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#REALTALK: Demystifying The 10 Most Confusing Insurance Questions

“Why do insurance agencies suck?”

To say I laughed out loud when I received that question from one of my newest clients is a complete understatement (he was referencing his prior insurance company). The sad reality is I’ve had that version of a question countless amounts of times over the course of my 13 year insurance career.

After I got done giving the same empathetic answer (“I’m an insurance agent yes but some insurance companies do suck”), I was inspired to shake things up.

Get Cray if you will.

On a monthly basis I answer the same question/or a similar version of it minimally on repeat 5-6 times. Whether it be if the color of a vehicle changes a rate of a car or whether it matters what state your car is registered in. Whatever the question is, I have probably answered it.

So what if I sent an email to 50 of my clients asking them what questions they have about their insurance or the insurance industry in general. An “ask me anything if you will.” Maybe not even about their current insurance with me, maybe about something that has happened in the past that they never got resolution to.

What if I created a safe space for them to air their insurance “dirty laundry” and get answers to the questions they may have thought too dumb to ask?

What if I told you 27 of the 50 clients responded… in 4 days.

It was almost as if my faith in people caring about their insurance was restored. I decided to take 10 of the most frequently asked confusing insurance questions and compile them here to hopefully put some others wondering minds to rest.

#REALTALK: Demystifying The 10 Most Confusing Insurance Questions

1. “Why does my neighbor only pay 60/month for his insurance on his car but I pay 137? This makes no sense, I love my service but feel like we are over paying compared to my neighbor”. – James M. Customer since April 2015.

I was so glad to see this one come through because it allows me to be able to review this clients concerns as well as hopefully pass along some info they could share with their neighbor.

Insurance is all rated based on “risk profile“. How old you are, your driving habits, where you live, what type of car you drive, etc. All of these make up your “base rate“. That’s the easy part of the answer. The harder part of the answer is that not everyone has the same coverages in place.

To specifically answer James’ question, his policy is what I would refer to as the “Carmel Frappucino” of Starbucks (for those of you who believe this isn’t the fanciest drink of the menu- I don’t know what to tell you). His coverage includes Collision, Comprehensive, Rental Car Coverage, Emergency Roadside Service, both Uninsured and Underinsured Motorist, and so many other valuable coverages that might not be on his neighbors policy. His neighbor might be the proud owner of a state minimum liability policy that is comparable to the beer at the bottom of a bottle on a 110 degree Arizona day (so gross). You see where I am at with this? No two policies are comparable just based on what you are paying alone.

2. “On my mortgage paperwork I get every year for home I see that my Taxes and Insurance are constantly changing. Why do they change? And why are they included in my mortgage payment?” – Sharon H. Customer since August 2016

For those of you who know me well, you know that insurance is my jam and…. I really should just stay in my lane. Lucky for me, I have great friends in resourceful places. For this question, I probably could have given a solid answer from what I know but thought meh let’s call the experts and get it right.

Leah is not just one of my closest friends, but she also happens to be an expert in the world of new home lending, refinances, and just my luck… escrow accounts!

If you had a minute to check the video above you have seen Leah give the explanation as to why your escrow and monthly mortgage payment seem to be ever changing.

Your escrow account is made up of the following 3 categories:

  1. Property Taxes
  2. Home/Hazard Insurance
  3. Mortgage Insurance (if applicable)

Leah goes on to explain that when you receive your annualized escrow report you might notice both subtle and significant changes depending on property values and or/increases to home insurance premium. She also explained to me off camera that it is imperative as a customer to pay attention to your escrow account after changing insurance companies.

Most times when a change to insurance company is made other than at renewal time it can cause a refund and new payment issued from an escrow account and can sometimes create an imbalance. She recommends reviewing your escrow account with the mortgage servicer to make sure that it is in balance every year.

If you are looking for ways to bring that monthly mortgage payment down she let me know that your taxes and insurance albeit small fluctuations at times are pretty set monthly costs. If you are really looking make a difference in that monthly budget cost something to consider right now would be a refinance to remove your mortgage insurance (if applied to your loan).

Your taxes and insurance payment are included in your escrow account for one single reason, the bank is protecting an investment they have made in both you and that property. They are making sure they are collecting the payment through the mortgage so if there is ever a loss their investment is protected.

3. “What do I do if I have windshield damage to my car on my auto insurance?”- Javier X. Customer since January 2018

Glass coverage in Arizona is almost a no-brainer right? The thing alot of clients might not know is that glass coverage is only available if you choose to carry Comprehensive coverage on your auto insurance. In Arizona we add an endorsement (or what I like to call BONUS COVERAGE) that allows you to have no out of pocket if you need a replacement windshield or repair. Here is the process for filing a glass claim.

  • Verify you have glass coverage with your local independent agents office.
  • If you have a preference of glass company you like to work with you can call them directly to get the claim process started. If you do not, most insurance agencies have a list that they are provided or have used that they like to call the “Dream Team of Preferred Vendors“. These are companies we have used, know, and trust. Ask and we shall deliver.
  • The glass company will take some information (date of loss, type of vehicle, how large the damage is, etc ) and together you will start a claim with the insurance carrier, they will verify coverage and work directly with the glass company to schedule your mobile glass repair/replacement. This is on your schedule.

*If you are local to we have had some tremendous customer service from RoadRunner Auto Glass, Star Glass, and The Glass Doctor of Tucson*

4. “Do I need flood insurance in Arizona? We live in the desert, do I really need it?”- Stephanie H. Customer since November 2014


Desert Life is alot of things, it is beautiful, it is hot as all get out most of the year, and it is humbling in that we truly are surrounded by the most majestic mountains. Out of all these things, being at risk for a severe flood probably doesn’t seem like something we need to worry about in the land of no rain. 

What if I told you that it’s because of our ill equipped ground that you should be thinking about adding flood insurance to your insurance portfolio? Check this out if you still are curious if is at risk for potential flooding.

By definition:

Flood Insurance will provide coverage to your home if exterior ground water enters your home and causes damage to your dwelling and contents.

The key here is exterior ground water. We aren’t talking about interior pipe explosions or leaks from a roof. We are talking an act of nature that is entering your home at the ground level. A Flood.

Everyone is in a flood zone. It is just a matter of which flood zone you are in that will determine your insurance premium.

Ok…… I lost you. I know I did. No one thinks flood insurance is cool. Well, except me.

So let’s simplify this… click here to have our agency determine your Base Flood Elevation. This will take some of the guesswork away and quite frankly just help you stop worrying.

5. “When do I need to add my child to my auto insurance policy?” – Noel P. Customer since December 2014

Your child needs to be officially added to your insurance policy as a driver when they have a valid state drivers license. It is an excellent idea to call your insurance agent when your responsible teen is becoming a permitted driver.

This way you can prepare together on how you can give your teen further discount opportunities to keep your insurance rate down when the time comes to add them to the policy.

6. “Are insurance agents responsible for rate increases?”- Jackie P. Customer since March 2018

One of my newest customers coming in like a wildfire with this douzy of a question. Simple answer… No. Contrary to popular belief, we do not wake up at 2 am and magically assign a rate increase to our customers insurance policies. Insurance agents have absolutely no control when a company takes rate increases. Fun Fact- we also don’t like it when your rate goes up.

There are certain things insurance agents can do to help with bringing a rate back down at the time of a policy renewal if you do have a rate increase. Chat with your agent prior to your renewal if you have concerns about this happening to you.

7. “How do insurance agents make money?”- Elizabeth R. Customer since November 2014

If I had a dollar for every time I was asked this question, I would be able to stop selling insurance and just live off my dollars! It would be wonderful. 

In order to actually make money being an insurance agent I believe you have to master two items:

  1. You have to be able to bring in new customers– independent insurance agents are paid on commission through the insurance company directly. When we write a piece of new “business” we are paid a certain portion of that premium. Some companies pay out 12 % others 15% and so on.
  2. You have to keep your peeps happy and taken care of- The name of the game in insurance is residual income. It’s no surprise that every time a policy renews we also get a split of the renewal commission for said policy. By having a customer/household renew with our agency it is allowing us to make additional commissions as well as grow our agency through new customers as mentioned above.

As an insurance agent, it is my belief that you can not have one without the other. It is our job to bring you in happy and keep you happy, because when it boils down to it- it’s simply how we make money.

8. “Do I need extra coverage if I am working out of my house” – Jim K. Customer Since October 2015

Yo Jim- I see you over there getting your at home hustle on. Get it.

You need extra coverage.

Depending on what you do, whether you have people in your home for business, or are inventory type of business… that is going to determine the type of coverage you need in order to properly cover your at home business. You might have other needs that won’t properly be covered by just simply adding the “business in home coverage” to your home insurance policy, so make sure to talk with your independent insurance agent to determine the best fit.

9. “I am thinking about driving for Uber or Lyft, do I need to do anything special to make sure that I am covered under my auto policy?” – Renando G. Customer since February 2017

Hey Renando… good looking out. Yes, not only do you need something special but you need a BONUS COVERAGE (since we are talking fancy).

You need what is called a Ride Share Endorsement.

This endorsement is not available with every carrier, and it is possible that the current insurance company you are with won’t automatically allow you to simply add it to your policy. The great news is though, having an independent agent that writes for more than one company we could easily find you a fit that would cover exactly what you need at a comparable rate.

I got ya. 

10. “Why do insurance companies suck so bad?”- James T. Customer since March 19th, 2018

Come on now… I couldn’t not answer this question. It is the one question that spurred the entire inspiration for this article.

Why do insurance companies suck so bad?

The background of this customer is that he and his family have been with a Captive Agency (an insurance agent that only sells business for 1 company) for over 15 years. They purchased a new home so needed to write a new policy with the company he was with and within the first year had a small claim.

Their Captive Agency/Company cancelled their policy because of the 1 claim in the first year of this new policy.

His frustration for this question comes from his tenure to this agency alongside with not having a “safe zone” in case something were to happen.

This is a big question and quite frankly dare I say it… a big statement.

I answer this both as an insurance agent and as an insurance consumer. Sometimes insurance companies decide that they have to make underwriting choices to protect their company.

Whether they do this because they aren’t profitable in a state, haven’t taken rate increases in 15 years (this never happens), or are simply trying to do away with writing a specific line of business.

Regardless of their intent to protect the company, insurance companies get a bad wrap for this. Let’s be honest, not everyone takes the time to review a positive claims experience online right?

Not everyone understands why insurance companies have to “take rate“. Its easy to just assume an insurance company is always out to get you when there is a lack of communication and education as a consumer.

So to answer your question James, the great news is… not all insurance companies suck. And yes… some actually do indeed inhale a significant amount of dusty air. Just remember, your insurance agent is NOT your insurance company. They are your advocate.

In most cases if you are unhappy by a choice the insurance company has made you can reach out to your advocate to discuss options and where to go from there together.

In closing…

Although opening up the proverbial can of worms proved to create a full inbox, it completely opened my eyes that consumers want to be educated. At the time of a new policy or even at renewal we as agents can’t possibly answer every single question. I hope this blog helped answer some of the questions you haven’t thought of yet.

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