05/25/2025
When Unqualified Advice Ruins Your Life - by a State Farm agent friend
“I was told my home insurance should cost NO more than $1,000.”
I insured a family for home and auto about 14 years ago. Great clients and even better people. About 8 years ago their once teenage son graduated college and after renting for a year, put an offer on his first home.
The son called my office for an insurance quote. After discussion I gave him a quote for 100% replacement on the structure and property, $1,000,000 liability, and an optional endorsement for back up.
Total annual premium $1,250.
A few days later the son contacted me via email to inform me that he was told “Your home insurance should be no more than $1,000.” The son asked me if there was anything I could do to reduce the premium down to $1,000. I said there were lots of things I could do. Lower your coverages, get rid of coverages, increase deductibles. I told him I do not recommend doing any of them, and implied politely, that his buddy is misinformed about the pricing of quality insurance and may be focusing on cheap insurance so he can qualify his monthly payment for the house financing.
The son ultimately went with an insurance agent that his buddy had a relationship. They were able to get the son insurance for $800!
Sadly I learned this month that a guest of the son had slipped and fallen down the stairs and suffered a brain injury. The son is being sued for $700,000 and is due to appear in court this summer.
The dad, who is still a client, told me that his son’s insurance policy only had $100,000 of liability. This is how they got the price under $1,000
It is looking that there may be settlement of $500,000. This means that the son could lose the $90,000 of equity in his $300,000 house and then have 20% of his wages garnished for the rest of his life. He will also forfeit savings and stocks in his portfolio which he has a value of $45,000. He will also liquidate his wedding fund he has been saving for to pay part of the judgement. The dad is preparing for the son and fiancé to move into his basement this year.
This happened because the son took advice from someone he perceived to be an expert who in fact wasn’t. Advice from an unqualified person
His life will be incredibly altered and face incredible hardship.
“Your home insurance should cost no more than $1,000.” -unqualified (many Tik Tox “influencers” have ridiculous advice)
This has been an episode of “When Unqualified Advice Ruins Your Life” by Dan Tivnan
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