Pod Insights The Moneywise Guys 11/7/24 The Cost of Driving: Auto Insurance, PAGA, and Negative Equity with Matt Clark About this episode The Moneywise Radio Show and Podcast Thursday, November 7th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Guys" podcast call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management instagram: MoneywiseWealthManagement Guest: Matt Clark, Attorney + Managing Partner at Chain Cohn Stiles Law Firm website: www.chainlaw.com/
Transcript 0:00 Speaker 00 From the padded radio room off Stockdale Highway, here is Money Wise. Call or text in at 661-396-1000.
0:09 Speaker 01 I need a dollar, dollar, dollar, that's what I need. Hey, hey. Well, I need a dollar, dollar, dollar, that's what I need. Hey, hey. Said I need a dollar, dollar, dollar, that's what I need. And if I share with you my story, would you share your dollar with me?
0:29 Speaker 02 Securities offered through SEF Securities, Inc., member FINRA/SIPC. Investment advisory services offered through SEF Investment Advisors, Inc. SEF Securities, Inc. and Money Wise Wealth Management are independently owned and operated.
0:40 Speaker 00 Now, let's start the Money Wise Show.
0:43 Speaker 03 Welcome, welcome, welcome. Welcome to the Money Wise Show, live from the padded radio room off Stockdale Highway.
0:54 Speaker 03 Welcome and joining us, we are live ESPN Bakersfield, 1230 AM, 101.1 FM. And as always, streaming on the interweb at MoneyWiseGuys.com.
1:05 Speaker 03 You can call or text into the show, we got a couple of texts over the, uh, over the break. But texting the show 24 hours a day, 661-396-1000, 661-396-1000. I'm, uh, Justin Leland, sitting here with Mr.
1:21 Speaker 04 Frank Lee.
1:22 Speaker 03 Frank Lee. Frank can dunk. Frank knows how to dunk.
1:26 Speaker 04 Uh, I've made some attempts and I don't want to discuss how that went.
1:32 Speaker 03 No? I, I could have sworn you had like a 48-inch vertical.
1:37 Speaker 04 Maybe with a trampoline.
1:40 Speaker 04 Maybe.
1:40 Speaker 03 Maybe, maybe, maybe.
1:45 Speaker 03 Welcome to the show. If you'd like to listen to the show, any of our past programs, please subscribe to the Money Wise Guys Podcast, which is, as always, commercial-free, which, you know, I prefer it that way. But hey, we're on terrestrial radio too, 1230 AM, 101.1 FM ESPN Radio.
2:05 Speaker 03 Who do you, who do you have tonight, Steven?
2:08 Speaker 00 Uh, my fantasy team over you? Yeah, I think I'm gonna smash you this week.
2:13 Speaker 03 You're gonna definitely smash me this week. I'm saying, who do you got Cincinnati versus Baltimore?
2:18 Speaker 00 I'm going Baltimore.
2:19 Speaker 03 Yeah, I'm going with Baltimore on this night.
2:21 Speaker 00 But I would not be surprised. You know, they played earlier in the season, only squeezed out by three. So hopefully it's a good game. Usually these Thursday games.
2:29 Speaker 03 Thursday games are bad.
2:33 Speaker 00 Hopefully, maybe I'll stay awake past nine o'clock tonight. We'll see.
2:37 Speaker 03 So last week was Halloween, right? And it was the Jets. I, you know, I was watching that game for a little while and I was like, they have to be the worst team on, in the NFL. How they came out and won that game, I don't understand.
2:50 Speaker 00 Jets, Jets, Jets.
2:51 Speaker 03 J E T S, Jets, Jets, Jets.
2:53 Speaker 00 You know that stands for, right?
2:55 Speaker 03 Uh.
2:56 Speaker 00 Just in the season.
2:59 Speaker 03 Yeah, I was thinking it had to do something with paper bags.
3:03 Speaker 00 But no, it should be a good game.
3:05 Speaker 03 Yeah, I think Cincinnati will probably make it close, but I do think that, uh, Jackson pulls it out.
3:10 Speaker 00 The Ravens are tough, man.
3:12 Speaker 03 Ravens are, I honestly, I think the Ravens are the class of the AFC right now.
3:17 Speaker 00 I don't know. If you add the refs and the Chiefs.
3:19 Speaker 03 Well, yeah, the, I mean, I mean, the refs are on the payroll.
3:23 Speaker 00 But I mean, Baltimore's defense isn't as tough as it has been in the past.
3:27 Speaker 03 Hasn't been the past.
3:28 Speaker 00 Obviously with their defensive coordinator being the Seahawks new head coach. But they are still the Ravens and, uh, it should be a good rivalry game with that, you know, the, with Joe Burrow.
3:40 Speaker 03 Joe Burrow, yeah.
3:41 Speaker 00 I mean, he's, he threw five touchdowns last time they played Baltimore, but we'll see.
3:46 Speaker 03 We'll see.
3:47 Speaker 00 Give you something to watch tonight.
3:48 Speaker 03 I, I will say that by this time on Saturday, I'm gonna know that Steven beat the living snot out of me.
3:55 Speaker 00 I got Derrick Henry tonight, so we'll see.
3:57 Speaker 03 It'll be over by eight o'clock tonight. You'll have already won. I'll have thrown in the towel.
4:02 Speaker 00 Well, that's what happens when you're a Dolphin fan. You just have to root your fantasy team.
4:07 Speaker 03 Yeah, they're playing Monday, right?
4:08 Speaker 00 Yeah, sadly. For some reason, they put us on prime time. Usually those games are flexed, but...
4:14 Speaker 03 Yeah, at this point in the season, it's like, wait, both teams are 2 and 7? Yeah, we're gonna flex that game.
4:19 Speaker 00 I looked into that. The flexes doesn't start until next week.
4:22 Speaker 03 Oh, that's why.
4:24 Speaker 00 We flew right under the radar.
4:24 Speaker 03 That's why. That's why. As always, please text or message into the program. We love to hear from our listeners, but we got a couple of good messages over the break. Frank, what do we got? Did you get that?
4:38 Speaker 04 Yeah, let me pull it up for a second. So first message that we have, uh, good afternoon, Monday, guys. What is PAGA?
4:46 Speaker 03 PAGA.
4:47 Speaker 04 And what is its purpose? I know you aren't attorneys, but I figured I'd rather ask you than talking heads, than the talking heads. Love the show.
4:56 Speaker 03 Well, thank you very much. Um, no, we aren't attorneys, but we play one on the radio. And speaking of attorneys, we will have one in studio here in about 10 minutes. Uh, Mr. Matt Clark from Chain Cone Clark will be here. We'll be talking about some auto insurance, uh, issues, laws surrounding it, uh, negative equity, all of the good things that have to go with auto insurance. Please stay tuned for that. But PAGA, that stands for the, what is it? It is the Private Attorneys General Act.
5:32 Speaker 03 It's a labor law in the state of California. Um, basically deals with, um, it authorizes basically aggrieved employees, uh, employees that are disgruntled to sue their former employer or even their current employer over, uh, civil penal, you know, basically to get civil penalties on behalf of, uh, labor code violations. Okay? So now in the past, I know that they've done some, uh, retrofits, I guess, if you will, to PAGA. Um, it used to be that if you're...
6:13 Speaker 03 If the company's address on the pay stub from ADP had the wrong zip code, then you could sue under PAGA. Even though you still got paid. Nothing, nothing was wrong with your paycheck, but there were, there were attorneys that were out there that would literally, this was their job, was to find these types of labor law violations and file these types of claims that were really quite frivolous, but they would win under PAGA.
6:43 Speaker 03 They've made it a little bit more difficult to do that. They, you can't, you have to actually have been aggrieved. Right? Meaning that your paycheck didn't go through because they wrote the wrong numbers on it or whatever, like you didn't receive pay. That's a labor law code violation. Now, again, I'm not an attorney. I play one on TV. But that is what PAGA stands for, is Private Attorney Generals Act, and it is there specifically for lawsuits to recover civil penalties on behalf of labor code violations in the state of California. Hopefully that answers the question.
7:21 Speaker 04 Yeah. And some of these labor codes also include unpaid wages, meal, rest break violations and
7:27 Speaker 03 Any, any number of things. I mean, obviously if you're in the state of California and you're a business owner, you know all about labor code, right?
7:38 Speaker 03 Yeah. Any of those things that are in violation, I mean, technically, under PAGA, there, there can be lawsuits for that. So, yeah. We had another message here said, did minimum wage go up again in California or is that only for bigger businesses? The answer to that question is, when doesn't minimum wage go up in California?
8:00 Speaker 04 It was on the ballot, wasn't it?
8:02 Speaker 03 Well, so on January 1st of 2025. Workers in California are going to get a raise of about just under 6% from $17 an hour to $18 an hour. For employers with fewer than 25 employees, this is the small businesses with fewer than 20, 25 employees, minimum wage is going to go up from 16 to 17 on the first. So, yes, and $18 by January 1st of next year. So, yes, minimum wage is going up in California. That's kind of always been on the docket. It continually goes up usually every year by about a buck.
8:46 Speaker 03 That's from previous propositions that were passed, and we had the recent one here, Prop 32. But yeah, minimum wage in the state of California, $18 as of January 1. As of January 1. All right.
9:00 Speaker 00 To what?
9:01 Speaker 03 What's that?
9:02 Speaker 00 To what? How much is it?
9:04 Speaker 03 18 bucks an hour.
9:05 Speaker 00 Wow.
9:06 Speaker 03 Yeah.
9:07 Speaker 00 My first job was under six bucks, so.
9:10 Speaker 03 I won't tell you what my first paycheck was.
9:12 Speaker 00 Back in my day.
9:13 Speaker 03 Back in my day.
9:14 Speaker 04 You guys got paid?
9:15 Speaker 03 Yeah. Right.
9:17 Speaker 00 I think mine was 525.
9:20 Speaker 03 I got paid in actually really shiny shells. Uh, this is what happened, so.
9:25 Speaker 00 Your parents fed you?
9:26 Speaker 03 Yeah, my parents fed me. Like, we have McDonald's at home. That kind of a thing. Um, yeah, you got to eat today, so congratulations, you're lucky.
9:35 Speaker 00 I heard that growing up so much.
9:39 Speaker 03 You, you have sheets on your bed. There you go. You're lucky. Um, no, yeah, so, uh, minimum wage going up to $18 an hour, which is great if you're a minimum wage employee. Not so great if you're the rest of us that have to pay for that $18 an hour job.
10:00 Speaker 03 All right. Anyhow, we are gonna get into what happened today with the markets. It's a bit of a, well, basically, the markets are up, except for the Dow. It's a bit of a mixed market, but basically, the Dow didn't move at all. It was less than a point.
10:15 Speaker 04 Yeah.
10:16 Speaker 03 So statistically, it was flat.
10:18 Speaker 04 Yeah.
10:19 Speaker 03 Right. NASDAQ and S&P both closed the days at record highs.
10:28 Speaker 03 NASDAQ jumped by about 1.5%, and the S&P was up by about 3/4 of a percent. Both at all-time highs. S&P, I'm looking at it right now, is just under 6,000. It's 5973. 5973. I was thinking it was gonna close at 6,000 at the end of the year. We still got 2 months to go.
10:49 Speaker 04 Yeah. I mean, it could fluctuate.
10:51 Speaker 03 It could fluctuate in between, but I think 6,000 is a foregone conclusion at this point.
10:59 Speaker 03 Who knows? I may be wrong, but that's not that far from where we're at right now at 5975. So, but what happened today, Fed policy, Jerome Powell got next to a microphone, and we cut the rates again by 25 basis points. That was 0.25%. That 0.25% drop in interest rates was not uncalled for and not unexpected. We are expecting another 0.25% cut in December. And in Jerome Powell's remarks, it basically spelled that out, that they're going to lower the interest rates again in December,
11:41 Speaker 03 that the cost of borrowing money is a bit high, and they want to kind of spur the economy a little bit. The economy is doing extraordinarily well, but the Fed lowering interest rates is going to help to kind of keep that pace, right? Keep us afloat, keep that pace of allowing for money to be able to flow freely and the economy to continue to grow. We just got numbers out a couple of days ago. I think our third-quarter GDP was 2.8%, which is fantastic. So you take into all of these accounts of, okay, inflation is back down under 3%, heading towards 2%.
12:25 Speaker 03 Unemployment rate is still at 4.1%. Job creation is still positive, although it's gotten a little softer.
12:33 Speaker 04 Yeah.
12:34 Speaker 03 Still positive growth in in job creation, but it's it's it's softening.
12:40 Speaker 03 And interest rates are are falling, right? They're getting they're getting a little bit better. And then you see the GDP at 2.8% growth.
12:51 Speaker 03 The economy is doing just fine. It's doing just fine on a macro level, right? Everybody's individual level might be a little different. You might feel inflation a little bit differently than your neighbor. And wage growth is still there, might not necessarily be for you, but necessarily for your neighbor, macro level, it's it's doing that.
13:09 Speaker 04 Right.
13:10 Speaker 03 But overall, if you're looking at the macro numbers, the economy is is just chugging along. And that's why the Fed is lowering interest rates.
13:18 Speaker 04 Yeah.
13:20 Speaker 03 One of the things I thought was interesting about Chairman Powell's conference was one of the questions from the
13:30 Speaker 03 the media was if if he was afraid that Donald Trump was going to fire him when he took office.
13:37 Speaker 04 Oh, yeah, that's right.
13:38 Speaker 03 He did ask that question. You heard that question, too? I I perked my ears perked up when I was like, hey, wait a minute. Okay, here we go.
13:45 Speaker 04 You piqued my interest.
13:46 Speaker 03 Yeah, wait, wait, what? Okay. And Jerome Powell basically shot back and said, I plan on finishing out my term in middle of 2026. And when the question was asked about the possible of being fired, the possibility of being fired, he said, basically, yeah, that's not something that can be done by law.
14:08 Speaker 04 Yep.
14:09 Speaker 03 I cannot be fired.
14:12 Speaker 03 Some people feel like he should. I am not one of those. I think he's done an absolutely masterful job of guiding
14:21 Speaker 03 the economy through COVID, out of COVID, and dealing with the inflation. Granted, inflation happened, but those were things that were outside of the control of the Fed, right? That was that was Congress, we're going to dump, you know, 17 trillion dollars into the economy all at once and see what happens. Well, guess what? Inflation took off. Well, he's done a fantastic job, and the Fed has done a fantastic job of getting that inflation back down to where it is now at about 2.4, 2.5%. While keeping unemployment at where it's at.
14:55 Speaker 04 Yeah.
14:55 Speaker 03 Like, when you take a look at all of the different metrics that they had to walk a tightrope on, and they've done it every single step of the way.
15:07 Speaker 03 Walking that tightrope while getting inflation back under control.
15:12 Speaker 03 Chair Powell has done a fantastic job.
15:15 Speaker 04 Yeah.
15:15 Speaker 03 I don't think it warrants him being fired, unless you're firing him for cause. Maybe, I don't know, maybe, maybe he's, you know, maybe his email is a little bit untoward or something. I don't know.
15:28 Speaker 04 A little sketchy.
15:29 Speaker 03 A little sketchy.
15:29 Speaker 04 Yeah. But yeah, no, under the conditions that he was in, I think he had to deal with something.
15:37 Speaker 03 Really unprecedented.
15:38 Speaker 04 Yeah, unprecedented and just had to, you know, play.
15:43 Speaker 03 And, and did a phenomenal job, if I, if I do have to say so. I mean, he did, he's done a phenomenal job of guiding the Fed and making sure that we still had unemployment, wage growth. The inflation was trending in the right way and just being a steward of the economy has done a fantastic job. So, you know, when, when asked that question about, was he afraid of being fired? The answer of, you can't fire me, I quit. In 2026, right? That's kind of the thing. So, I mean, that's all, I mean, we'll see how that all plays out and just, just how much political pressure is, is, you know, levied against a technically a non-political job.
16:27 Speaker 03 An apolitical job. We'll see how that goes in January, but as of right now, Fed Powell, Fed Chair Powell saying, I'm sitting right here.
16:39 Speaker 03 You can't fire me.
16:41 Speaker 00 You knew who I am.
16:42 Speaker 03 You, you know who I am. You can't fire me. I'm gonna sit right here. So we'll, we'll see what happens. I mean, who knows? But that's, that's what this is going on right now. When we come back, we have a good friend of the show, Matt Clark from Chain Cone Clark, coming in to talk about all sorts of cool things about insurance, car insurance. I know it doesn't sound all that great, but you know what? He's gonna make it sound great. So you're gonna stay tuned and we'll be right back.
17:11 Speaker 00 Are you curious to learn more about how you can be money wise? Check out the Money Wise website at MoneyWiseGuys.com to get more info about what we do and how we can help you.
17:31 Speaker 03 Welcome back.
17:38 Speaker 03 One of the best intros ever.
17:42 Speaker 03 One of the best intros ever. Welcome back. Welcome to the show. Money Wise here on ESPN, Bakersfield, 1230 AM, 101.1 FM. We got a great friend of the show, great friend of Money Wise, joining us in studio, Mr. Matt Clark. Hello. Matt Clark from Chain Cone Clark. How are you guys doing? We're doing well. Fantastic. Doing well. Hey, so, um, we had a question and I'm gonna ask you this. It's kind of, I know we're gonna talk about, you know, insurance and uninsured motorists and all that kind of stuff. Sure. But we had a message came in and of course that was a, you know, I know you guys aren't
18:25 Speaker 03 attorneys, but I want to ask you this question anyways. But as a business owner. Okay. You know what PAGA is, right? Sure.
18:35 Speaker 03 What is your, what is your take on PAGA? Uh, it's been.
18:39 Speaker 05 Okay, look, I'm not gonna, I'm not gonna toe the party line here. So, I'll just tell you honestly what I think. I think it's been aggressively misused in California.
18:48 Speaker 03 Yes.
18:49 Speaker 05 It's been abused in California. There are lawyers out there who are essentially sharks just looking for the potential to file a PAGA claim.
18:58 Speaker 03 For any reason whatsoever under labor code.
19:00 Speaker 05 Doesn't matter, I mean, it could be, you know.
19:03 Speaker 03 You put the comma in the wrong place on my paycheck.
19:05 Speaker 05 Yeah, I mean, I doubt that one, but, but, look, I mean, I was, I'll tell you an anecdotal story about that. I was at a mediation several years back with a mediator down in the LA area. Very, very well-known, huge case mediator named Jeff Crivvis. And, rest his soul, Jeff passed away earlier this year. Anyway, we're down there, we're mediating a case, and he had two going on at the same time. And the other was a PAGA claim against a one-store sandwich shop.
19:33 Speaker 03 Oh, my goodness. Small, little business.
19:36 Speaker 05 Small, little, mom-and-pop business, just getting by on Ventura Boulevard, down there in the, in the Valley of LA. And, and basically, this PAGA claim was putting these people under.
19:48 Speaker 03 Was gonna put them out of business.
19:49 Speaker 05 One PAGA claim, just to put them out of business. And, and the lawyers were punitive in nature. It was, "We wanna shut this business down, we're gonna take every last penny we can, and then we're gonna shut this thing down." And that was, that was an eye-opener to me. Why? Because...
20:04 Speaker 03 Because they could?
20:05 Speaker 05 Because they could, right? I mean, I'll, I'll tell you another, and it's, a lot of people don't know this, but, you know, when you go into a, a bar, or even a restaurant, and they've got like the big NFL game on. Or they've got, you know, the UFC fight, or something like that. They're supposed to pay a much different rate than like you and I pay in our homes.
20:26 Speaker 03 Right, for DirecTV or whatever.
20:27 Speaker 05 Exactly, you can't just take your cable box from home, take it to your bar, restaurant, plug it in.
20:31 Speaker 03 Plug it in and use it.
20:32 Speaker 05 There are lawyers that go around, and they're hot, they're these shark-like lawyers, and their whole job is to get UFC, HBO, NFL, back their money for bars and restaurants, usually mom-and-pops that don't know any better, who are using a home cable box, or, or home receiver, to play the game, or the fight, or whatever it may be, in their bar or restaurant. And they put these people out of business, right?
20:58 Speaker 03 Oh, crap.
20:59 Speaker 05 And so, I, I've seen that happen, I've had, I've had friends that that's happened to. And so, PAGA is a little bit like that.
21:06 Speaker 03 Oy.
21:08 Speaker 05 Geez.
21:09 Speaker 03 Well, there's your answer to our listener who asked us about PAGA.
21:13 Speaker 03 PAGA, PAGA, tomato, tomato.
21:15 Speaker 05 Yeah. Yeah, yeah, it's, um, again, I'm not toing the, you know,
21:20 Speaker 03 Yeah.
21:20 Speaker 05 Look, I'm a plaintiff's lawyer. That's what I do. I represent people who have been injured. I would never touch a PAGA claim, period.
21:27 Speaker 03 Just because it's just,
21:29 Speaker 05 Um.
21:29 Speaker 03 Like you said, it's too aggressively pursued.
21:31 Speaker 05 Exactly. I, I think that the law originally was passed with good intention because I think there are employers out there who take
21:37 Speaker 03 Take advantage.
21:38 Speaker 05 Advantage of wage an hour. Um, but I think that, uh, in this particular instance, uh, it's just been, uh,
21:46 Speaker 03 It was too loosely written.
21:47 Speaker 05 You got it. It's been abused and, uh, it's time for a change.
21:51 Speaker 03 Yeah.
21:52 Speaker 04 Are there any works right now, like,
21:55 Speaker 03 Have they made some modifications to it? I, I thought they had made some minor modifications over the last year or so.
22:01 Speaker 05 Because I don't do it. I don't follow it very closely, so I don't know.
22:04 Speaker 03 Ah, geez. All right. So we're going to get into, uh, more happy coverage, which is, uh,
22:13 Speaker 03 All right. So buying a used vehicle, buying a new vehicle, you know, what are the pros and the cons? I, if we're talking about buying a vehicle and there's say negative equity in the vehicle, obviously you're gonna have to have a certain, I mean, we're in California, you have to have insurance, right?
22:35 Speaker 05 Right.
22:35 Speaker 03 But having negative equity in the, in the vehicle means you have to insure the vehicle for more than
22:39 Speaker 05 Wrong.
22:40 Speaker 03 Right?
22:41 Speaker 05 No.
22:41 Speaker 03 No?
22:41 Speaker 05 Not true. No.
22:43 Speaker 03 Talk to me.
22:44 Speaker 05 That's the problem.
22:44 Speaker 03 Okay.
22:45 Speaker 05 So first of all, I, I, I think your listeners, you, you have a savvy group of listeners. So I'm sure they know what it means by carrying negative equity over into a vehicle purchase. So, but just as to sum it up, right?
22:57 Speaker 03 Right.
22:58 Speaker 05 Uh, you have a, a 2020, uh, you know, suburban.
23:04 Speaker 03 Uh huh.
23:04 Speaker 05 And the fair market value on that suburban is $25,000 because of mileage or whatever it may be.
23:10 Speaker 03 Uh, blue book value, yeah.
23:12 Speaker 05 The blue book value is only 15, uh, or no, excuse me. Blue book value is 25. But you owe 35.
23:19 Speaker 03 Okay, so you're upside down $10,000.
23:21 Speaker 05 You're upside 10K, that's your negative equity. There are a lot of lenders out there who will loan you the money on a new car purchase and they'll roll that 10K negative equity over into the new car purchase, right? So now you go in, you buy a new car. We all know, you know, there are certain kinds of cars where this may not apply, but the vast majority of vehicles out there, especially new vehicle purchases, the moment you drive it off the lot.
23:42 Speaker 03 It's 20% less than.
23:43 Speaker 05 You go lost 20%.
23:44 Speaker 03 Right.
23:44 Speaker 05 Okay, the car's now been titled and registered, it's considered used.
23:47 Speaker 03 Right.
23:48 Speaker 05 You've lost 20% of the value. So if you're putting down less than 20%, you're already negative the moment you drive it off the lot.
23:54 Speaker 03 You roll on 10K.
23:56 Speaker 05 You roll on 10K of additional negative equity and now you're really, really upside down. You then go buy your everyday, regular auto insurance policy, okay? Well, that auto insurance policy is only required under state law to pay you fair market value, okay? So you get in a wreck, the vehicle gets totaled, maybe it's not even your fault.
24:14 Speaker 03 Right.
24:15 Speaker 05 All you're gonna get on that property damage claim is fair market value. So, again, just hypothetically, we'll use the Suburban example.
24:23 Speaker 03 Right.
24:23 Speaker 05 It was worth 25, you owed 35, you rolled it into a new Suburban. I haven't bought a Suburban in a long time, so I don't know what those cost, but just make the math easy, say 50K.
24:33 Speaker 03 Yeah.
24:33 Speaker 05 Okay? So, but you really are in it for 60K because you rolled 10K of negative equity into it. And, oh, by the way, it lost 20% the moment you drive it off the lot.
24:43 Speaker 03 So now it's only worth $40,000.
24:45 Speaker 05 It's worth 40, but you owe 60, okay? You get in a wreck the next day, guess what your insurance company's gonna pay?
24:53 Speaker 03 40K.
24:53 Speaker 05 40K.
24:54 Speaker 03 So what happens to the other 20?
24:56 Speaker 05 That comes out of you.
24:57 Speaker 03 That takes a big old bite out of my pocket.
24:59 Speaker 05 So, yeah, I mean, so I guess the point of this, and I've seen this happen to my clients, I've seen them in this negative equity situation, and there's really only two ways to protect yourself, right? One is, don't do it.
25:11 Speaker 03 Yeah.
25:11 Speaker 05 Right?
25:11 Speaker 03 Just don't fall into that trap.
25:13 Speaker 05 I mean, it's kind of, I don't wanna use your guys' show here, right? It's money unwise, I think is what it is. But, but, so there's one. The other is, you can purchase something called gap insurance.
25:26 Speaker 03 Okay.
25:26 Speaker 05 Okay?
25:27 Speaker 03 I have heard of that.
25:27 Speaker 05 And your gap insurance will cover the negative equity. So it will cover it. But man, a lot of people don't buy gap.
25:35 Speaker 03 Well, because they, you know, they're cash strapped because they bought that $50,000 suburban for $60,000.
25:40 Speaker 05 You got it. That's correct. So if you're, if you're already in that position and you're in front of the finance person and they're offering you gap and the gap's an extra, you know, who knows what?
25:49 Speaker 03 Six bucks a month.
25:50 Speaker 05 Yeah, whatever it may be. It's like, no, I don't want that. It's kind of like the tire and wheel warranty or whatever it may be. I don't want that either. Okay. So then they don't buy it.
25:58 Speaker 03 You gotta have the clear coat.
26:00 Speaker 05 I, I had, I had a case one time where this is back in a different era when, I mean, remember back in the era where lending was free and and wild and people got all kinds of crazy loans.
26:12 Speaker 03 You could fog a mirror, you got a loan.
26:13 Speaker 05 Exactly. That is exactly correct. I had a guy go out and buy a pickup truck. Ended up representing him. He bought a pickup truck. He literally drove it off the lot, had signed the papers, drove it off the lot, was on his way home when he got in a huge wreck. Not his fault. Huge wreck. Pickup truck ends up rolling totaled. He had carried negative equity into the deal. It was a zero down loan.
26:39 Speaker 03 He had six miles on the car.
26:41 Speaker 05 Like six miles on the odometer, but it was now considered used. The guy was like $35,000, $36,000 upside down on the deal.
26:50 Speaker 03 Oh, and he didn't take the gap?
26:51 Speaker 05 He didn't take the gap.
26:54 Speaker 03 That's a really expensive auto accident.
26:56 Speaker 05 That's a, that's a really expensive and difficult lesson to learn.
26:59 Speaker 03 Yeah.
27:00 Speaker 05 You know, I, I'm sure your advice would be, uh, don't get into a auto purchase where you're having to roll over negative equity.
27:07 Speaker 03 Well, that's the first things first is to not, to not be naive and do that. Right? Like, I, I think as a society, we all wind up wanting to have the latest and greatest. Keep up with the Joneses. It's like, hey, the next door neighbor just bought this, you know, sweet Cadillac Escalade.
27:20 Speaker 05 Right.
27:20 Speaker 03 You know, I'm gonna buy the Lambo, you know, or whatever, like just to one up them. That's not a good plan.
27:27 Speaker 05 Correct.
27:27 Speaker 03 Right? It's, it's, you're still driving a vehicle that's getting you from point A to point B.
27:31 Speaker 05 Correct.
27:32 Speaker 03 Right?
27:34 Speaker 03 I'm fine with the Toyota.
27:35 Speaker 05 Yeah.
27:35 Speaker 03 You know.
27:36 Speaker 05 I mean, it's, it's just, um, if you're having to carry over negative equity, by very definition, you're probably living beyond your means.
27:44 Speaker 03 Exactly.
27:45 Speaker 05 Yep. And just a bad idea.
27:46 Speaker 03 It's just a bad idea in general.
27:48 Speaker 05 But I, I guess the lesson to be learned from our conversation is if you are that person that decides to do that, there is still a way to protect yourself.
27:55 Speaker 03 Okay.
27:56 Speaker 05 And that is pay for that darn gap coverage.
27:58 Speaker 03 No matter what it costs. I mean, it's like 20 bucks a month or whatever is, you know, it's not.
28:03 Speaker 05 Which is probably about what it's going to cost.
28:06 Speaker 03 Yeah, it's not that much and it's not going to break you and it's going to be something that's going to make you whole.
28:11 Speaker 05 Yeah.
28:11 Speaker 03 If, and if you're in a bad situation like that.
28:14 Speaker 05 And what I hear is the lawyer all the time. It's like, well, wait a second. It wasn't my fault. Why am I the one having to pay for this, you know, 30 grand or whatever I am upside down in a vehicle? Well, the answer is you're, you're having to do it.
28:24 Speaker 03 Replacing the vehicle.
28:25 Speaker 05 All they're going to do is give you that fair market value. That's all the insurance companies are going to do.
28:29 Speaker 03 We're going to take a quick break. We're going to have more with Matt Clark when we come right back.
28:33 Speaker 00 Are you an employee with a company sponsored retirement plan? Do you fully understand how you're invested and whether or not you are maximizing your retirement plan's options? For more information on a free assessment, contact MoneyWise's 401K specialist, Justin Leland at 661-847-1000. That's 661-847-1000.
29:03 Speaker 03 Welcome back.
29:12 Speaker 03 We got a good question that came in during the break.
29:16 Speaker 03 We're here with Matt Clark, partner, Chain Cone Clark.
29:22 Speaker 03 All right, this is going to hit you hard. Here's the message. With higher insurance minimums. Do you think more people might drive without insurance? And is it important to have uninsured motorist coverage to protect against that? Thanks, guys.
29:35 Speaker 05 That's that, okay. Now you're on to a topic that is near and dear to my heart.
29:40 Speaker 03 Right.
29:41 Speaker 05 In our community, even so, so the what probably brought that question about is come the first of the year, the state minimum for auto insurance goes from a 1530 policy, 15,000 per person, 30,000 per accident.
29:54 Speaker 03 Right.
29:54 Speaker 05 To a 3060.
29:56 Speaker 03 Yes.
29:56 Speaker 05 30,000 per person, 60,000 per accident. Okay.
29:59 Speaker 03 By design, because what car do you know that's worth 15,000?
30:03 Speaker 05 Well, no, no, no, that's not, that's not the PD.
30:05 Speaker 03 Per accident, yeah.
30:06 Speaker 05 That's not for the property damage. Property damage is separate coverage.
30:09 Speaker 03 That's the liability.
30:10 Speaker 05 That's the liability.
30:11 Speaker 03 Right.
30:11 Speaker 05 So that's for if you hurt somebody.
30:13 Speaker 03 Right.
30:14 Speaker 05 If you only had a 1530 and you hurt one person, or you killed them even.
30:18 Speaker 03 Yeah.
30:18 Speaker 05 Your insurance company is only going to pay 15,000 bucks.
30:21 Speaker 03 And you're going to be on the tab for the rest of it.
30:22 Speaker 05 Exactly.
30:23 Speaker 03 Right.
30:23 Speaker 05 So they're increasing the limits, which, by the way, it's about time. In California, we have the lowest minimal limits in the country.
30:30 Speaker 03 Right.
30:31 Speaker 05 No state in the union at this point has lower minimum, minimal limits than we do.
30:35 Speaker 03 What is the, what is the average, would you say, nationwide?
30:39 Speaker 05 You know, I can't really say nationwide because I don't practice law nationwide. I practice in California. What I can tell you is this. What I can tell you is this.
30:46 Speaker 03 It's higher than 1530.
30:47 Speaker 05 Nationwide, it's definitely higher than 1530 because we're the lowest, right? California is by far the lowest. I mean.
30:54 Speaker 03 And it hasn't changed in 20 years.
30:56 Speaker 05 I always judge it this way, right? What's Mississippi and Alabama doing? Okay? Because if we're lower than Mississippi and Alabama, where obviously the cost of living is substantially lower than California.
31:07 Speaker 03 We're missing the boat.
31:08 Speaker 05 We're missing the boat. We're doing something wrong.
31:10 Speaker 03 Yeah.
31:10 Speaker 05 And so, last time I checked, Mississippi, I think, is a 2040. And Alabama might be a 3060, which is what we're going to.
31:18 Speaker 03 What we're moving into, yeah.
31:19 Speaker 05 But, but your listener's question was, well, is that going to result in more people being uninsured? I don't have a crystal ball and I can't answer that question. You know, look, premiums go up every year because insurance companies are greedy and they want to make more money. And even though they all gripe about the, the cost of claims in California. The reality is the Geico's, the progressives, the farmers, the state farms, that you name it are posting record profits out of California.
31:43 Speaker 03 Right.
31:43 Speaker 05 Okay, so don't, don't buy into this nonsense that it's like, well, claims are up and we're, our profits are down, but no, that is not true. Uh, that being said, I will all but guarantee you the carriers are going to use this increase as an excuse to increase premiums.
31:59 Speaker 03 Right.
31:59 Speaker 05 Okay, and so.
32:01 Speaker 03 Which they've already done.
32:02 Speaker 05 Well, they've already done it without raising the limits.
32:04 Speaker 03 Right.
32:05 Speaker 05 So you, you don't think they're going to raise the premium when they raise the limits?
32:07 Speaker 03 Of course they are.
32:08 Speaker 05 Of course they are.
32:08 Speaker 03 Right?
32:09 Speaker 05 So, uh, yes, I think you, you are likely to see more people out there uninsured. In Bakersfield, I will tell you right now, you have a huge population of the people on the roads that have no insurance.
32:23 Speaker 03 What would you, uh, what would you peg the, the percentage at here in Kern County?
32:28 Speaker 05 Just based on my own anecdotal evidence of what I see in cases coming into my office, right? I mean, we're an injury firm, so we see injury cases come in. I would say it's probably into the, in the 15 to 20% range, completely uninsured. And people say all the time, well, how's that happen? That's illegal. And I said, well, geez, people speed, that's illegal. People drive with their cellphone in their hand, that's illegal.
32:49 Speaker 03 Yeah.
32:49 Speaker 05 You know, people do illegal things all the time.
32:51 Speaker 03 Right.
32:51 Speaker 05 It doesn't mean.
32:52 Speaker 03 I have the keys to a car, I'm going to drive it, whether it's insured or not, you know.
32:56 Speaker 05 You got it, exactly. I mean, by the way, a lot of those people are also unlicensed.
32:59 Speaker 03 Unlicensed, right?
33:00 Speaker 05 A lot of them have prior DUIs.
33:02 Speaker 03 Right, suspended licenses or whatever.
33:04 Speaker 05 Yep, exactly. So how do you protect yourself uninsured motorist coverage?
33:08 Speaker 03 Yeah.
33:08 Speaker 05 That uninsured motorist coverage is what will protect you. A lot of people don't understand this, this little known fact, and that is uninsured motorist coverage not only protects you when you're in your car, but it protects you when you're out of your car. So if you're hit by an uninsured motorist in a parking lot, or your kid's hit crossing the way to school, or you're hit on your biker's bicycle, or your scooter, or whatever it may be, as long as that other uninsured vehicle makes physical contact with you or a resident relative in your household, your policy covers you.
33:38 Speaker 03 Wow, interesting. I did not know that.
33:41 Speaker 05 And, and you know, we go back to this limits issue for a second. If the person that, that is at fault and causes you to suffer an injury only has what we currently have as the state minimum, a $15,000 policy. That barely covers the ambulance bill in the emergency room.
33:56 Speaker 03 I can tell you that from firsthand experience.
33:58 Speaker 05 Yeah, yeah, I mean, in fact, if you have any real treatment at the emergency room, it's not going to cover you.
34:04 Speaker 03 It won't cover it.
34:05 Speaker 05 Fifteen grand gone instantly.
34:06 Speaker 03 Fifteen grand is literally just getting you a gurney. That's about it.
34:11 Speaker 05 Uh, yeah, yeah. I mean, look, your ambulance bill is going to be a minimum of eighteen hundred, minimum.
34:16 Speaker 03 I will say, I was rear-ended on Highway fifty-eight near Union Avenue.
34:22 Speaker 05 Should never drive right there, by the way.
34:24 Speaker 03 Stopping your traffic, right. What are you doing out in Union? I was, I was, my previous job, I was working.
34:31 Speaker 05 Good job, Frank.
34:34 Speaker 03 But I wound up getting in an accident and, uh, neck pain and whatever. So an ambulance comes to grab me. Literally, they drive me from Union and the fifty-eight.
34:45 Speaker 05 To KMC.
34:46 Speaker 03 To, not to KMC, to, um.
34:49 Speaker 05 Memorial?
34:49 Speaker 03 Uh, yes.
34:51 Speaker 05 Okay, so about a two-mile drive.
34:53 Speaker 03 Two and a half mile drive.
34:54 Speaker 05 Yeah, eighteen hundred bucks.
34:56 Speaker 03 Three grand.
34:57 Speaker 05 Well, that's because they, they gave you oxygen.
35:01 Speaker 03 They gave me an aspirin on the way. That's not cheap. It was, the EOB that I got was three grand.
35:07 Speaker 05 Yeah, so, so that's the point, right? Fifteen thousand bucks doesn't cover anything. Lots of people out there are driving around with those minimal policies.
35:16 Speaker 03 Yeah.
35:17 Speaker 05 You should have uninsured motorist coverage. It costs very little to add that to your premium.
35:22 Speaker 03 What is your take?
35:23 Speaker 05 It protects you.
35:24 Speaker 03 Yeah, what is your take on, on folks that, um, they have insurance, they have the uninsured motorist, and then, uh, they've decided, hey, what about like an umbrella policy above and beyond that? Cause I own a home, all of these other things that are, you know, valuable things. What does an umbrella policy mean and, and how does it work in, in these types of cases?
35:45 Speaker 05 So we don't really, in the, in the legal world, we don't call them umbrella policies. We call them excess, right? So you have a primary policy and then you have excess over the top.
35:53 Speaker 03 Right.
35:54 Speaker 05 You can have a primary auto policy and you can have excess on your auto. So, so most carriers, the way it'll work is they're going to require you to max out your underlying limits. So use a, just use say AAA as an example.
36:08 Speaker 03 Right.
36:08 Speaker 05 Their underlying max limit is $500,000. That's the most they will write you. Okay, single limit, 500,000, 500,000 UM. If you want more than that, you then buy an excess plan.
36:20 Speaker 03 Mm-hmm.
36:20 Speaker 05 A lot of times you'll hear referred to as umbrella and you can get another million. And you can also add another million in uninsured motors coverage over the top of that. Me personally, back many years ago, when I was a much thinner guy and I raced bicycles. I mean, I knew what the risk was, right?
36:36 Speaker 03 Right.
36:37 Speaker 05 A lot of times you get hit. It's the, we used to joke in the, in the cycling world that it's not a matter of when you will get hit. It's not a matter of if you'll get hit, it's a matter of when you get hit.
36:46 Speaker 03 Yeah, and how bad.
36:47 Speaker 05 Exactly. And so, and I was, by the way, North Chester, coming back into town, guy turned right in front of me. Um, and so I carried both an underlying maximum policy plus excess coverage over the top on my uninsured. Because that would protect my family if I got picked off by a car on the side of the road.
37:04 Speaker 03 Right.
37:05 Speaker 05 And so you can do that. I mean, that's, that's something, especially if you own a home, you should be considering, you bundle. I mean, I hate to sound like an insurance salesperson here.
37:13 Speaker 03 You're bundling all these things.
37:13 Speaker 05 You bundle it together and you can get a better rate because you're bundling your homeowners, your auto and your excess. That excess not only applies to your auto, but it applies to your homeowners as well.
37:22 Speaker 03 Correct.
37:23 Speaker 05 And so that, that's the smart play. You should talk to your insurance agent about that. Again, I am like the absolute opposite of an insurance salesman. Like, like the opposite, okay?
37:33 Speaker 03 Yeah.
37:34 Speaker 05 Uh, yet that's my recommendation.
37:35 Speaker 03 Yeah, I mean, you, you want to protect yourself as best as possible. Uh, we did get another message, says, I believe what you mentioned about uninsured motors. Uh, I've been in two small wrecks and both times the person took off. And ended up finding out that they were uninsured and had no license. For some reason, my insurance still went up when it wasn't, I wasn't at fault. Question is, how will California's new insurance minimums in 2025 affect drivers who already have a hard time paying for insurance? Thank you and glad to hear from Mr. Clark.
38:04 Speaker 05 So number one, your insurance should not go up for making an uninsured motorist claim.
38:09 Speaker 03 Right.
38:09 Speaker 05 Okay, uh, there's a
38:10 Speaker 03 It's probably going up for other reasons.
38:11 Speaker 05 So your policy goes up every year, just because
38:15 Speaker 03 Regardless, because they're insurance companies.
38:17 Speaker 05 There are like four bean counters in the middle of the table. They're like, hmm, how do we make more money this year? Oh, I got it. Raise premiums, right? And so that's why it goes up.
38:27 Speaker 03 Right.
38:27 Speaker 05 Under insurance code 11580.2, that's California insurance code 11580.2. That's the statute that governs.
38:34 Speaker 03 He does not have a book in front of him. He just ripped that off of the top of his head right there.
38:38 Speaker 05 That's the statute that governs uninsured motorist law in California. They cannot raise your rates.
38:43 Speaker 03 Right.
38:44 Speaker 05 Because you made a claim, okay? Now, again, anecdotally, all rates go up every year and, you know, if somebody can explain to me why that is honestly, I'd be willing to talk to them. I'd love to hear it, but, uh, um, I, I can't explain why this individual caller had some rate increases.
39:04 Speaker 03 Had something to do with climate change, I'm sure.
39:07 Speaker 05 It was because, it was because their fence blew down in the winter.
39:11 Speaker 03 Yeah.
39:11 Speaker 05 And they made a claim and they decided to raise their auto premium as well.
39:14 Speaker 03 Yes. Okay. All right. They bundled it all together.
39:17 Speaker 05 That's how it works. You know, I mean, you guys have heard that, right? God forbid you ever make a claim against your homeowner's policy. What's the very next thing that happens?
39:26 Speaker 03 Everything goes up.
39:26 Speaker 05 They drop you.
39:27 Speaker 03 That too, that too.
39:28 Speaker 05 You get to go find new homeowner's coverage.
39:30 Speaker 03 Yeah, yeah. Don't, don't file a homeowner's claim. Just don't do that. Yeah. So, I mean, the question is here, it's like with the new insurance minimums for 2025, you know, you have people that are out there already having a hard time paying for insurance.
39:43 Speaker 05 Sure.
39:44 Speaker 03 And that's going to be, I, I think that might be the linchpin that causes a lot of people to drive around uninsured because it's like, look, hey, you know what? I have a choice of putting food on the table or paying for my auto insurance. I think I'm going to feed my kids.
39:56 Speaker 05 Listen, I, I am a realist and the part of the problem is the insurance companies run everything related to insurance in California. So we have a state insurance commissioner. I have absolutely no idea who that person is because I've never
40:12 Speaker 03 Francisco Lara?
40:13 Speaker 05 Okay, sure. What do they do?
40:15 Speaker 03 I have no idea.
40:16 Speaker 05 Yeah. I mean, they're supposed to regulate these things.
40:18 Speaker 03 No.
40:19 Speaker 05 They're supposed to regulate, you know, in part at least, how insurance companies calculate premiums. I don't get it. And so, um, look, I'm a realist. I understand that if you raise the amount of coverage, of course, the premium is likely to go up. Um, and it is going to cost folks money. And so, you know, if you're a savvy listener, then the question becomes, how do I protect myself? Well, it's that uninsured motorist's plan.
40:45 Speaker 03 Right. That's the first and foremost thing.
40:47 Speaker 05 And it's cheap, guys.
40:49 Speaker 03 It really is.
40:49 Speaker 05 Like compared to all the other coverages on your, your policy, it's the cheapest.
40:54 Speaker 03 Well, and not only that, not only is it cheap, but what's more expensive? Paying that extra little bit or having, getting sideswiped by an uninsured motorist? And now having to cover yourself out of pocket because you didn't have that coverage.
41:08 Speaker 05 Having your $3,000 ambulance bill.
41:10 Speaker 03 Right.
41:11 Speaker 05 Because they gave you, what'd you say, two Tylenol? Oxygen.
41:15 Speaker 03 They gave me oxygen.
41:17 Speaker 05 I'll take the oxygen out of the air, thank you.
41:20 Speaker 03 In a, in a, in a neck brace.
41:21 Speaker 05 Right.
41:22 Speaker 03 Yeah, that's about it.
41:23 Speaker 05 It was a very nice neck brace.
41:25 Speaker 03 It was made out of gold.
41:26 Speaker 05 Was it Gucci? Gucci on the side?
41:28 Speaker 03 Louis Vuitton.
41:29 Speaker 05 Yeah.
41:31 Speaker 03 Matt Clark, thank you so much for joining us. We'll, we're going to take a quick break and we'll take you into the end of the show. We'll be right back.
41:37 Speaker 00 Money Wise Wealth Management is the only locally owned, independent firm that uses a comprehensive wealth, tax and estate approach, working closely with a highly trusted CPA and attorney. For information on how Money Wise can help you invest and plan for your future, call 661-847-1000. That's 661-847-1000.
42:06 Speaker 03 Welcome back.
42:11 Speaker 03 Steven's just going with all of the great intros today.
42:13 Speaker 05 Well, I, I, did you borrow my high school playlist?
42:16 Speaker 03 That's mine, but yeah.
42:20 Speaker 05 I know, uh, Justin likes to rock out.
42:23 Speaker 03 I, you know what? I do like my 90s punk and, uh.
42:27 Speaker 05 And there's only so much I can get away with on the radio.
42:30 Speaker 03 There's only so many of those songs you can get away with on the radio. This is true. Um, yeah, some Descendants maybe one day. I don't know. Something. Uh, we got another message in here. Uh, that's why we kept, uh, Mr. Matt Clark over for, for one last segment before we leave. Uh, if liability coverage doesn't cover my own car, why should I consider adding collision and comprehensive coverage, especially with the new insurance rules coming in 2025? With property insurance going up, it's getting crazy in California. This is always, I think, a misnomer about liability and collision and comprehensive, like, oh, I have comprehensive. So?
43:09 Speaker 05 So liability, liability covers you when you are at fault and somebody else makes a claim against you. Okay? Liability does not repair your vehicle.
43:20 Speaker 03 Nope.
43:20 Speaker 05 At all.
43:21 Speaker 03 Nope.
43:21 Speaker 05 Okay? If you want to have insurance that will cover you if you're at fault in the next, meaning cover you for the property damage. If you're at fault in an accident, or say somebody uninsured hits you. Okay? And you want to use your own insurance company to pay for the repairs to your vehicle or it's a total loss to pay the total loss value. You have to have collision on your policy. Otherwise, it's not going to pay you. You're going to be out.
43:45 Speaker 03 Right.
43:46 Speaker 05 And, and that happens all the time. I, I'll, I'll tell you something I hear in my office. Uh, like literally every day I have somebody call and tell me this. It'll be a terrible wreck. There's never enough insurance, you know, that kind of thing.
43:56 Speaker 03 But I have comprehensive.
43:58 Speaker 05 No, I have full coverage.
43:59 Speaker 03 I have full coverage.
44:00 Speaker 05 I have full coverage.
44:02 Speaker 03 No, you, what?
44:02 Speaker 05 And that's something that I guess the insurance industry said years ago and people caught on.
44:07 Speaker 03 Yeah.
44:08 Speaker 05 There is zero legal definition to full coverage. Okay? In my mind, full coverage means you have the minimum necessary to meet the financial responsibility laws in the state of California, which as of today is 1530 liability.
44:22 Speaker 03 Right.
44:23 Speaker 05 If that's all you have and you get in a wreck and either you're at fault or that other person doesn't have coverage, there is nobody to pay for the damage to your vehicle.
44:31 Speaker 03 None.
44:31 Speaker 05 That's how it works. So you should have collision and comprehensive, of course, covers things like theft.
44:36 Speaker 03 Yeah.
44:36 Speaker 05 You know, vandalism.
44:38 Speaker 03 Somebody busts out your window and steals your laptop.
44:40 Speaker 05 You got it.
44:40 Speaker 03 You know, that kind of stuff.
44:41 Speaker 05 That's what the comp's for.
44:42 Speaker 03 Gotcha.
44:43 Speaker 05 That's how it works.
44:44 Speaker 03 Hopefully that answers the question there. Obviously, it's still crazy in California with the insurance. I, I, I, is it really crazy in California, or is it really crazy pretty much everywhere? If you're an insurance company, you're making money hand over fist, regardless of what state you're in.
45:01 Speaker 05 Here's how I kind of judge some of this stuff, right? When I watch an NFL game, I only see two commercials. Okay, I see insurance commercials and drug company insurance commercials. That's it.
45:12 Speaker 03 Maybe a beer commercial here and there.
45:13 Speaker 05 So who's making all the money?
45:15 Speaker 03 Yeah, pharmaceutical companies and insurance companies.
45:17 Speaker 05 The NFL. Yeah. There you go.
45:21 Speaker 03 They're selling the ad space.
45:24 Speaker 05 But no, I, I look at it from that angle, right? It's like, um, why are they spending all of this money marketing to you? Because it is a highly profitable business. That's it.
45:35 Speaker 03 Otherwise, they wouldn't have the money to pay for the NFL commercials.
45:37 Speaker 05 Right, right. I mean, there is no more expensive place to advertise than the NFL, period.
45:42 Speaker 03 Well, you would know.
45:43 Speaker 05 Uh, yeah, well, that's why I'm not on NFL games. I can't afford it. You will not see me on the Super Bowl, friends.
45:52 Speaker 03 Right, no, no, you're not gonna drop 60 million on a 10 to the 20 second spot.
45:56 Speaker 05 Yeah, right, right. Um, so, yeah, no, I mean, look, Jake from State Farm's rolling in the cash.
46:02 Speaker 03 Yeah.
46:03 Speaker 05 That's, that's how it works. So, do I think it's a California unique issue? No, I don't. I think it's nationwide. I think we, you know, look, we live here, and so it impacts us immediately, and it's very easy to blame everything on the state of California. I'm not saying by the way that the state's blameless.
46:17 Speaker 03 Yeah, there's, there's definitely blame.
46:19 Speaker 05 I think there are areas where the state deserves some blame, but, uh, when it comes to insurance premiums, it's a problem all over the place.
46:24 Speaker 03 Yeah.
46:25 Speaker 05 And, and, you know, you guys talk about it on your show all the time, but a lot of it's, it's just inflation.
46:30 Speaker 03 Yeah.
46:31 Speaker 05 That's what it is.
46:32 Speaker 03 And, you know, to be money wise, I will say this, and I, to, to end out the show, I will say, obviously, the state of California is upping it from 1530 to 3060. It doesn't cost that much more to go from 3060 to, say, 9120 or whatever. Like, it, it's not that much more expensive to get a higher value policy for liability coverage.
46:54 Speaker 05 That is 100% accurate. It, it, the limits go 3060, 5100, 100, 300, 250, 500, 500 single.
47:02 Speaker 03 Exactly.
47:02 Speaker 05 That's how it's written.
47:03 Speaker 03 And so... Get insurance that's going to cover you and make you whole, even if you were at fault, right? Make sure that you're doing the right thing by you and your family, keeping the insurance that you need to keep to make sure that you're not going to wind up carrying the bag. And for God's sakes, don't have negative equity in your car. Don't roll over negative equity into your next car purchase. Do the MoneyWise thing and buy it for cash. With that, we'll be back tomorrow. Chris and Latroy will be running the show tomorrow. As always, be smart, be safe, be money wise. We'll see you tomorrow.
47:40 Speaker 02 Securities offered through SCF Securities, Inc., member FINRA/SIPC. Investment advisory services offered through SCF Investment Advisors, Inc. SCF Securities, Inc. and MoneyWise Wealth Management are independently owned and operated.
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