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Archive for April, 2015

According to researchers from the U.S. Geological Survey, more than 143 million people residing in the lower 48 United States are vulnerable to earthquakes. The risk for those on the Pacific coast is well known, but those residing in the Rockies, Midwest, New England and parts of the Southeast also face an elevated risk. More alarming is the fact the study does not factor in earthquakes attributed to oil and natural gas “fracking” activities. While the U.S. Geological Survey site is very technical, we offer this link that summarizes their recent findings should you wish to learn more.

We share the news of this report not to create undue alarm, but as a reminder that homeowners insurance policies do not provide coverage for damage to your residence that is caused by earth movement.  As with most risks, insurance coverage for earthquake and other earth movement is available and worth considering.   To learn more about your options contact your personal risk advisor.

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One of the more thoughtful bloggers I’ve discovered recently is Don Shaughnessy.  In this insightful post, https://moneyfyi.wordpress.com/2015/04/03/9285/  Don reminds readers all too often, consumers are lured by marketers into asking the wrong questions, and in the wrong order.  It prompted me to re-post below a similar message I learned 4 years ago from Carl Richards:

Perhaps 95% of the consumers and professional advisors I meet with attempt to focus their discussion simply on the insurance policies they own.  Ours is a product focused culture, and our buying decisions are guided by products receiving 5 star reviews, Consumer’s Digest Best Buy recommendations, and / or finding a “good deal”.  The power of product advertising has robbed us of the ability to ask ourselves the larger questions.   Questions like “Why am I buying this product?”

Why buy insurance for your home?  Why buy insurance for your car?  When I ask these questions of my clients, I often receive an expression suggesting puzzlement, annoyance, or both.  To ease both emotions, I ask if the reason is to replace what they own in the event it were damaged or destroyed.  “Of course!” is the most common answer.

Since the real reason to buy insurance is to protect and restore our tangible and / or financial assets in the even of an unforeseen loss, why is “Save Money Now” the central theme in most insurance company advertising campaigns? Sadly, it is because advertisers have reminded insurance carriers that many consumers respond to “save money” offers.  To gain market share, they focus their ads on product, making “save money” the product.  Do consumers ever wonder how the savings are being achieved?  Insurance carrier benevolence???  These campaigns are effective, and despite the “savings” provided to some consumers, these carriers earn a profit, content to sell products that often do not provide the desired protection.  All because no one ever asked “Why”.

Carl Richards, Contributor at New York Times Bucks Blog and the author of Behavior Gap, reminds us that in the financial services industry, consumer focus on product is exploited by those who are paid to sell product. Richards is well-known for using illustrations that lend clarity to issues that many journalists do not understand. While the lesson of the illustration above is aimed at investors, it is just as relevant to those seeking the right way to protect their homes, cars and other assets from unforeseen loss. Richards explains: “Most of us are trained to think ‘What’ first, because it’s what you hear about all day long. It’s the message you read in financial publications and see on CNBC. But ‘What’ questions should come after we think about ‘Why’ and ‘How’ ….Starting with ‘Why’ means achieving clarity about your personal financial goals and creating a plan.” Thank you, Carl Richards, for reminding us that before we focus on the ‘what’ product solutions, we first need to start with asking ourselves the larger ‘Why’ questions.

For more about Carl Richards work: http://www.behaviorgap.com/

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