04.02.25 Home Insurance - New Considerations / Caution: Meme Coins & Crypto

Today Clark goes back to basics on homeowner’s insurance as rates continue to rise around the country, including 2 common mistakes to avoid, and specific advice for those thinking of moving. Also in this episode - eyes wide open on meme coins and crypto. There are lots of people pitching these as “alternative investments” to the stock market. Get Clark’s take on how to approach the hype. Homeowner’s Insurance: Segment 1 Ask Clark: Segment 2 Clark On Crypto: Segment 3 Ask Clark: Segment 4 Mentioned on the show: Housing market map: How much home insurance is expected to rise by 2055 Best and Worst Homeowners Insurance Companies How Much Homeowners Insurance Do I Need? 5 Reasons Why Your Home Insurance Will Cancel You as a Customer Credit Karma Review: Free Credit Score and More at Your Fingertips Warning: How You Should NOT Buy Gold Limited Purpose Flexible Spending Account (LP-FSA) Guide What Is an HSA Account and How Does It Work? Legit Online Surveys for Money: What I Earned Clark.com resources Episode transcripts Community. Clark.com / Ask Clark Clark.com daily money newsletter Consumer Action Center Free Helpline: 636-492-5275 Learn more about your ad choices: megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

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• 1:16Speaker 02

  It's great to have you here on the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life. Today, I want to talk about some stuff with homeowners insurance. You gotta know when you're looking for a house or you already have one. Homeowners' rates have been causing such a burden on people in so many places in the country, we need to talk strategy. Later, so...

• 1:51Speaker 02

  Crypto goes through cycles of being really talked about, a lot of buzz, a lot of speculation, and then it will kind of fade and then it comes back. And right now crypto is having a moment again. People talk about it as alternative investments and I'm ready because I know every time I talk about crypto, how many Clark stinks will we get? How many dozens about just that? Well, I'm always willing to step into it and I'll do that later in this podcast and YouTube show. So there's a new report on how much and how little homeowner's insurance is going

• 2:33Speaker 02

  to go up in different places in the country. This report that was put together based on data from several different organizations, the write-up I saw on it, it's not exclusive to them, but it was a fast company story. And some of the increases that are coming in homeowner's insurance are exactly where you'd expect. New Orleans, which is below sea level, the premium increases coming there over the next many years, over 600%. The best estimate, 634% increase in homeowner's insurance from where it already is, which is

• 3:18Speaker 02

  not a bargain. Miami, Florida, 590%. Pinellas County, Florida, which is St. Pete Clearwater, 451%. Duval County, Florida, which is Jacksonville, 333%. You getting the idea? And then you look at California areas, subject to wildfires, premium increases, depending on the county, 250 to just under 300%.

• 3:52Speaker 02

  I mean, these are big, ugly numbers from already high premium levels. The areas being affected by the big run-ups in premiums are in a relatively small number of geographic areas in the country. Surprisingly, there are some places in Texas that are going to see very high increases. One not surprising at all, Galveston, which has suffered from a lot of flooding and hurricane damage. So when you think about where we're headed with costs, you can start with areas that

• 4:37Speaker 02

  are likely subject to wildfires. We just saw the tragedy that hit Oklahoma with wildfires. And on this chart, parts of Oklahoma are going to have some of the highest increases in homeowners insurance in the country, highest percent increases. And they're not anywhere near a coast. So we think coastal, but there can be a number of factors that when you're thinking of moving to an area and you're all excited about it and you're thinking about what it's going to cost to live there, what do we think first? What's the house going to cost? Right?

• 5:21Speaker 02

  But what is owning that house going to cost? An example in Texas where it can be a bad twofer, property taxes in Texas tend to be very high. And now we've got these coastal regions in Houston seeing potentially very large increases in homeowners insurance.

• 5:42Speaker 02

  I want you to be realistic when you're looking at buying a place along a coastal area. What's the all-in gonna cost you? Not just what it costs to buy the place, but the other things you have to pay for. I'm not trying to be a spoilsport or ruin things for you, but I want you thinking about them. And just generally around the country with homeowners insurance, we tend as consumers to make two mistakes. One, we have a deductible way too low on our homeowners insurance. Two, we don't have enough coverage on our homeowners insurance if something bad happens.

• 6:25Speaker 02

  So deductible, I want your deductible to be as high as your mortgage company, if you have a mortgage on your home, will allow you to have. If you don't have a mortgage, which a third of people own homes roughly, don't have a mortgage, I want you to have the highest deductible you can stand. Because you don't want to make small or moderate claims against homeowners anyway, because now they'll just cancel you. And then others don't want you, because you had a claim and you got canceled. So you want to use and think of homeowners insurance as being for catastrophes. And with the run-up in the cost of construction and the value of homes, a lot of us are way

• 7:10Speaker 02

  underinsured on our homes. So what I want you to do is at the low end, be your own insurer. Low end, I mean, the initial costs that would, in the past, maybe have been a claim. And then at the high end, a major claim, I want you to make sure you have enough coverage. And be willing to shop around for homeowners. Because we think they're loyal to us. Generally, they're not.

• 7:41Speaker 03

  Speaking of which, Brandy in Virginia wrote in with this one. I wanted to see if Clark thinks this insurance company is a good homeowners insurance company. I noticed it wasn't listed in your top 10 list that you talked about.

• 7:54Speaker 02

  There was known as an aggregator, which is why they wouldn't be on that list. There are several out there. And what they do is they essentially are shopping. Multiple insurers for you, kind of like what we historically did if we went to a human, an independent insurance agent, to get a quote from an independent insurance agent. They would check different companies and come up with a policy that would work. Independent agents have grown in importance in coastal areas, especially in Florida and in California, because it's taking more work to get a lot of people a homeowner's insurance that's any good that they can afford.

• 8:39Speaker 03

  Sarah Lee in Texas says, I'm not sure if it's Sarah Lee or Sarah Lee, I apologize if I'm pronouncing it wrong. I just read your newsletter story on Spirit. Would free Wi-Fi on an airplane qualify as public Wi-Fi? When I fly, I won't use the USB power outlets, only the AC plugs for fear of a virus. Is this safer than a hotel's free Wi-Fi?

• 9:00Speaker 02

  No.

• 9:01Speaker 03

  And is there any way to protect yourself? Thanks, you guys rock.

• 9:04Speaker 02

  Yeah, so there are two things here. With airplane Wi-Fi, if you use a good, reliable virtual private network, VPN, you should be A-OK using airplane Wi-Fi. And number two is if you don't use a VPN, or even if you do, avoid doing any kind of banking, brokerage, looking at your retirement account, anything where the password, a criminal obtaining your username and password could be devastating financially. So as long as you are mindful and careful that you're just doing it to look at entertainment, or you're just doing

• 9:47Speaker 02

  it to read news stories, or whatever, then using the Wi-Fi on an airplane

• 9:54Speaker 02

  Is fine, but if you're going to do anything sensitive, you put that guardrail in place or protection in place with the VPN and still maybe not go to sensitive sites.

• 10:07Speaker 03

  I use, I bought a three pack for like 10 bucks of these little devices that you plug your USB into and then it plugs into the USB port that's supposed to protect you. And, and somebody, I think a listener told us about those.

• 10:23Speaker 02

  How about that?

• 10:24Speaker 03

  About that on Amazon. Jenna in Texas says, my husband and I are looking to buy a house in the next year. We took out a loan to buy a car last month, even though we had the money to buy in cash. We thought that if we took out a car loan and paid it off fast, we would get a better rate on the house. Is this true? And if so, how fast do you recommend paying off the car to get us the best rate for our house? Besides credit cards, he only has student loans that were paid off within three and a half years and I've never had a loan.

• 10:52Speaker 02

  Okay. You just made me really happy because here it is April and you're not buying the house till next year. If you told me you took out a car loan now in April and you were buying a house in June, I'd be really upset because recent applications for credit, even though they may, having that additional credit may look good on your credit score, it looks really ugly to a mortgage underwriter. The underwriters are very unhappy with any applications for credit within six months of applying for a home.

• 11:36Speaker 02

  So you're going to be outside that zone. And in your case, that car loan, especially if it's paid off before you start applying for mortgages, is going to be nothing but good for you on your credit. So for you, this is wonderful that you have the funds, that you just need the loan for a short period of time. You'll blow out that loan before you go apply for mortgages. Great. And you've got the credit cards that you Obviously, I can tell by the way you handle money, you pay them off, fine. Credit cards are a loan. You said you've never had a loan, but you've had this car loan. You have it now. You have the credit cards. You should have a great credit score.

• 12:19Speaker 02

  If you're not tracking your credit score yet, you can set up a credit karma account and get kind of an idea how your credit's doing. Your credit cards, you can go on their app many times, on their website. Sometimes on your statement, it'll show what your current credit score is and you'll know how you're doing because the credit score is so important for what interest rate you're going to get on a loan. But again, mortgage underwriting is different than other loan decisions. And that's why applying for credit within 180 days of applying for a mortgage is really a bad idea.

• 13:01Speaker 02

  Coming up ahead, crypto is back again as a constant conversation between me and my son and generally in society. And I want to talk about, if you're new to the game, what you need to know.

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• 15:04Speaker 02

  People love financial shortcuts. People want the quick path, the expressway, the supersonic travel to wealth, instead of step by step. And it's true that most of us become wealthy gradually, if we do become wealthy. But a lot of people are in a hurry. They want to make money so quickly. I shared a few months ago about my 19-year-old son, who is really interested in finance and has taken money he's made and put it into a small investment portfolio in an account

• 15:47Speaker 02

  at Fidelity Investments. I keep talking to him about the tax implications of doing rapid buying and selling and all of that, and it's like going, right? You know, he's not really cluing in to that. But he's a smart guy and he's gonna learn what he needs to and he needs to get hit in the face a little bit by it. But he is like a lot of young people, long-term to him is a month. I mean, he's not thinking about what long-term means. And I'm letting him

• 16:26Speaker 02

  learn on his own. And so he was doing very rapid trading. He's chilled on that some. But when I said to him, you know, to get favorable tax rates, you have to hold something a year. He said, he was like, looking at me like I was from Mars. Hold something for a year? And that's common. And then he's been big into crypto and he's gotten burned by it a decent amount. I mean, that's a even a higher risk thing than getting involved in

• 17:07Speaker 02

  doing a lot of trading like he's been doing. But fortunately, it's not a lot of money. And it's a great way for him to learn. And it's his money he's putting at risk. So he's got a much better feel for the oops involved. And so he's not betting the farm on it. But with crypto, he and I have had a lot of conversations. And there's a thing right now where crypto is suddenly back in and people are also getting burned by scams. Any of these pitches, how you're gonna make all this money and it's a sure thing that you buy this meme

• 17:49Speaker 02

  coin or whatever. I mean, look what happened where destabilized the government of Argentina. Because the president said, hey, I really recommend this meme coin. And it turned out to be a scam. And the promoters got all this money and other people lost so much money who got fooled. The problem in this area is that money that you really need, you can't put at risk because it's still very much in the pioneering days. What happened to pioneers? Pioneers anywhere, but you think about pioneers in American history.

• 18:32Speaker 02

  The fatality rate traveling across the country was huge. You know, disease, accidents, ambushes. The fatality rate was enormous. That's why they always say pioneers get slaughtered so settlers can get rich. Because it's a high risk kind of thing. Know that that's how you have to think about crypto. Even I know the, the most respected crypto Bitcoin has risk to it. And you think about people getting money stolen from them from crypto exchanges. Like the one recently where the North Koreans allegedly stole a billion and a half dollars

• 19:15Speaker 02

  from people through a crypto exchange. So if you want to do crypto, it can't be money you need to have to live on. If you want to play it, play it. It's a little bit like going to Vegas. I'm going to tell you why. When people got worried about the economy here and overseas, gold, which is a great potential hedge against rough times, went up. What did crypto do? It went down. Went down because crypto is a speculative holding. Gold is a hedge.

• 19:58Speaker 02

  Gold doesn't create value of any kind, but it's a way for people to, gold, silver.

• 20:06Speaker 02

  Platinum, there are ways for people to hold something that the marketplace places a value on that goes opposite people's fears otherwise. Crypto doesn't play that role. It may someday, not yet.

• 20:23Speaker 03

  And you're not recommending someone go out and buy a bunch of gold either?

• 20:26Speaker 02

  No, I mean, gold, if you want to have gold or precious metals or whatever, hedge, meaning that it goes one way typically while other stuff like investments and companies go the other way. And I would say never more than 5% of your assets in a hedge like that.

• 20:46Speaker 03

  Like an ETF?

• 20:48Speaker 02

  You could do, well, I love the gold ETFs because you don't have to pay a big buy sell spread on physical gold and you don't have to store it and you don't have to worry about somebody stealing it.

• 20:59Speaker 03

  All right, we'll go to questions. Kathy in Tennessee says, "Our town changed pay parking lots around the hospitals and medical buildings to scan a barcode payment only. The local news has featured a scam about parking scan QR codes and cautioned citizens. My child had an appointment at our children's hospital. I attempted to scan the parking lot QR code and pay with a MasterCard. My card said it was a fraud. There were no visible staff to pay. We attended the appointment and were out in 30 minutes. I tried again before leaving the parking lot to pay with no success. I received a parking notice for $75.25. The unpaid parking fee was $20. A fee of $55.25 was added. The notice says

• 21:42Speaker 03

  checks and cash are not accepted. Again, a QR scan code is listed. Is this legal to conduct business in this manner? My credit card company continues to declare the site a fraud and will not send payment."

• 21:55Speaker 02

  Okay, Kathy, thank you for bringing this up. First, I'm glad that the media reports have been out there and you need to know when you go to a parking lot and there's a QR code there, criminals are putting fake QR codes up and stealing your money. That's why the credit card company wouldn't allow this to process. Because they've had so many problems with this going on. So the parking lots have not come up with any secure way to prevent this from happening. Leaving you in the worst case scenario, you use the QR code, this payment goes through. You think you paid for parking and you come back and your car has been towed or booted.

• 22:39Speaker 02

  So this is a problem that the parking lots, they didn't create the problem, but they have not taken steps to protect the consumer and to protect their own revenue. So what I would do is you call them and say you tried to pay. Your credit card company said the QR code there was fraudulent and would not let you pay. You tried to pay a second time. The credit card said you couldn't. You're happy to pay the parking charge only. Otherwise they're getting nothing. And you need to contact the management of, if that was a hospital parking lot that they've outsourced.

• 23:22Speaker 02

  You need to contact the hospital and talk to the, either the patient advocate office or the PR office, the public affairs office at the hospital. Tell them what's going on. Tell them about how they're trying to hold you up. And the one thing you don't do is you don't pay this ridiculous fee. If they are very difficult to deal with, you write them by email and you send a physical letter to them about why you have not been able to pay and you're happy to pay the parking charge only.

• 23:56Speaker 03

  I would also follow up with the local news station that did the story and, and see if they want a follow-up story on this happening too in their area.

• 24:04Speaker 02

  That's a great idea.

• 24:05Speaker 03

  All right. Another question came in from Jennifer in North Carolina. What is the difference between a health savings account, HSA, and a limited purpose flexible spending account, LPFSA? Does the HSA not cover dental and vision expenses like glasses?

• 24:21Speaker 02

  So an HSA can cover pretty much any medical expense. So the limited purpose flexible spending account is what it says. It can only be used for very, very minimal things. You can't do a regular flexible spending account and an HSA, both. But you're allowed to do an HSA and these limited purpose flexible spending accounts for ancillaries.

• 24:51Speaker 03

  Vision and dental.

• 24:52Speaker 02

  Vision and dental. So why would somebody do both of these instead of just putting money into the HSA? Because you pretty easily hit the max on an HSA that can be used for, I'm not aware of any reason it couldn't be used for dental or vision in HSA. But if somebody wants to be able to put more money in tax-free for related medical expenses, which I consider dental and vision stuff to be, then you do both. Because this is the one workaround to be able to put more pre-tax money aside for medical.

• 25:35Speaker 03

  And Teri in Georgia says, are surveys for money legitimate? My friend has completed many surveys over the past 10 years and she enjoys them. What about the survey organizations that one can find by searching Google?

• 25:46Speaker 02

  Okay, first of all, be careful with any Google search because a lot of times what you'll get will be scams. On the surveys, we've done extensive research on these and we put writers to work on Clark.com, trying different ones. And there are a number that are legit, but what we've discovered every time we've checked this is that the amount of money you earn per hour equivalent is so low that you have to be like your friend who enjoys doing them and getting a little money or whatever along the way, but not look at this as a legit, real.

• 26:27Speaker 02

  Supplement to income. They can be legit, but the amount of money you're getting is not any meaningful amount.

• 26:35Speaker 03

  And you certainly never want to pay to be able to take surveys and I wouldn't go with some random company and give them my information.

• 26:42Speaker 02

  Yeah. So if you want to read more about it, go read our research on surveys and which ones we've found you can trust. Also what you're likely to earn with them effectively per hour. And you'll think, hmm, maybe, maybe not. More likely, maybe not. And I want to thank you for joining us today. You know what's coming up? Our next podcast is Clark Stinks. You get to hear where I let you down, where I gave advice you don't agree with, where you feel like I'm just plain dumb. So don't miss it. And I want to tell you how much I

• 27:26Speaker 02

  enjoy visiting with you each day. I hope that you enjoy our podcast or our YouTube show and that you also get an opportunity to follow us on whatever your favorite social media is, or that you get our free newsletters, or that you find information that you can trust at Clark.com or Clarkdeals.com. And it's all about you being empowered so that you can save more, spend less, and avoid getting ripped off and have a great rest of your day.

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