The Two Myths That Cost People Money

We debunk two money-draining insurance myths by comparing online quotes to real coverage and breaking down why “cheap” can backfire fast. We also explain where premiums go, why rates rise, and how a quick coverage review helps you avoid nasty claim surprises.

• online agents vs local agents and why service matters when you need answers
• how missing coverages can turn a “deal” into a costly claim
• uninsured motorist property damage and why it can protect your car without a rate hit
• why we sponsor local groups and what community visibility signals to clients
• where premiums go, how risk pooling works, and why uninsured drivers push rates up
• a real claim story that shows the power of personalized help at the scene
• the most common way people discover they are not covered and how annual reviews prevent it
• rapid fire true or false on credit score, renters insurance, flood coverage, bundling, and cheapest policies

Pull out your policy, look at your declarations page, then call your agent and say, “Hey, I understand some of this, but I don’t understand this. Can you please answer these questions for me?”

Transcript

Welcome And Today’s Two Myths

SPEAKER_00 0:06

Hi there, everybody. I'm Leo, the marketing intern here at Chuck Patashall Agency Incorporated, Farmers Insurance. Got Chuck Patashall sitting here with me. And today we'll be talking about two myths that cost people money. This is episode three here, so I'm trying to keep this rolling.

Online Quotes Vs Real Coverage

SPEAKER_00 0:26

So today we're going to start off with online agents versus local agents. When someone gets a cheaper quote online, is it usually actually cheaper or does it look that way for a reason?

SPEAKER_01 0:42

Well, it could be a little both, Leo. One of the things that a lot of people don't understand is exactly what the coverages are and what they do if you're in an accident. And sometimes if some people are just shopping for price, then they click a button and they just want to go as low as they can. So when they do that though, they might be missing out on some very important coverages for their auto policy that would protect them in an accident. Okay. And that's the beauty of maybe having a local agent is somebody you can call, you know, instead of live chat or being on hold for 45 minutes. Having a local agent that you know you can call them, they'll answer and you can ask them a quick question. Do they come in to give you a review and go over your coverages so you can understand everything? So actually, sometimes cheap is not better because the quality of coverage can suffer.

SPEAKER_00 1:36

All right. Well, thank you very much. I got one other question here. What's something you catch in a policy review that a person would have missed shopping online?

The UMPD Coverage Most Miss

SPEAKER_01 1:45

One of the things that we talk about and coverages that I always look for for my clients is there's a coverage called UMPD, and it stands for uninsured motors property damage. Now, a lot of people don't realize, and it's a very inexpensive uh coverage to uh get and put on your policy. Most people just think I have uninsured motors. Well, that's just for liability for like medical bills if you're hit by a hit and run driver or somebody that has uh no insurance or somebody has liability limits lower than yours. Uninsured motors property damage pays to fix your car if you're involved in an accident with an uninsured driver, a hit-and-run driver, okay, with usually a small deductible anywhere from two to three hundred dollars. But the cool thing about this coverage is it does not make your cover your premium go up. Oh, interesting. If you had to file a collision claim, right, which is collision with your vehicle or another object, uh, you'd have to pay through it through that coverage, and that could make your insurance rates go up. Where you MPD, it's about $12 to $16 every six months, uh, and it does not make your insurance go up, and it fixes your car.

SPEAKER_00 2:56

So Okay. Thank you very much. Uh moving on to the next one here.

Why Community Sponsorship Matters

SPEAKER_00 3:01

Uh, why does sponsoring something like the Little League or Chamber of Commerce uh matter to you here at this agency? And what does that money go toward?

SPEAKER_01 3:11

Well, really, we are very community service oriented here at the Chuck Patershaw Agency. Um, I've lived in this community for 22 years. My staff has lived this in the community. You're going to Linfield University, you're in this community. Uh we want to make sure that we're visible, that we want to take care of people. Uh, we do a lot of donations, we do a lot of public service type things, we do uh Easter egg hunts, we do uh with a car dealership here in town, we do a trunk retreat for Halloween. Um and sponsoring uh athletic teams shows that as an agency, we care about our community. We want to be highly involved to be able to answer those questions as a trusted partner in this community.

SPEAKER_00 3:51

Okay, thank you very much. And if someone's dead set on shopping online, what's the one thing you'd tell them to check before they buy?

SPEAKER_01 4:00

I would make sure that the person you're talking to, you ask them to explain the coverages to you. It only takes a few minutes. You know, you'd be amazed, Leo, when we do an annual review for our clients here in the office, that we sit them down and most of the time they come in and they go, Yeah, yeah, I think we know what's going on. I say, well, just let me explain all these coverages and what they do. It'll only take less than five minutes or so uh to give you a well rounded uh pattern of what your policy does. And by the end of that five minutes, they go, I didn't know that. You know, thanks for explaining that to me. Because a lot of people, as humans, we fear having to ask questions because we don't want to look like we don't know what we're doing. And insurance is complicated. And I would say please uh put your ego at the door and make sure you ask a lot of questions about the coverages and what they do to that person online.

SPEAKER_00 4:52

All right, thank you. Yeah, that's that's really good because some people they just uh they just do whatever they're told, right? You know, some people don't don't uh ask too many questions before. So really important to ask questions and make sure you know exactly what's going on with your policies.

Where Your Premium Money Goes

SPEAKER_00 5:08

All right, so moving on to this second segment. Uh it's the common phrase of insurance is a scam. Um, and just trying to figure out some of the common myths that go with that. So, where does my premium actually go when I'm not filing anything?

SPEAKER_01 5:24

Right. And and a lot of people just, and I've I've heard this. I haven't had any claims in like 10 years, uh, and my rates keep going up, they keep going up, and what's going on? It's just a ripoff. Especially in auto insurance, there's so many components to rate that policy. There's a geographic component where you live, um, a population graphic, you know, do you have a lot of people in the area, or is it a rural area? You know, your driving record, your age, male or female. Uh and in the state of Oregon, all insurance companies use a credit reporting uh system. Also, all of these things affect your rates. And sometimes what happens, for an example, it used to be back about 10 years ago or 12 years ago, there's about 11% of people, this is nationwide, that were driving around without insurance at all. They just refused to get it or they didn't have it. Wow. Well, now in 2026, that figure is almost closer to uh 15, 16 percent. So you can see that the percentage of people driving without insurance is going up. And when those people are involved in an accident, your policy is gonna pay for it, or collectively, it's gonna make your rates go up and you didn't even do anything. You've been a great driver and you've been minding your own business because insurance is based on pooling premiums together to pay claims. All of these people that don't have insurance are not paying premiums, that's making R, the consumers' rates, go up. So a lot of different things uh involved. And your agent should want to talk to you about these different variables and explain them to you. So it gives you a little bit better flavor or taste of the mechanism behind that piece of paper.

SPEAKER_00 7:07

Okay. Thank you very much.

The Value Of An Agent In A Claim

SPEAKER_00 7:09

And uh tell me about a claim you handled that changed how someone thought about their coverage.

SPEAKER_01 7:15

Well, I can I can tell you uh a specific example about how they thought of their insurance agent. I remember years ago, I was in my office and I had a friend who was a client, and he called me up and he said, Hey Chuck, I'm I'm in an accident. And I said, uh I said, Are you okay? And he said, Yes. Is the other person okay? Yes. We're just calling the police right now. Um I said, where are you? And he said, I'm right down the street, down from your agency. And I said, I'll be right there. And I wasn't critically busy at the time, and I told my staff, I'm gonna go see one of our clients. And I pulled up before the uh police officers did. And when I got out of the car and my friend said, Thank, thank goodness you're here. And the other driver of the other car said, Who's this? Is this the police? And he goes, No, this is my insurance agent. And and the guy goes, Well, I don't have an agent that does that, you know, that uh comes out to an accident to make sure I'm okay. Um, I've learned a long time ago that giving personalized service, uh being there for your clients, means all the world. And uh having an agent who's in your corner that will help fight uh for you with a claim, uh, educate you on the process, help you get a rental car, uh, give you resources to help you, uh, it means a lot to people.

SPEAKER_00 8:29

Okay, perfect. Thank you very much. And what's the most common reason you see a claim get denied and how could someone avoid that?

SPEAKER_01 8:38

One of my favorite sayings is I'm horrified, you know, that somebody's gonna call and they have a claim and they're not covered. You know, the time to find out you're not covered in a claim is not when you have one. And that's why it's we always ask our clients to come in once a year. You know, you go to the doctor once a year for a checkup, you go to the eye doctor once a year, you go to the dentist every six months or so. Come in and see your insurance agent. Things change. Your circumstances could change. And when you sit down with your agent for a less than an hour, you can go over coverages and make sure you're getting the coverages you need and want or that are very important to you and um uh that are gonna take care of you in a claim. So you know you're covered and for what, right? Right from the get-go, we're good-go.

SPEAKER_00 9:24

I see. So make sure to check with your insurance agent to see that you're you're covered to exactly what you need.

SPEAKER_01 9:30

Exactly.

SPEAKER_00 9:31

All right, and then we're moving on to a rapid fire myth bust um segment here.

Rapid Fire Myth Busting

SPEAKER_00 9:38

So I'm gonna read a line and then, Chuck, you were gonna say true or false and why.

SPEAKER_01 9:43

Okay.

SPEAKER_00 9:43

Okay. So first one, your credit score has nothing to do with your insurance rate. False. Why?

SPEAKER_01 9:49

And why is because a lot of people think with the credit score, it's like uh I'm applying for a credit card, you know, where it's gonna ding my credit score or whatever. Insurance companies uh they do a cursory like uh credit background, but it doesn't, it doesn't hurt your credit score at all. It doesn't ding it. Um and so some states, states are different, some states don't have that law. Oregon does, where they say people typically that don't have sparkling credit are more likely to get involved in a claim. I don't know the basis behind that, I don't understand it, but state law has a lot to do with it, and so in the state of Oregon, uh, yes, uh a little small component of the rate is based on credit score.

SPEAKER_00 10:33

Okay. And renter's insurance is expensive.

SPEAKER_01 10:37

Hmm. False. The reason it's false, if you're renting, you can get a renter's policy which covers you for your contents, your personal belongings, and so forth. You know, anything that's not a part of the building in that apartment or that home. But more importantly, liability also if you get sued, somebody trips and falls on your property, right? Um, then there's that liability coverage that will protect you in a lawsuit to protect your assets. Renters' policies are typically very inexpensive. They could be anywhere from $10 to $20 a month, uh, and they can cover your personal belongings and liability for lawsuits, right? Um in some apartment complexes and homeowners are now requiring that their tenants have renter's insurance to show them proof of that. But it's very inexpensive. All right, thank you. Home insurance covers flooding automatically. False. Um, flooding is a big no-no. Now, if if you know something happens where water is their sudden discharge of water, like the hose going to your dishwasher or your uh washing machine, you know, breaks suddenly and and floods you know your house, um, that type of water is covered, but water caused by rain or water caused by increasing, like you live next to a bay or a creek or something like that. That is a federal program called the flood management program for FEMA, and so it's a separate policy. A lot of people are forced to buy that policy by their mortgage company if they're living close to a body of water. Interesting. Um, and the mortgage company may say to give you this loan, you have to have homeowners insurance and flood insurance. Uh, but it's regulated and it is a separate specialized coverage.

unknown 12:24

Okay.

SPEAKER_00 12:24

And bundling always saves you money.

SPEAKER_01 12:28

True. And insurance companies, you know, they're they're not dumb. They want to uh try to get as many policies as they can, but they also hold a carrot out there saying that if you have multiple vehicles, you can get a discount on your car insurance. If you have a home or a renter's policy with your auto policy, uh, then you can get a discount on both, on your on your home and on your auto or your renters. If you have a home, you get a little bit more of a discount. Renters, you still get a discount, but not as much. Um, but also uh it's a way to package things together so that you can be properly covered.

SPEAKER_00 13:03

So okay. And the cheapest policy is always the best deal.

SPEAKER_01 13:08

False. Um going back to some people don't know what they don't know about insurance coverages and they want to go cheap. They could be cutting out very important coverages that uh they should have had without a proper review. And then they have a claim and then they call the agent or they call the insurance company and they say, What do you mean I'm not covered? Um, and then they get really upset, and insurance is a scam, you know, it's just a way to rob money. You know, there's this old saying when I was growing up as a kid in business, it's called buyer beware, you know, and what that means is really a client or a consumer of insurance, you should ask all the questions that you can. Insurance agents don't mind that. Um, we don't mind it here at our office. We love it when people ask us questions because we love educating them and giving them all of their options. Then once they have all their options, then they can tell us what they think is best for them.

SPEAKER_00 14:01

Okay. Love to hear it. And then one last question. If you never file a claim, your insurance company doesn't care about keeping you.

SPEAKER_01 14:12

Well, let's put it this way, they do care about keeping you, faults, you know, uh, because you know, if you have a lot of claims in a short period of time, you know, uh that's called claims frequency. Insurance companies can raise raise your rates, non-renew you, but they actually people that uh do not have a lot of claims or do things to mitigate claims, right? You're you're making sure that you're taking care of your house or you're taking care of your vehicle, um, you know, that you show pride in ownership and you don't have a claim. Insurance companies actually really like that, right? And they will give you claim-free discounts, accident-free discounts. Um, there's a lot of discounts that can go with those policies to reward you for being a good customer and not filing a lot of claims.

SPEAKER_00 14:58

All right.

What To Do This Week

SPEAKER_00 14:59

Thank you. Um, and then what's one thing people should do this week regarding insurance?

SPEAKER_01 15:06

I would say that you should pull out your policy, or if you have it in a PDF format or whatever, take a look at it. Go over it. I'm not asking you to open up the policy guts, and and a lot of that is legal ease that I love um uh translating for people, but look at your declarations page. You know, it says what's covered, a home or your car, or you know, what are the limits of liability? What does this BI and PD do? Bodily injury and property damage, what does comprehensive or collision actually cover? Uh I would say look at your declarations page, look over the coverages, and then call your agent and just go, hey, I understand some of this, but I don't understand this. Can you please answer these questions for me? That's the best thing that people can do to start getting uh used to uh what coverages actually cover or do not and the mechanism that goes with it.

SPEAKER_00 16:00

Perfect. So ask your questions, guys, and stay up to date on what what your coverage is. Um thank you. That's episode three of Chuck the Insurance Guy. Thank you guys for tuning in and talking to you again soon. Thanks for having.