I am so happy to welcome guest writer and friend Julie Sequeira.  Julie is property and casualty insurance agent/expert with American Family Insurance.  Because home and auto insurance is one of our largest household expenses, I wanted a little more insight into rates and how we can be better insurance consumers.  Take it away, Julie!

 

Kristi:  What can we expect for car and home insurance rates this year?

 

Julie:  I think you can likely expect an increase on the low side of 10% and more realistically 20% base rate increase – that means that if you have had an accident, traffic ticket or claim your renewal rate increase will be higher than that. For the foreseeable future rates will continue to rise in Colorado. With rising rates you will see new offerings in deductibles and limited coverage for wind/hail claims.

 

KS:  Why will my rates go up in Denver if the hail was in Lakewood?

 

JS:  Rates are driven mostly by claims history in our geographic state and certainly the metro area is considered one area for things like hail because it is so pervasive in this area. An exception might be the western slope in Colorado where they don’t have hail storms. And insurance is collective risk – so yes, we all pay higher rates when more people file claims.

 

KS:  What tips do you have to make sure clients are getting the most complete insurance coverage?

 

JS:  Talking with your agent is usually the best way to get the most complete coverage because you give them information that you don’t realize is insurance related during conversations. For example, you might say, “we really love eating breakfast outside on our new larger deck.” A good agent will then ask you questions about the deck and potentially other home improvements that may require increasing some coverages.

 

Be honest with your agent because then you will understand your coverage limitations and be able to choose options for coverages that you need but if you don’t tell then it is hard to make sure you are covered correctly. Additionally, bundling really does help because then the agent looks at your account holistically so that you have few gaps in coverage.

 

KS:  Thank you, Julie for your expertise!  For more information or to contact Julie, see her bio below.

 

 

Julie Sequeira has been in the insurance industry since 1998 and has run her own agency since 2004. She works to provide the most comprehensive coverage with the best premium for her clients. She seeks to help people keep their assets and sanity during difficult times.  For more information, visit https://agent.amfam.com/julie-sequeira/

 

For your entertainment, I have brought into the fighting ring two financial advisors, Rebecca Kennedy and Addie McHale, to duke it out over whether a Costco membership is a good or bad financial move.  Hold onto your hats, readers!  This could get messy!

 

This week we hear from Costco Non-Believer, Rebecca Kennedy, CFP ®.

 

Kristi:  When did you get your first Costco membership?  Why?  How long did you have it?

 

Rebecca Kennedy:  My first membership was a wedding gift that we received almost exactly 10 years ago.  We had it for one year because that was the length of the membership.  We let it expire because we just didn’t go much. We tend to join every few years for one reason or other, mainly because our memories are short.

 

KS:  What did you love about your membership?  What did you hate about it?

 

RK:  Shopping at Costco is truly an experience.  It’s laid-out with fun, eye-catching products that are sure to enhance your life in some form or fashion – at least temporarily, like all things.   What I dislike about Costco, in addition to the crowds and how much time a shopping trip can take, is that it’s FAR too easy to walk out having spent hundreds of dollars on debatable “needs.”

 

KS: Can you quantify or just anecdotally say why you think a membership is a good/bad financial move?

 

RK:  I think membership is a bad financial move for most people, though I can’t unequivocally say it is for all.  I consider myself a fairly disciplined person, though definitely not as disciplined as Addie, and I have trouble making rational purchases at Costco.  Inevitably, I walk out having spent more than was ever intended and purchased things that were not on my shopping list.

 

Not everything sold at Costco is even that good a deal, especially when you factor in the time value of money spent upfront on an item that could take months to consume.  It’s even less of a good deal if some portion of your purchases aren’t fully consumed and eventually get thrown out or perish before their “use by” date.     Case in point, I still have four frozen veggie burgers in my freezer from the 16-count bulk pack purchased months ago.  They were a decent deal, and I thought they would make weeknight dinners easier.  But you know what?  I’m sick of veggie burgers.

 

And what about the value of your time making trips to multiple stores?  Costco doesn’t carry everything on my shopping list so that means at least one other trip. All of these things, in my opinion, argue against a Costco membership as a good financial move.

 

 

Rebecca Kennedy, CFP ^® is the Principal of Kennedy Financial Planning, a fee-only Registered Investment Advisor based in Denver, Colorado.  She does hourly and project-based financial planning and investment advising for a wide range of clients.  She is a member of the Garrett Planning Network, NAPFA, and the Colorado Financial Planning Association, and has over 19 years of experience in the financial services industry.  http://kennedyfinancialplanning.com/