The Cost of “Petty” Property Crimes: An Insurance Agent’s Perspective

The Cost of “Petty” Property Crimes:  An Insurance Agent’s Perspective

I grew up and still live in what I consider to be one of the City of St. Louis’ best neighborhoods, the Holly Hills area of South St. Louis.  Carondelet Park is the centerpiece of this grand old neighborhood.  In very many ways we still enjoy a “small town feel”, where folks know their neighbors, kids still can walk or ride their bikes to school and you can enjoy the park or walking the streets with your dog and feel fairly safe. 

The world, of course, has changed a lot and everyone simply has to be more alert of their surroundings than was needed 30 or 40 years ago……at least that is true in my neighborhood.   Petty crime has always been an issue in the City of St. Louis and I would jokingly say that every 2 years or so I would be unwillingly required to “pay” a voluntary tax of a stolen bike, lawnmower, smashed car or garage window,  etc…..I was willing to be a victim of these minor nuisance crimes because of all the other things I absolutely love about city living.

Then about 2 years ago, gun violence and other personal assault crimes began to enter into the picture.  I was not willing to accept that level of threat.  The choices, of course are to leave the city (and that is a decision made by countless citizens), hunker down and really try to shut out the problem or stay and fight back against crime.  My wife and I have chosen the latter.

Thanks to the tireless efforts of many neighbors a neighborhood watch involving dozens of volunteers has taken root.  We drive, we walk, we stay in communication with our neighbors and try to keep each other as safe as possible while cooperating with local police.  As PART of this endeavor (and fighting crime and getting at the root causes of crime have MANY parts), I thought local cops walking a beat would be a good idea.  Every police officer I know as a friend or client has to work a secondary job to support their family.  That also is another problem facing my city, but it is over my pay grade!  You see off duty officers at Cardinal games, the local YMCA, bars, restaurants, banks……..and to have these same officers walking and patrolling the very area where many of them live and grew up made a lot of sense to me.  Hiring off duty officers is nothing new but trying to get several hundred families to buy into the idea of donating $20 per month to accomplish this goal is. 

 The true cost of safety is found not in anger, but in action and $20 a month. 

The true cost of safety is found not in anger, but in action and $20 a month. 

Currently we are registering names of neighbors who are willing to donate and the response has been fantastic.  We have 160 families willing to help and are well on our way to our goal of 500.  In St. Louis we have dozens and dozens of tiny neighborhoods.  Crime stats are easy to get from local police in these areas.  For me, a common sense rule of thumb is if you can walk somewhere in 10 minutes from where you live, that is still your neighborhood.  Within that 10-minute walk of my front door are at least 4 “neighborhoods” where crime stats are kept.  These include:  Holly Hills, Carondelet Park, Boulevard Heights, Carondelet (not to be confused with the park), Bevo Mill, Dutchtown and I’m sure a couple more!

My financial idea of the $20 per month is based on the following scenario.   If there were just 50 property-only crimes within that 1 square mile of my front door this would be the economic cost as I see it coming from an insurance agent’s point of view. 

When there is some “petty” theft or vandalism to your home or car, a deductible comes into play 99% of the time.  That deductible is EASILY $250 per occurrence, and more practically is $500 or even $1000.  50 property crimes per month with a $250 deductible equates to $12,500 per month, collectively.  Then of course, you discover the smashed car window or garage break-in as you are leaving for work, so many times you have to call into work to hassle with the aftermath of the “petty crime.”  Let’s just say half of the victims had to work and take just a half day off via vacation day or lost wages…..that would easily equal another couple thousand dollars.  When the value of the property is greater than your deductible of $250 the insurance company gets involved and could easily payout another $12,500 in claims per month.  As an insurance agent I can tell you that claims increase premiums and just for comparison sake, I changed my own personal auto policy to 63129 as opposed to 63116.  On this change ALONE, my family would save $2000 per year in auto insurance costs.  There are lots of factors that go into this but I can say with confidence we are all paying higher insurance costs regardless of being a victim of crime or not.

I purposely left out any discussion of the effect that crimes against persons, as opposed to property, can have on a family.  As a family that suffered greatly in that area, I can tell you there is no amount of time, money or effort you would not pay to prevent something terrible happening to your loved ones.

Some will say that we already pay taxes for police and of course that is true.  I can also tell you that in the City of St. Louis the police are underpaid and in many cases overworked.  No one person can do everything but collectively many people can accomplish a lot.  The $20 per month contributions will go a very long way in my neighborhood and those areas immediately surrounding the Holly Hills area.  It will allow us to hire off duty officers to go back to walking a neighborhood beat, with a partner officer.   The trust and respect that officers and citizens need can be enhanced and greater understanding and cooperation will be realized.  In short, I think it is the best $20 per month I have ever spent.

Steve Butz





“Open Season”

Late October into early November means a lot of important events and seasons to many Americans.  It is time for the World Series, (could the Cubs really win?), the Presidential election, and deer and duck season for hunters!  November 1st starts the “open enrollment” season for healthcare under the Affordable Care Act, aka: “Obamacare”.

November 1st-January 31st are the only 3 months individuals can either sign up for or enroll and apply for a different plan, unless one meets one of the exceptions to this rule.   Some folks will want to change their plan.  Others are being forced to apply for new coverage as their current insurance plan will no longer be available in their state.  (This is the case for many in Missouri as Coventry,  a major provider in this market, has pulled out of the Federal Exchange.)  Still others will be applying for the first time even though it has been a legal requirement to have this coverage but for whatever reason they have decided to not comply in the past.

PENALTY:  The current penalty for not complying (not having) individual health insurance is approximately $700 or 2.5% of gross income.  The IRS is responsible for auditing this part of the plan and now that real penalties are being imposed, many Americans will be impacted, who prior to the penalty phase were not taking this part of the Affordable Care Act seriously enough.  It should be noted that the penalties are still far less in many cases than the premiums charged, so if you are healthy and younger, it would seem not having the coverage is much cheaper than actually complying with the ACA.

AVAILABILITY AND NETWORKS:  As recently as 1 year ago there were four companies providing individual policies on the Federal exchange in Missouri.  Anthem, Cigna, Coventry and United Health Care all provided options but due to mounting losses and fewer applicants than planned especially among younger and healthier applicants (see the small penalty imposed above).  Coventry and United Health Care have pulled out of this market in our state.  Choice of hospital networks has also been somewhat limited as the Anthem plan does not include the BJC (Barnes) hospital network!  Currently Cigna’s plan is only BJC plus St. Anthony’s in south St. Louis county.  In my opinion this is not the end of the world but certainly a change that most consumers have not had to deal with in the past.

PREMIUMS AND COSTS:  Rate increases are substantial this year and will most definitely be getting consumer’s attention!  This must just be in our human nature, many times we just do not pay attention until something really costs us.  An average family of 4 will have a premium of around $1,200 per month.  Even with an average subsidy on the exchange of 50% the out of pocket cost is $550-$600 PER MONTH.  with the Federal government subsidizing the other 50% of the premium.  If we connect those dots,  the subsidies do get repaid by taxpayers at some distant point……at least theoretically!

DEDUCTIBLES:  This is the single biggest issue that individual health consumers are just starting to grapple with as a new reality.  The average out of pocket maximum for on exchange individual plans is $6,850…..that is PER PERSON, PER YEAR!  The deductible alone averages $6,000.  Meaning until you have paid $6,000 per year your insurance is not really “kicking in”.  A real life example this year is a dependent child needing their tonsils removed and the parents paid out of pocket $5,890 for an out patient surgery center, without complications and a 3 hour total time procedure.  Lots of folks say to me, “what is the point of even having insurance with a deductible this high?”  It is very possible to reach two people (thankfully currently the maximum) in a family reaching this amount.  Very conceivably the gross out of pocket for a family COULD be $13,700 PLUS the annual subsidized premium of $6600 for a total cost of $20,300 for a typical family of 4 with an annual household income of $55,000 or so.  I am using a Bronze plan for this discussion. 

THE CURRENT MEDICAID-ACA GAP:  It is possible in Missouri to make too LITTLE money to qualify for any subsidy under the ACA…..AND unbelievably too MUCH to qualify for Medicaid.  Currently this amount is around $12,000 per year of income per person.  If you make less than $12,000 you make too little to receive any subsidy and I think it is easy to infer a person making this little cannot afford to pay the full premium for health insurance.  It seems reasonable and prudent to me that this gap needs to be closed.  The Missouri legislature can expand Medicaid, (which they have declined to do) or the formula for the subsidy should be lowered slightly.  No matter how we slice it up the pie, folks are going to receive care and for the maximum number of citizens to have coverage and be paying something towards that care is both just and economically prudent.

BENEFITS OF THE ACA:  There are many benefits, but I want to touch on just a few of these.  One we have the goal of providing at least SOME MODICUM OF CARE TO ALL CITIZENS.  Issues such as portability of the coverage or removing pre-existing conditions for coverage have been important enhancements.  Many important preventative screenings and tests are covered automatically at no out of pocket costs, these include mammograms, pap tests, colonoscopy, flu shots, immunizations etc…….

FINAL THOUGHTS:  Do you have health coverage?  Do you understand that coverage?  If not, find a health insurance professional to help you get to that level!  Crawford-Butz and Associates will gladly provide you with a recommendation!   Take care of your health to the best of your ability.  So many of the health problems that we Americans experience are life style choices…..I am sure we have all heard it a thousand times before but we smoke too much, eat too much and exercise too little!  I will see you at the YMCA and if you don’t see me, call me and remind me!!!

Indexing: A Common Sense Proposal for Missouri…….(at least that’s my opinion!)

I posted on the campaign Facebook page today an article from the Post-Dispatch.  The over-riding point of the article is that we have a short sided view of funding important functions provided by our state.

As a small business owner and manager in this state, I can attest that thankfully Missouri is an excellent place to live, work and conduct business.  This is as it should be. 

It has been my lifelong experience that no one likes to pay taxes and more often than not feel that they are over paying and that others pay too little!  I have long tried to listen to all points of view and propose a common sense compromise that most can live with. 

The layers of taxation are numerous and at times confusing, complicated and even disguised.  Education by our elected officials, transparency and simplification when possible would also help citizens understand their actual tax burden.   It would be impossible in this post to discuss these layers at length but I do want to mention 3 taxes in particular: Mo State personal income tax, the state gasoline tax and the cigarette tax.

Missouri Income Tax:  Currently (and for many year’s prior) our MO Income Tax rate is 6% of adjusted gross income.  Without going into too much detail this is the best example I can show of a simplified flat tax and by its very nature it is “INDEXED”.  As an individual’s income increases the dollar amount paid will go up exactly proportional at a rate of 6%.  (Again I am simplifying and only referring to the marginal rate, not the effective rate!)  Bottom line:  As you make more you will pay more, but you know that rate will be fixed, at least for now at 6%.   I have always felt that the income tax was a relative bargain and we received a lot of value in return from state services.  I use the words “relative bargain”……always room for improvement from all of us!

The other 2 taxes I mention the state gas tax and cigarette taxes do not function in the same manner.  Currently these taxes are both $.17 per gallon of gas and coincidently $.17 per pack of cigarettes.  MODOT’s funding stream is not secure at this level……..the last time this was increased was 1996!  Common sense will tell us that even with VERY low levels of inflation, $.17 in 1996 is not the same as $.17 in 2016.  Add to this fact our vastly improved fuel economy, hybrids, electric cars etc…..reduce our consumption.  I am sure 99% of us consider that a very positive development, but it does imply that in the long run an alternative funding mechanism needs to be introduced.  In the short run simply indexing the gas tax to even a 1% annual inflation adjustment the tax per gallon in 2016 would be approximately $.21/gallon.  We must maintain our transportation infrastructure and all citizens benefit from this type of investment and spending. 

The cigarette tax in our state is just plain silly.  We are WAY below the national average and less than half (or more) than the next lowest state.  Again, I love fiscal responsibility but is there ANY reason our cigarette tax is $.17 per pack when Virginia, Georgia, Alabama, Arkansas and Kentucky’s are at LEAST double our rate?

Metro Link Expansion

Metro Link Expansion comments via Next Door/Steve Butz

A comprehensive, well planned expansion of Metro Link might be part of the key to revitalization of the metro area, but I am not sure it is the highest priority that the region faces. Most of the positive comments for expansion centered on cities such as New York, Chicago, San Francisco etc.....These cities do have great mass transit and I have used it many times when there, but it is an unfair comparison. The St Louis metropolitan area ranks about 20th in the nation with an MSA (metropolitan statistical area) population of about 2.5 million and flat growth. Tampa (+7%), Denver (11%), Charlotte NC (9%), Austin Tx (16.5%), Nashville (9%), Kansas City (4%), Indianapolis (5%) Baltimore (3%) are all better comparisons for our city. Four of these cities, Denver, Baltimore, Charlotte, and Austin have light rail systems the other four do not.

I would especially encourage considering how Kansas City and Indianapolis have increased mass transit into and out of their main business and entertainment districts using buses/trolley type system that run very much like street cars did.....(now I am showing my age!). In KC for example they will run a bus every 15 minutes during peak times. It is called the MAX and it runs non-stop on Main Street and other key corridors. Indianapolis is investing in the same concept (goINDY) and they are using electric buses but they will function very similar to the street car lines of old. Their top reasons listed for this approach vs light rail is, (according to their website) cheaper to "build" since they are using current roads, and the infrastructure improvements of sidewalks, street lighting, pedestrian/bike lanes, beautification of the routes benefit everyone.

With the tremendous infrastructure issues that St Louis faces in terms of new street lighting, roads, bridges, the deterioration of the stonework along River Des Peres etc.....Just saying maybe we should renovate/properly maintain the "house we have" before we consider a major addition.