Transcription:

Episode 6 – Insurance Expert Greg Schnee

15:43

Announcer: The money experience where experts in finance and life experience professionals, chat amongst friends. Get comfortable and listen in while we uncomplicate all things money, how to save it, how to invest it, and even how to spend it. Here are your hosts.

Kevin: Welcome everyone. This is Kevin McGarry, your host of the Money Experience, managing partner of Valley Financial Group. Really excited about today we have Greg Schnee of Goosehead Insurance. Welcome, Greg.

Greg: Thanks for having me. It’s great to be here.

Kevin: It’s a big topic right now with everything, but also big weekend Eagles play the Cowboys.

Greg: Yeah, we ready?

Kevin: I’m ready, man. I mean, I can honestly say to you, I don’t know what your teams are, but the Cowboys, Villanova, the Mets, these are teams I do not like. How about you?

Greg: Come on. Same, yeah, four for four over here. Phillies, Sixers. There’s flyers and Eagles. Eagles season ticket holder for a long time until the girls came. Now I make it down to a couple games, but man, Eagles, let’s go.

Kevin: That’s awesome. Awesome. Just tell us a little bit about yourself. How many years you’ve been in the assurance industry and everything.

Greg: Sure, sure. Yeah. crazy to say, but been in the insurance industry over 25 years now. Started out, I’ll give you a little background. Born and raised in Philly. Went down to U Penn, played a little football down there. Came out of school and started up with an auto insurance company where I actually, God, I was there almost 20 years. I was a vice president of claims for a big auto insurance organization. Almost 10 years ago, I came out to the other side of the business and now I have my own insurance agency.

Kevin: That’s awesome.

Greg: Which is what I think we’re going to talk a little bit about today. Thank you.

Kevin: So, you played football at Penn?

Greg: I did. I did some fun times.

Kevin: What’s this year? This 30th year?

Greg: 30 year anniversary. We won the Ivy League championship two years, 93 and 94. Nine in oh, 10 and oh, and this is the tomorrow is actually the anniversary, 30th anniversary of the 93 team. So, going to do a little event down there.

Kevin: Who was Penn’s biggest rival in the Ivy League?

Greg: Princeton back in those days. In fact, it was 94, I want to say, when we were both seven and Oh playing in Franklin Field.

Kevin: That’s awesome.

Greg: Crowd of about 50 plus…

Kevin: Was it sold out?

Greg: 50 plus thousand in Franklin Field. Franklin Field’s big, that’s where the Eagles used to play. But that was a big crowd. That was fun.

Kevin: That’s awesome. Thinking about it too, man. I mean, now to dive into this right now. We do a ton of financial planning here, and the one thing we see when clients or prospects sit down with us, most people are underfunded or don’t even have insurance. So, but before we even dive into what type of insurance people need or what you see out there, going back to 94, 93, but also going back to the last 47 years, this is the biggest increase in insurance we have seen. Now what are you seeing out there?

Greg: This is the hardest market of insurance in like you said, almost 50 years. And what does that mean when I say hard market? So, in the world of insurance, real quick, as a consumer, we would love to see it be a soft market. In a soft market rates are pretty steady sometime. Rates are even coming down. Insurance companies are sort of fighting for your business because they want business, they’re profitable, they’re making money, they want to bring business in. That’s a soft market. Then you have your normal market, which is where we are usually. Now where we are, we are in a hard market. In the hard market. Companies are losing money, as crazy as that sounds, these insurance companies are losing billions of dollars right now. Everybody thinks, hey, insurance companies are raking in all this money. I mean, we’re literally seeing big insurance companies go down, become insolvent. So, what does that mean for the consumer? Rates are just up, up, up 20, 30, 40% plus rate increases across the board. As you open up your bills, you’re seeing those increases, I’m sure if you’re checking them.

Kevin: I know you’re definitely feeling in the pocketbook.

Greg: That’s absolutely right. So, in a hard market, what we see is these rates increase. Companies tighten up their standards, they become more restrictive, less options in the market and it’s just a very tough time on both consumers as well as those in the industry.

Kevin: So, what do you recommend the consumer doing? Right now obviously last year we were at 40 year highs in inflation, inflation’s come down a little, but it’s still high. And for the consumer out there renewing my auto insurance, what do I do?

Greg: Yeah. So, it’s a great question. The first and foremost, it sounds so simple, but is do something right. Pay attention to it. Pay attention to what you’re paying. Too often I speak to people and they haven’t looked at their policy in 10 plus years, sometimes longer. You just kind of take it as a given. It is what it is. So, kind of dig in. I’ll tell you a little bit about myself. I’m an insurance broker, which there’s different ways that insurance can be sold in the marketplace. You have captives who only have one option. Your Farmers, State Farm, that sort of thing. They have just that one option. So, if rates are great, great. Go with it. But if they’re not, and the options aren’t there that’s it. That’s all they have. So, as a broker, I have access to the whole market. So, we’re looking at sometimes 50 to a hundred plus different options depending what type of insurance it is. So, when we talk about shopping around and having the power of choice, that’s huge especially in a market like today. It’s great in general, but in the market like today, you absolutely have to be able to check what else is out there in the market. Because if you’re looking at 20 companies, 19 of them may not be a great option, but we may be able to find that one that’s good for you.

Kevin: When do you think they should start looking?

Greg: So, typically renewals. Let’s talk about basics like an auto insurance policy, home insurance, et cetera. Renewals for those policies typically generate 30, 45 days in advance. But something I tell people a lot, I mean, it’s a pretty good way to sort of map out your financial plan, is to look at renewal. But you can look at those type of policies anytime. It’s fine to change midterm. If you listen to this podcast and you say, man, I haven’t looked at my insurance in forever, and you pull it out and you see that you’re paying triple what you were three years ago, let’s get it going now.

Kevin: And we see that a lot. We see clients come in here when we’re doing cost analysis on their monthly income and we will ask, hey, when’s the last time you shopped this? And it could be years.

Greg: Yes. Yes. And loyalty is a great thing in life, right?

Kevin: Yes. Can be costly.

Greg: Loyalty in the world of insurance especially can be, like you said, very costly. Unless you’re working with, again, a broker or someone who can actively look around the market and make sure that you are in a good spot. Does it make sense to shop insurance every year? Absolutely not.  There are some loyalty discounts and things like that that can keep you in a better spot if you’re with a company 2, 3, 4, 5 years. And as long as everything’s good and it’s normal, you mentioned inflation. Inflation is one of the biggest issues that’s going on in insurance, cost of claims are rising, et cetera. All that translates into higher premiums. So, but at the end of the day, that idea of loyalty, I see it a lot. Hey, I’ve been with this company for 25 years, I just never looked at it. There’s a lot of problems with that. You’re probably paying too much. And probably something we’re going to talk about in a little bit is you may not be covered properly because we’ve started this conversation about price and people talking about cost. This is where I’ll be the corny insurance guy and say to me, it’s always my goal to find you the very best price that I can. But at the same time, I absolutely have to make sure that you’re covered properly.

Kevin: And that leads me into another question, like how do you know what coverages you need in your life?

Greg: Yeah. So, it’s why someone like me is here. We have these discussions. We have these discussions every day. Depending what type of insurance we’re talking about, auto insurance, home insurance, life insurance if you own a business, you need business insurance, health insurance, et cetera. What do you need? It’s very individualized. But too often what we see, and again, we’re sitting in your beautiful offices here, having this discussion where you manage a lot of wealth and people have assets and they have assets to protect. And that’s what insurance does. And I give the silly analogy a lot of times, but when I speak to people, typically, they’re more concerned about, what coverage do I have if I get a dinging on my fender? Can I take it to the body shop tomorrow and get it fixed? And that may cost $300 to fix. What they really should be concerned with is, am I protecting my assets? The money that I have in the bank, my retirement accounts, the equity in my home, the car that I own. Because if God forbid, they drive down the road one day and hit someone else, and that person wants to sue them, do they have enough, what’s called liability limits? Are they even protected?

Kevin: So, trying to discount their own amount, they’re paying for their insurances. That’s one mistake. Do you see any other mistakes the consumer’s making in purchasing insurance?

Greg: I do. You and I talk about it a lot. Sometimes people just don’t even have the coverage that they need. Where’s that? Life insurance, a lot of times people are just not covered properly for life insurance. We hear people talk about, well, I have something at work that work policy that may be one year’s salary. None of us want to think about it, but God forbid something happens and we’re not here. Your spouse is not here, that the people that are left need to be protected. So, life insurance is a big one where I see people just don’t have the coverage and never have had the discussion with someone about it. So, that’s one I really encourage people to think about. Do you have enough life insurance? Do your loved ones have enough life insurance? The other big one again, that I think is probably very prevalent among the folks that might be listening today and your clients, an umbrella policy. Back to what I was talking about earlier, when it comes to liability. You have assets that you need to protect. Hopefully Kevin and Eddie have done a great job and built some wealth and it’s just been amazing. Well, again, that wealth needs to be protected. And something like an umbrella policy or a personal liability policy does, is helps to just — why they call it an umbrella is it puts an umbrella over those assets with additional layers of protection. So, the first thing you need to do is make sure that you have enough liability protection on your auto insurance and home insurance and any other types of policies you might have, a vacation home rental homes, boats, et cetera. And then you want to put an umbrella over top of it, you can get millions of dollars in coverage and protect yourself the right way for literally hundreds of dollars a year. We can get a million dollar umbrella policy in a lot of situations for $350, 400 a year, which sounds wild to people because that’s a big number. But that’s what it is. It’s for the catastrophic situation. It’s for that situation we never want to be in, that we never want to think about. But where we may be on the hook for a lawsuit or for negligence, for some really serious thing that happened and we want to be protected.

Kevin: That’s awesome. So, wrapping this podcast up, three action steps right now, someone that’s listening to this podcast, they can take for their insurance coverage.

Greg: Absolutely. I mean, obviously I would love to help anybody who has questions or feels confused or sort of lost in this.

Kevin: So, work with a professional?

Greg: Work with a professional. Absolutely. Maybe you have an agent that you’ve worked with in the past. If you haven’t spoken them to them in a while, give them a call. If you don’t have someone that you trust, again, find that person. I do recommend finding a broker of some sort who has the ability to shop around the market. But for yourself, the first thing you want to do is take a look at those bills, pull them out. You may not even know what you have. Even when you look at the paperwork, you still may not know what you have or whether it’s enough. There’s a lot of intricate details there. So, that idea of speaking to someone and really getting a good look at things is a really good idea. And then give some serious thought to the things we’ve talked about today. Like I said, especially something real and dear as you know, Kev, the life insurance thing has always been a big deal for me. Some agents don’t talk about it a lot because it’s a little bit…

Kevin: It’s crazy. I just saw a stat the other day. 52% of Americans have some form of life insurance. So, that tells you a lot of people don’t have any, no coverage at all.

Greg: Yeah. It really gives me a pit in my stomach, as we’re on social media and you’ll see the GoFundMe and it’s heartbreaking. And obviously you want to contribute and you do. But there’s only so much that folks can do. And the GoFundMe is typically to help with final expenses, a funeral, things like that. And as you and I have spoken about many times, we say, well, man, what happens with that family after that funeral is over. Again, it’s heartbreaking. It’s heart wrenching. And another example of something where I think people have an idea that it’s a lot more expensive than it really is, and we can get some really big numbers of life insurance and get people protected the right way for very reasonable amounts.

Kevin: Yeah. So, what I’m hearing from you is speak to a professional.

Greg: Absolutely.

Kevin: Number two, review it. And number three, don’t shortchange yourself. Create a cash flow plan that you can cover and protect all your assets and your family and your wealth.

Greg: That’s absolutely right.

Kevin: So, I want to thank you for joining us today.

Greg: Thank you. Thanks for having me.

Kevin: Well standing ovation for you.

Greg: Yeah. Love it.

Kevin: Have a great 30th anniversary for winning the Ivy League. Not too many people get to win an Ivy League. And all Greg’s information will be on the show notes. If you have any questions, feel free to give us a call. I’m going to thank you for everyone listening, and have a great rest of your day.

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