

Crosby Warren: So there’s a lot of behind-the-scenes appetite that, uh, can impact what someone is seeing on, um, their overall portfolio, right? Um, another example is, you know, when you look at carriers, it also is, i- is where do they wanna be in 5 or 10 years, right? Um, you know, do they wanna be, with their overall portfolio, do they, you know, need to push more home insurance, as an example?

Crosby Warren: And I wouldn’t say push, that’s, that’s not the right word. Um, but do they wanna be more aggressive in certain areas than others? Um, so it’s every carrier is a little different. That’s the, uh, benefit of working with an independent agent, as an example, because you have multiple companies that you can look at because, um, you know, to your point, there’s the, every carrier’s a little different with how they’ve, you know, what their experience has been leading up to that rate, and again, what are they looking for in the future and where do they wanna grow?

Crosby Warren: Um, a lot of companies, you know, they can put restrictions and moratoriums on certain areas because they’re oversaturated, as an example, right? And so then they start to maybe get a little bit more aggressive, a little bit more, uh, price-focused in other areas as well. So there’s a lot of factors behind the scenes, but understanding kind of the broader market, um, can be beneficial for a consumer to kinda take a look at multiple areas.

Jon Meyer: Okay, so now you bring up the next point, which is a consumer will look at that and say, “How about I buy the homeowner’s insurance from this company, but the cheaper car insurance from that company?” And now they start splitting companies. I’ve always Experienced, I guess, with some scenarios that that’s not a good thing, that you don’t want to necessarily split companies.

Jon Meyer: Can you speak to that?

Crosby Warren: Yeah. And, and I’ll be clear, when I, when a, a, a an individual comes or a household comes to us looking for help, we always wanna focus on just y- having everything with one carrier. Um, there’s certainly a pricing component, okay? Um, but even more so there’s an eligibility component because a lot of the best carriers, Jon, the best insurance companies, um, they require a full package.

Crosby Warren: And when I say a full package, most of that at a bare minimum is going to be, uh, like a primary residence and then an auto component. Um, obviously we wanna see the umbrella as well. If there can be certain scenarios where, you know, somebody has a cabin or a secondary property somewhere, we might have to do a one-off with another provider.

Crosby Warren: Um, but if we can, that’s what we wanna do, have it with all, with one carrier. The other big component that people sometimes forget about is if we do have a big event, a big loss, and it spans, uh, or the scope of that loss is over two insurance or two policies, like a home and an umbrella, as an example. If we’ve got two insurance companies working on that same situation, there can be some heads butting a little bit.

Crosby Warren: Whose attorneys are gonna be handling the litigation? Who’s handling the communica- you know, all of the ins and outs of that loss, there can be a little head butting between the companies, and unfortunately, that’s usually at the expense of the consumer experience, right? So sometimes it is what it is, and we have to piece together a plan.

Crosby Warren: A lot of times that’s underwriting related. Maybe we’ve got some activity, like claims on a house, and we have to go to a different market. Uh, a lot of times it’s driving, uh, records, youthful drivers getting in trouble, um, somebody having, like, a major violation like a, a under the influence loss. Um, that’s where we start to have to piece things together.

Crosby Warren: Um, again, always focusing on getting the client the right protection they need, but it’s, it’s not always ideal to have, of course, kind of a piece together situation for those, uh, items like I mentioned.

Jon Meyer: I’m glad I’m still giving the right answer to that question. Let’s jump into– Just let’s give a few tips here.

Jon Meyer: I’ll see if you, your list is the same as mine. What are the three to five things that you think everyone Should be thinking about when they do these policy, put a policy in place and, you know, or what are… The opposite of that’s true too. Like, what do people miss?

Crosby Warren: Well, what people have to focus on, and, and I’ll talk about home insurance first, Jon, is, um, the d- the coverage for the house.

Crosby Warren: That’s always, that can be a misrepresented number, um Because people will have a misnomer of, “Well, you know, I could sell my house for X dollars tomorrow. Why wouldn’t I insure it for that dollar amount?” Or, you know, “I bought it for five, you know, five or 10 years ago for X dollars, and the county assesses my taxes at this value, so why is it something different?”

Crosby Warren: Um, the lens people have to think about, homeowners and consumers, is that number actually represents a rebuild value of the property, right? So it’s not what is that house truly there today, it’s we have to come in and remove the debris and rebuild it brand new, same size and quality. So that number is much different than what you could sell it for tomorrow.

Crosby Warren: So really understanding that, um, because so many folks will come to us for help, and that number is off quite a bit. And if you think about it, even from like a financial planning and a net worth side, most people’s primary or even secondary residences, that’s a big part of their assets, right? And so making sure that you’ve got the right protection in place for an asset like that, that’s critical because what insurance really is there for is to, again, we’ve talked about it for the big stuff, but trying to avoid significant out-of-pocket.

Crosby Warren: Because if you don’t have the right protection for a house and you have that total loss, you know, people could end up paying– or, or if you don’t have the right coverage as well, uh, or a contract, people could be paying thousands and thousands of dollars out of pocket to put actually that home back together.

Crosby Warren: Um, you think about the fires that were out in California in the Palisades, so many people are under-insured. That rebuild in a widespread event like that, people, their policy is probably covering them for 3 million, and the true rebuild is six and a half to 7, right? And imagine what that does to someone’s financial situation.

Crosby Warren: They probably can’t rebuild. So that’s, it, it’s something– So a little bit of a long-winded explanation there, but that’s something that I want folks to think about, uh, when they’re thinking about home insurance. Um, the other piece that I would say is, um, at least on the house, is estate planning tools like trusts, those types of things, they get missed, um, being listed to the home policy.

Crosby Warren: And that kind of is a little bit of a curveball for folks, um, and the reason why that’s important is if there was a liability event, like a slip and fall or the dog bites the neighbor kid, something like that, and we have litigation The consumer or the homeowner would get sued, but that trust could also be brought into litigation as well.

Crosby Warren: And so making sure that the policy responds for the homeowner as well as the trust, it’s just, it’s kinda like, again, dotting the I’s, crossing the T’s, making sure that we’ve got that extra step. It doesn’t cost any money to add a trust. It’s just kinda like l- adding a mortgage to a policy.

Jon Meyer: Yeah, and what you’re talking about there is just adding the trust as another insured, right?

Crosby Warren: That’s it. It’s just a clerical step-

Jon Meyer: Yeah …

Crosby Warren: that unfortunately gets missed so often, unfortunately. So those are a couple of things that I think people need to think about. You know, again, on the house side, just understanding the contract. Wind/hail deductibles, again, sneak up on people. They need to understand what changes have happened to their home policies.

Crosby Warren: Um, so really, again, I think those are some of the, the, the big things on the home side. When you think about auto or someone’s overall plan, um, you know, driving a motor vehicle is the largest exposure a household has every day, right? And it’s not only necessarily the homeowner themselves, um, you know, getting hit by ano- or, or causing an accident, but actually being a victim of, like, a hit-and-run or an uninsured driver.

Crosby Warren: Those are big things that those limits on the auto side, Jon, can sometimes be overlooked, where someone has minimal coverage or, you know, base coverage, like 100/300, you know, 100,000 per person for 300,000 for an accident. That’s great for a college graduate, but someone who’s got two houses and, you know, has become successful in their own right, that’s just, i- it’s not, um, a good limit.

Crosby Warren: And of course, that kind of is a nice segue into what other, is an area people miss too, is the umbrella protection. You know? There’s so many people that still to this day come to us for help and have overlooked that step And just as a, a quick education, the umbrella piece is excess liability, and that’s providing that, uh, that consumer, that client extra liability protection in the event of a lawsuit, whether it’s motor vehicle related, they cause an accident, hurt somebody, or, you know, they’ve got that dog bite claim, right?

Crosby Warren: So making sure that extra step in that policy is part of the, uh, of their overall plan is really critical, and, um, you know, as you look at it, I would say n- at least 95% of the consumer world should have an umbrella, right?

Jon Meyer: And how much?

Crosby Warren: Well, that’s another good question.

Jon Meyer: Right.

Crosby Warren: And from our chair as an insurance advisor, um, we usually don’t know what’s under the hood, meaning we don’t know where people’s net worths are.

Crosby Warren: We don’t know what they’ve accumulated. We don’t know if they’ve had liquidity events or inheritance events that has really changed the financial picture. And that’s where working with professionals like you, Jon, in your organization and, and just the financial planning or wealth management world as a whole to really understand what are the risks ’cause, um, in exposures, because, and you would know better than me, there are retirement vehicles that are protected from litigation, right?

Crosby Warren: And there are some that might not be. So really understanding and having a team for that consumer, having those resources, and making sure that there’s some synergy there is really critical for, for a lot of folks. Um, making sure that that conversation is coming up, you know. And, and that comes up in, in so many meetings, um, with our clients where we talk about the umbrella because we’re always offering higher limits, and that really starts to get the wheels turning for people.

Crosby Warren: And, you know, they’ll come to me and say, “Crosby, what’s the right number?” And I say, “I, I can kind of give you an idea of what, you know, the equation is, but I truly don’t know because I don’t know exactly what’s happening behind the scenes.” And we always wanna get the financial professionals involved, um, to make sure again that, that, that consumer boardroom, you know, we view the financial world, the financial planners as the quarterback, and we’re kinda that wide receiver that’s out there to say, “Hey, we’re gonna talk to Jon about this because we wanna have a conversation to make sure the left hand’s talking to the right hand on that type of a r- risk.”

Jon Meyer: But to that point, what I’ve run into is a lot of people want to insure from an umbrella standpoint ‘Cause umbrellas start at a million. They go up in a million dollar increments, right? And, and everyone’s like, “Well, I’ll, I’ll just insure my net worth,” but that’s the wrong number in my mind ’cause your net worth subtracts debts, and people aren’t suing you based on the fact that they’re gonna subtract your debt.

Jon Meyer: So what I always tell people, and maybe I’m wrong, you tell me, is we should be insuring your asset levels.

Crosby Warren: I would agree, yes. And what c- what is exposed, right? What, what could be brought into a lawsuit, um, if worst case scenario happens, you have a once in a lifetime liability event, and somebody’s suing you for 2 million bu- $2 million.

Jon Meyer: Mm-hmm.

Crosby Warren: Right? So, you know, a- and there’s probably not a magic number out there. Um, so if people are in between, it’s usually just a couple hundred dollars to go from one level to the next, right? So if we’re going from one million to two billion, a lot of times it’s just $200. So you just dial it up. And, um, so if there’s ever any kind of question or even any nervousness, you know, I ask a lot of clients at, uh, when we’re sitting down for renewal, I ask them, “What’s keeping you up at night?”

Crosby Warren: “Well, you know, little Timmy started driving, and, you know, he’s looking at his phone all the…” Y- I mean, those are things that we want to, uh, address and talk through, and if that means, you know, increasing an umbrella to a certain limit or, you know, just again, too often in our industry historically it’s been so transactional where, you know, someone goes online and kinda does it themselves, or they work in, work with a call center somewhere, right?

Crosby Warren: That’s where that’s a good solution for some people, but I think when we start to talk about people in households that have a lot at stake and a lot of exposures, they ki- they need to think about taking that extra step in working with people that they can actually get educated on and really talk through to make sure that, um, they’re getting the coverage that they need.

Jon Meyer: So I’m gonna throw you a softball. Um, in the umbrella world, there is the old, uh, uninsured/underinsured motorist question. I’m gonna let you just, uh, throw that one out there ’cause it’s one of probably the main things I see missing from so many people’s policies.

Crosby Warren: Well, just a quick explanation for the listeners.

Crosby Warren: An uninsured/underinsured event is if you’re driving, minding your own business, and someone flies through a stop sign and hits you. It’s 100% their, their fault, right? You’re injured. You gotta go to the hospital. Maybe it’s something even more severe. We naturally would go after that individual, right? The at fault party.

Crosby Warren: But- We’ve been talking about high premiums, we’ve been talking about insurability. Unfortunately, not everyone’s going to have the highest limits because they’re trying to save premium because of how expensive these policies are. So they go with, let’s say an example of state minimums, 30,000 per person up to 60,000 for an accident here in Minnesota.

Crosby Warren: Boy, that’s not gonna go very far, right? Or we get a hit-and-run situation, right, which can be out there. Um, and a lot of times, unfortunately, in these scenarios, someone doesn’t have $5 million in the bank to go after, right? So we hit a dead end, and we have to come back to our own policies for pain and suffering, lost wages, um, out-of-network medical care.

Crosby Warren: Um, a couple of years ago, my unin- uh, one of my insureds had an, uh, an uninsured/underinsured claim. We had to outfit his home with wheelchair accessibility, right? All of these costs add up, and the uninsured/underinsured is a very broad protection. Now, most states will require it on the underlying auto policy, right?

Crosby Warren: So anyone buying a policy, you usually will have that depending on the level. Now, if it’s a la- large incident, is it enough? You know, is 300,000 enough? Is 500,000 enough? Different exposures are out there. Different people, you know, in the middle of having kids at home, um, and being an inc- high-wage income earner, you know, that’s a pretty big exposure if something happens.

Crosby Warren: But it’s maybe not as big if you’re retired and you have a nice, uh, nest egg. And so everyone has to kind of weigh, um, uh, their needs and their exposures and what they truly want. Um, but having it on the umbrella is something that we recommend for all of our clients. It just depends on the level. Now, the tricky part is not all of the insurance companies in the marketplace, Jon, offer this protection on an umbrella.

Crosby Warren: The big names that you hear on the radio and see on TV, a lot of them have taken this off the menu, right? They understand that these losses are becoming more frequent, and we’ve also started to see the severity of these losses, the costs increase significantly, just like everything else. So a lot of the bigger carriers just decided to not make it as part of an option unless you’ve been with them for 30 years and you’ve, you’ve had it.

Crosby Warren: So there takes a certain carrier to offer that on the umbrella side. Um, it also takes another type of carrier to offer more than a million in certain cases, right? So again, it, it’s, they’re out there, those options are out there. But in, from my chair, if you’ve got a household and you’re driving a motor vehicle, it is a big exposure.

Crosby Warren: And at least having a million dollars on the umbrella for your uninsured/underinsured, it’s critical. It truly is. The other reason is if anything motor vehicle happens, so what’s also brought into this is riding a bike or out for a jog, or you’re a pedestrian, you know, out for a night- evening stroll. Um, that’s also where your auto policy responds first, and that’s where an uninsured/underinsured situation would also present itself as well.

Crosby Warren: So it’s not always when you’re behind the wheel, the anything motor vehicle related. The, the wheelchair accessibility example I mentioned, that client was actually an avid cyclist, so he was out riding his bike and got hit by an uninsured driver. So that’s where the auto comes in, that’s where that umbrella comes in as well.

Crosby Warren: So it’s, uh, it’s really, again, a critical part of the exposure, uh, for households. Unfortunately, it’s just not talked about enough in the mainstream market.

Jon Meyer: What’s interesting to me, you’ve mentioned that, you mentioned, um, how deductibles have changed to a percentage of the policy for, for roofing. There’s a few other things you’ve mentioned where what I’ve seen is most people aren’t looking at their policies, so they don’t know this stuff And then they’re surprised when it happens.

Jon Meyer: I’ve run into several clients who are just shocked that, that when they went to claim, something didn’t happen the way they thought it might. So if we can say anything from today, go talk to your insurance agent, but also read your policy because these things are… I don’t, I don’t like to say it too maliciously, but I- they do kinda get slid in year after year in the, in the fine print, and people don’t know that they changed.

Crosby Warren: Correct. And the insurance company shifts that responsibility to the insurance or to the client.

Jon Meyer: Yep.

Crosby Warren: Right? To the policy owner. They say, “Well, we gave you the policy.” But it takes a certain kind of individual, Jon, to read through an insurance contract, right? Meaning you gotta be detail-oriented, or you gotta be an insurance nerd like me.

Jon Meyer: Well, now actually now we have AI. We just dump it in AI and say, “What’s changed?”

Crosby Warren: That’s true, and so it, it… That, those are the types of tools that consumers have to, uh, to rely on. Uh, they have to, they have to put them in their toolbox. Um, the conversation of, of having a resource like an agent or an advisor to help and discuss these things, um, that is really critical, again, especially for folks who have a lot at risk, right?

Crosby Warren: And, you know, you’re not gonna get that from a call center, unfortunately, right? So understanding what’s happening, and the other thing too, Jon, is, is The insurance world for decades, it was kind of on cruise control, you know? A lot of the older generational agents, you know, a lot of times it was just dust collecting, uh, on these policies.

Crosby Warren: And, um, the agents weren’t being proactive. The only times there was interactions was if there was claims or a, a really significant price increase, right? Um, but over, like I said, over these last six-ish years, we’ve had so many changes. And people, I, I mean, I’m talking to them daily, it’s, it’s just there, there is a disconnect understanding of what you have and what that in…

Crosby Warren: You know, the expectation of the consumer and what that insurance policy’s truly going to be doing. You know, we again keep talking about the shift of, you know, uh, self-insurance for people. It’s, a- again, being dictated by the consumer, but it’s also being dictated by the insurance company in the contract.

Crosby Warren: So people do need to educate themselves. Using AI is a great thing to help. Um, but even better is, is just talking through it, making sure that maybe you don’t meet every renewal, but at least every couple of years touching base with whoever you’re working with and having a conversation and saying, “Hey, Crosby agent, what am I, what have I missed?

Crosby Warren: What, what’s changed? What can I expect moving forward?” Those are the things that, again, shifting from that commodity aspect to, hey, everything’s a little different from carrier A to B to C to D. And the, the consumer does have to have a little bit more education on their side

Jon Meyer: to, to make sure they’re

Crosby Warren: informed.

Crosby Warren: Well, as we wrap it up, I’m gonna ask the question I always like, which is what haven’t I asked? Well, I, if you haven’t noticed, I certainly could talk about this all day long, so thank you for cutting me off, Jon. But, um, I, you know, I, I guess what’s next, right? What, what, what do we, what do we see over the next three to five years?

Crosby Warren: Um, good news, like I was saying earlier, I think things are starting to level off for the consumer, right, which is good. Pricing’s gonna look a little at least stabilizing Uh, gonna look stable. Um, underwriting appetite, Jon, is starting to increase. So we’re starting to see, uh, companies, um, adding more discounts, um, accepting fringe risks, somebody maybe with a couple of claims here, a couple of claims there.

Crosby Warren: It, it’s just starting to open up because it constricted so much over these, you know, this correction period that now things are starting to loosen up and it’s gonna help the consumer. It’s gonna help for choice. It’s gonna help for really, um, you know, uh, people to possibly get even more competitive options there.

Crosby Warren: The other thing that I would mention too is Things are starting to shift a little bit with consumer needs. So, um, a couple of examples are like water damage and flooding we touched on earlier. More companies are starting to offer, as an example, hydrostatic coverage for a basement. And what that is very quickly is water collecting around your foundation.

Crosby Warren: Somebody has a finished basement, water starts to creep in through the corners or the seams, stuff like that, right? Usually excluded. Companies are starting to offer that now. Um, companies are starting to offer private flood insurance. Historically, you have to go through FEMA, and you can imagine that lovely process.

Crosby Warren: Um, it’s just, it’s, it’s a little challenging. And imagine trying to settle a claim with FEMA. So companies are shifting towards a, um, a more private situation there. So specialty carriers, kind of a, you know, the, the Chubbs of the world, uh, Pure, et cetera, they are starting to offer that type of protection.

Crosby Warren: And the other thing that’s going to be probably part of everyone’s home policy within the next, I would say s- eight years, nine years, would be cyber protection. So as things continue to get more technology-based, we talked about AI, um, unfortunately that’s helping people– Well, it’s helping people read contracts and understand their insurance, but it’s also h-helping bad characters out there take advantage of people, right?

Crosby Warren: And so not to be confused with identity theft, because that’s more of a monitoring situation, not monetary reimbursement. Cyber, which is being offered by a lot of, and a lot of times, Jon, it’s gonna be attached to your home policy.

Jon Meyer: Mm-hmm.

Crosby Warren: It’s providing protection for phishing scams, social media issues, uh, smart devices, smart vehicles, the Rivians, the Teslas of the world, ransomware, all of these things that households are now starting to face, we actually have great programs and resources to help people out if they are a victim of that.

Crosby Warren: So I think that’s, that’s going to be on more and more, uh, uh, dashboards for people, consumers moving forward. That’s, um, that’s really going to be something that, uh… And we’re honestly adding it to pretty much all new policies that are coming in, and explaining it and educating people, and it’s amazing how many times we, we, we hear people say “Wow, you’re right, I do actually have that exposure,” or, you know, “We, we, uh, had a close call because of this,” right?

Crosby Warren: So it’s just, it’s continuing going to be a, an emerging exposure for a lot of people. And again, weighing exposures. If you’ve got kids that are on social media, if you’re, have a fine art collection and you’re purchasing stuff and wiring money to California for X piece, you gotta weigh where you’re at.

Crosby Warren: But, um, there are really great programs that are emerging, um, and already available from a lot of providers. So, um, we kinda start to see that as a much more of a conversation down the line.

Jon Meyer: That’s what I’ve seen as, as we moved along, is cybersecurity switching from just the business risk to now personal risk, so glad you brought it up.

Crosby Warren: Yeah. Absolutely.

Jon Meyer: So before we go, why don’t you tell us, Crosby, if people wanna get ahold of you for any reason, where they can get you?

Crosby Warren: Just reach out to Cox Insurance Associates, uh, here in, in Minne- or St. Paul, as you had mentioned. Um, but, uh, we work, uh, eh, we’re multi-state, so, you know, we work in all 50 states.

Crosby Warren: Um, we’re independent, work with multiple providers. Um, and this is all we do, so we do business insurance on the property and casualty side, um, meaning homes, autos, businesses, vehicles, stuff like that. Health insurance, we don’t do. Financial products, we leave up to you, Jon. Life insurance, we leave that up to everybody else.

Crosby Warren: Um, this is our lane. This is what we focus on. And, um, and yeah, that’s, uh… So happy to, uh, to be a resource for folks. Um, and, um, you can always reach out to crosby@coxins.net.

Jon Meyer: There you go. And if people wanna talk to you for another three, four hours about insurance, you’ll be available.

Crosby Warren: Oh, I’m a hit at cocktail parties, Jon.

Crosby Warren: Um, you know- There you go … it’s, it’s just thrilling. And, um, sometimes they don’t know what they’re getting into. You should… You know, my wife, she always, uh, usually just kinda fades off and walks away when, uh, we start to talk about insurance, somebody has a question. She knows what’s coming, so she just kinda, like, goes and, and, uh, does something

Jon Meyer: else for a little bit, so.

Jon Meyer: Yep.

Crosby Warren: I appreciate the opportunity, Jon.

Jon Meyer: Yeah. Thanks for joining us. This was fun. And if you’d like to catch more of, uh, my podcast or anything here at BGM, you can join us at bgm360.com, and feel free to reach out. Appreciate it, everyone.

 

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