Latest / Money In Motion with Klaas Financial / Protecting What You've Built

Transcript

Protecting What You've Built · Money In Motion with Klaas Financial

0:00
Speaker 1: And our phone lines, they are open to you right now.
0:02
Speaker 2: If you've got questions for our retirement planning professionals from
0:05
Speaker 2: Kloss Financial, you can give us a call, get you
0:07
Speaker 2: on the air, 608-321-1310.
0:07
Speaker 1: That's 608-321-1310. Anything retirement-related. Love to get you on the program.
0:16
Speaker 2: We're going to be talking with CJ and Eric this
0:18
Speaker 2: morning about protecting what you've built. It's such an important topic.
0:21
Speaker 2: Don't forget also, as you listen to the program, a
0:24
Speaker 2: couple of really cool features of the show, the website KlausFinancial.com.
0:27
Speaker 2: You can listen back to this in previous shows podcast
0:30
Speaker 2: right at the website KlausFinancial.com. You can also schedule a
0:34
Speaker 2: complimentary conversation right from the website. Just head over to KlausFinancial.com.
0:38
Speaker 2: That's Klaus, K-L-A-A-S-Financial.com. Or, of course, you can call the
0:42
Speaker 2: office right here in Madison at 608-442-5637. No charge for
0:48
Speaker 2: that initial. Get to know your appointment at Klaus Financial.
0:50
Speaker 2: It will be complimentary to you. Again, that number, 608-442-5637.
0:55
Speaker 2: As I mentioned, a couple of great features of the program.
0:57
Speaker 2: I wasn't necessarily talking about CJ and Eric, but they
1:00
Speaker 2: definitely qualify as some great features of the show. The
1:02
Speaker 2: second one I did want to mention, though, was the
1:04
Speaker 2: Klaus Quiz Question of the Week, your chance to win
1:06
Speaker 2: a fantastic prize. This week, get a chance for you
1:08
Speaker 2: to win a $ 25 gift card to Olive Garden. We'll
1:11
Speaker 2: tell you a little bit later on in the program
1:12
Speaker 2: how you could win that. A little tip, listen closely
1:15
Speaker 2: because oftentimes the question and answer to the Klaus Quiz
1:18
Speaker 2: Question of the Week comes up during the show. And
1:20
Speaker 2: speaking of our retirement planning professionals, CJ and Eric, they
1:23
Speaker 2: join us now.
1:25
Speaker 1: CJ, how are you doing this morning?
1:27
Speaker 3: I'm doing great, Sean.
1:28
Speaker 4: How are you?
1:28
Speaker 1: I'm doing fantastic. Eric, how have you been?
1:32
Speaker 4: Not too bad, Sean. Excited for our topic today.
1:35
Speaker 1: As am I.
1:36
Speaker 2: It's a really, really important and a big topic as well,
1:38
Speaker 2: and we're going to get into it with CJ and
1:40
Speaker 2: Eric in just a moment. I mentioned the Kloss Quiz
1:42
Speaker 2: question of the week, a chance to win a great
1:44
Speaker 2: prize from our friends at Kloss Financial. And before we
1:46
Speaker 2: start talking about protecting your property, liability, umbrella insurance, all
1:52
Speaker 2: that stuff, and how that really fits into a successful
1:54
Speaker 2: retirement plan, let's actually look back at last week's show,
1:57
Speaker 2: get the question to the Kloss Quiz question of the week,
1:59
Speaker 2: and answer there as well, Eric.
2:02
Speaker 3: Yeah, absolutely.
2:03
Speaker 4: So last week, Nate and I were talking about student
2:06
Speaker 4: aid and college funding. So our question last week was,
2:11
Speaker 4: true or false, FAFSA stands for the Free Assessment for
2:15
Speaker 4: Farming Students. Okay, so the answer to that was false.
2:19
Speaker 4: It stands for the Free Application for Federal Student Aid.
2:23
Speaker 4: And I will say After last week's show, FAFSA is
2:26
Speaker 4: hard to say over and over again.
2:29
Speaker 3: It is.
2:29
Speaker 1: It is.
2:30
Speaker 2: And I practiced all last week after the show, and
2:34
Speaker 2: then I'm getting home, I guess, last week in the afternoon,
2:37
Speaker 2: and it's running through my head over and over again
2:40
Speaker 2: as well.
2:40
Speaker 1: Yeah, that is a tough one.
2:42
Speaker 2: And it's a great, important, if you're a parent, grandparent,
2:46
Speaker 2: you got some grandkids or kids heading off to college,
2:48
Speaker 2: that was a really important conversation. Back at KlossFinancial.com. That's Kloss, K-L-A-S, Financial.com.
2:55
Speaker 2: Of course, today's show is called Protecting What You've Built.
2:58
Speaker 2: And CJ, when people think about retirement planning, they usually
3:01
Speaker 2: think about investments, Social Security, tax planning, maybe health care
3:05
Speaker 2: as well. But insurance doesn't always make that list for
3:09
Speaker 2: a lot of folks.
3:10
Speaker 1: But it should, shouldn't it?
3:13
Speaker 5: Yeah, it really should because protecting wealth, in our opinion,
3:17
Speaker 5: is just as important as building your wealth. Now, to
3:20
Speaker 5: be clear, often when these topics of insurance come up,
3:23
Speaker 5: consumers can start to roll their eyes like, oh, this
3:25
Speaker 5: is so salesy. And I just want to be super clear.
3:28
Speaker 5: We actually do not sell insurance. We are financial planners,
3:32
Speaker 5: retirement planners. We're what's called a fee-based fiduciary. So we
3:34
Speaker 5: don't sell products that generate commissions. And therefore, the beauty
3:38
Speaker 5: is we're going to talk about this from a conflict-free perspective.
3:42
Speaker 5: But as Eric and I will be discussing today, it's critical, right?
3:47
Speaker 5: At certain stages of your life, especially, it can really
3:51
Speaker 5: show up in major ways. And then, you know, today
3:53
Speaker 5: we're going to be talking about some of the what's
3:54
Speaker 5: commonly referred to as PNC insurance or property liability umbrella.
4:00
Speaker 5: And so, you know, most people spend 30 to 40
4:03
Speaker 5: years of their lives accumulating assets. They're diligently often contributing
4:07
Speaker 5: to retirement accounts. They might be paying down debt. growing
4:10
Speaker 5: investment portfolios, and often are building equity in their homes.
4:15
Speaker 5: With all those important steps that tend to take up
4:19
Speaker 5: our attention, it can be really easy to forget about
4:22
Speaker 5: the risk management side of financial planning, and that's where things.
4:26
Speaker 3: Can kind of sideswipe you along the way if you're
4:28
Speaker 3: not careful.
4:29
Speaker 5: So if you spent decades creating a strong financial foundation,
4:33
Speaker 5: it's important to think about what could potentially threaten that foundation. Unexpected,
4:38
Speaker 5: you know, property damage, a liability claim, a lawsuit, some
4:42
Speaker 5: sort of automobile accident where you're at fault or other scene,
4:46
Speaker 5: you know, events can create significant financial consequences. So remember,
4:51
Speaker 5: insurance exists to help transfer certain risks away from your
4:55
Speaker 5: personal balance sheet and onto an insurance company. In most cases,
5:00
Speaker 5: it's the most important tool available for protecting the assets
5:03
Speaker 5: you've worked so hard to accumulate. So just Pay attention.
5:07
Speaker 5: We're going to go through some important reminders for everybody.
5:10
Speaker 5: You're used to hearing us talking about financial planning and
5:12
Speaker 5: investments in the market and the economy. Today, you're going
5:15
Speaker 5: to get to hear about the protection side of the equation.
5:18
Speaker 2: And I got a chance to preview the show and
5:19
Speaker 2: some of the notes, and it's a really, really important program.
5:22
Speaker 2: It's going to be one of those shows as well.
5:23
Speaker 2: You're definitely going to want to listen back to. Head
5:25
Speaker 2: on over to KlausFinancial.com. That's Klaus, K-L-A-A-S-Financial.com. Again, subscribe to
5:31
Speaker 2: the podcast right from the website. Also, while you're there,
5:34
Speaker 2: don't forget you can schedule a complimentary chat Write online, klossfinancial.com,
5:38
Speaker 2: or call the office here in Madison, 608-442-5637. No charge
5:43
Speaker 2: for that initial get-to-know-you appointment at Kloss Financial. It will
5:45
Speaker 2: be complimentary to you. So, Eric, let's start homeowners insurance.
5:49
Speaker 2: We'll start with that. And virtually every, you know, virtually
5:52
Speaker 2: every homeowner has a policy. What role does that play
5:55
Speaker 2: then when it comes to the overall financial plan?
5:58
Speaker 4: Yeah, I think, you know, like you said, virtually every
6:00
Speaker 4: homeowner has a policy. And I think a lot more
6:02
Speaker 4: people are thinking about it these days. This has been
6:05
Speaker 4: property and casualty insurance in general has been one of
6:08
Speaker 4: the largest drivers of inflation in recent years here. And
6:12
Speaker 4: it's really made people stop and look at those renewals
6:15
Speaker 4: when they get them, because suddenly that premium looks a
6:17
Speaker 4: lot different. But for on the homeowner side, this is
6:21
Speaker 4: often the first line of defense when it comes to
6:23
Speaker 4: protecting one of your largest assets, right? For most folks,
6:27
Speaker 4: your home is And the equity you have in your
6:29
Speaker 4: home is one of the largest assets you own. And
6:32
Speaker 4: most people understand that it can help cover, you know,
6:35
Speaker 4: damages like fire, wind, hail, or other covered events. I
6:39
Speaker 4: think we can all agree that those wind and hail
6:41
Speaker 4: events have been frequent recently. But many policies provide, you know,
6:46
Speaker 4: much more than that. They frequently include protections for like
6:49
Speaker 4: your personal belongings, temporary living expenses, if you experience a
6:54
Speaker 4: loss and need to live somewhere else. And then one
6:56
Speaker 4: other thing that we're going to talk a lot more
6:58
Speaker 4: about today, it often provides liability coverage if someone is
7:02
Speaker 4: injured on your property.
7:04
Speaker 2: Well, and CJ, let's talk then as we talk with
7:06
Speaker 2: CJ Kloss and Eric Schwartz of Kloss Financial. CJ, let's
7:09
Speaker 2: talk then about some common mistakes homeowners make with their coverage.
7:15
Speaker 5: Yeah, a big mistake we see frequently is focusing exclusively
7:20
Speaker 5: on the premium rather than understanding the coverage itself.
7:24
Speaker 3: So everyone likes to save money. We get that.
7:26
Speaker 5: But lower premiums sometimes come with higher deductibles, lower liability limits,
7:31
Speaker 5: or coverage restrictions that might not become apparent until some
7:35
Speaker 5: sort of claim occurs. Insurance is one of those areas
7:39
Speaker 5: where it's important to understand exactly what you're buying rather
7:42
Speaker 5: than simply selecting the least expensive option. Now, admittedly, if
7:47
Speaker 5: you watch commercials during a football game or anything like that,
7:51
Speaker 5: and you look at kind of property and casualty insurance companies,
7:55
Speaker 5: you know, you'll often find that it's sold on premium.
7:59
Speaker 5: And that's just marketing, right? So I'm not necessarily blaming
8:03
Speaker 5: the insurance companies, but often it's like, hey, if you
8:06
Speaker 5: just come here, you can save 10%.
8:08
Speaker 2: Or more, 15% or more.
8:09
Speaker 5: And it's all about premium, which is interesting from a
8:13
Speaker 5: daily standpoint of saving money for cash flow. But it's
8:19
Speaker 5: not so interesting when a claim arises and it turns
8:21
Speaker 5: out that you were underinsured. So along the same line,
8:25
Speaker 5: another mistake we see frequently is not reviewing policies on
8:29
Speaker 5: a regular basis. This is especially problematic when it comes
8:32
Speaker 5: to home policies because the cost to rebuild a home,
8:35
Speaker 5: of course, rises over time. So construction labor costs increase,
8:39
Speaker 5: building materials become more expensive, renovations and home improvements could
8:43
Speaker 5: have substantially increased the value of your property, but you
8:46
Speaker 5: didn't notify your insurance agent. And as a result, a
8:49
Speaker 5: policy that was perfectly appropriate five or ten years ago
8:52
Speaker 5: to cover the rebuild cost has now become inadequate to
8:56
Speaker 5: protect you to rebuild that home. So we see this
8:59
Speaker 5: quite often, and it's sad, but some major event occurs,
9:03
Speaker 5: a home burns down or whatever it might be, and
9:05
Speaker 5: the last time you reviewed your homeowner's policy was 10
9:08
Speaker 5: years ago, and just it's not enough to rebuild. So
9:11
Speaker 5: often it causes a bloated mortgage that somebody didn't used
9:14
Speaker 5: to have before, or they're not able to rebuild the
9:17
Speaker 5: home to the same quality it was before it burned down.
9:20
Speaker 5: So we encourage clients to periodically review their homeowner's coverage,
9:24
Speaker 5: particularly after major renovations or additions, or some sort of
9:29
Speaker 5: significant increase in construction costs. The goal here is to
9:34
Speaker 5: ensure that if something unexpected occurs, the policy remains aligned
9:38
Speaker 5: with the reality of what it would cost to rebuild
9:40
Speaker 5: your home.
9:41
Speaker 2: Talking this morning with CJ Kloss and Eric Schwartz, talking
9:43
Speaker 2: about protecting what you've built. Don't forget, CJ and Eric
9:47
Speaker 2: are retirement planning professionals. They come to us from Kloss
9:49
Speaker 2: Financial online, klossfinancial.com. That's Kloss, K-L-A-S financial.com. and the telephone
9:55
Speaker 2: number 608-442-5637. So, Eric, let's... talk about the i think
10:00
Speaker 2: the other big insurance that most of us are familiar
10:02
Speaker 2: with which is automobile insurance why is that it's interesting
10:07
Speaker 2: to be talking about this because why is that such
10:10
Speaker 2: an important part of financial planning.
10:13
Speaker 4: Yeah i think it's because driving Represents one of the
10:16
Speaker 4: most significant liability exposures that many individuals face on a
10:21
Speaker 4: regular basis. I mean, I think most of us drive
10:24
Speaker 4: frequently and we don't often think twice about it, right?
10:27
Speaker 4: It's just something you do every day, but there is
10:30
Speaker 4: a significant risk in there. Every time you get behind
10:33
Speaker 4: the wheel, we are assuming.
10:35
Speaker 3: That level of risk.
10:36
Speaker 4: When people think about auto insurance, they often focus on
10:39
Speaker 4: repairing a vehicle after an accident. While that's certainly important,
10:45
Speaker 4: liability coverage is usually the bigger financial planning concern here.
10:48
Speaker 4: So I said we're going to talk a lot about
10:50
Speaker 4: liability today. A serious accident involving injuries can result in
10:55
Speaker 4: very large claims. It can have medical costs, legal expenses,
10:58
Speaker 4: lost wages, and property damage, and all of that can
11:02
Speaker 4: really quickly add up. So if a claim exceeds the
11:06
Speaker 4: insurance limits available under your policy, your personal assets can
11:11
Speaker 4: potentially become exposed. And I think people really do not
11:14
Speaker 4: think a lot about that.
11:16
Speaker 2: Talking this morning with CJ Kloss and Eric Schwartz, our
11:18
Speaker 2: retirement planning professionals from Kloss Financial.
11:21
Speaker 1: Really good stuff this morning.
11:23
Speaker 2: Important conversation as well, of course, as we talk about
11:27
Speaker 2: liability when it comes to their auto policy, your auto policy.
11:31
Speaker 2: We'll talk a little bit more on that exact topic
11:34
Speaker 2: with our friends from Kloss Financial in just a moment.
11:36
Speaker 2: In the meantime, if you haven't had a chance, check
11:38
Speaker 2: out the website, Head on over there, klossfinancial.com. That's kloss, K-L-A-S, financial.com.
11:44
Speaker 2: And their telephone number, 608-442-5637. Don't forget, no charge for
11:48
Speaker 2: that initial get-to-know-you appointment at Kloss Financial. It will be
11:52
Speaker 2: complimentary to you. Again, their number, 608-442-5637. We'll continue our
11:57
Speaker 2: conversation with CJ and Eric and take your call next
11:59
Speaker 2: as Money in Motion with Kloss Financial continues right here
12:02
Speaker 2: on 1310 WIBA. Talking with our retirement planning professionals, CJ
12:08
Speaker 2: Kloss and Eric Schwartz. Of course, they do come to
12:10
Speaker 2: us from Kloss Financial, the website klossfinancial.com. That's Kloss, K-L-A-S, financial.com.
12:17
Speaker 2: Great website to learn all about Kloss Financial. You can
12:19
Speaker 2: learn about, of course, the team. You can learn about
12:21
Speaker 2: their separate divisions, how they can help you. Or if
12:24
Speaker 2: you're an employer, some great opportunities and options for you
12:26
Speaker 2: at klossfinancial.com. Also, listen back to this and previous shows podcast.
12:31
Speaker 2: Another great feature is the opportunity to schedule that complimentary
12:34
Speaker 2: chat right from the website, KlausFinancial.com. That's Klaus, K-L-A-A-S, Financial.com.
12:40
Speaker 2: You can, of course, give them a call as well
12:41
Speaker 2: right at the office, 608-442-5637.
12:46
Speaker 1: No charge for.
12:46
Speaker 2: That initial get-to-know-you appointment at Klaus Financial. It will be
12:50
Speaker 2: complimentary to you. Again, their number, 608-442-5637.
12:52
Speaker 1: 442-5637.
12:54
Speaker 2: And if you've got a question, get you on the
12:56
Speaker 2: air studio line that remains the same. It's 608-321-1310. That's 608-321-1310.
13:02
Speaker 2: Talking this week with CJ and Eric about protecting what
13:05
Speaker 2: you've built. And CJ, just before the break, Eric started
13:08
Speaker 2: talking a little bit about automobile insurance. And he mentioned
13:12
Speaker 2: about liability limits. And how should folks then be thinking
13:17
Speaker 2: about liability limits on their auto policy?
13:21
Speaker 5: Yeah, everybody, you know, if you're kind of catching on
13:23
Speaker 5: to what we're doing here, we're talking about different types
13:26
Speaker 5: of kind of core property and casualty insurance coverages, homeowners,
13:30
Speaker 5: you know, auto insurance, umbrella. We're going to go through
13:33
Speaker 5: all of these today. But instead of just focusing on
13:37
Speaker 5: the policy itself, we're also talking about the risk that
13:41
Speaker 5: it's covering.
13:42
Speaker 3: As a matter of fact, that's probably the.
13:44
Speaker 5: Most important point of insurance is like, what's the point
13:48
Speaker 5: of this? And it's like, in the rare instance where
13:51
Speaker 5: something bad happens to your home, you're covered. In the
13:55
Speaker 5: rare instance that you get into a really nasty vehicle accident,
14:00
Speaker 5: what are the liabilities that exist? And so it's most
14:04
Speaker 5: important to ask the question of, am I appropriately covered than.
14:10
Speaker 3: did I.
14:11
Speaker 5: Save $ 5 this year on my premium.
14:13
Speaker 3: To get it down?
14:14
Speaker 5: So that, you know, it's cause it's, it's just kind
14:16
Speaker 5: of asking the wrong question and our humble opinion. So
14:20
Speaker 5: we often encourage people to think about liability limits in
14:23
Speaker 5: the context of what they're actually trying to protect. So
14:26
Speaker 5: when someone first starts their career, they may have limited
14:29
Speaker 5: assets and relatively modest savings, but 20 or 30 years
14:32
Speaker 5: down the line, that same individual may have paid off
14:35
Speaker 5: a home. They might have substantial retirement accounts, investment assets,
14:39
Speaker 5: and some sort of other accumulated wealth, boats, whatever it
14:42
Speaker 5: might be. The insurance coverage that seemed reasonable earlier in
14:46
Speaker 5: your life may no longer match the financial circumstances.
14:50
Speaker 3: Of your life.
14:53
Speaker 5: So this brings us back to what Eric was saying earlier.
14:56
Speaker 5: It is critical to periodically review liability limits, especially after
15:01
Speaker 5: meaningful increases in net worth. I just want everybody to understand,
15:06
Speaker 5: I'm a consumer just like you. There's nothing More frustrating
15:10
Speaker 5: than to feel like you're, quote unquote, wasting money on
15:13
Speaker 5: more insurance premiums. I want to be the first to
15:15
Speaker 5: tell you, because we don't sell this stuff.
15:17
Speaker 3: I couldn't agree more.
15:20
Speaker 5: And yet what's fascinating about it is I promise you
15:23
Speaker 5: the pain that you experience of incremental increases to your
15:28
Speaker 5: premiums due to your things getting more expensive and your
15:31
Speaker 5: wealth going up pales in comparison to the pain of
15:35
Speaker 5: having a claim and not being covered. I promise you.
15:39
Speaker 5: I hope you never have to experience the edge of
15:42
Speaker 5: that sword, but it is a sharp edge.
15:45
Speaker 3: And so my.
15:46
Speaker 5: Encouragement would be every couple of years, sit down with
15:49
Speaker 5: your property and casualty insurance agent and just say, all right,
15:51
Speaker 5: here's where I'm at.
15:52
Speaker 3: Here's where things are. Am I covered appropriately?
15:55
Speaker 2: Talking this morning with CJ Kloss and Eric Schwartz of
15:57
Speaker 2: Kloss Financial Online, klossfinancial.com. and their telephone number 608-442-5637. So Eric,
16:04
Speaker 2: let's take a deeper dive into liability insurance generally. What
16:08
Speaker 2: is a liability protection such an important topic?
16:12
Speaker 1: Why is that?
16:14
Speaker 4: Yeah, liability coverage protects us against claims that you may
16:17
Speaker 4: have caused bodily injury or property damage to someone else.
16:21
Speaker 4: So this isn't something people necessarily enjoy talking about, but
16:25
Speaker 4: I think we can all agree accidents happen, right? Nobody
16:28
Speaker 4: plans for this. And You know, maybe someone slips and
16:31
Speaker 4: falls on an icy sidewalk. Maybe a tree from your
16:34
Speaker 4: property damages your neighbor's structure. Maybe you have a visitor
16:38
Speaker 4: who's injured while on your property. We've talked about it
16:43
Speaker 4: earlier as well, an automobile accident that results in significant damages.
16:47
Speaker 4: None of these situations require bad intentions, right? They're just
16:51
Speaker 4: often the result of unfortunate circumstances. And I think a
16:55
Speaker 4: lot of times when people think about liability issues, they
16:59
Speaker 4: tend to think of blame, right? Because when it comes
17:01
Speaker 4: to liability, that's essentially what we're evaluating is who is
17:06
Speaker 4: at fault or who caused this damage. And I think
17:09
Speaker 4: a lot of people think, well, I wouldn't do anything
17:11
Speaker 4: to hurt anyone else or damage anyone's structure. I wouldn't
17:14
Speaker 4: do anything on purpose. Well, it's not really what it's about, right?
17:17
Speaker 4: It's about the reality of what has happened. And without
17:22
Speaker 4: adequate liability coverage, the financial consequences can be substantial.
17:28
Speaker 2: Really important stuff as we talk this morning with Eric
17:30
Speaker 2: and CJ, our retirement planning professionals from Kloss Financial. Very
17:34
Speaker 2: important warnings as well in understanding what the importance of
17:39
Speaker 2: having that insurance and, of course, protecting what you've built.
17:43
Speaker 1: Don't forget, if you want to listen back to the show,
17:44
Speaker 1: you should be doing that or share the show as well.
17:46
Speaker 2: If you head on over to klossfinancial.com, you can do
17:48
Speaker 2: just that. Subscribe to the podcast. Right at KlausFinancial.com. That's Klaus, K-L-A-A-S, Financial.com.
17:55
Speaker 2: And CJ, Eric kind of brought us nicely to this,
17:57
Speaker 2: which is umbrella insurance. Many folks have heard the term
18:01
Speaker 2: but may not fully understand it. Can you explain what
18:04
Speaker 2: umbrella insurance is?
18:06
Speaker 1: Yeah, absolutely.
18:07
Speaker 5: So an umbrella policy is designed to provide an additional
18:11
Speaker 5: layer of liability protection above certain underlying insurance policies, which
18:15
Speaker 5: are typically homeowners and automobile insurance policies. So think of
18:19
Speaker 5: it as extra protection sitting on top.
18:22
Speaker 3: Of your existing coverage.
18:24
Speaker 5: Often, you know, we think of is it travelers has
18:27
Speaker 5: the umbrella, you know, so just view that. It's like
18:30
Speaker 5: you have the auto and homeowners and then you have
18:32
Speaker 5: this umbrella that goes over top of them. So that's
18:35
Speaker 5: what umbrella insurance is designed to do is provide extra
18:40
Speaker 5: above the policy limits coverage. So if a covered liability
18:45
Speaker 5: claim exceeds the limits of the underlying policy, the umbrella
18:49
Speaker 5: policy could provide additional protection once those limits have been exhausted.
18:53
Speaker 5: So for example, suppose someone is involved in a major
18:56
Speaker 5: automobile accident that results in damages significantly higher than the
19:01
Speaker 5: liability limits that.
19:02
Speaker 3: Are available through the auto policy.
19:05
Speaker 5: An umbrella policy can provide additional coverage beyond those underlying limits,
19:10
Speaker 5: albeit it's fairly uncommon for that to occur. But when
19:15
Speaker 5: it does, the umbrella policy then kicks in and provides
19:17
Speaker 5: that liability protection. Because as Eric said, if your liability coverage,
19:21
Speaker 5: if you don't have an umbrella policy and your liability
19:24
Speaker 5: coverage is, say, up to $ 250, 000 on an auto policy,
19:28
Speaker 5: you get into an accident that causes somebody pain and
19:31
Speaker 5: damage that they have to go to the hospital for,
19:34
Speaker 5: and they end up needing to get care that exceeds
19:38
Speaker 5: the $ 250, 000.
19:39
Speaker 3: Limits, it can impact your personal assets.
19:43
Speaker 5: So these umbrella policies kick in if people have them
19:46
Speaker 5: to provide additional coverage. So for listeners who maybe haven't
19:50
Speaker 5: heard of or considered umbrella coverage before, this can probably
19:54
Speaker 5: sound like another thing you have to pay for. But
19:58
Speaker 5: when you consider the premiums against the potential coverage, umbrella
20:02
Speaker 5: insurance can easily be one of the most cost-effective ways
20:05
Speaker 5: to increase your overall liability protections. Really, everybody, once you
20:10
Speaker 5: fully understand this and you actually look at the premiums
20:13
Speaker 5: for umbrella policies to add an extra million or two
20:16
Speaker 5: million to it, Talking.
20:21
Speaker 1: This morning with C.J.
20:22
Speaker 2: Kloss and Eric Schwartz, our retirement planning professionals from Kloss
20:25
Speaker 2: Financial Online, klossfinancial.com. That's Kloss, K-L-A-S, financial.com. A little hiccup
20:32
Speaker 2: there with C.J.
20:33
Speaker 1: 's connection.
20:34
Speaker 2: We'll get that remedied in just a moment. But Eric,
20:37
Speaker 2: as we talk about this stuff, who are we talking to?
20:40
Speaker 2: Who should seriously consider that umbrella insurance? We lose Eric
20:48
Speaker 2: as well.
20:48
Speaker 6: Oh, goodness.
20:49
Speaker 2: It seems like we may have had a connection issue
20:51
Speaker 2: there with both the retirement planning professionals for Klaus Financial.
20:54
Speaker 2: We'll take a short break, and then we'll reconnect with them.
20:57
Speaker 2: We'll continue our conversation. Really important stuff this week, talking
21:00
Speaker 2: about protecting what you've built, how property, liability, and umbrella
21:04
Speaker 2: insurance fit into a successful retirement plan. We'll get the
21:07
Speaker 2: details from CJ and Eric. We will do that next
21:09
Speaker 2: as Money in Motion with Klaus Financial continues right here
21:13
Speaker 2: on 1310 WIBA. Talking this morning with our retirement planning
21:19
Speaker 2: professionals from Kloss Financial, CJ Kloss and Eric Schwartz.
21:23
Speaker 1: Don't forget you can learn all about Kloss Financial on
21:25
Speaker 1: their website, klossfinancial.com. That's kloss, K-L-A-S, financial.com. Great website and resource.
21:32
Speaker 2: Also a great opportunity to listen back to this and
21:34
Speaker 2: previous shows, podcasts, all at klossfinancial.com. That's kloss, K-L-A-S, financial.com. Also,
21:42
Speaker 2: while you're there, don't forget you can schedule that complimentary
21:44
Speaker 2: conversation right from the website, or you can give them
21:46
Speaker 2: a call at the office, 608-442-5637. No charge for that
21:51
Speaker 2: initial get-to-know-you appointment at Kloss Financial. It will be complimentary
21:54
Speaker 2: to you. Again, their number, 608-442-5637. Talking this morning with
21:59
Speaker 2: CJ and Eric about protecting what you've built and, uh,
22:03
Speaker 2: talking about different types of insurance products that can help
22:07
Speaker 2: with a successful retirement plan. And Eric, just before the break,
22:12
Speaker 2: started talking about umbrella insurance. And I think one of
22:15
Speaker 2: the questions folks have is, who should seriously consider that
22:19
Speaker 2: umbrella insurance?
22:22
Speaker 5: Yeah, so every situation is different, but there are several
22:25
Speaker 5: circumstances where it's often worth exploring. So Individuals with significant
22:30
Speaker 5: investment assets could want umbrella coverage. The same applies to
22:35
Speaker 5: people who own rental properties or recreational vehicles, boats, swimming pools,
22:39
Speaker 5: vacation homes, etc. Families with teenage drivers may also face
22:44
Speaker 5: increasing liability exposure.
22:46
Speaker 3: If I have to define that one for you, then
22:48
Speaker 3: I don't know what's wrong.
22:50
Speaker 5: And then business owners obviously frequently consider umbrella coverage as well,
22:54
Speaker 5: depending upon their circumstances and maybe the value of the
22:57
Speaker 5: business that they have. Now, there are different ways with
22:59
Speaker 5: good lawyers to actually limit liability through different assets that
23:02
Speaker 5: you have to kind of segment your estate, so to speak.
23:07
Speaker 5: So this is where like LLCs come into play or
23:11
Speaker 5: S-corporations to actually set different assets off to the side.
23:15
Speaker 5: But either way, umbrella insurance, kind of the more you
23:18
Speaker 5: have in terms of assets or the amount of personal
23:23
Speaker 5: liability you have through like teenage driver's, This is where
23:26
Speaker 5: umbrella insurance really shows up and becomes a value.
23:30
Speaker 2: Talking this morning with CJ Kloss and Eric Schwartz of
23:31
Speaker 2: Kloss Financial Online, klossfinancial.com. That's Kloss, K-L-A-S, financial.com. And CJ,
23:38
Speaker 2: are there any misconceptions about umbrella policies that you're frequently
23:41
Speaker 2: running into?
23:43
Speaker 5: Yeah, one misconception is that umbrella insurance is only for
23:46
Speaker 5: the ultra wealthy. In reality, many middle income and upper
23:50
Speaker 5: income households carry umbrella policies. Another misconception is that if
23:55
Speaker 5: someone has never been sued, then they don't need additional protection.
23:59
Speaker 3: That's just not true.
24:00
Speaker 5: The purpose of insurance isn't to predict the future. It's
24:03
Speaker 5: to prepare for uncertainty. Most major insurance claims arise from
24:07
Speaker 5: situations nobody expected to ever occur. So people don't purchase
24:11
Speaker 5: homeowner's insurance because they expect a fire. They purchase it
24:15
Speaker 5: because they recognize the risk that exists if a fire happens.
24:19
Speaker 5: Umbrella coverage follows that same thought process.
24:23
Speaker 3: And let me add to that.
24:24
Speaker 5: I mean, insurance in general is saying, hey, there's maybe
24:28
Speaker 5: these low-risk events that might occur. So think death, right?
24:32
Speaker 5: What's the likelihood of your death when you're young?
24:34
Speaker 3: Pretty small probability.
24:36
Speaker 5: Fire in your home, a significant car accident where you
24:40
Speaker 5: cause a lot of damage to somebody's physical body or
24:42
Speaker 5: their property. These are not probabilistically huge likelihoods in your life. However,
24:49
Speaker 5: if they happen, they can cause large financial ruin.
24:53
Speaker 3: This is the whole premise of insurance.
24:55
Speaker 5: Insurance is what's called the rule of large numbers. So
24:58
Speaker 5: basically we all pay a little bit into a pot
25:00
Speaker 5: and then maybe a few of us have these events
25:02
Speaker 5: occur and all of our money goes to those few
25:04
Speaker 5: people where it occurs. And that's really the whole premise, right?
25:08
Speaker 3: And you go, wait, wait, wait, wait.
25:12
Speaker 2: Oh, oh, we just lost CJ there. But Eric, kind
25:15
Speaker 2: of picking up where CJ was talking then as we
25:18
Speaker 2: look at kind of how this works and of course
25:20
Speaker 2: some practical steps folks can take If they haven't reviewed
25:23
Speaker 2: their insurance recently, what should folks be looking at?
25:26
Speaker 6: Yeah, I think the first thing is pretty simple. Just
25:31
Speaker 6: gather your homeowners, your auto, your umbrella, any other relevant
25:35
Speaker 6: policies that you have. You can review the coverage amounts,
25:38
Speaker 6: the deductibles, and the liability limits. People tend to like
25:42
Speaker 6: to just get these policies in place and then kind
25:45
Speaker 6: of forget about them because nobody likes to think about
25:47
Speaker 6: paying for something you hope you never have to use.
25:50
Speaker 6: But coming back to review them and understand what you
25:52
Speaker 6: have is really, really important. And from there, you want
25:56
Speaker 6: to think about what's changed, right? So what's happened since
25:59
Speaker 6: those policies were last evaluated? Has your home increased in value?
26:03
Speaker 6: Have you accumulated additional assets? Have you purchased a recreational property,
26:09
Speaker 6: added drivers to the household? And finally, you want to
26:12
Speaker 6: coordinate that review with both your insurance professional and your
26:17
Speaker 6: financial advisor. We talk about this all the time on
26:19
Speaker 6: the show. And just like any part of the financial
26:23
Speaker 6: planning process, risk management, it's most effective when you actually
26:27
Speaker 6: integrate it with your overall financial plan rather than having
26:30
Speaker 6: it operate independently. That's where we see people, you know,
26:35
Speaker 6: either be underinsured or maybe they purchase coverage they don't
26:38
Speaker 6: need because they're, you know, they're working with an insurance
26:40
Speaker 6: agent who doesn't have all the details of the rest
26:43
Speaker 6: of their financial picture. So bringing this together and kind
26:47
Speaker 6: of having one coordinated plan is really key.
26:50
Speaker 2: Great, great wrap there as well. A lot of kind
26:54
Speaker 2: of summarizing our conversation this morning. There was a lot
26:56
Speaker 2: of information in this week's program, as always, really important stuff.
27:00
Speaker 2: Don't forget, you can listen back to this and previous shows, podcasts,
27:03
Speaker 2: all at KlossFinancial.com. That's Kloss, K-L-A-S-Financial.com. Telephone number 608-442-5637. No
27:11
Speaker 2: charge for that initial get to know you appointment at
27:13
Speaker 2: Kloss Financial. It will be complimentary to you. Again, their
27:16
Speaker 2: number 608-442-5637. 4-4-2-5-6-3-7. You want to hold on to that
27:20
Speaker 2: telephone number now because it's time for the Kloss Quiz
27:22
Speaker 2: Question of the Week.
27:23
Speaker 1: It works like this.
27:24
Speaker 2: In just a moment, I'll ask you the Kloss Quiz
27:26
Speaker 2: Question of the Week. You'll then have 30 minutes from
27:28
Speaker 2: today's program to call the Kloss Financial Office right here
27:30
Speaker 2: in Madison at 6-0-8-4-4-2-5-6-3-7. And if you are the first
27:33
Speaker 2: caller with the correct answer, you'll win this week's prize,
27:36
Speaker 2: which is a $ 25 gift card to the Olive Garden.
27:39
Speaker 2: This week's Kloss Quiz Question of the Week is this.
27:42
Speaker 2: True or false? An umbrella insurance policy replaces... the liability
27:46
Speaker 2: coverage provided by your homeowners and auto policies. Telephone number 608-442-5637.
27:54
Speaker 2: If you are the first caller with that correct answer,
27:56
Speaker 2: you'll win that $ 25 gift card to Olive Garden. Don't
27:58
Speaker 2: forget as well, that's Kloss Financial's office right here in Madison.
28:02
Speaker 2: That number 608-442-5637. Eric, thank you so much for joining
28:06
Speaker 2: us this morning.
28:07
Speaker 1: You have a great day and we'll talk real soon.
28:10
Speaker 2: Thanks, Sean.
28:11
Speaker 1: Take care. And of course, we've got news coming your
28:14
Speaker 1: way next right here on 1310 WIBA.
28:17
Speaker 2: This is Money in Motion with Kloss Financial Asset Advisors, LLC,
28:21
Speaker 2: a registered investment advisor registered.
28:24
Speaker 1: With the SEC. The contents of this.
28:26
Speaker 2: Show are for informational purposes only and should not be
28:29
Speaker 2: considered individual investment advice.
28:31
Speaker 1: Kloss Financial does not offer tax or legal advice.
28:34
Speaker 2: Any opinion offered during the course of this show is
28:37
Speaker 2: the opinion of that particular investment advisor representative and not
28:42
Speaker 2: necessarily the opinion of Kloss Financial.