Getting Your Edge: How to Downsize Your Home.
Life Happens to Everyone! These events can force changes in how and where you live. How you react and manage those events is what matters.
Join Judy Gratton and Dennis Day, two agents with over 30 years combined experience in real estate, as they provide you insights into managing the twists and turns life throws at you, so you can land on your feet and in the right place.
Whether you need to downsize from your forever home, upsize to handle a growing family, or moving an aging parent into a safer setting, the “Downsize" Podcast will share the information you need to be ready.
Using their personal experiences and interviews with experts in a variety of fields, like: financial planning, estate sales, or living abroad, our hosts will dish out the information and advice that will help you take on life’s challenges informed and prepared. For more information about the Edge Group Real Estate Team:
www.EdgeGroupTeam.com
Getting Your Edge: How to Downsize Your Home.
Your Insurance Policy Isn't What You Think It Is
Learn the truth about your insurance policy in this eye-opening video. Don't wait for a crisis to find out what your coverage really includes.
In this enlightening episode of 'Getting Your Edge,' hosts Dennis Day and Judy Gratton dive into the complex world of insurance with expert Douglas Olson from USI Insurance Services. Olson breaks down the intricacies of insurance policies, the impact of recent natural disasters on the industry, and why your insurance policy might not cover as much as you think. The episode covers the challenges faced by insurance companies, including the reasons behind rising premiums and policy non-renewals, as well as the legalities and contractual obligations that come with insurance. Whether you're a homeowner, real estate professional, or simply an insurance consumer, this episode offers invaluable insights into what you need to know about your insurance coverage.
00:00 Introduction and Greetings
00:34 Meet Douglas Olson: Insurance Expert
01:10 Understanding Independent Insurance Agencies
02:49 The State of the Insurance Industry
04:00 Consumer Expectations and Insurance Realities
05:22 Challenges in the Insurance Market
10:48 Impact of Environmental Factors on Insurance
22:03 Insurance Companies' Financial Struggles
34:18 Concluding Thoughts and Contact Information
We Would Love to Hear Your Feedback! (https://www.buzzsprout.com/twilio/text_messages/2067330/open_sms)
Hello, all this is Dennis Day, with Getting your Edge, how to Downsize your Home and we have a fantastic show for you. Thanks for showing up. I'm here with my co-host, judy Gratton. Welcome, judy.
Judy Gratton:Good morning on this wonderful spring morning glooming and the daffodils are coming out.
Dennis Day:It's pretty nice after some of that the gloom and doom that we have to live with. So this is really nice and I have a fantastic guest for you today. This is Douglas Olson and he is with the USI Insurance Service. They are the sixth largest insurance service in the nation and he is here to talk about a hot topic insurance. Surprisingly enough, he's going to talk about insurance, and there's a lot in the news lately about insurance. Welcome, douglas Olson. It's great to have you here. Give our listeners and viewers a little background about you and your company, usi, and your experience in the insurance industry.
Douglas Olson:My name is Douglas Olson. I am a salaried employee for USI Insurance Services. Usi Insurance Services is an independent insurance agency. We have about 600 companies that we can provide to clients throughout our company. Independent agency is a pretty important distinction to understand. You probably think of the word broker, where we can go look at a whole bunch of companies, but what a broker really does is they just hand you off to that company, they get a finder's fee and they go back to the next client. So your relationship is then with that insurance company that you chose as an independent agency. We are developing the relationship together.
Douglas Olson:So let's say, in four or five years your situation's changed. Now you're investing in buying a whole bunch of properties and now the company that is protecting you probably doesn't fit your needs, or you're doing a lot of traveling, or you're downsizing or whatever the case may be. We still have our relationship, we can still help you and maybe we move you to another carrier, and now the relationship hasn't changed. Just the company that's giving you those protections are changing and what we do effectively is we try and understand what your risks are. So we have a holistic approach that we do. We have a proprietary system of 150 years of claim history where when we ask you some questions, we literally have the data and information and analytics to back up what our responses are and we offer you ways to reduce those risks. Then the byproduct is whatever's left over, let's find the insurance carrier that fits your needs the best. I want to be as knowledgeable as possible so that I can be an advocate for those that I help.
Dennis Day:Douglas is our expert today.
Judy Gratton:With everything that has been going on and insurance companies leaving the area. Douglas, can you give us your outlook on just an update of where we are in our country? I know that's a big question, but with all those fires in Los Angeles and now they're in South Carolina and North Carolina and tornadoes and shoot we almost had a tornado here yesterday. So what's happening? Because people think that they can rely on their insurance for these events.
Douglas Olson:That is an open loaded, got all kinds of answers and there isn't a correct one. There are several. So forgive me, but I think the easiest way to explain it is probably give ourselves a nice soft landing spot to think through, and that would be the following All of us, all three of us here and those that will be viewing this are going to be a consumer at some level. We as consumers, our moods adjust, our demands change and our outlook continues to adjust as each day goes by. Why am I mentioning us as consumers? Because if we really are honest and we look back at the last 20 years of what we as consumers have asked insurance companies to do, it's cheaper, faster. You have to be honest about that. And what does that mean for the insurance companies? Well, of course, they're going to oblige means they have found ways to be efficient, which is wonderful. There's nothing wrong with that.
Douglas Olson:But along the way as they've done that, what normally happens is because consumers have become so price driven in, the insurance companies are not offering advice, because if they offer the wrong advice to one person, they now have to cover it for every one of their clients. You have to understand there's some legalities on the insurance side that they have to deal with. They are a business. They are an entity controlled by every insurance commissioner in every state, responding as the client wants by providing less expensive products, asking less questions to push that product to the client and accepting your money. What insurance is a contract? If you sign your name and pay for a contract, you're bound to that contract and that's why I'm bringing this up.
Douglas Olson:The challenge here is what we have done as consumers, by asking for faster, cheaper. So in that process, with the insurance companies not explaining what those coverages are and why there are differences, now consumers are buying a product that probably is not protecting them the way they believe. They just assume and I'm going to use the words we don't like full coverage. They just assume that's the case. But how can an insurance company that doesn't carry inventory think about this train? Loads of lumber. They're not buying left front fenders for 89 Mercedes 300 class cars so that they can have a less expensive fender than their competitor.
Douglas Olson:Insurance companies are just writing checks. Let's be honest. They're just trying to make us whole when we've had that loss. So that means they have no control over the market. They have no control over the weather. They have no control over accidents that occur or things that go wrong accidents that occur or things that go wrong. And then you add another element, which is as an insurance company. In most days, remember, this is a 40,000 foot elevation. Understanding, this is not fine print, exactly how it works, but let's pretend that we are creating our own insurance company. That insurance company is now going to have to show three years of losses in our request to increase insurance rates. So, unlike a gas station or a grocery store selling eggs, insurance carriers cannot do that by law. They must submit the request to the insurance commissioner's office, and that process can take anywhere from three months to 18 months, depending upon how in-depth that request is and the back and forth that happens with that insurance carrier.
Judy Gratton:So we have to show three years of losses to even do that.
Douglas Olson:And there's a good reason for that. Judy and I was trying to give us a foundation have to show three years of losses? Would it be fair to you and I as a consumer if in 2021, grabbing completely fake numbers out of the air there were?
Douglas Olson:no losses and they just sent refund checks to their clients and then in 2022, they had a billion dollars in losses, more than what they actually brought in for insurance premium and then tell that insurance company you can only look at the year that you got the refunds to everybody and that's how we're going to tell you no on your insurance rates. Or would it be more appropriate to have a three-year balance, as you make this request, and a little bit of a historical perspective, where now you're thinking about new modeled vehicles that have come onto the market with changes and safety features and stuff like that, and they need to have that data to know what is their real information? What are they really paying out for those vehicles or materials and changes in building construction?
Judy Gratton:Yes, from my point of view as the consumer insurance, the way I envisioned that it ran is that because all of us are paying into this fund and not all of us will need the money at a certain time, that allows them to make whole people who are damaged based on what their policy provides, on what their policy provides.
Judy Gratton:And here I am in real estate and tell people to sell and make sure that they've got their, that they read the contract, but I can promise you I did not read my entire insurance policy.
Judy Gratton:It shocked me because I heard Douglas speak at another event when you told me that if you do upgrades to your home, you're supposed to let your insurance company know that, because all these years I thought we had full replacement coverage and I've asked my husband multiple times and we never told them when we totally remodeled the downstairs or put solar panels on the house, any of the improvements that might have changed the value on the home, and I'm like, oh my gosh, how is that going to fly?
Judy Gratton:That was really eye-opening when you said that. So it's these kinds of things that I don't think people understand at all and I think maybe people in places like California, where all the fires were, are having rude awakenings when they're going to, first of all, the insurance companies, I think are backing out of states that they can't afford to cover. Because that am I right on what my role model, my head, is that the money comes in from all of us, eh, and then it goes out accordingly to the people. Who is that basically how the they don't make money anywhere else?
Douglas Olson:No, let me answer your first question. You have a pretty good understanding of how this is supposed to work, so please don't adjust that. I'm adding to that knowledge. I hope that makes sense.
Douglas Olson:Yes, of course we all pay into, just for simplicity, a big bucket of money, and when things go wrong, we expect the money is going to come out Okay, as we were talking a moment ago, it's contractual right, as consumers have asked for cheaper, faster, along. That way, we do care about how much we pay for taxes and so every year, every town, every environment, they all have to make budget decisions on what they're going to do. So we also have to bring into the element of how are we managing our forests? Now, how are we allowing houses to be built on the side of a mountain, next to a river that hasn't flooded in 100 years, which means probably that might not be the best idea, but we are trying to allow a lot of what we want to do as humans to be done, and so they try and put things in place to allow us, as humans, to do those things. We are not necessarily wrong in what we're trying to accomplish, but we must be careful and be aware that if we used to do fire breaks and we used to manage the forest. And the easiest way to explain it. This isn't factual because I don't have it in front of me, but there's a great point of reference.
Douglas Olson:Before 1900, we used to lose like 2 million acres of forest land a year. Then we started managing the forests, that acreage reduced by about 80% of our loss on an annual basis because we were managing the forest, both in how we were logging it, how we were creating roads, how we were protecting the environment, all of these things that were being done as we build more and more houses closer and closer in these denser forest lands. Let's be honest, right? So if you go back to 1900, we didn't have the technology and the ability we have today. We didn't have airplanes, we didn't have helicopters, we didn't have a lot of the stuff that we have today.
Douglas Olson:So I think what you're going to see is you're going to see a retraction on some of this, because we do have to figure out if we are going to allow the fire department let's talk about this for a quick second If we're going to allow a community to push back on those that have been voted into positions to help us better our environment or position.
Douglas Olson:And let's talk about water lines here for a second. We cannot then be mad when a hundred houses burn down that are on that same water pipe that the fire department needs to use. And if we are honest and we think about this for just a second, I know there's loss. I'm certainly not trying to lessen that, but we also do have a responsibility as we calmly walk through a loss. If 100 houses have burned to the ground, that means all those shutoff valves for toilets, sinks and the main water main coming into that house has been melted so that water is flowing at full capacity out of that pipe. And now you multiply that by 100 houses 10 houses, 20 houses, 15 houses how do you think the fire department is going to have water pressure when they connected that fire hydra?
Judy Gratton:Think about that. But in our business, in real estate, what I have noticed in terms of insurance, for instance, we sell some condominiums down in Long Beach, Washington. I started getting calls from buyers saying I can't get insurance. So I started reaching out to insurance companies, and I won't name names, but there was one large one who came back to me and said, oh, right now we're not insuring any condos. I went what? What? I mean, that's a whole industry that people, especially first-time homebuyers, are going into. And they did call me back three weeks later and said oh, we're back to insuring condos, but the idea that an insurance company wouldn't insure something as basic as condominiums the particular condos that we sell are older. They're within what do you say, Dennis? Maybe 200 yards of the ocean. Well, maybe more than that, Not much, though, and they don't have fire sprinklers. So we're running into massive amounts of insurance on that because it's almost uninsurable.
Judy Gratton:There are many companies who won't insure, and that's a shock, and I think people who are buying, maybe even just general homeowners, especially in California, when they started receiving notices that their insurance was canceled. So what's going on? First of all, it's not necessarily had anything to do with weather Fire sprinklers. That's just something they didn't have before. Another one I ran into was knob and tube wiring electrical wiring. A lot of insurance companies will not insure around that. So there are things out there that I don't think people realize until they're stuck that it's something they need to pay more attention to. I think that's really why we had you on here, is that you need to explain to people Insurance is not just a one and done thing, which I've done One and done with a company since we've owned this house. Now I'm petrified to call.
Douglas Olson:You're bringing up a lot of amazing points, judy, and I'm really glad you're saying that, because it humanizes this boring conversation known as insurance. So I encourage you to continue asking those types of questions and bringing that dialogue into this, because on our side, what we also have to worry about is the environment. And when we talk about the environment while we're not going to be talking about is there a global warming or is there not global warming Are we making mistakes? Are we not making mistakes? I think I've already articulated we, as human beings, can go both ways. We can make some very good progress forward and we can also make some unfortunate progress in another direction. We're humans. We're learning as we go.
Douglas Olson:That said, the insurance companies, as we talked about a few moments ago, they have to wait three years to show the losses. So when I say that, I don't want you to think that they just they have to stop. They have to wait every three years, on an annual basis, but they have to. One of the requirements is to show three years worth of history, and they also get the opportunity to project. And where are those projections going to come from? They're ingrained in our communities. They're going to the council meetings. They're going to Olympia for us here locally. They're going to Olympia and listening to the Senate have these debates and what they're going to do and how they're going to spend our tax dollars to do certain things. And if they start hearing we're going to get rid of 50 full-time fire departments in this particular area because we can't afford the budget and turn them into part-time. Let's think about that on the insurance side for just a moment. The risk must go up.
Douglas Olson:A hundred fold.
Judy Gratton:probably Every one of those that you take out rises the risk.
Dennis Day:Yeah.
Judy Gratton:And especially for the people that live in those areas. Would that be correct to say?
Douglas Olson:Yeah, let's just pick on one person. Let's say the captain of that fire department. That captain might be retired, that captain might have a full time job. He or she might have another job on the side right, because we're not having fires on a daily basis, we're not having automobile accidents on a daily basis in certain areas where they're having these budget conversations and are pulling back. That person might be 40 minutes away, but you need them right now.
Douglas Olson:Also a product out there that we use quite a bit, or a reference point, which is a protection class, and that is what some of your clients are coming up against. So the protection class in Washington State is something that WSRB helps us keep track of, and that's what we're just talking about. You might have a community say we can't afford to pay for four full-time fire department buildings, full staffed. We need to take two of them and turn them into part-time. That might save a million dollars a year. I'm not sure what those numbers might be for that group of individuals, but now, for every 15 minutes a fire is burning, it's costing the insurance company at minimum. So be clear at minimum $100,000 for every 15 minutes. So if a full-time fire department as soon as they get the call they're all jumping. They might take two and a half to three minutes to be in the vehicle and moving down the road, versus all the part-time folks have to come from their home or their workplace to get to the building, to get one of the engines up and running, to get the doors open, to get out. That might be 15 minutes difference. That's not to say that's a bad thing, but we have to be realistic and know that as soon as that fire is known, most of the time fires have been going for a little bit. So that client is probably already going to cost the insurance company $200,000 in loss.
Douglas Olson:It's not just the fire. What damage is being done by the fire hoses as they're trying to knock that out? What damage is being done to windows or roofs as they open up to try and knock that fire out? Oh, and what's this thing that fires produce? I think it's called smoke. So then there's this thing smoke damage that goes through the home. And now all the electronics have to be replaced. You can't fix those. The furniture is going to be replaced, the carpeting, your clothing. The damage isn't just what the fire does, it's also what the smoke does. All of this to just say you're 100% spot on, judy. You're 100% spot on, judy, the way that this works today.
Douglas Olson:If insurance is not a priority on protecting the 30, 40, 50 years the first three years, whatever it is that you've been building your assets and working your tail off to have a way to retire in a blink of an eye, if we aren't having an honest conversation with an insurance advisor to make sure that the product that we have in place is actually going to do what you want it to do on claim day and as carriers leave the market. Let's touch on this for just a quick second. We are talking about us here, locally. We are talking about California, but the Senate and I think it was May of 2024, they consolidated is probably the right way to say it. What we're just now discussing on how many of these policies are being non-renewed. So non-renewed means we've decided to leave the market, or your maintenance clause is saying that your home is not maintained the way we wish. You don't have the debris removed from around your house. You got cars on blocks parked in your front yard. There's multiple reasons why someone would be non-renewed.
Judy Gratton:See, I don't think, and that's I keep coming back to. This is why people need to hear what you're saying, because I didn't think about this Not that I have cars on blocks in my front yard, I didn't think about that. I would never have thought about that. I just thought I have a policy, something happens, you're going to pay, and then recently used my policy. I wish I hadn't, but it was a fight with and I was angry and I know people get that way and I think we need to pause here and have a reality check of really what insurance is and what we can expect of it and how it's changing today. Like you said, they're moving out of markets. You mentioned and I won't mention the name again. You can't think it's okay, but the losses that one very large company took was it 2024, 2023? It was a massive amount of money and I was amazed at how much money they lost in a year.
Douglas Olson:So I'm going to give you two answers to that. Judy One, the company's name is State Farm. They are the largest insurance company in the United States. They're a fantastic company. There's nothing wrong with that company in any way, shape or form. I believe they insure 11% of every vehicle on the roadway in the United States, to give you an idea of their size, and there are thousands of insurance carriers Mine might be a little under. Maybe they're at 13%.
Douglas Olson:I haven't looked at the current numbers as insurance companies buy other insurance companies and stuff happens. The reason that I bring them up specifically is because I like to use them as a safe barometer on what's happening in the insurance industry. Because if I say number two here, which is the insurance industry as a whole, isn't a bad place, what does that mean? That means for every dollar, a consumer has paid an insurance premium. So if we put all insurance companies into a singular bucket this is not accurate as of today, but it's a general understanding for us to have this conversation the average for the entire industry that was paid out was $1.05. So that means for the last 7 to 10 years, the insurance industry has been writing more checks out than they've been taking in for insurance premium.
Douglas Olson:The reason I mention State Farm is because they were in the billions of dollars in underwriting losses for multiple years in a row. Now it's also a business decision. And what does that mean? Row Now, it's also a business decision, and what does that mean? So as a point of reference again, this is just 40,000 foot elevation. To make the math easy for all of us, the perfect world would be for every dollar I bring in as an insurance company, I'm only spending 70 cents for everything advertising losses, lawsuits, claims, buying other insurance companies. You name it because I need to reinvest, because what we should be doing is reinvesting that 30. Because we need that bucket of money to be a much bigger bucket of money for the unknown environmental losses that we're going to have or the catastrophic unplanned losses. We can't just think fires. Think of what hurricane damage does oh, hurricanes, floods, fires.
Douglas Olson:Yeah, you got it. And then, as we allow ourselves to build homes closer to these areas or saturate those areas with how we're building things now, the insurance companies are on the hook. If you pay $2,000 a year for your home insurance and you actually do an analysis and you go line by line and you look at how that coverage actually responds for you on claim day, you're more than likely getting $4 million worth of coverage overall. Now you're not going to get a check for $4 million because it depends upon the type of loss and some of the money goes this way, some of the money goes towards that and so on. But really that exchange for $4 million in coverage for $2,000, it's a pretty good exchange.
Douglas Olson:I think we can agree to that. As we were mentioning the insurance industry, if they were only spending 70 cents, they could reinvest that 30 cents and have this extra bucket of money so that when things that are unplanned or that they couldn't project, for example, a hurricane, a tornado fire, an earthquake, and so that's what that's supposed to do. I'm hoping what you're understanding through that is that the insurance industry for seven plus years has not been able to do that in an underwriting format the way they'd like.
Judy Gratton:Also, Perfecting the bucket.
Douglas Olson:Yeah, absolutely In the early 2000s. We had this thing called mortgage challenge in the early 2000s through 2010. Is that right?
Judy Gratton:With getting affordable insurance.
Douglas Olson:No, I'm talking about. We had a lot of banks that were closing on Fridays.
Dennis Day:We had to bail out General.
Judy Gratton:Motors, you know to fail 2006 through about 2010.
Douglas Olson:So the reason I like using this as a reference while we had this happening it didn't happen overnight, would that be fair? There were a lot of undercurrents that probably developed that and it reared its head through 2006, 7, 8, 9, and we finally got rid of it in 11. Think of how many mortgage companies aren't here anymore because it's that time, or banks that are now owned by somebody else and we had to change the guaranteed FDIC from 100,000 to a quarter million because of so many failures. Please think of the insurance industry as being in that 2003 through 2005 era.
Douglas Olson:But the difference here is the insurance industry is not too big to fail, but they've been pretty smart. They have buckets of money. The problem is they're draining the money, so are we going to have to bail them out? No. Are insurance companies going to make smart decisions? Yes. And let's be honest, if we go back and look at the mortgage industry during that time, one of the jokes which is accurate is if you could go and breathe on a mirror, you could get a mortgage. It was true.
Judy Gratton:Yes, absolutely true, and the sad thing was most of those people that were only alive didn't get to keep those houses.
Douglas Olson:Yeah, and the only reason I bring that up is this is a point of reference. If we went back in the time machine to 2022, imagine your dining room table and you're inviting over your friends and your family and you have decided you want to cover your table with all of their favorite foods and beverages the whole table and you've invited them over and now they can choose what they'd like. Imagine you now as the insurance company. That's what insurance companies were doing. They were trying to take on every single risk if you were willing to pay the premium. Okay, now let's fast forward to where we are in today's environment. The reason you're seeing so many non-renewals or insurance companies leave industries or leave certain risk areas is they're having to retract and go. I have to cut out this type of risk If I want to stop this excessive bleeding. We cannot continue. They are a business. If you think of your own budget and you're spending $100,000 at Costco a year, but you're on a $10,000 budget, you gots the problem. So what I'm getting at here is now the insurance industry, every single insurance carrier. Where they had a dining room sized appetite today, it shrunk down to just a dinner plate, and that's why you're seeing no, we're not going to do condos. We now have insurance companies being absorbed by other insurance companies. You've probably heard that Safeco, who's owned by Liberty Mutual, is now being absorbed by Liberty Mutual. We don't sponsor the Mariners anymore or the stadium and stuff like that, but they're making that business decision. Instead of there being two lines of offerings, we're consolidating into one. That's one example.
Douglas Olson:You have other insurance carriers, like Nationwide, their private clients and this is actually older than 30 days a private client book of business. They have not only decided to leave that business. In 39 states across the United States, they're shutting the entire division down. They're not offering that product anymore. That means the million, 2 million, 5 million, $15 million homes that they were once insuring now has to go find their own insurance with another carrier. Yes, and I think all the non-renewals will be done, I think through October. But think of that. Think of the number of clients in 39 states they have. That's home, auto, umbrella, boats, yachts, motorcycles. That's a big book of business that they've decided to walk away from. Wow, and going back into the last 30 days, an insurance carrier that you probably know and hear a lot of it might be a person by the name of Flo.
Judy Gratton:One thing I don't like are the commercials.
Douglas Olson:In your world. This is important for your viewers to be aware of, and all of this is Google-able, by the way. So this isn't I'm just saying something, I'm being very careful Progressive. You might've heard of that company and Flo's Advertising. They recently announced that they've made the business decision to no longer offer insurance for any investment properties across the entire country at all coverage. So let's say you had a primary home and a condo in Arizona or another home in New York or whatever. Nope Cannot offer that anymore. They're canceling all those policies, are going to not renew them and we cannot offer those. So they only effectively say I only want the primary home, the auto and the umbrella and the toys we'd want yeah, so they just don't have as many policies.
Douglas Olson:Yeah, so if you're paying out a dollar five for every dollar you bring in, you're losing money. Yeah, so as they look at their book of business and they look at where are we bleeding the most, and if they cut that off, maybe they're down to 95 cents. So now they're going back in the right direction. So they may be doing that and we started to touch on this a little bit but when you also have insurance commissioners, when you have an insurance company saying I need 28%, that's how much we've paid out in lot. We need 28% to at least break even with these current rates, and you have an insurance commissioner's office say no, you can only have 6%, what other business choice does a business have if they keep going and they keep asking these insurance commissioners for the rate that they actually need? We as consumers are not happy about those rate increases, so we go shopping when we see those rate increases. Let's be fair, totally understand all the elements that are involved here, but if the insurance commissioners offices are saying no, you cannot do that.
Douglas Olson:What other decision does an insurance company have other than start reducing what they feel is acceptable in their underwriting guidelines and reduce what they're willing to take on and you could look at California as a great example.
Douglas Olson:They're being forced to pay for things after they've already taken the insurance premium and they've got all these agreements, and now there's changes happening where now they have to pay for losses that they didn't even get premium for.
Douglas Olson:That's why you have insurance companies leaving markets.
Douglas Olson:All of these elements we're talking about how we've done a poor job in underwriting, as when I say that, I just mean if I only have to answer my name, phone number and address and what kind of insurance I want and I could get an insurance quote and pay for it, that's probably not as effective as do you have dogs in the house? Are there kids in the house? Do you have a pool in the backyard? We could keep going with the laundry list of things, but if you're not asking and answering those questions, are you really getting an insurance product that's generating the correct premium for that risk? And so all of these elements are coming into. This is why you're seeing, across the entire country, insurance companies making decisions to pull back on what they're willing to insure, leave the industry in certain sectors, whatever the case may be, and we're still seeing consistent increase in rates because, at the end of the day, insurance companies do have to at least be able to provide us a check on claim day, and they need a certain dollar amount in the kitty to be able to do that.
Dennis Day:Can I ask a question about kind of the consumer side? Yeah, my insurance home and auto is on a six month cycle. Yeah, so let's say in January I renew my insurance policy, everything's fine, and then my insurance company says, hey, we're not in this market anymore.
Douglas Olson:Do I have my coverage till the end of that six month cycle or is it just gone? That's a very good question and remember early in the conversation we used I used this word called contract. That contract bounds them to that, what we call the term, the amount of time that they've extended to you and you've accepted you are covered as that policy. The only way they can legally change that is you call in and say I need to add a car or I need to make adjustments to my coverage. The contract is the contract until you trigger the change.
Dennis Day:Okay, thank you, because I was a little scared that they were holy moly.
Judy Gratton:That's what oh good, and it's been such. Douglas, I'm so grateful that you joined us and spent this time with us, and thank you.
Dennis Day:Thank you.
Judy Gratton:Thank you, I'm sorry, it went long. Don't be sorry. Like I said, we could do this all day on this subject.
Dennis Day:So if someone wanted to find you, Douglas, what would they do? Phone call, email.
Douglas Olson:Whatever is their preference. I'm on LinkedIn, like most of us are. I'm assuming Judy will provide all my information Information, yeah, okay. Thank you both.
Dennis Day:Douglas Olson, thank you so much from USI.
Douglas Olson:This has been fantastic. Nobody has an insurance headache now need Advil.
Dennis Day:I'm getting there. Thank you for watching and or listening. Hope to see you soon. Take care, bye.
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