A Car Hits a Hydrant

It All Started with a Little Accident

A young driver hit a fire hydrant, causing a powerful fountain of water to shoot 30 feet in the air. (See Wedding Dresses Drowned on NBCSanDiego.com.)  The water pooled three feet deep on the roof of a commercial building, causing the roof to collapse over a bridal shop, drenching the contents. Several brides’ dreams of a beautiful dress at their weddings were ruined in a matter of minutes.  Not to mention, another couple’s livelihood was destroyed, at least for the time being. Thankfully, no one was inside at the time, so there were no injuries.

As an insurance agent, after making sure everyone is okay, I’m trained to look at tragedies like this from the business side.  The driver who caused the accident is on the hook to pay for any damage they caused. Anyone who has been in a fender bender knows that even a small scratch to another car’s bumper can cost $3,000 to $5,000 to repair.  (I know, it’s outrageous. But there it is.)

An accident like this can cause over $100,000 in damage to property in a matter of minutes.

Imagine if someone had been hurt, or killed in the accident or cave-in.  What’s a life worth?

Imagine if the original driver had been texting, talking on the cell phone, or worse: intoxicated.  How much  damages would a judge and jury want to add to the judgment to punish them?

Required Insurance in California

In California, we are required to carry $15,000 of liability insurance to pay for injury or death to a person, $30,000 total per accident, and $5,000 for damage to property.  These are the minimum amounts required by law. Without this much coverage, you cannot get a registration for your vehicle or a driver’s license.

Car Totaled in Fender Bender Cost $8,000

How Much Liability Coverage Do You Really Need?

A lot of people figure they don’t need much more than the minimum. The insurance company will pay that, and it’s all done. After all, if you haven’t invested in a home or business yet, and your car isn’t worth much, and you don’t really own much, what are they going to get if they sue you?  Like squeezing blood from a turnip, right?  …

You might be surprised.

• Did you know that if you lose a lawsuit, and the damages are greater than the amount of insurance you bought, you are still on the hook for the rest?
• Did you know that the victim in your accident is not limited to the maximum of your policy: they can sue for the actual amount of damages.
• Did you know that the judge can attach up to 25% of your income for 10 years to pay off the debt?
• Did you know that a judge can renew that judgment for another 10 years after that at a time till it’s paid off?

Look at your paycheck, and imagine losing 25% off the top, AFTER taxes have been withdrawn.  Yeeeowch!

Do the Math

When it’s time to update your insurance, do the math to figure how much you really are exposed, and make sure your insurance amounts are high enough to cover that.

For example, if you own a home and have any equity, add that to the list.  Add the value of any property you own.  Now add in 25% of your salary for the next 10 years.  THAT is the amount you want to make sure is covered.

If you own a business and/or have investments, add their value to the list, too.

The only thing they can’t touch is your retirement account.  So, whew, you can keep that out of the calculation for now.

For many people, the amount comes up to $300,000 or less.  But if you own a business, have a high income or have investments, it could easily top $500,000.  All the hard work you have invested in your business and your savings for so many years could go up in smoke in a matter of weeks.

Isn’t That What Underinsured/Underinsured Motorist Coverage is For?

That coverage is limited, too.  If the victim’s insurance doesn’t have enough coverage to make up for the shortfall in your coverage, you still have to come up with the difference. And, the other insured drivers in California have to pick up YOUR tab since you didn’t pay enough to cover yourself.  Not only do your premiums go up in the future, but so do everyone else’s.

What Can You Do To Protect Yourself?

Fortunately, most accidents don’t result in mega damages like this case might, especially when there are no injuries.  And the insurance companies tend to negotiate most of the cases to match the victim’s actual damages after an accident.  Most cases are settled out of court.  However, about 5-10% of cases make it to trial, and when they do, the average damage judgments are over $460,000.

If you have a lot of assets to protect, you should set your coverage levels higher.  If you have over $500,000 to protect, it’s time to look at umbrella insurance, too.

It might surprise you that adding up to $1 Million of umbrella insurance only costs a couple hundred extra per year.  When you look at the size of those judgments, that small extra investment can pay for itself 100,000 times over if a serious accident occurs.

Mind the Gap: Works both for the Metro and for Insurance

Mind the Gap

If you have ever been so fortunate to take the Metro subway in London, you would have noticed signs that say “Mind the Gap” to warn you not to trip on the space between the platform and the floor of the metro cars.   Likewise, there can be a gap in your umbrella coverage if you are not careful.

For example, if you have $300,000 in liability insurance on your auto, but your umbrella insurance doesn’t kick in until after 500,000 of damages, you still might find yourself on the hook for $200,000 before the umbrella can kick in.  So, if you’re going for the umbrella, buy enough of the regular liability coverage to make sure that any damages in excess will be immediately covered by the umbrella.

Confused?  You’re Not Alone!

I have a Master’s degree in business, and didn’t really understand these concepts until I studied for my insurance license.  Fortunately, your insurance agent can help you figure out what kind of coverage you really need to be as close to “Full” as realistically possible for most accidents.  While the sky is truly the limit when a jury is involved, so there really is no such thing as “Full Coverage,” you can make sure your coverage protects your family financially from freak accidents like the fire hydrant flooding the bridal shop. Or everyday accidents like the $8,000 fender bender that totalled my family member’s car.

Shameless Plug

Of course, if you don’t already have an insurance agent who is looking out for your best interests, I invite you in for a free consultation to go over your personal situation and review your coverages. You may be fine.  And if you are, I’ll tell you.  If you have some gaps, I’ll show you in detail, and give you some pricing options so you can decide how much risk you are willing to take for yourself, and how much you want to insure to protect.

And even better, I’ll review your coverage every single year to make sure changes in your life are covered.  When you buy a house, when your business grows, when you have kids, when you get boats, RVs, ATVs, motorcyles or other fun toys… I’ll make sure you’re protected at every stage of life.

That’s what I do!

Call me any time to discuss your situation, and I’ll help you make sense of it all.

I’m at 619-414-7723, or visit my web site to check things out at www.3amInsurance.com

Thanks for reading!

Anne McElvain

Lic# 0G5927

Godin writes:  “If you do great work and it works, you should get rewarded. And if you don’t, it’s hard to see why a rational organization would keep you on.”

I think that with such a new discipline, it’s a slippery slope to use web measurement statistics, which are akin to a popularity contest, to flush away people’s careers.  Web traffic is NOT a measurement of how good a writer or journalist someone is.  It’s only an indication of how good that writing is being marketed to the potential audience.

I’m all for personal accountability and keeping up with the technological advances.  However, some people were trained and raised to be thoughtful writers and great technicians. Some work takes months or years to bear fruit.  And the work of some writers is subject to traffic that a different department is responsible for guiding on a web site.  If their web page placement, headlines, inclusion in daily news bulletins, and other methods designed to drive traffic to the columnist’s article are under someone else’s control, people could be flushed away due to the whims of some kid in a department in another state that they have no chance to woo or influence.

Sure, we can promote our own work and learn to drive eyeballs to our own columns. I totally agree that is the wave of the future. We have rapid evolution in technology, and regularly wash out obsolete people and companies in a brutal survival of the fittest battle. But to fire people TODAY for something that was not in their job descriptions in the first place, without first offering them some opportunities to learn the new ways of the dog-eat-dog world, is cruel. In fact, it’s a great way to flush out all your employees aged 50 and over, many of whom have been slower to come to the web self-promotion table.

I think that if this new hyper-measurability is going to become part of our new reality, and one’s technical competence no longer matters as long as one can prove one’s popularity, the only fair thing to do is help the people of good quality learn all the new ways to become popular.  A whole population was trained to be employees, not raised to be entrepreneurs. Many may need a total paradigm shift in order to take on this completely new mindset and compete on this micro-competitive level.

A little more compassion and assistance from the younger, more technically advanced generation would be useful.  Let’s not replace all the brilliant minds with a bunch of slick Internet salespeople who sizzle with no substance.

Here’s an idea: how about pairing careers: put a great marketer with a brilliant mind?  Now you have the best of both worlds, and a much better chance to dream up, build and market that Purple Cow.  And both players have a heavy incentive to be successful. The marketer would be measured on how many eyeballs are driven to the columnist’s page, and the columnist would be measured on how many repeat visitors come back for the quality of the writing.  If we rise and fall together, we can create synergy and mutual accountability that doesn’t sacrifice quality for raw popularity.

People are more than numbers, and companies need to keep this equation in mind before flushing their employees down the toilet. Perhaps the new legal trend in workplace age discrimination law will center around ruthless companies using this kind of shallow number crunching to get rid of older, more expensive employees and wriggle out of paying them for pensions and health care benefits.

So, a note to bottom line bean counters: remember the human factor, and help older employees transition to the brave new world, and avoid costly litigation. Hint, hint!

I’ve been leading customer support departments for software companies that produce software for both PC and Mac for over 20 years, and I would like to add something about helping customers with RI to recognize that their behavior is out of bounds so that they can deal with it rationally. I’m going to use the masculine form when I refer to the customer, mostly because the vast majority of my experience has been dealing with men calling for tech support.  However, I have also experienced women calling with RI.

First, when a customer is screaming at you in a fit of righteous indignation, he begins by being angry that the product could have been released with so many flaws, and that his precious time has been wasted. He often follows that with the threat of a lawsuit to recover the cost of his pain and suffering, lost wages, and lost profits. Nowadays, he will often promise to post extremely negative messages on every industry blog about you and how awful your products and services are.  Because the modern Internet gives a loud voice to every crank who has the commitment to trash your reputation, you have to take these customers much more seriously than you would have had to before.

In some ways, that’s a good thing.

Like a voiceless toddler who is experiencing frustration and powerlessness, throwing a tantrum may be the only way they feel they can get attention in life.  Sure, it’s negative attention, but it’s attention all the same.

It’s not our job to be these customers’ therapist, and remind them they are all grown up now, and they can use their big boy words. You can’t change other people, no matter how you try. However, what we CAN do is make sure this customer knows he is being taken seriously, and that his opinion matters.  This is especially true in a world where our personal contact is severed, substituted by the presence of the Internet, in a worldwide marketplace. You can change how you interact with HIM, and by doing so, you have a chance at changing the relationship with him.

Here’s an example of how I did this with one customer. I’ll call him “Barry:”

Barry: “Your product stinks!  It erased all my data, and now I’ll have to spend years getting it back! I’m going to sue your company. Your people should not be allowed to be in business!  Your company must be owned by terrorists, because you’re sucking the life out of businesses by destroying their data.  I’ll have you know I intend to blog about this in every web site dealing with your product!”

Now, in your gut reaction, you may want to argue with Barry, to tell him he’s wrong about you, about your company’s owners, and about your evil intent to destroy America from within.  HOLD your breath. Listen carefully to everything he is saying.  Barry lost his data, and he’s afraid he’s going to lose his entire business.  If he were anyone else, calling with sobs in his voice, you would take pity on him and do whatever you could to help him get his data back, and find out how it was lost in the first place, wouldn’t you?

In toddler terms, let’s translate Barry:  “Whaaaa!  I lost my data and my whole business is in jeopardy! Whaaaa!”

Just like a toddler has to get the screaming and crying over with, you have to let Barry get his angry tirade over with.  Like a toddler, arguing only makes Barry escalate into more anger, and more screaming.  So, don’t argue.

You have to prove you have been listening, paying attention, and that you heard Barry.  When Barry takes a breath or asks you to respond, you can use the therapist’s technique of active listening called “echoing.”  That means, repeat back to Barry the important parts of what he said.  But before that, Barry needs some validation. And he feels he needs an apology.  Even if you KNOW he is wrong. Even if you KNOW he pressed the delete confirmation button too quickly.

Customer Service: “Barry, I’m so sorry that your data was erased. I can see why you are so angry.  I agree, that shouldn’t be happening!  I know how valuable your data is, and I’ll stick with you all the way to make sure we get it back. Now, let me make sure I got this correctly: all of your data was erased when you were using our software, is that right?”

At this point, Barry might flare up again. However, most customers have a moment to calm down and gain perspective when they realize you are not being defensive, not arguing with them, and actually accepting their main problem completely.  Often, this is so surprising to them that it sucks all the wind out of their sails, and they are ready to get right down to business and solve the problem.

Why?

Barry anticipated that you were going to resist him, and he whipped himself into a frenzy before he called you. He acted out every scenario in his head, having to fight with you, having to threaten you in order to force you to help him solve his problem.  Perhaps he had received negative support from other companies before, so he girds himself for battle. By not picking up arms and engaging in a fight, you will surprise Barry.  Like a nurturing mom, when the toddler stops screaming in the grocery store, she can gently take him to the car, get him dusted off, and take him home.

But we’re dealing with an adult here.  Aren’t adults “supposed” to act like adults?  Well, yeah. In a perfect Zen world, everyone would communicate clearly and completely, and we’d all be able to work through our problems quickly and rationally.  In the real world, however, we are faced with imperfections everywhere, and we are often forced to deal with bad behaviors created by other companies who dealt poorly with their customers like Barry in the past. So, we take ‘em as they come.

In the case of Barry, we found that he made a mistake in operating the software, clicking “Delete All” and then clicking YES on the “Are you sure?” question without thinking.  Even though he was wrong and made a mistake, and you might be tempted to throw it back in his stupid face, hold your breath AGAIN.  Remember, emotionally, Barry is only 2 years old.  Would you tell a 2-year-old “You idiot, YOU deleted the data on PURPOSE! Can’t you READ the screen? I can’t believe you have a Master’s degree and run a business, much less tie your shoes!”

Okay, after you hang up, you can play with that to get it out of your system.  But while you’re talking to Barry, it’s more effective to be nurturing, just like you would for a toddler.  In fact, you might even have an opportunity to partner with Barry to make your product even better.  (The cynical programmer’s term is “idiot-proofing” your product.”) Here’s how you handle it with a tantrum-prone adult:

Customer Service: “Oh, I see how this might have happened.  Do you remember clicking on the ‘Delete All’ option?”

Barry: “Yyyyyyyyessssssss, but…” he hesitates, preparing to defend himself from being blamed, or made to feel stupid.

Customer Service: “There is usually a question like ‘Are you sure?’ after that. Did you get that question?”

Barry: “No. I don’t remember that.” You can hear his tone getting snippy again. He’s ready to argue.

Customer Service: “Darn.  I think maybe the button may not be prominent enough, or the warning might not be alarming enough.  You know, I have heard that from other customers before. I’m going to talk to our development team about this.  Could you help me with this?  If you hit that Delete All button by accident, what kind of warning would help you protect your data?”

Barry: Now off the hook for blame, he seizes on the opportunity to help. He’s now your partner. “Well, maybe you should have to put in a password. Or it should flash bright orange. And it should automatically back up in a safe place before deleting.”

Customer Service: “Thank you, Barry. Those are great ideas! I’m emailing them now.”

The call often ends with Barry thanking you for your help, getting his data back, and for being so kind.  And often, he apologizes for his earlier tone.  And the next time he calls, he’s often a pussycat because he has come to expect that you will treat him well. AND: you may have a million dollar idea that can go into version 2.0.

Bottom line: If we all treat our customers with dignity and respect, they will be much more likely to choose other means of communication than righteous indignation.  We can’t ask them to be adults (that would be insulting). We have to help them to feel validated and heard, and we’ll start extinguishing these tantrums over time.

I’m a bit frozen at the moment, running down both roads at once.

What to do, what to do?

Too many roads from which to choose.

My problem is that I have real estate in which I’m upside down, so I can’t sell them or walk away without entering the world of bankruptcy or foreclosure. That means, I wouldn’t get to start over for over a decade, and I’d be living under the burden of these millstones for far longer than if I can manage to keep up with them and hold onto them for 3-4 more years, at least until breakeven, when I can dispose of the properties and free myself from the debt portion of them.

Debt is a prison.

I am indentured for quite a few years to come in order to pay off my debts and be able to move freely about the earth.

When do you decide that the 10-year banishment of bankruptcy and foreclosure is better than the millstone of debt?

By working together, I believe we can pool our talents to the benefit of us all. I wax philosophical a bit, so I hope you will indulge my contemplative nature.

Thank you for stopping by.