RC4 Insurance Agency, LLC

Ten Tips To Help You Improve Your Insurance Score

2012-01-27T06:34:00.000-08:00

Credit scoring is here to stay for pricing insurance coverage. Please review the follow ten tips to help improve your insurance score and hopefully reduce your insurance cost.

1. Pay your bills ontime. Timeliness in paying your bills improves your score.

2. Manage your outstandingbalances. As a rule of thumb, maintain account balances at least 75 percentbelow your available credit.

3. Avoid excessiveinquiries to your credit reports. Too many inquiries may negatively impact yourscore.

4. Limit the numberof credit accounts. Your access to excessive unused credit could result intoo much debt.

REQUEST A HOMEOWNERS INSURANCE QUOTE FROM RICK CORNEJO INSURANCE SOLUTIONS

5. Review your creditreport regularly. Know what is on your credit report, and take necessary stepsto dispute any inaccuracies.

6. Avoid ‘quick’credit fixes. Good credit is built overtime.

7. Manage your debtconsolidation. Consider how to effectively pay down your debt withoutgenerating more credit activity.

8. Limit the amountof new debt you take on. Too many newloans or credit accounts opened in a short amount of time can negatively effectyour credit rating.

9. Establish creditif you do not have a long track record. A longer credit history has a positiveimpact on your score.

REQUEST A AUTO INSURANCE QUOTE FROM RICK CORNEJO INSURANCE SOLUTIONS

10. Work with yourcreditors. Resolve outstanding balancesbefore they are turned over to a debtcollector.

Good Luck and good living with an improved insurance score!

The Good, The Bad, And The Details Behind Credit Scoring And Your Insurance

2012-01-19T08:26:00.000-08:00

I am not a big fan of credit scoring as a rating-underwriting factor for insurance. Unfortunately credit scores are here to stay for personal insurance rating. The following article provides and explanation-information about the insurance industry use of credit scores.

The goal of every insurance company is to correlate rates for insurance policies as closely as possible with the actual cost of claims. If insurers set rates too high they will lose market share to competitors who have more accurately matched rates to expected costs. If they set rates too low they will lose money. This continuous search for accuracy is good for consumers as well as insurance companies. The majority of consumers benefit because they are not subsidizing people who are worse insurance risks—people who are more likely to file claims than they are.

The computerization of data has brought more accuracy, speed and efficiency to businesses of all kinds. In the insurance arena, credit information has been used for decades to help underwriters decide whether to accept or reject applications for insurance. New advances in information technology have led to the development of insurance scores, which enable insurers to better assess the risk of future claims.

An insurance score is a numerical ranking based on a person’s credit history. Actuarial studies show that how a person manages his or her financial affairs, which is what an insurance score indicates, is a good predictor of insurance claims. Insurance scores are used to help insurers differentiate between lower and higher insurance risks and thus charge a premium equal to the risk they are assuming. Statistically, people who have a poor insurance score are more likely to file a claim.

Insurance scores do not include data on race or income because insurers do not collect this information from applicants for insurance.

RECENT DEVELOPMENTS

Federal Activities: In 2008, the Federal Trade Commission (FTC) asked nine of the largest homeowners insurance companies to provide information that it says will allow it to determine how consumer credit data are used by the companies in underwriting and rate setting. The Fair and Accurate Credit Transactions Act, passed in 2003, directed the FTC to consult with the Office of Fair Housing and Equal Opportunity on how the use of credit information may affect the availability and affordability of property/casualty insurance, whether the use of certain factors by credit scoring systems could have a disparate impact on minorities and, if so, whether the computer models used could be modified to produce comparable results with less negative impact. The final report is expected early in 2012, according to the Property Casualty Insurers of America.

In a similar study, the FTC found that auto insurers’ use of insurance credit scores leads to more accurate underwriting of auto insurance policies in that there is a correlation between insurance scores and the likelihood of filing an insurance claim. The FTC report, Credit-Based Insurance Scores: Impacts on Consumers of Automobile Insurance, released in July 2007, also states that credit scores cannot easily be used as a proxy for race and ethnic origin. In other words, credit scoring predicted risk for members of minority groups in much the same way that it predicted risk for members of non minority groups.

The Federal Reserve also studied the use of credit scoring. Although looking at credit scoring to quantify risk posed by a borrower rather than an applicant for insurance or a policyholder, the Federal Reserve said in a report issued at the end of August 2007 that credit scores were predictive of credit risk and were not proxies or substitutes for race ethnicity or gender, underscoring the FTC study.

State Activities

NAIC: The National Association of Insurance Commissioners (NAIC) is developing a set of questions for state insurance departments to use in the event that they want to survey auto insurance companies operating in their state on risk classification. The information could be used to determine the degree of variance in the use of different factors, including credit scores. States that decide to carry out a survey may also decide whether or not to publish the results. The voluntary use of the risk classification survey is an outgrowth of an earlier, narrower project on credit scoring alone.

Alaska: Under the state’s current credit scoring law passed in 2003, insurers may consider credit scores to underwrite and rate new customers but must ignore it, or “strip it out,” when those same policies come up for renewal. As a result, many policyholders have seen their premiums increase suddenly, some more than 20 percent.

In 2012 insurers will be asking lawmakers to support a new measure or change the current statute to allow the use of credit scores at renewal and to allow insurers to send “adverse action” notices (see below) to their policyholders only when the rate is higher than the rate they would have received had credit not been considered. Both changes are supported by the state’s insurance director.

Arkansas: A report from the insurance department shows the impact of insurance scoring on calculations of the final premium in 2010 for some 3.1 million personal lines policies. In 43 percent of those policies, the use of credit information resulted in a decrease in the final premium and in 12 percent of cases, it resulted in an increase. Credit scoring was a neutral factor—meaning it did not affect the outcome—in the remaining 45 percent of policies. Policies for which credit information decreased the premium outnumbered policies for which it increased the premium by 3.5 to 1.

When analyzed by type of insurance policy, the data showed the use of credit scoring impacted more auto insurance policies positively (45 percent) than homeowners policies (43 percent). The percentage impacted negatively was about the same for both types of policies. This is the seventh report issued by the Arkansas Insurance Department as required by the Use of Credit Information in Personal Insurance Act. In 2009, slightly fewer policies saw a decrease in premium (39 percent).

Texas: In May 2011 the Texas Supreme Court ruled that credit scoring, which uses race-neutral factors, is allowed under Texas law even if it has an unintended impact of creating higher insurance premiums for some minority policyholders. The lawsuit was brought by an African-American attorney, Patrick Ojo, on behalf of himself and other minorities whose homeowners insurance premiums had increased because of information acquired through the insurer’s automated credit scoring system. Ojo had never filed a claim. Ojo argued that the credit-scoring system results in a racially disparate impact and therefore violates the federal Fair Housing Act (FHA). The court rejected the plaintiffs’ arguments and said that Texas law supersedes the FHA and that the state’s insurance code does not provide for disparate impact liability.

Texas law prohibits the use of race, color, religion or national origin in underwriting and setting rates. Insurers do not collect such information.

NCOIL: The National Conference of Insurance Legislators (NCOIL) voted in July 2009 to amend its model law on credit-based insurance scoring. The revision requires insurers using insurance scoring for underwriting or rating purposes to consider “extraordinary life circumstances,” such as serious injury or illness; divorce; death of a spouse, child or parent; identity theft; temporary involuntary loss of employment for three months or more; or a federal or state-government declared catastrophic event. Policyholders would have to document their request for an exception to the insurer’s rules or practices and demonstrate that circumstances they described had had a direct impact on their credit score. The NCOIL model law is in effect in more than half of the states. Several others have laws that recognize the extraordinary life circumstances concept.

Only California and Massachusetts ban the use of insurance credit scoring for rating purposes. Hawaii does not permit its use for auto insurance and Maryland bans it for homeowners insurance.
Kansas: In April 2010 the Kansas legislature passed a measure that amends the existing insurance credit scoring law instead of banning the use of credit scoring as had originally been proposed by the House in 2009.

The legislation included the NCOIL extraordinary life circumstances provision, which requires insurers to take into account personal hardships such as a serious injury that led to usually high medical bills, long-term unemployment or the death of a spouse, see above and Background section. In addition, it removed the requirement that insurers reexamine policyholders’ credit history every three years, making the credit check on policy renewals voluntary. In this way, consumers can opt to have their score re evaluated when they think their score has improved. Not having to check credit history every three years has the added advantage of lowering insurers’ expenses.

The bill also modified the trigger for an adverse action notice. Adverse action notices are generally sent when a policyholder’s insurance policy is not renewed or the rate is increased. In Kansas adverse notices were also required if the customer did not receive the best possible rate.

Adverse Action Notices: In Washington State, the state insurance department promulgated a rule that requires insurers to provide specific and detailed reasons and explanations, in plain, unambiguous language, whenever they inform consumers of an “adverse action.” Adverse actions include non renewal of an existing insurance policy, an increase in premium or a refusal to issue a new policy, based on credit scores. Under the rule, insurers must provide a description of the element in the credit history that adversely affects the consumer’s insurance score. They must also explain how this affects the insurance score and what consumers can do to improve this aspect of their score.

In June 2007, the U.S. Supreme Court overturned appeals court rulings in two cases that centered on when insurers are required to send consumers notices to comply with the Fair Credit Reporting Act (FCRA). Siding with insurers on the issue, the high court said that the companies were not breaking the law. The 9th Circuit court had ruled in the first case that an insurer must issue adverse action notices whenever a consumer’s credit information does not result in the consumer receiving the best possible rate but the high court said that such actions would result in too many notices being sent that were likely to be ignored. In the second case, it said that the company had not acted recklessly in willful disregard of the law.

BACKGROUND

Insurance scores are confidential rankings based on credit history information. They are a measure of how a person manages his or her financial affairs. People who manage their finances well tend to also manage other important aspects of their lives responsibly, such as driving a car. Combined with factors such as geographical area, previous crashes, age and gender, insurance scores enable auto insurers to price more accurately, so that people less likely to file a claim pay less for their insurance than people who are more likely to file a claim. For homeowners insurance, insurers use other factors combined with credit such as the home’s construction, location and proximity to water supplies for fighting fires.

Insurance scores predict the average claim behavior of a group of people with essentially the same credit history. A good score is typically above 760 and a bad score is below 600. People with low insurance scores tend to file more claims. But there are exceptions. Within that group, there may be individuals who have stellar driving records and have never filed a claim just as there are teenager drivers who have never had a crash although teenagers as a group have more accidents than people in other age groups.

Credit Report Information—Who Wants It? It is becoming increasingly important to have an acceptable credit record. Whether we like it or not, society equates the ability to manage credit responsibly with responsible behavior, even if individuals have a bad credit record through no fault of their own. Landlords often look at applicants’ credit records before renting apartments to see whether they manage their finances responsibly and are therefore likely to pay their rent on time. Banks and other lenders look at the credit records of loan applicants to find out whether they are likely to have loans repaid. Some employers also look at credit records, especially where employees handle money, and view a good credit record as a measure of maturity and stability.

In some insurance companies, underwriters have long used credit records in cases where additional information was needed. Before the development of automated scoring systems, underwriters would look at the data and make decisions, often erring on the overly cautious side that disadvantaged many more people. Automated insurance scoring and underwriting systems eliminate the weaknesses inherent in someone's personal judgment and have allowed more drivers to be placed in preferred and standard rating classifications, saving them money. With the development of these scoring models, the use of credit-related information in underwriting and rating for many insurers has become routine. Insurers use insurance scores to different extents and in different ways. Most use them to screen new applicants for insurance and price new business.

Why Insurers Need It: Insurers need to be able to assess the risk of loss—the possibility that a driver or a homeowner will have an accident and file a claim—in order to decide whether to insure that individual and what rate to set for the coverage provided. The more accurate the information, the closer the insurance company can come to making appropriate decisions. Where information is insufficient, applicants for insurance may be placed in the wrong risk classification. That means that some good drivers will pay more than they should for coverage and some bad drivers will pay less than they should. The insurance company will probably collect enough premiums between the two groups to pay claims and expenses, but the good drivers will be subsidizing the bad.

By law in every state, insurers are prohibited from setting rates that unfairly discriminate against any individual. But the underwriting and rating processes are geared specifically to differentiate good risks from bad risks. Since insurance is a business, insurers favor those applicants that are least likely to suffer a loss. One of the key competitive aspects of the personal lines insurance business is the ability to segment risks and price policies accurately according to the likely cost of claims generated by those policies.

Insurance scores help insurers accomplish these objectives. Actuarial studies by Tillinghast, an actuarial consultant firm, have shown a 99 percent correlation between insurance scores and loss ratio—the cost of claims filed relative to the premium dollars collected. In other words, people who have low insurance scores, as a group, account for a high proportion of the dollars paid out in claims. Insurance scores developed by the insurance scoring company Fair Isaac involve a set of 15 to 30 credit characteristics, each with an assigned weight, that produce a score ranging from 100 to 999. The lower the score, the greater the risk. According to Fair Isaac, 76 percent of consumers exhibit good or fair credit management behavior. Only four percent of the population are so-called “no hits” with no credit history. This small group would include the very young, who have not yet established a credit history; those who might not use credit on personal or religious grounds; and retirees who have probably paid off their mortgage.

The reasons behind the predictive value of credit scores appear to be behavioral. The character trait that leads to careful money management seems to show up in other daily situations in which people have to make decisions about how to act, such as driving. People who manage money carefully may be more likely to have their car serviced at appropriate times and may also more effectively manage the most important financial asset most Americans own—their house—making routine repairs before they become major insurance losses. But of course, there are always exceptions to the rule. For example, there are people who have filed for bankruptcy that have never filed an insurance claim. Furthermore, a low insurance score doesn't predict that a person will have an accident.

The information used in insurance scoring models does not include personal data such as a person’s ethnic group, religion, gender, family or marital status, handicaps, nationality, age, address or income. The scoring process relies on information in a person's credit record. Particular emphasis is placed on those items associated with credit management patterns proven to correlate most closely with insurance risk, such as outstanding debt, length of credit history, late payments, collections and bankruptcies, and new applications for credit. Credit-related activities within the last 12 months are given most weight.

Common Misunderstandings about Credit Scoring: Many people have no idea they are beneficiaries of insurance scoring. More than 50 percent of policyholders have a lower premium because of good credit, insurers say, although consumers themselves, when asked, think most people do not benefit.
Some consumers are disturbed by the fact that, when applying for insurance, one insurer will reject their application based on their insurance score yet another company will find it acceptable. They ask how insurers' responses can be so different when they are all working from essentially the same credit report information. Many large insurance companies have now developed their own insurance scoring model, using their own proprietary information in combination with standard actuarial data. Even when insurers use the leading vendors of insurance scoring models they may have the model tailored to their own target market. Not all insurers are looking to insure the same kind of drivers or homeowners. Some may target only those with the best scores, with no recent accidents or traffic violations, while others may seek out people with a less than perfect record.

Since virtually all companies use credit information in different ways, insurance scoring fosters competition among insurance companies and more choices for the consumer.

Most people think that insurers can obtain all the information they need from state motor vehicle departments and that reportable accidents, speeding tickets, convictions for drunk driving and other traffic violations are automatically in this age of electronic communication, instantaneously recorded. But, in fact, much of that data is missing from motor vehicle records (MVRs).

A 2002 Insurance Research Council study found that MVRs are typically inaccurate. One in five convictions may be missing. An earlier study found that on average only 40 percent of reportable accidents appeared on MVRs. An analysis of current laws shows the amount of useful information is very limited. Some states don't require records of information that show how drivers perform, such as convictions for drunk driving. If a driver is found guilty of an out-of-state infraction, that information is not automatically provided to the state where the licensed driver or vehicle is registered. Other states offer drivers an opportunity to obtain a lesser sentence or to avoid having information noted in the official record. By contrast, credit records are generally complete and where they are not or are inaccurate, there is a clearly defined review process for correcting the deficiencies.

In short, credit information is generally more accurate, and that works to the advantage of the majority of insurance consumers. With this information available to insurers, a majority of policyholders will pay less for home and auto insurance.

Research: A 2004 study commissioned by the Texas Department of Insurance on the use of credit information by insurers doing business in the state found a strong relationship between credit scores and claims experience. The study also found that the use of insurance scores significantly improves pricing accuracy in predicting risk when combined with other rating variables such geographical area and age of driver. Although there was a consistent pattern of differences in credit scores among different racial/ethic groups, with blacks and Hispanics having worse scores than whites and Asians, on average the results were actuarially supported and not unfairly discriminatory. This means that all drivers with the same credit rating characteristics would be charged the same amount, regardless of race, income or ethnic background. The research, which was required by law, was conducted by the insurance department with assistance from the University of Texas and the Texas A&M University as well as the Office of Public Insurance Counsel. The findings, which were published in December 2004 and January 2005, confirm the results of other studies.

Another earlier Texas study published in March 2003 found a strong correlation between credit history and the filing of an auto insurance claim—both the size and frequency of claims. The Bureau of Business Research at the University of Texas found that when credit scores were matched up with claim data, those with the worst credit scores had claim losses that averaged $918—53 percent higher than the expected average—and those with the best credit score had losses that averaged $558—25 percent less than the average.

A June 2003 study by EPIC Actuaries conducted for the insurance industry also found that overall, insurance scores significantly increase the accuracy of the risk assessment process. Insurance scores, their study showed, are among the three most important risk characteristics for each of the six major automobile coverages. For example, for property damage liability coverage, those with the worst insurance scores had expected losses of 33 percent above average. Those with the best had losses 19 percent below average. Some 2.7 million records were studied.

Some states have examined the issue of whether credit scores have an adverse impact on low-income or minority populations. A February 2004 report issued by the Maryland Insurance Administration (MIA) found that there was insufficient data to conclusively determine whether the use of credit scoring has an adverse impact on these communities because insurers do not collect information on an applicant’s race or income. Without such data, it is not possible to match premiums paid to any socioeconomic group.

The Missouri Department of Insurance claimed in February 2004 that low-income households and minorities are adversely affected by insurance scoring. However, the department’s findings were based on flawed methodologies. For example, it aggregates ZIP code credit score data for everyone in a ZIP code area, whether they own cars or homes and therefore purchase auto or homeowners insurance or not.

Typical Provisions in Legislation Regulating Insurers’ Use of Credit Information:

Need to File a Model with the Department of Insurance. Insurers are required to file their underwriting model based on insurance scores with the state’s department of insurance.

Restrictions on Factors. An insurance score uses information from an individual’s credit history that has been shown to statistically correlate with claim costs. Restrictions on factors that may be used vary from state to state but may include:

Total available credit
Disputed items under review
Number of credit inquiries (credit card or loan applications)
Debt from financing payments to hospitals or for health reasons
Use of certain types of credit (personal loans, credit cards)

Limits on Use. Different states have proposed varying thresholds, but in general they allow insurers to accept or reject an application based on an insurance score.

Prohibitions on Penalizing Consumers with No Credit Histories. While credit cards, mortgages and other debt instruments are widely used today, there are still segments of the population (some elderly people, certain religious sects and some low-income individuals, including students) that have no experience with credit. Regulations generally require insurers to consider an applicant with a so-called “thin” or “no-hit” file an average risk.

Sole Use Rules. Insurance companies are usually barred from using insurance scores as the sole determining criteria in making underwriting or rating decisions.

Disclosure Rules. Insurers are required to inform consumers they are using credit information in the underwriting/rate making process. If that is a deciding factor in rejecting the application for insurance or another adverse decision, in accordance with the Fair and Accurate Credit Transactions Act of 2003 (FACT), the insurer must notify the individual that credit report information was used and may have to make a copy of the credit report available to the consumer free of charge.

Even before the recent surge of interest in the use of credit reports, many states already required insurers to notify their policyholders if credit histories were used or played a role in adverse decisions, such as raising rates or placing a policyholder in a higher rating tier. Many also already barred insurers from using insurance scores as the sole determinant in underwriting — the process of deciding which applicants to accept and classifying those selected —or pricing/rating decisions. As the issue of credit has assumed a higher profile, additional states have passed such laws. Most are based on a model law passed in December 2002 by the National Conference of Insurance Legislators (NCOIL). Among other things, the model legislation requires insurers to disclose to consumers that a credit report may be used and to notify the policyholder in compliance with the federal Fair Credit Reporting Act when credit is the basis for an adverse action. The model law prohibits the use of credit information as the sole basis for refusal to insure or to non renew or cancel. It also bars the use of disputed information or information identified as medical collection accounts in the credit report. And it encourages insurers to take into account extraordinary life events, such as catastrophic illness or the death of a spouse.

Another area is how lack of credit history—“no-hits” and “thin files”—should be dealt with. The NCOIL model law says that in such cases either the credit score should be considered “neutral,” or average, or credit as an underwriting factor should not be used at all. As a third option, it allows the insurer to follow a procedure of its own. The justification for this must be provided to the insurance department.
A few states have very restrictive rules. A law passed in Washington State in March 2002 prohibits cancellations after 60 days and non renewals based in whole or in part on credit history. Maryland, which had previously allowed the use of information from credit histories, bans the use of credit in homeowners policies and in auto insurance underwriting decisions on existing business. And while credit-related information may be used in rating decisions about new insurance policies, the law imposes a cap on discounts and surcharges related to credit of 40 percent.

Only one state, Hawaii, has a law on the books that bans the use of credit reports for auto insurance underwriting and rating. In California, the use of credit is not permitted under Proposition 103 for rating auto insurance policies unless specifically allowed by the regulator and in Massachusetts, although not banned, regulators will not approve rate filings for auto or homeowners insurance that include the use of credit scoring. According to the Property Casualty Insurers Association of America, 26 states have adopted laws on credit or regulations based largely on the National Conference of Insurance Legislators’ model law.

Federal Activities: In December 2003, H.R. 2622, the Fair and Accurate Credit Transactions Act of 2003 (FACTA) was signed into law, permanently reauthorizing the expiring Fair Credit Reporting Act. FCRA was first created in 1970 and amended in 1996. The law preempts state privacy laws, some of which are more stringent than the federal law. Banks, insurers and others who use credit information can now work under a uniform set of federal rules. The law gives consumers new fraud and identify-theft protections. It allows them to opt out of information sharing among affiliates if the purpose of the sharing is for marketing.
The law also entitles one free credit report a year upon request from the three major credit reporting agencies, Equifax, Experian and TransUnion. Consumers can obtain their free reports from http://www.annualcreditreport.com , a service funded by the three agencies.

The law directed the Federal Trade Commission (FTC) to conduct a study on the use of credit information by financial services companies, including insurers’ use of insurance scoring. The FTC was required to consult with the Office of Fair Housing and Urban Development, part of the Department of Housing and Urban Development, in researching this issue. The study will evaluate whether the use of credit information has an effect on the affordability and availability of financial services products, including the degree to which it may have a “disparate impact” on various demographic groups. The bill requires the FTC to make recommendations for legislative or administrative actions.

Article from Insurance Information Institute, Inc

Another Record Setting Year for Property Claims

2012-01-09T07:54:00.000-08:00

2010 was the record year broken. Higher premiums and coverage reductions are probably next for insurance consumers.

Private-Sector Insurers To Pay More Than $32 Billion In Claims From Natural Disasters In 2011

Federal Government Set Record For Disaster Declarations

NEW YORK, December 30, 2011—Insurance companies will pay more than $32 billion in claims to help people rebuild homes and businesses damaged or destroyed by natural disasters in 2011, a record year for federal disaster declarations, according to the Insurance Information Institute (I.I.I.).

“Catastrophes striking the United States in the first nine months of 2011 caused $32.6 billion in direct insured losses, nearly double the $18.6 billion in catastrophe-caused direct insured losses insurers generally incur over the first nine months of any given year,” said Dr. Robert Hartwig, CPCU, the president of the I.I.I. and an economist, citing figures released earlier this month by ISO’s Property Claim Services. “The $32.6 billion figure doesn’t even include the significant insured losses which arose after the pre-Halloween snowstorm, which caused enormous damage to multiple states along the Atlantic seaboard. Coupled with other events in 2011’s fourth quarter, direct insured losses could exceed $35 billion this year.”

Despite the frequency and severity of 2011’s natural catastrophes in the U.S., policyholders’ surplus—insurers’ net worth measured according to Statutory Accounting Principles—fell only four percent to $538.6 billion as of September 30, 2011 as compared to $559.2 billion at year-end 2010.

“The policyholders’ surplus number is a sure sign that U.S. property/casualty insurers remain well-capitalized, and capable of paying future claims,” Dr. Hartwig stated.

The federal government declared on 99 separate occasions this year that a major disaster existed after a natural disaster had occurred, easily breaking the previous record (81), which was set in 2010, the I.I.I. said. The federal government’s designation makes federal funding available to individuals and businesses impacted adversely by the named disaster. The most recent declaration was on December 22, 2011, and had its origins in the severe snowstorms and flooding which occurred in Alaska between November 8 and 10, 2011. The 99 disaster declarations are nearly triple the average of 34 per year dating back to 1953. The I.I.I. developed three PowerPoint slides which place 2011’s natural disasters in historical perspective.

Moreover, the federal National Oceanic and Atmospheric Administration (NOAA) announced this month that the U.S. was the site of12 separate weather/climate disasters, each of which caused at least $1 billion in aggregate damage in 2011. The previous record, set in 2008, was nine, according to NOAA.

To date, the U.S. set a record with 12 separate billion-dollar weather/climate disasters in 2011, with an aggregate damage total of approximately $52 billion. (This number reflects both insured and uninsured losses). These events were:

• The Groundhog Day Blizzard (January 29-February 3): This large winter storm impacted numerous central, eastern and northeastern states and brought Chicago to a virtual standstill.

• Midwest/Southeast Tornadoes (April 4-5): Forty-six tornadoes swept through a total of 10 central and southern states.

• Southeast/Midwest Tornadoes (April 8-11): Fifty-nine tornadoes are believed to have formed within this timeframe, hitting nine central and southern states.

• Midwest/Southeast Tornadoes (April 14-16): About 160 tornadoes are estimated to have hit 10 states in the central and southeastern portions of the U.S.

• Southeast/Ohio Valley/Midwest Tornadoes (April 25-30): More than 300 tornadoes caused 321 deaths in the U.S. in late April, with 240 of the fatalities occurring in Alabama.

• Midwest/Southeast Tornadoes (May 22-27): The EF-5 tornado which struck Joplin, Missouri on May 22 was the single deadliest tornado (158 fatalities) to hit the U.S. in decades. Fourteen other central and southern states were hit by this tornado outbreak in late May.

• Midwest/Southeast Tornadoes and Severe Weather (June 18-22): Eighty-one tornadoes tore through seven central U.S. states whilewind and hail caused severe damage in four southeastern states.

• Southern Plains/Southwest Drought, Heat Wave and Wildfires(Spring-Summer):Texas, Oklahoma, New Mexico, Arizona, southern Kansas, western Arkansas and Louisiana were the regions of the U.S. hardest hit by these conditions.

• Mississippi River Flooding (spring-summer): Unusually heavy rains, combined with a melting snowpack, caused severe flooding along the Mississippi River and its tributaries.

• Upper Midwest Flooding (spring-summer): These floods prompted the evacuation of nearly 11,000 people in Minot, North Dakota, as the Souris River overflowed. Numerous levees were breached along the Missouri River, flooding thousands of acres of farmland as well.

• Hurricane Irene (August 20-29): Irene made landfall in North Carolina as a Category 1 hurricane and moved northward, causing major flooding in New Jersey, upstate New York, and Vermont.

• Wildfires in Texas, Arizona and New Mexico (spring-fall): The Bastrop Fire in Texas in early September was one of the most destructive wildfires in Texas’ history and destroyed more than 1,500 homes. Meanwhile, Arizona’s Wallow Fire burned more than 500,000 acres in June, making it the largest wildfire on record in the state’s history. Finally, New Mexico’s Las Conchas Fire was also one for the record books, impacting more than 150,000 acres and coming close to Los Alamos National Laboratory in June.

Article From www.iii.org The Insurance Information Institute

First Day of Winter-Winter Driving Reminders

2011-12-22T05:27:00.000-08:00

Today is the first day of winter so might be a great idea for refreshing the basics of winter driving. Hopefully I don't jinx the little snow fall in Minnesota this year. Happy Holidays!!!

The Weather Outside Is Frightful: So Is The Driving!

Cars may be safer than they were decades ago, and weather forecasting may be more accurate, but winter is still one of the most dangerous seasons for drivers on the road. “Most people don’t realize that the leading cause of death during winter storms is vehicular accidents,” notes EMC Insurance Company Senior Engineer Chris Murphy.
"Despite the technological advances, safe winter driving is still the same old story," advises Murphy. "Prepare your vehicle for winter, take time to slow down, pack a survival kit and know what to do if you get stranded."

Prepare Your Vehicle For Winter
Installing snow tires can have a significant impact on your vehicle’s ability to handle winter driving conditions. All-weather radials can be used effectively in areas that do not receive large amounts of snow or ice. Whether you have snow or all-weather radials, now’s the time to make sure they have adequate tread. While you have a mechanic check the tires, be sure he/she also checks other aspects of the vehicle, including your battery, antifreeze, brakes, wipers, defroster and lights.

Take Time To Slow Down
The rule of thumb is to allow a two-second following distance between the front of your car and the rear of the vehicle in front of you. In bad weather, add one additional second for every hazardous condition encountered.

Pack A Survival Kit
The Federal Emergency Management Agency (FEMA) recommends a safety kit be kept in each vehicle. FEMA suggests the kit contain a flashlight with extra batteries, a first-aid kit, several blankets, extra newspaper for insulation, a small shovel, bottled water, matches and booster cables.

Stay In Your Vehicle
If you become trapped in your vehicle during a blizzard, FEMA recommends you stay inside. Display a trouble sign by hanging a brightly colored cloth on the radio antenna and raising the hood. To keep warm, run the engine and heater occasionally, about 10 minutes each hour. Watch for signs of frostbite and hypothermia.

"These are the basics," says Murphy. For additional information on safe winter driving, he encourages policyholders to visit the following online resources:

Article from EMC Insurance Company Website

Cellphones, Distracted Driving, Cell Phone Ban In Vehicles??

2011-12-15T05:30:00.000-08:00

The National Transportation Safety Board has called for a ban on all cellphone use by drivers-including the use of hands-free devices. It is the most far-reaching such recommendation to date, based on a decade of investigations into distracted driving accidents, as well as concern that the increasing popularity of smart phones may give drivers even more reasons to look away from the road.

Increased reliance on cellphones has led to a rise in the number of people who use the devices while driving. There are two dangers associated with driving and cellphone use, including text messaging and using the Internet, jeopardizing the safety of vehicle occupants and pedestrians. First, drivers must take their eyes off the road and hands off the wheel to manipulate the devices when dialing, texting and surfing the Web. Second, people can become so absorbed in their conversations and other uses that their ability to concentrate on the act of driving is severely impaired. Since the first law was passed in New York in 2001 banning hand-held cellphone use while driving, there has been debate as to the exact nature and degree of hazard. The latest research shows that using a cellphone when driving is just one of many types of distracted driving that may lead to crashes and near crashes.

RECENT DEVELOPMENTS

■Statistics: In September 2010 the Transportation Department released a report showing that the number of fatalities linked to distracted drivers declined 6 percent in 2009, compared with the previous year. According to the report, 5,474 people were killed in 4,898 crashes caused by distraction in 2009, compared with 5,838 killed in 5,307 crashes in 2008. However, because the total number of traffic crashes declined slightly in the U.S. last year, distracted driving was a factor in 16 percent of crashes and fatalities in both 2008 and 2009. The number of people injured in crashes linked to distractions declined 4 percent, or 448,000, and accounted for 20 percent of all injuries in highway accidents. The number of deaths caused by distracted driving in 2009 increased 22 percent, compared with 2005, although the total number of fatalities declined by 22 percent during the same period. In 2005 only 10 percent of crashes were caused by distraction.

■New Technology: A number of cellphone companies are considering developing technology that will prevent people from receiving calls and texting while driving. The technology is intended to limit dangerous distractions by temporarily interrupting service so that people do not answer their phones when they are behind the wheel. One carrier has already introduced a service that automatically disables rings and alerts and sends calls to voice mail when phones are in a moving car. Some safety advocates said that it is unclear whether consumers would avail themselves of the technologies or whether the technologies would be effective.

■Research: According to a new survey conducted for the American Automobile Association Foundation for Traffic Safety, more than one-third of drivers (35 percent) acknowledged that they had read or sent a text message while driving over the past month and over two-thirds (67 percent) said they had used a cellphone. Nevertheless, the survey found that 95 percent of drivers consider text messaging while driving a dangerous threat and 88 percent say the same about talking on a cellphone. The survey also found that 87 percent of respondents support laws against text messaging while driving, 70 percent want laws against the use of hand-held cellphones and about 50 percent said cellphone use should be completely banned while driving.

■Studies about cellphone use while driving have focused on several different aspects of the problem. Some have looked at its prevalence as the leading cause of driver distraction. Others have looked at the different risks associated with hand-held and hands-free devices. Still others have focused on the seriousness of injuries in crashes involving cellphone users and the demographics of drivers who use cellphones. Of increasing concern is the practice of texting and, with the growth of popularity of so-called smartphones, high-tech cellphones with computer-like features, surfing the Internet while driving.

The following is a summary of some recent research on the issue.

■In an informal online survey conducted by a large insurance company in November 2010, approximately one in five drivers acknowledged surfing the Internet while behind the wheel. In the survey, more than 19 percent of respondents admitted to having gone online via a cellphone at least once a week while driving, 74 percent reported making or receiving calls at least once a week while driving and 35 percent reported sending or receiving text messages as frequently. The company said that it plans to conduct a more thorough study in 2011. The insurer said that the 19 percent estimate of Web use might be low because most respondents to the survey were in their 30s, while the largest users of cellphones tend to be younger.

■Public Attitude Monitor 2010: Texting While Driving, a survey released in November 2010 by the Insurance Research Council, found that 18 percent of drivers in the U.S. reported texting while driving in the last 30 days. This figure includes 31 percent of drivers age 16 to 24, 41 percent of drivers age 25 to 39 and only 5 percent of drivers 55 and older.

■A study by the Highway Loss Data Institute (HLDI), released in September 2010, found that texting bans may not reduce crash rates. The study looked at collision claims patterns in four states—California, Louisiana, Minnesota and Washington—before and after text bans went into effect. Collisions went up slightly in all the states, except Washington, where the change was statistically insignificant. Adrian Lund, president of HLDI and the Insurance Institute for Highway Safety, said that the findings “call into question the way policymakers are trying to address the problem of distracted driving crashes. They’re focusing on a single manifestation of distracted driving and banning it. This ignores the endless sources of distraction and relies on banning one source or another to solve the whole problem.”

■A survey conducted for a large insurance company by Harris Interactive released in September 2010 found that a large percentage of teens between the ages of 14 and 17 strongly believe that drunk driving was more likely to cause a fatal accident than texting. More teens also thought that drunk driving was more likely than texting to cause a crash and result in ticketing and arrest. The survey seems to indicates that despite public awareness campaigns about the dangers of distracted driving many teens still do not understand the risk.

■Also in September 2010 the AAA Foundation for Traffic Safety released its third-annual Traffic Safety Culture Index, which reported that 52 percent of drivers said they feel less safe on the roads now than they did five years ago. The leading reason cited (88 percent) was distracted driving by motorists who drive while texting and emailing. The study also showed that while 62 percent of respondents feel that talking on a cellphone is a serious safety threat they do not always behave accordingly. Almost 70 percent of drivers surveyed admitted to talking on their phones, and 24 percent said they read or sent text messages or emails while driving in the previous month.

■A survey released in August 2010 showed that nearly 90 percent of teenage drivers acknowledged such distracted driving behavior as texting or talking on a cellphone although most respondents were aware that the behavior increased the risk of an accident. The online survey, conducted by Seventeen magazine and AAA, the auto club, gathered responses from 1,999 drivers between the ages of 16 and 19. Eighty-four percent said they were aware that distracted driving increased the risk of a crash, yet 86 percent acknowledged such behaviors as texting, talking on cellphones, eating, adjusting radios, applying makeup or driving with four or more passengers.

■A study released in January 2010 by the Highway Loss Data Institute (HLDI), an affiliate of the Insurance Institute for Highway Safety (IIHS), shows that the number of traffic crashes have not declined in California, Connecticut, New York and Washington, DC, the three states and jurisdiction that prohibit drivers from using handheld cellphones. The study was based on an analysis of insurance claims for crash damage. Officials said more research is needed to clarify the findings, which run counter to the result of other IIHS research.

■Also in January 2010 the National Safety Council (NSC) released a report that estimates that at least 1.6 million crashes (28 percent of all crashes) are caused each year by drivers talking on cellphones (1.4 million crashes) and texting (200,000 crashes). The estimate is based on data of driver cellphone use from the National Highway Traffic Safety Administration and from peer-reviewed research that quantifies the risks using cellphones and texting while driving.

■State and Federal Initiatives: In September 2010 the Governors Highway Safety Association decided not to endorse a proposal calling for a total ban on cellphone use by drivers. In response to a California proposal calling for the group to ask state legislatures to consider a complete ban, the association questioned whether the prohibition could be enforced.

■In March 2010 the Treasury Department proposed that an interim plan prohibiting texting by drivers of interstate buses and trucks over 10,000 pounds announced by Transportation Secretary LaHood in January be made permanent. On October 1, 2009 President Obama signed an executive order prohibiting federal employees from texting while driving. The order applies to employees using cars or cellphones provided by the government or using their own cars or phones for government business. The order applies to some 4.5 million federal employees, including the military.

■The number of state legislatures debating measures that address the problem of cellphone use while driving and other driver distractions continues to rise.

■As of June 2011 ten states—California, Connecticut, Delaware, Maryland, Nevada, New Jersey, New York, Oregon, Utah and Washington State—plus the District of Columbia, had laws on the books banning the use of hand-held cellphones while driving. Almost all of the laws have "primary enforcement" provisions, meaning a motorist may be ticketed for using a hand-held cellphone while driving without any other traffic offense taking place, according to the Insurance Institute for Highway Safety.

■Also as of June 2011, 34 states and the District of Columbia banned the practice of texting with a cellphone while driving. Most of these laws have primary enforcement provisions. The Utah law, passed in May 2009, is the toughest in the nation. Offenders convicted of causing an accident that injures or kills someone while texting behind the wheel face up to 15 years in prison. The law does not consider a crash caused by a multitasking driver as a accident but rather as an inherently reckless act, like drunk driving.

■Businesses: Businesses are increasingly prohibiting workers from using cellphones while driving to conduct business. Exxon Mobil and Shell are examples of large companies that ban employees' use of any type of cellphone while driving during work hours. The California Association of Employers recommends that employers develop a cellphone policy that requires employees to pull off the road before conducting business by cellphone.

■Court Decisions: In December 2007 International Paper Co. agreed to pay a $5.2 million settlement to a Georgia woman who was rear-ended by one of its employees. The employee was driving a company car and talking on a company cellphone at the time of the accident. The settlement was reached even though the employee had violated her company’s policy of requiring the use of hands-free headsets while driving. The suit is among the most recent of several cases where an employer has been held liable for an accident caused by a driver using a cellphone.

Article from the Insurance Information Institute, Inc website.

Adult Children Living At Home Are They Covered?

2011-12-09T06:45:00.001-08:00

With a tough job market, many parents are welcoming back grown children who they thought had left the nest for good. Here’s how to make sure they have the right auto, home and health-insurance coverage when they move back in with you.

________________________________________

Auto insurance. If your child just graduated from college and doesn’t have their own car, then your auto-insurance coverage may change very little. If you had been getting a discount because your child was living more than 100 miles away while at college, just let your insurer know that they have moved back home. The discount will disappear, but your child won’t need to get a new policy, and they’ll have coverage when they drive any of the family cars.

If your child has their own car, then they should have their own policy.

Home insurance. Your homeowners insurance policy will cover your childs stuff while they are in your house. But if they have any valuable items -- such as an expensive computer system or other fancy electronic equipment -- make sure your policy provides enough coverage. Contact your agent or insurer about your overall coverage limits or buy extra coverage for specific items. Most insurers limit coverage on certain types of valuables, such as jewelry, to just a few thousand dollars, but you can usually add extra coverage.

Health insurance. The health-care-reform law requires insurers to let adult children up to age 26 stay on their parents’ policies, which can be a big help for kids who have a tough time finding a job with benefits. In most cases, this extra coverage won’t take effect until January 1. But some insurers are letting recent grads stay on their parents’ policies before the law officially kicks in.

If you have health insurance through your employer, you should be given the option during open-enrollment season this fall to sign up children younger than 26 for coverage under your policy in 2011.

If an adult child has a job with benefits but loses that job after open-enrollment season, then they can be added to his parents' policy -- even if they are eligible to keep the coverage from his previous job through COBRA.

You may not have to pay extra to add your child to your policy if you already have a family policy to cover younger siblings. If you do have to pay extra, however, compare the additional cost to the price of your adult child buying their own policy. Most healthy people in their twenties can find individual health insurance for reasonable pricing. You can lower the premiums by raising the deductible, yet still have coverage for major expenses.

Either way, you may need to find other coverage until you can add children to your policy on January 1 -- and you’ll need to find alternatives if children are older than 26. A child options depend on current health and coverage. If they are healthy, they could buy a low-cost individual policy and then decide whether to keep it past January 1 or switch to coverage under your plan. If they have health issues and has COBRA coverage from a previous job, they could keep that coverage for up to 18 months (although the price may be quite steep). If they have been uninsured for at least six months, they can sign up for coverage under the new high-risk pool. See www.healthcare.gov for details and more options.

Cost of Car Crashes Per Person: $1,500

2011-11-18T13:38:00.001-08:00

The total cost of motor vehicle crashes in the U.S. totals $299.5 billion, according to a study done for the auto club AAA.

According to the study conducted for AAA by Cambridge Systematics, the overall cost of crashes equates to an annual per person cost of $1,522.

The study examined the relationship between congestion and crashes to determine the relative economic impact by using figures provided by the Texas Transportation Institute 2010 mobility report data.

The cost of crashes is three times higher than the costs associated with traffic congestion, which is $97.7 billion. The annual cost of of congestion is $590 per person a year.

“The burdens associated with congestion are top of mind for many Americans as they travel to and from work each day,” said AAA President and CEO Robert L. Darbelnet. “However, at $300 billion annually, crashes cost our society more than three times the amount of congestion. This report further underscores the importance of a long-term, multi-year federal transportation bill that will provide the necessary and sustained investments that lead to better and safer roads for all Americans.”

The cost of crashes is based on the Federal Highway Administration’s comprehensive costs data for traffic fatalities and injuries that assign a dollar value to a variety of components, including medical and emergency services, lost earnings and household production, property damage, and lost quality of life, among other things.

Results from the study show large cities incur the largest total crash costs because the number of fatalities and injuries is larger than in smaller cities. However, if the total cost of crashes is calculated on a per person basis, smaller cities tend to have greater per person costs.

In very large metro areas, the average crash cost per person is $1,406, while for small cities, it is $1,778. The Miami-Ft. Lauderdale-Miami Beach, Fla., area had a total cost per person of $2,016 versus a medium-sized city of Baton Rouge, La., where the average cost was $3,747 and a small city (Beaumont-Port Arthur, Tex.), at $2787.

Insurance Company Results First Half of 2011

2011-11-10T08:51:00.001-08:00

Insurance company results are not good for the first half of 2011. Companies may react and not in a good way for customers. Plan to see large increases in property insurance premiums, coverage decreases, higher deductibles and other lines may see higher premiums to help prop up property insurance results in an effort to help overall results. Article from ISO/PCI/INSURANCE INFORMATION INSTITUTE.

ISO: Property/Casualty Insurers’ Profits and Profitability Tumbled In First-Half 2011 As Catastrophes Ravaged Underwriting Results

ISO/PCI/INSURANCE INFORMATION INSTITUTE

— Private U.S. property/casualty insurers’ net income after taxes fell to $4.8 billion in first-half 2011 from $16.8 billion in first-half 2010, with insurers’ overall profitability as measured by their annualized rate of return on average policyholders’ surplus decreasing to 1.7 percent from 6.4 percent.

REQUEST A HOMEOWNERS INSURANCE QUOTE FROM RICK CORNEJO INSURANCE SOLUTIONS

Driving the declines in insurers’ net income and overall rate of return, net losses on underwriting grew to $24.1 billion in first-half 2011 from $5.1 billion in first-half 2010. The combined ratio — a key measure of losses and other underwriting expenses per dollar of premium — deteriorated to 110.5 percent for first-half 2011 from 101.7 percent for first-half 2010, according to ISO and the Property Casualty Insurers Association of America (PCI).

The deterioration in underwriting results is largely attributable to a spike in net losses and loss adjustment expenses (LLAE) from catastrophes. ISO estimates that insurers’ net LLAE from catastrophes in first-half 2011 totaled $23.9 billion, up from $8 billion in first-half 2010. These amounts exclude LLAE that emerged after insurers closed their books for each period but do include late emerging LLAE from events in prior periods.

Partially offsetting the deterioration in underwriting results, net investment gains — the sum of net investment income and net realized capital gains (or losses) on investments — grew $2.4 billion to $28.4 billion in first-half 2011 from $26 billion in first-half 2010.

REQUEST A AUTO INSURANCE QUOTE FROM RICK CORNEJO INSURANCE SOLUTIONS

Insurers’ miscellaneous other income fell $0.1 billion to $0.6 billion in first-half 2011 from $0.7 billion in first-half 2010, and their federal and foreign income taxes dropped $4.7 billion to $0.1 billion from $4.8 billion.

Policyholders’ surplus — insurers’ net worth measured according to Statutory Accounting Principles — fell $0.2 billion to $559.1 billion at June 30, 2011, from $559.2 billion at year-end 2010.

Insurers’ 1.7 percent annualized rate of return on average surplus for first-half 2011 was the lowest for any first half since the start of ISO’s quarterly records in 1986 and 7.7 percentage points less than the 9.4 percent average first-half rate of return for the 25 years from 1986 to 2010.

The figures are consolidated estimates for all private property/casualty insurers based on reports accounting for at least 96 percent of all business written by private U.S. property/casualty insurers.

“Despite record-setting catastrophe losses from events like the deadly EF 5 tornado that struck Joplin, Missouri, last May, insurers emerged from first-half 2011 financially sound and well able to continue providing essential financial protection to consumers and businesses alike — a quiet but important testament to insurers’ enterprise risk management and the effectiveness of state solvency regulation,” said David Sampson, PCI’s president and CEO. “As of June 30, 2011, insurers had $559.1 billion in policyholders’ surplus to cover new claims and meet other contingencies — more than 150 times all direct insured losses to U.S. property from Hurricane Irene. The industry is strong, well-capitalized, and capable of paying claims.”

“The 110.5 percent combined ratio for first-half 2011 is the worst six-month underwriting result since the 111.1 percent combined ratio for first-half 2001. Even after adjusting for record catastrophe losses, the latest data indicates that insurers continued to face strong headwinds in their core business — underwriting,” said Michael R. Murray, ISO’s assistant vice president for financial analysis. “ISO estimates that insurers’ combined ratio would have risen 1.3 percentage points to 103 percent in first-half 2011 if net LLAE from catastrophes had remained the same as they were in first-half 2010. The deterioration in adjusted underwriting results is a particular cause for concern, because today’s low interest rates severely limit insurers’ ability to generate incremental investment income.”

The property/casualty industry’s 1.7 percent annualized rate of return for first-half 2011 was the net result of negative rates of return for mortgage and financial guaranty insurers and single-digit rates of return for other insurers. ISO estimates that mortgage and financial guaranty insurers’ annualized rate of return on average surplus improved to negative 26.1 percent for first-half 2011 from negative 43.6 percent for first-half 2010. Excluding mortgage and financial guaranty insurers, the industry’s annualized rate of return fell to 2.3 percent in first-half 2011 from 7.6 percent in first-half 2010.

Get Ready for Another Extreme Winter: Protect homes from water damage. Proper maintenance during winter weather can reduce the risk of damage due to water intrusion

2011-11-02T06:40:00.000-07:00

Step 1
Evaluate the risk

Protect Pipes from freezing.

When pipes burst because they froze or snow accumulation leads to significant water intrusion, your home and contents can suffer significant damage. Even if you live in an area where your home is frequently subjected to sub-zero temperatures and your plumbing system is designed to handle the cold temperatures, loss of power or heat can lead to frozen pipes and significant damage. If you are located in a region that is prone to freezing temperatures taking steps to prevent frozen pipes and other leaks can reduce the risk of property damage. Properties in the southeast and parts of northern California may not be designed to help ward off damage from freezing temperatures but can experience bouts of freezing weather.

REQUEST A HOMEOWNERS INSURANCE QUOTE FROM RICK CORNEJO INSURANCE SOLUTIONS

Step 2
Protect your pipes from freezing

•Insulate all accessible pipes using pipe insulation (this can be found at your local hardware store).

•Keep all exterior entry, exit and garage doors to unheated spaces closed as much as possible during the winter months.

•Prior to the winter months, ensure that all cracks, holes, and other openings on the exterior walls are sealed tightly with caulk or insulation to prevent cold air from penetrating the wall cavity.

•If the temperature drops lower than usual or you lose heat and any pipes are located adjacent to exterior walls or within base-cabinets or in closets, leave the cabinet/closet doors open or use a fan to increase warm air circulation around the pipes.

•In areas of severe cold weather, pay close attention to local weather reports for notice of extreme weather.

◦When extreme cold weather is predicted, let all faucets drip to prevent freezing of the water inside the pipe and if freezing does occur, to relieve pressure buildup in the pipes between the ice blockage and the faucet.

◦The pressure buildup is the actual cause of bursting pipes.

•Install a water leak detection system, available at your plumbing supply store, which will alert someone in your household if water is detected.

•Shut off the water supply during periods when the home may be unoccupied, particularly when colder weather is expected.

•Be sure to drain your water supply system before leaving the home unoccupied.

REQUEST A AUTO INSURANCE QUOTE FROM RICK CORNEJO INSURANCE SOLUTIONS

Step 3
Check for frozen pipes

•To check pipes:

◦Turn on each water supply faucet individually (both hot and cold) to ensure that there is a steady stream of water present.

◦If the flow of water is slowed, or worse, there is no flow, then it is likely that your pipe has frozen.

◦Identify the blockage (probably the area of most exposure) and use a blow dryer (do NOT use an open flame torch!) to heat the supply line, leaving the faucet open.

◦Continue heating the pipe until there is a steady flow of water.

Step 4
Remove snow from window wells and against walls

•Snow buildup around windows and against walls also can lead to water damage.

•To maintain proper drainage and reduce the risk of leaks in basements, remove snow from window wells and against all walls.

Step 5
Clear debris from drains and gutters

•Clear debris from basement drains.

•Make sure gutters are clean and stable to ensure proper drainage

Article From Insurance Institute for Business & Home Safety.

REQUEST A AUTO-HOME-LIFE BUSINESS INSURANCE QUOTES BY VISITING RICK CORNEJO INSURANCE SOLUTIONS WEBSITE

Get Ready for Another Extreme Winter: Winter Maintenance

2011-10-28T06:27:00.000-07:00

Is Your House Properly Winter-Proofed? Good Maintenance Can Prevent Damage to Your Home

Winter-Related Disasters Cause Over One Billion Dollars In Losses Annually

It can be hard to think about winter-proofing your home when the weather is still mild in many places, but now is the best time to prepare your home. Many winter-related disasters can be prevented if you take a few simple steps to protect your home from freezing temperatures, snow and wind, according to the Insurance Information Institute (I.I.I.).

The Farmers’ Almanac predicts that “the eastern third of the country, (New England down to Florida and as far west as the lower Ohio River and Mississippi River Valley), will experience colder-than-normal” temperatures this winter.

Melting snow can inflict significant damage to property, and winter storms are the third-largest cause of catastrophe losses, noted the I.I.I. According to ISO, winter storms accounted for 7.4 percent of catastrophe losses nationwide from 1991 to 2010, or an average of $1.3 billion per year (in 2010 dollars). The average water damage and freezing claim was $6,347 from 2005 to 2009, with such claims accounting for the second most frequent cause of loss after wind and hail.

An important part of planning for winter is to review your insurance coverage. Make sure that you have enough insurance to rebuild your home and replace everything in it. And, if you do not have flood insurance, water sewer back up, or earthquake coverage talk to your insurance agent or company representative about obtaining this important protection.

To prepare your home for the upcoming winter, the I.I.I. and the Insurance Institute for Business & Home Safety (IBHS) offers the following tips.

Outside Your Home

■Clean out gutters. Remove leaves, sticks and other debris from gutters, so melting snow and ice can flow freely. This can prevent ice damming, a condition where water is unable to drain through the gutters and instead seeps into the house causing water to drip from the ceiling and walls.

■Install gutter guards. Available in most hardware and home stores, gutter guards prevent debris from entering the gutter and interfering with the flow of water away from the house and into the ground.

■Trim trees and remove dead branches. Ice, snow and wind could cause weak trees or branches to break and damage your home or car, or injure someone walking by your property.

■Repair steps and handrails. This may prevent someone from falling and seriously being injured. Broken stairs and banisters can become lethal when covered with snow and ice.

■Seal cracks in holes in outside walls and foundations. Use caulking to protect water pipes and make sure that skylights and other roof openings have proper weather stripping to prevent snowmelt from seeping in.

Inside Your Home

■Keep the house warm. Set the thermostat for at least 65 degrees—since the temperature inside the walls, where the pipes are located, is substantially colder a lower temperature will not keep the pipes from freezing.

■Add extra insulation to attics, basements and crawl spaces. If too much heat escapes through the attic, it can cause snow or ice to melt on the roof. Water can then re-freeze, causing more snow and ice to build up. This can result in a collapsed roof, and can contribute to ice damming. Ideally, the attic should be five to 10 degrees warmer than the outside air. Well-insulated basements and crawl spaces can help protect pipes from freezing. You may also consider insulating unfinished rooms such as garages to keep pipes from freezing.

■Have the heating system serviced. Furnaces, boilers and chimneys should be serviced at least once a year to prevent fire and smoke damage.

■Check pipes. Look closely for cracks and leaks and have the pipes repaired immediately. Wrap exposed pipes with heating tape.

■Install an emergency pressure release valve in your plumbing system. This will protect the system against increased pressure caused by freezing pipes and can help prevent your pipes from bursting.

■Make sure that smoke and fire alarms are working properly. Residential fires increase in the winter, so it is important to protect your family with working alarm systems. Also, consider installing a carbon monoxide detector, since a well sealed home can trap this toxic gas.

■Learn how to shut the water off and know where your pipes are located. If your pipes freeze, time is of the essence. The quicker you can shut off the water or direct your plumber to the problem, the better chance you have to prevent pipes from bursting.

■Hire a licensed contractor to look for structural damage. If damage is discovered, have it repaired now rather than waiting for a problem to occur. Also, ask about ways to prevent water damage due to snow-related flooding. Plastic coatings for internal basement walls, sump pumps and other methods can prevent flood damage to your home and belongings.

If you are going to be away for an extended period, take special care. Turn the water off and/or have the water system drained by a professional to keep pipes from freezing or bursting. Also, hire someone to check your home on a regular basis so that, if there is a problem, it can be fixed quickly, lessening any damage. Activity at your home will also reduce the likelihood that it will be burglarized.

ARTICLE FROM INSURANCE INFORMATION INSTITUTE

New York Press Office

Get Ready for Another Extreme Winter: Preventing Roof Collapse

2011-10-27T05:10:00.000-07:00

The past two winters have brought record amounts of snowfall across the country, and forecasters are again calling for especially cold and snowy conditions this year. Avoid costly losses by getting prepared before freezing temperatures set in.

PREVENT ROOF COLLAPSE

Heavy accumulations of snow, ice and rain can lead to water damage and even roof collapse.

Evaluate the risk

Guidance for understanding how much snow is too much

1. Evaluate your risk of roof top snow/ice accumulation

A. Steep sloped roofs (slopes greater than 3-inches of slope in 12-inches of horizontal distance) and particularly the steeper ones that are typically found on houses in northern climates tend to shed melt water.

B. However, low slope and flat roofs over porches, lanais or parts of a home that are next to a taller section of the house can be at particular risk because of the tendency for snow and ice to accumulate in these areas, especially during periods windy weather.

2. Estimate how much weight your roof can support

A. Unless the roof structure is damaged or decayed, most residential roofs regardless of the location of the house should be able to support 20 pounds per square foot of snow before they get into trouble.

B. In some areas of New England or in some mountainous areas, the snow loads used in the design of homes may be considerably higher and the roofs may be able to resist a greater depth of snow.

C. If you live in an area known for lots of snow, you can probably check with your building department to find out if higher loads were used at the time your home was built.

3. Estimate how much the snow on your roof weighs using these guidelines from IBHS:

A. Fresh snow: 10-12 inches of new snow is equal to one inch of water, or about 5 lbs per square foot of roof space, so you could have up to 4 feet of new snow before you need to worry.

B. Packed snow: 3-5 inches of old snow is equal to one inch of water, or about 5 lbs per square foot of roof space, so anything more than 2-feet of old snow could be dangerous.

C. The total accumulated weight of two feet of old snow and two feet of new snow could be as high as 60 lbs per square foot of roof space, which is beyond the typical snow load capacity of most roofs.

D. If there's ice, it's much heavier, with one inch equaling about a foot of fresh snow.

Next Steps

Snow removal may be necessary to avoid roof collapse.

1. If you are in the "danger zone" according to chart above or if the loads you estimate based on the thickness of the various types of snow and ice exceed 20-25 psf, you should consider removing snow from your roof.

2 .For safe removal that won't endanger you or damage your roof, use a snow rake with a long extension arm that will allow you to remove the snow while standing on the ground or hire a snow removal contractor.

Source: EMC Insurance Company & The Insurance Institute for Business & Home Safety

Deer Collision Season

2011-10-18T07:13:00.000-07:00

According to the Insurance Institute for Highway Safety there are an estimated 1.5 million deer-vehicle collisions annually in the United States, causing more than 150 fatalities and $1.1 billion in property damage.

These collisions become more frequent during the fall and winter due to the deer migration and mating season. This season usually occurs from October through December. Coupled with the facts that deer populations are growing and deer habitat is being displaced by urban sprawl makes for a deadly combination for both deer and motorists.

Certain states experience more collisions with deer than others. The states with the highest number of accidents involving deer are:

1.Pennsylvania
2.Michigan
3.Illinois
4.Ohio
5.Georgia
6.Virginia
7.Minnesota
8.Texas
9.Indiana
10.South Carolina

The top ten ranked deer collision states account for 51% of all deer collision claims. Drivers in these states, and all others, can avoid becoming involved in one of these costly and potentially deadly deer-vehicle collisions that take place across the United States each year by taking a number of precautions.

There are a number of precautions motorists can take to help prevent accidents with deer. Drivers wishing to avoid vehicle-deer collisions should:

•Be aware of posted deer crossing signs. These signs are placed in known active deer crossing areas.

•Be aware that deer are most active during the evening, between 6 and 9 p.m.

•At night, use high-beam headlamps as much as possible to illuminate the sides of the road where deer can linger.

•Be aware that deer often move in packs – if you see one deer, there is a good chance several more are just a few yards behind.

•Do not rely on car-mounted "deer whistles." Studies have shown deer are not affected by this deterrence method.

•If a collision with a deer seems inevitable, it may be best not to swerve. The risk of personal injury is greatly increased by swerving, which can place you in the path of oncoming vehicles or may cause you to lose control of your vehicle.

While research has revealed several innovative ways to deter deer from entering the roadways and alerting drivers to the dangers of deer in the area, there will always remain a constant danger of deer-vehicle collisions. Undoubtedly, the best way to avoid deer-vehicle collisions is through attentive driving behavior.

Request An Auto Insurance Quote

Rick Cornejo Insurance Solutions Your Full Service Insurance Solution.

Does Your Homeowners Insurance Cover Backup of Sewer & Drains???

2011-09-09T09:11:00.000-07:00

Backup of sewer and drains...

Will your homeowners insurance cover this?

Fall and spring tend to be our wettest seasons making our homes most susceptible to the backup of sewer or drain lines. While these events don't occur often, when they do, the problem can be a small disaster. Did you know a standard homeowner's insurance policy excludes coverage for such an event?

It's true. The backup of sewer and drains as well as the failure of a sump pump is excluded. The damage you sustain from either of these problems will not be covered and you'll be responsible to pay for the loss and the clean up. If you have a finished basement, or use your basement area for storage, you shouldn't go without this coverage endorsement.

Heavy rains can trigger a backup. A storm sewer or sanitary sewer backs up into your home and usually comes in through a sump well, washtubs in the basement, or toilets in the basement. However, the damage can happen anywhere in the house. Sump pump failures normally occur from power outages or motor failures. Sump pumps run on electricity and during a bad storm many times the power goes out. That’s when you need the sump pump the most, to pump the heavy water from the rain out of the basement.
The damage can be quite costly. Normally damage occurs in the basement, which houses the mechanical systems of the house such as: washer and dryer, furnace, hot water tank and the numerous items people store there. Water or sewage usually destroys anything it comes in contact with. For the thousands of dollars in damage, it would be well worth purchasing the additional coverage with your homeowner's policy to cover such an event.

This coverage can often be purchased as an endorsement on its own, or with an endorsement that will expand/increase other coverages on the policy. If you would like to request a home insurance quote please click to following link:

Request a Home Insurance Quote

Office Safety Hazard Tips

2011-08-18T14:04:00.000-07:00

What Safety Hazards Are Lurking In Your Office?

You typically don’t think of an office setting as a dangerous work zone, but it is. In 2008, more than 80,000 private industry office and administrative workers suffered on-the-job injuries, according to the Bureau of Labor Statistics.

Loss control specialists encourage you to look for the following risks in your office setting and take appropriate action to increase the safety of your employees:

■Arrange office furnishings to provide workers with unobstructed areas for movement.

■Make sure stairways are well-illuminated and kept in good condition.

■Mark any differences in floor levels that could result in a fall.

■Keep walkways clear of cords, clutter and spills.

■Use stepladders rather than chairs to reach high objects.

■Use full-spectrum lights to reduce eyestrain.

■Use task lighting where possible to direct light to where it is needed most.

■Reduce monitor glare by using plasma screens or removable anti-glare screens.

■Reduce sun glare with window blinds or tinted glass.

■If possible, relocate noisy equipment away from workers.

■Use carpeting to help absorb foot traffic and conversational noise.

■Incorporate partitions to reduce noise around workstations.

■Be sure workers know how to adjust chairs to eliminate strain.

■Reduce the possibility of low back strain by using footrests.

■Position computer monitors with the top of the screen at eye level.

■Reduce excessive reaching by placing the computer mouse close to the keyboard.

Source: EMC Insurance Company. From on-site inspections to online training, Count on EMC® to help you reduce the hazards lurking around your office.

10 Most Stolen Vehicles for 2010

2011-08-04T08:08:00.000-07:00

NICB Names 10 Most Stolen Vehicles for 2010

Domestic Automakers Occupy Six Positions—Most Since 2002

DES PLAINES, Ill. – The National Insurance Crime Bureau has released Hot Wheels—its list of the 10 most stolen vehicles in the United States. The report examines vehicle theft data submitted by law enforcement to the National Crime Information Center (NCIC) and determines the vehicle make, model, and model year most reported stolen in 2010.

See the full report that includes State by State analysis at http://www.nicb.org/.

For 2010, the most stolen vehicles* in the nation were:

1. 1994 Honda Accord

2. 1995 Honda Civic

3. 1991 Toyota Camry

4. 1999 Chevrolet Pickup (Full Size)

5. 1997 Ford F150 Series/Pickup

6. 2004 Dodge Ram

7. 2000 Dodge Caravan

8. 1994 Acura Integra

9. 2002 Ford Explorer

10. 1999 Ford Taurus

Hot Wheels is the only report that examines all theft data without regard to a vehicle’s insured status thereby providing a more complete view of the vehicle theft landscape. For example, certain models of older cars and trucks are popular with thieves because of the value of their parts—but many are not insured against theft. Whereas newer, more expensive and insured vehicles are often stolen to be resold intact with counterfeit vehicle identification numbers or shipped out of the country.

Nationally—and for the first time since 2002—thieves preferred domestic makes over foreign brands. Ford took three spots, Dodge two and Chevrolet held one while the remaining four were held by Honda, Toyota and Acura. However, the top three positions continue to be held by Honda and Toyota models, a trend that has been consistent since 2000.

Overall, vehicle thefts continue their decline. Preliminary 2010 FBI crime statistics point to a further 7.2 percent reduction over the thefts posted in 2009. Should the preliminary numbers hold when the FBI produces its final statistics later this year, 2010 will post the fewest vehicle thefts since 1967.

Improved technology is one of the keys to lower theft rates and the Hot Wheels statistics demonstrate that. Of the nearly 52,000 Honda Accords stolen in 2010, over 44,000 were models made in the 1990s, compared with fewer than 5,700 that were produced since the year 2000.

Even though the continuing decline in vehicle thefts is great news, if it happens to you it can be financially devastating and just an all-around hassle. NICB urges motorists to follow its “layered approach” to auto theft prevention. By employing these simple, low-cost suggestions people can make their vehicles less attractive to thieves.

NICB’s four layers of protection are:

Common Sense: Lock your car and take your keys. It’s simple enough, but many thefts occur because owners make it easy for thieves to steal their cars.

Warning Device: Having and using a visible or audible warning device is another item that can ensure that your car remains where you left it.

Immobilizing Device: Generally speaking, if your vehicle can’t be started, it can’t be stolen. “Kill” switches, fuel cut-offs and smart keys are among the devices which are extremely effective.

Tracking Device: A tracking device emits a signal to the police or to a monitoring station when the vehicle is stolen. Tracking devices are very effective in helping authorities recover stolen vehicles. Some systems employ “telematics” which combine GPS and wireless technologies to allow remote monitoring of a vehicle. If the vehicle is moved, the system will alert the owner and the vehicle can be tracked via computer.

Check out VINCheckSM, a free vehicle history service for consumers. Since 2005, NICB has offered this limited service, made possible by its participating member companies. Check it out at: www.nicb.org/vincheck.

Anyone with information concerning vehicle theft and insurance fraud can report it anonymously by calling toll-free 1-800-TEL-NICB (1-800-835-6422), texting keyword “fraud” to TIP411 (847411) or by visiting our Web site at www.nicb.org.

* This report reflects stolen vehicle data reported to NCIC in 2010. No further filtering of information is conducted, i.e., determining the total number of a particular make and model currently registered in the U.S. for comparison purposes.

Disaster Tips

2011-06-21T06:54:00.000-07:00

With the increase in natural disasters it might be a good time to review some disaster tips for your family and home.

Disaster Tips

Your home is one of your most important investments. By keeping it properly maintained in every season, you can help reduce the risk of a loss and ensure the safety and well-being of your friends and family.

Survival Kit

When preparing for a disaster, be sure to make a survival kit that includes:

• Canned or other non-perishable food

• Non-electric can opener

• First aid kit and manual

• Portable radio and/or television

• Flashlights

• Extra batteries

• Water in non-breakable containers

• Prescription medicines as needed

• Extra clothing and blankets

• Emergency cash and credit cards
• A copy of your Travelers insurance policy

Earthquake

Before

• Hang heavy items such as pictures and mirrors away from beds, couches and anywhere people sit.

• Fasten shelves securely to walls and place large or heavy objects on lower shelves.

• Be sure that water heaters and other gas appliances are properly bolted down or supported on the floor or wall.

• Make sure that your house is properly bolted to the foundation.

• Review how to shut off utilities in an emergency with all family members.

• Prepare a SURVIVAL KIT.

• Identify safe places with your family in each room, such as under sturdy desks or doorways where you can seek cover.

During

• If you are indoors, seek cover under one of the safe places identified. Stay inside and avoid all places where glass could shatter, such as windows and mirrors, or where heavy furniture could fall over.

• If you are outdoors, move away from buildings, overhead wires and streetlights. Stay put until the earthquake passes.

• If you are in an automobile, pull over and stop your car in a clear area away from bridges, buildings, overpasses and trees. Stay in the car and after the earthquake has stopped, proceed with caution avoiding ramps and bridges that may have been damaged. Be sure to turn on the radio for current earthquake information.

After

• Be prepared for aftershocks that may cause additional damage.

• Listen to a battery-operated radio or television if possible.

• Clean up any flammable liquids and leave immediately if you smell gas fumes.

• Stay out of damaged buildings. Seek temporary housing if you are not able to return to your home just yet.

• Promptly report the loss to insurance agency or company using the toll-free claim reporting number.

Hurricane

Before

• Understand the difference between a hurricane watch and a hurricane warning. A hurricane watch means that a hurricane may occur within the next 24 to 36 hours. A hurricane warning means that a hurricane will probably strike your area within the next 24 hours.

• Prepare a SURVIVAL KIT.

• Plan your evacuation route in advance of the storm.

• Close storm shutters and board up all windows.

• Stock up on drinking water and non-perishable goods.

• Have a supply of batteries and be sure you have flashlights and a portable radio in good working condition.

• Review how to shut off utilities in an emergency with all family members.

• Secure all outdoor objects or move them inside.

• Secure your boat or move it to a safer place.

• Fuel your car in case you must leave immediately.

During

• Listen to the radio for important storm information and instructions.

• If at home, stay inside and away from all windows, skylights and glass doors. Do not go outside, even if the weather appears to have calmed. The "eye" of the storm can pass quickly, leaving you outside when strong winds resume.

• If you must evacuate, leave as soon as possible and be sure to tell someone outside of the storm area where you will be.

After

• Stay tuned to the radio or television. If you have had to evacuate, return home only after authorities advise it is safe to do so.

• Avoid downed power lines.

• Beware and check for gas leaks or electrical system damage.

• Make temporary repairs as necessary.

• Promptly report the loss to insurance agency or company using the toll-free claim reporting number.

Flood

Before

• Learn the flood warning signs and alert signals of your community.

• Collect emergency building materials if you live in a frequently flooded area: plywood, plastic sheeting, lumber, nails, shovels and sandbags.

• Prepare a SURVIVAL KIT..

• Plan and practice an evacuation route. Establish a meeting place should your family get separated.

• Review how to shut off utilities in an emergency with all family members.

• Homeowners policies do not usually cover flood damage.

During

• Listen to a battery operated radio or television for the latest storm information. If advised to evacuate, do so immediately.

• Move to high ground, avoid rising waters and do not walk or drive through any floodwaters.

• Stay away from downed power lines and electrical wires.

After

• Listen to the radio and do not return home until authorities indicate it is safe to do so.

• Be watchful of snakes that may have found their way into your home.

• Throw away all food that has come in contact with floodwaters.

• If your basement has flooded, pump out the water gradually. Remove about 1/3 per day to avoid structural damage.

• Promptly report the loss to insurance agency or company using the toll-free claim reporting number.

Tornado

Before

• Learn the warning signs and alert signals of your community.

• Understand the difference between a tornado watch and a tornado warning. A watch means that tornadoes may develop, while a warning means that a tornado has been sighted and you should seek shelter immediately.

• Prepare a SURVIVAL KIT.

• Conduct drills with your family. Designate an area of your home as a shelter and practice what the plan would be should a tornado occur.

• Move cars and other outside objects inside the garage.

During

At home:

• Seek shelter away from windows in the center of the room. Basements and storm cellars are the best havens, but if there is no basement, take cover in a bathroom, closet, or under a sturdy piece of furniture.

At work or School:

• Go to the basement or an inside hallway at the lowest level. Keep away from large, open areas such as auditoriums, cafeterias and gymnasiums. Lie low and use your arms to protect the head and neck.

In a car:

• Do not try to outrun the tornado. Stop the car, get out, and if there is no facility nearby to take shelter in, lie in a low area such as a ditch.

After

• Keep calm. Stay in your shelter until after the storm is over.

• Listen to the radio or television for the latest storm information.

• Check for gas leaks or electrical system damage.

• Watch for downed power lines when going outside.

• Promptly report the loss to insurance agency or company using the toll-free claim reporting number.

Wildfire

Before

• Give your yard a good annual clean-up and maintenance. Prune tree limbs within 10 feet of your home, clear away dead plants or branches, and remove pine needles, leaves, and other debris from the yard, roof, and gutters.

• Prepare a family evacuation plan. Have more than one escape route and designate a meeting place if family members are in different locations when an evacuation order is given.

• Make sure adult family members know how to shut off utilities and how to use fire extinguishers.

• Prepare a SURVIVAL KIT.

• Keep an updated inventory of your personal property and important documents. (Click here for information on how to conduct a Personal Property Inventory.)

During

• Listen to the radio for important reports and evacuation information.

• Remove lightweight and non fire-resistant curtains from around windows.

• Place combustible patio furniture in the house or garage. Move all flammable furniture away from windows to the center of the house.

• Close windows and interior doors.

• Connect a garden hose to the outside tap and place lawn sprinklers on the roof. Wet the roof and any shrubs within 15 feet of the house.

If you must evacuate:

• Shut off propane at the tank, or natural gas at the meter, and turn off all pilot lights.

• Turn on a light in each room of the house to increase the visibility of your home in heavy smoke.

• Wear protective clothing including sturdy shoes, long pants, and long-sleeved shirts, gloves, and a bandana or handkerchief.

• Advise a friend or family member outside the wildfire area that you are leaving and where you will be.

After

• Stay tuned to the radio or television for updated information. If you had to evacuate, return home only after authorities advise it is safe to do so.

• Check for hazards such as electrical shorts or gas or water leaks. Turn off any damaged utilities, and arrange for the electric or gas company to test, repair, and turn utilities back on.

• Check the roof and attic for smoke, sparks, and embers.

• Throw away any items such as food or medicines that have been contaminated by smoke or fire.

• Promptly report any loss to your insurance agency or company using the toll-free claim reporting number.

(Disaster tips provided by Travelers Insuance Company)

Nissan Leaf, Chevy Volt Get Top Safety Ratings

2011-04-28T08:34:00.000-07:00

The Leaf and Volt do well in crash test. If pricing gets competitive and battery charging becomes available on the road people might actually purchase these vehicles. Mass sales of these vehicles in the US would be a win-win for all.

Nissan Leaf, Chevy Volt get top safety ratings - Business wire - bellinghamherald.com

By DEE-ANN DURBIN - AP Auto Writer

DETROIT The Chevrolet Volt and Nissan Leaf got top safety ratings in some of the first-ever tests of electric cars by an insurer-funded research group.

Both cars earned top scores for front, side and rear-impact crashes and for rollover crash protection, according to results released Tuesday by the Insurance Institute for Highway Safety.

While both the Leaf and Volt are classified as small cars, the institute said their heavy battery packs put their weight closer to large sedans. The Volt, for example, weighs 3,760 pounds, which is close to the weight of the Chevrolet Impala. The Leaf weighs 3,370 pounds, which is similar to a Nissan Altima midsize car. That extra mass helps protect their occupants, since heavier cars are less likely to be pushed around in a crash.

The Leaf runs solely on battery power and has a range of around 100 miles. The Volt can go around 40 miles on an electric charge before a small gas engine kicks in.

The institute said it was the first time it has tested road-worthy plug-in cars. Two golf cart-like electric vehicles, the Gem e2 and Wheego Whip, were tested for research purposes but performed poorly in side-impact tests, the group said. But those cars run at very low speeds and aren't required to meet federal safety standards.

The federal government hasn't yet released crash-test results for the Volt and Leaf.

"What powers the wheels is different, but the level of safety for the Volt and Leaf is as high as any of our other top crash test performers," said Joe Nolan, the institute's chief administrative officer.

The institute, which is funded by insurance companies, buys the cars it tests directly from dealers.

UnitedHealth Shares Advance After Insurer Boosts Full-Year Forecasts

2011-04-21T12:00:00.000-07:00

This is an interesting article from Bloomberg about UnitedHealth Group, Inc. A few things that I found interesting:

Impact of New Regulation Less Then Expected

Higher Enrollment

Decline In Medical Spending (Shouldn't this increase if you insure more people?)

Net Income Higher Then Estimates

Largest Jump in Exchange Share Price Since December 2008

UnitedHealth Shares Advance After Insurer Boosts Full-Year Forecasts

UnitedHealth Group Inc. (UNH), the largest U.S. insurer by sales, rose the most since 2008 in New York trading after increasing its full-year forecast on higher enrollment and a decline in the company’s medical spending.

UnitedHealth gained $3.59, or 8.1 percent, to $47.83 at 1:28 p.m. in New York Stock Exchange composite trading, after climbing to $48.90 in the biggest jump since December 2008. The Minnetonka, Minnesota-based insurer said 2011 net income will be $3.95 to $4.05 a share, more than a January forecast of as much as $3.70. First-quarter earnings were 36 cents a share higher than the average estimate of seven analysts.

UnitedHealth is the first of the major health insurers to report earnings that include the impact of government-mandated spending that kicks in this year. The health-care overhaul signed into law in 2010 requires managed-care companies to spend at least 80 percent of revenue collected from premiums on care or rebate the difference to clients. UnitedHealth said it spent 81.4 percent in the first quarter.

“The impact of the new regulations was less than expected,” said Jason Gurda, an analyst at Leerink Swann & Co. in New York. “This was also UnitedHealth’s best quarter for investment income in 11 quarters.”

First-quarter net income rose 13 percent to $1.35 billion, or $1.22 a share, from $1.19 billion, or $1.03, a year earlier, the insurer said. Sales rose 9.7 percent to $25.4 billion, topping analysts’ average estimate of $25 billion.

Industry Boost

Other managed-care company shares benefited from UnitedHealth’s first quarter. The Standard and Poor’s 500 Managed Health Care Index jumped as much as 6.8 percent in intraday trading, the most since Nov. 4, 2009.

WellPoint Inc. (WLP) of Indianapolis climbed $3.10 to $72.49; Aetna Inc. (AET) of Hartford Connecticut rose $1.84 to $38.86; and Philadelphia-based Cigna Corp. (CI) gained $1.68 to $45.56. WellPoint is scheduled to report earnings on April 27; Aetna on April 28; and Cigna on May 5.

UnitedHealth’s results beat estimates because of a combination of the company’s “initial conservatism on its outlook, strong enrollment gains and overall execution,” said Matthew Borsch, an analyst at Goldman Sachs Group Inc. in New York.

In January, Chief Executive Stephen Hemsley said the company would make adjustments to its forecasts after the first quarter once it was clearer what the impact of the health-law mandates would be and whether demand for medical services was increasing.

Hemsley Comments

Today, Hemsley said on a conference call that “we see expansive market opportunities opening in health benefits and health services.”

Enrollment at the end of the quarter rose 5.2 percent to 38.7 million from a year earlier, the company said. Membership in managed-care plans sold to the government programs Medicare for the elderly and disabled and Medicaid for low-income Americans rose 8.1 percent.

UnitedHealth raised its outlook based on a 90 basis point decline in the portion of premium revenue the company spent on medical care in the quarter, said Ana Gupte, an analyst at Sanford C. Bernstein & Co. in New York. “UnitedHealth is firing on all cylinders of growth,” she said.
To contact the reporters on this story: Pat Wechsler in New York at pwechsler@bloomberg.net

To contact the editor responsible for this story Reg Gale at rgale5@bloomberg.net

Emergency Preparation Suggestions

2011-04-04T11:02:00.000-07:00

Stuff happens. And it often happens when you least expect it!

With storm season around the corner and the economy looking iffy, now is a good time to ask yourself how prepared you are against disasters, both personal and communal. For example, on an individual level, what if you lost your job, became ill or lost a loved one? On a broader level, what if a natural or man-made disaster strikes? Are you, your finances and family prepared to withstand an emergency.

Most of us shy away from emergency planning because it is a subject we all prefer not to ponder. No one likes to think about bad things happening. But look at it this way: When you have an emergency strategy in place you free yourself from worry and have greater peace of mind. Plus, you'll increase your likelihood of coming out of the emergency with minimal damage and ease your transition to getting your life back to normal.

Here are nine suggestions to do to safeguard yourself against life's unpleasant surprises:

1. Build your emergency fund. Everyone should have enough cash on hand to cover at least three months' worth of living expenses. That means enough to cover your mortgage or rent, food, utilities, debt payments and other regular expenses you can't put off even in an emergency. That may seem a daunting task, but start out small. Make a goal and be disciplined to save for your emergency fund. Make sure your cash is accessible and safe.

2. Cover your assets. Make sure your homeowners and renters insurance is up-to-date. Keeping an inventory of your possessions will also help you get faster service if you need to file a claim. And make sure you know what your insurance covers. For example, most homeowners policies protect you if a major storm hits, but they won't provide flood or earthquake protection.

3. Protect your livelihood. If you have a family or someone else who relies on you for financial support, your untimely death could be financially devastating. Buying a life insurance policy is a good way to provide for your survivors after you're gone.

You'll also want disability insurance, just in case something happened to you that prevented you from working for a time. Many people get some form of disability insurance through their job, but you'll want to make sure it's enough.

4. Make your wishes known. Everyone should have a will. There are two parts to the essential will. Part one handles end-of-life issues, such as who inherits your property and who gets custody of any children. Part two handles issues that may arise while you are alive but unable to speak for yourself, including medical and financial decisions.

5. Safeguard important documents. Protect your finances by keeping essential documents in a fire-proof home safe, including birth certificates, adoption papers, passports, Social Security cards, insurance policies, property and automobile deeds. You might also include a backup CD of family photos or important computer files. It's a good idea to toss in some money, too, in case you need to evacuate your home in a hurry (stopping at an ATM mid-emergency will be the least of your worries).

6. Have a grab-and-go survival kit. There may come a time when you have to leave your home quickly. Creating a portable survival kit with food, water and supplies to last at least three days will help hold you over until your situation stabilizes or help arrives. You can pack your own, or you can buy a basic, pre-made kit for a family of four at The Red Cross Shop for $89.

More comprehensive kits cost between $55 and $100 per person at other online retailers. Make sure you personalize your kits with an extra set of house and car keys, a pair of prescription glasses or contact lenses, medications and other special items for pets, infants or elderly family members.

7. Keep your car tuned -- and gassed -- up. You'll want to make sure your getaway car is reliable. So keep up to date on maintenance and repairs, and get in the habit of never letting the fuel dip below half a tank before refilling.

Because emergencies can strike on the road, too, make sure your car is stocked. In addition to jumper cables, flares, a flashlight and basic tools, include a first aid kit, blankets, a shovel, tissues, drinking water and nonperishable food like fruit juice and energy bars. In the glove box, make sure you have a map. And toss in an old cell phone -- even if it doesn't have a service carrier, you may still be able to use it to dial 911.

8. Stock up. There's no need to stockpile supplies in your basement, but FEMA recommends that you keep enough food and water in your home to sustain your family at least two weeks. If something unexpected comes up, you don't want to have to worry about feeding your family. Think of it as an emergency fund you can eat.

Buy canned goods, dry mixes and other foods that store well. (Don't forget a manual can opener and a camping stove, in case you lose electricity.) Collect food you normally eat, so you can rotate it into family meals instead of buying a 50-pound bag of oatmeal that may spoil before you ever use it. To build your stash, purchase a few extra items each time you go to the store, or buy a little more when favorites go on sale.

9. Get your family organized. Establish an evacuation plan and select a meeting place. Pick two locations for your family to meet: right outside your home and outside your neighborhood in case you can't return home. Get a copy of FEMA's "Are You Ready? A Guide to Citizen Preparedness." It details how to prepare for natural and man-made disasters. The American Red Cross's "Terrorism: Preparing for the Unexpected" also is helpful and includes a primer on first aid.

And it's always a good idea to learn basic emergency skills. Everyone in your home should know how to operate a fire extinguisher, turn off gas and electricity, and perform CPR and basic first aid.

Quick Ice Dam Cure

2011-03-04T11:47:00.000-08:00

The snow in Minnesota has been historic in 2010-2011 and there is a good chance more snow is to come before spring is sprung. If you have ice dams this article from "This Old House" and Roy Barnhart might be useful.

If you live in a cold, snowy region, you already know about the damaging effects of ice dams. The gutters clog up with ice, then water runoff from the roof gets trapped by the dam and eventually backs up the roof, travels under the shingles, and leaks into the house.

While a permanent fix for ice dams usually requires increasing the insulation, sealing, and ventilation in the attic, there is a simple way to diminish the damage after the dam has formed.

Fill the leg of discarded pair of panty hose with a calcium chloride ice melter. Lay the hose onto the roof so it crosses the ice dam and overhangs the gutter. If necessary, use a long-handled garden rake or hoe to push it into position.

The calcium chloride will eventually melt through the snow and ice and create a channel for water to flow down into the gutters or off the roof.

Illustration by Narda Lebo
Ice-Dam Breaker

Insurance Fraud 10% Of Your Insurance Premiums?

2011-02-25T09:49:00.000-08:00

Insurance fraud doesn't look like it will be going away anytime soon. If the estimates that 10% incurred losses are from fraud are correct then I would suggest your insurance premiums are at minnimum 10% higher due to insurance fraud and climbing. Reporting insurance fraud when aware of it is a good idea.

The Insurance Information Institute estimates that fraud accounts for about 10 percent of the property/casualty insurance industry’s incurred losses and loss adjustment expenses*. This fraud results in higher premiums.

Fraud may be committed at different points in the insurance transaction by different parties: applicants for insurance, policyholders, third-party claimants and professionals who provide services to claimants. Common frauds include "padding," or inflating actual claims; misrepresenting facts on an insurance application; submitting claims for injuries or damage that never occurred; and "staging" accidents.

Prompted by the incidence of insurance fraud, 42 states and the District of Columbia have set up fraud bureaus (some bureaus have limited powers, and some states have more than one bureau to address fraud in different lines of insurance). These agencies have reported increases in referrals (tips about suspected fraud), cases opened, convictions and court-ordered restitution.

The exact amount of fraud committed is difficult to determine. The proportion of fraud varies among the different lines of insurance, with healthcare, workers compensation and auto insurance believed to be the lines most vulnerable. The nature of fraud is constantly evolving. Shortly after the enactment of the 2010 healthcare reform law, the Health and Human Services secretary issued warnings about a proliferation of phony health insurance policies.

*Estimate based on research conducted by the Battelle Seattle Research Center for the Insurance Information Institute in 1992 (Fighting the Hidden Crime: A National Agenda to Combat Insurance Fraud. Insurance Information Institute, March 1992) and other industry reports (including Insurance Fraud, Renewing the Crusade, Conning, 2001).

RECENT DEVELOPMENTS

The National Insurance Crime Bureau (NICB) said that 70,295 questionable claims were referred to it in the first three quarters of 2010, about 7,400 more than in the first three quarters of 2009, or an increase of 12 percent. The largest number of suspicious claims in the first three quarters of 2010 was in the faked or exaggerated injury category, up 17 percent from a year ago to 11,048. Questionable claims for auto glass fraud were up 511 percent in the first three quarters of 2010, compared with the previous year. (See following chart.)

(1) Includes property, casualty, commercial, workers compensation, vehicle and miscellaneous claims.

Source: National Insurance Crime Bureau.

Source: Article From IIX Website

Independent Agent Advantage

2011-02-15T15:43:00.000-08:00

Short video on why you should choose to insure with an independent agent like myself.

Car Breakdown Safety

2011-02-12T05:56:00.000-08:00

Good common sense video on what to do when a car breaks down. Some things seem so logical but occasionally a reminder helps. I know I need constant reminders especially on topics related to that old cliché' "safety first" so my stupid gene doesn't take over the brain.

Worker's Compensation Insurance Settlement with AIG

2011-02-11T08:28:00.000-08:00

Just more reasons for all of us to admire AIG (not really)!!!

Minnesota Department of Commerce part of $100 million settlement with AIG over misreporting of workers' compensation premiums.

Minnesota's cut is more than $2 million

American International Group Inc., AIG, and its workers compensation insurance affiliates have agreed to pay $100 million in fines to insurance regulators in all 50 states and the District of Columbia for alleged premium under-reporting, the Minnesota Department of Commerce, one of the eight lead state regulators on the case, announced today. Minnesota's share of the settlement would be a little more than $2 million.
The settlement stems from a two-year market-conduct examination of the company, which found

non-compliance with rating, forms and financial reporting laws. Most significantly, it found that AIG misreported $2.12 billion of workers compensation premium that was reported instead as general or commercial automobile liability premium. By misreporting these premiums and not paying its fair share, the company caused the cost of workers' compensation insurance for all parties to go up.

"We expect insurance companies to be honest and forthright in their handling of premiums. For many years, AIG was misstating its financials to states, including Minnesota. That has given them an unfair competitive advantage and has damaged the integrity of the financial information all state regulators rely on," said Commerce Commissioner Glenn Wilson. "We are glad that AIG has accepted the findings and has agreed to implement a rigorous compliance plan."

The Settlement Agreement calls for:

A fine of $100 million to be shared by each state adopting the settlement agreement;

Payment of an additional $46.5 million in premium taxes and assessments;

Adoption of a compliance plan ensuring the company's compliance with workers compensation rates, forms and financial reporting requirements;

Monitoring by the lead states of the company's compliance with that plan for a 24-month period; and

An additional fine of up to $150 million if an examination at the end of the 24-month period demonstrates non-compliance by AIG.

In addition to its role as a lead state in the multi-state examination, in 2008, the department was instrumental in brokering a similar settlement between AIG and the Minnesota Workers' Compensation Reinsurance Association, the Minnesota Workers' Compensation Insurers Association, the Minnesota Insurance Guaranty Association, and the Minnesota Workers' Compensation Assigned Risk Plan. This settlement was related to similar charges of misstating workers' compensation premiums.

Following that 2008 settlement, the department continued on as one of the lead states in the most recent multi-state market conduct examination that led to the action against AIG announced today. The Minnesota Department of Commerce joined insurance departments in Delaware, Florida, Indiana, Massachusetts, New York, Pennsylvania and Rhode Island in the market-conduct examination.

AIG has pledged its commitment to the terms and principles of the compliance plan based on the settlement agreement.

I AM RENTING A CAR SHOULD I PURCHASE RENTAL CAR INSURANCE?

2011-01-12T10:36:00.000-08:00

This is a great informational video about renting a vehicle in the United States and how your auto insurance may respond. If you are a current auto insurance customer or are looking for new auto insurance and have questions about renting a car and how your auto insurance will respond please call my office.

2010-12-27T14:35:00.000-08:00

More bad news about Minnesota weather and it is not even winter related!

Reporting Bruce Hagevik

By Bruce Hagevik, NewsRadio 830 WCCO

ALBERT LEA, Minn. (WCCO) – Minnesota had more reported tornadoes in 2010 than any state in the nation with 145. The preliminary numbers were issued by the National Weather Service’s Storm Prediction Center.Texas took second place with 105 reports. But there’s a difference between reported and confirmed tornadoes.“Those are preliminary numbers where sometimes multiple spotters report the same tornado,” said meteorologist Todd Krause of the Twin Cities office of the National Weather Service. “As it turns out Minnesota in this year wound up with 104 (confirmed) tornadoes,” he added. Krause says the 145 figure no doubt will be reduced in the final count. “The same is true of other states as well,” said Krause. Still, Minnesota will likely retain its number-one position. Forty-eight tornadoes were spotted in the state June 17, which set a one-day record. There were also tornadoes in Wisconsin, North Dakota and Iowa, totaling 74 including Minnesota. “That places it in second in the country all time for summertime tornadoes,” said Krause. “‘Summertime’ being June, July, August.”there were 24 tornadoes in the state in all of 2009.

NewsRadio 830 WCCO’s Bruce Hagevik Reports

Navigating The Auto Claim Process

2010-12-14T08:47:00.000-08:00

Nobody ever wants to get into an accident. But should the unfortunate occur, your insurance company should be there to help you get back on the road. Claim practices can vary by company, so make sure to ask about the particular company's claim practices when purchasing insurance.

Here are some of the most frequently asked questions we receive about the auto claim process.

What should I do if I'm in an auto accident?

Here are the immediate steps to take after an auto accident.

• First, remain calm. Move out of the way of traffic, and turn on your hazard lights.

• Call the police, even in a minor accident.

• If someone is injured, request medical assistance. If fire is involved, request fire department aid.

• Do not discuss who is at fault.

• Exchange necessary information with the other driver(s). Don't forget to write down the contact information and license plate numbers of all involved vehicles.

• Call your insurance company as soon as possible following a loss. Most companies have a toll-free reporting number available 24 hours a day, 365 days a year. The sooner you call, the sooner they can help.

What information do I need to report a claim?

The information needed will depend on the type of claim you're reporting. Typically, however, insurance companies ask for:

• Your contact information

• The name and contact information of any other involved parties

• Your policy number (if available)

• The type of loss you're reporting (auto, home, etc.)

• The date the incident occurred

• A description of the loss

• A description of any injuries

I don't have all the information needed to report my claim. What should I do?

You should report your claim to your insurance company as soon as possible, even if you don't have all the necessary information. The faster you report your claim, the sooner your insurance company can start assisting you. Your company's claim representative should contact you throughout the claim process, so they can assist you with any additional information needed.

What happens after I report my claim?

Claim practices may vary by company, but typically after reporting your loss a claim representative should call you to discuss what will happen next, what your policy covers and answer your questions. For auto and property claims, the representative will usually set up a time to inspect the damage in person. When shopping for insurance, ask about the company's claim handling procedures so that you know what to expect in the event of a loss.

How long will it take to settle my claim?

The faster you report your loss, the faster your insurance company can begin handling your claim. Every loss is different, so the length of time needed to settle a claim varies. The type of claim, severity of the damage and other circumstances will determine the time needed. Your insurance company's claim representative is your point of contact for any questions you might have about your specific claim or the claim process in general.

When can I expect payment?

First, your insurance company should review the facts of the loss to determine what happened and whether the loss is covered by your insurance policy. For damaged property or vehicles, this usually requires an in-person inspection. Once the claim representative determines whether the policy covers the loss and the extent of the damages, they can set up payment.

After I report my claim, will my insurance go up?

It depends. A lot of factors go into determining your premium, including the coverages and limits you purchase, how much you drive, driving record and claim and loss history. When looking at claims and losses, companies usually look at the type of loss, the amount paid on the claim, whether anyone was injured and whether there are other losses on the policy.

Can my insurance company assist me with auto repair options?

You always have the right to have your vehicle repaired at the shop of your choice. For your convenience, many companies offer repair options to assist you during this time. Ask your insurance company for more details.

I wasn't at fault for the accident. Can I get my deductible back?

If it's determined that you're not at fault for an accident, your insurance company may notify the negligent driver and/or their insurance company to recover the amount your insurance company paid for the accident, including your deductible. This is called subrogation. Recovery of your deductible may take time and is not guaranteed. The best way to understand the subrogation process is to contact your insurance agent or insurance company.

Minnesota Insurers May Face Worst Year Ever for Catastrophe Losses in 2010

2010-12-02T05:10:00.000-08:00

This is more bad news about the property loss problems in the State of Minnesota.

This is an article from BestWire about Minnesota insurance companies’ probable losses in 2010. This is bad news considering Minnesota is already the 3rd worse state for property claims. Expect to see double digit increases on homeowners’ insurance renewals and higher mandatory deductible minimums.

OLDWICK, N.J. November 12, 2010 (BestWire) — Unusual weather this year, including more than 100 tornadoes and a windstorm in late October, will lead to huge catastrophe losses for insurers in Minnesota.

"We're looking at $2 billion in catastrophe losses" said Mark Kulda, spokesman for the Insurance Federation of Minnesota. Kulda cautioned that the figure is a preliminary estimate, based on comments from some of the federation's members, who have said this year has been the worse for insured losses.

The prior worse year was 1998, Kulda said, when insurers paid $1.5 billion in claims, due largely to tornadoes, including storms that caused devastating damage in St. Peter and Comfrey, Minn.

Between January and July 31, Minnesota was hit by 99 confirmed tornadoes, including four powerful F4 tornadoes in June, according to the National Oceanic and Atmospheric Administration. Minnesota typically ranks about 10th in tornadoes among states. This year, Minnesota is topping the list, Kulda said.

The Enhanced F, or Fujita scale, is a damage scale that meteorologists use to rank tornadoes from zero to five. Based on damage to 28 separate indicators, an F-0 tornado is estimated to have wind gusts of 65 to 85 mph, an F-4 tornado is estimated to have wind gusts of 166 to 200 mph, and an F-5 tornado is estimated to have gusts topping 200 mph, according to the NOAA. Some 60 tornadoes tore through the state on June 17 (BestWire, June 18, 2010). Areas hardest hit include Wadena, in north-central Minnesota, where the high school was destroyed, and the town of Albert Lea, in southeastern Minnesota, Kulda said.

Minnesota and other states were hammered by a massive storm system in late October. One large insurance company had 2,107 claims in Minnesota following the storm system that hit from the Dakotas, as far south as Mississippi and Alabama, east to the Carolinas and Virginia beginning the evening of Oct. 25 through Oct. 28, spokesman Dick Luedke said.

The same large insurance company received about the same number of claims in Illinois, more than 1,100 in Wisconsin, nearly 700 in Indiana, and more than 500 in Michigan, Luedke said.

A 2nd large insurance company received more than 1,800 claims in Minnesota, Illinois, Ohio, Indiana, and Missouri from the October storm system. That figure includes 883 property-damage claims in Minnesota, spokesman Jerry Davies said in an e-mail.

"Many customers were affected by the October 2010 super storm, and our top priority is helping them through the claims process so they can rebuild or restore their property as quickly as possible. We will report catastrophe losses in our next quarterly earnings release," spokeswoman Christina Loznicka from a 3rd large insurance company said in an e-mail.

The storm system swept down from Alaska, moving south and east, with low pressure so intense that it set a record in Minnesota, said David Imy, a meteorologist with the NOAA Storm Prediction Center in Oklahoma.

Over water, Imy said, such low pressure is equivalent to a category 3 hurricane.

The storm caused blizzard conditions in North Dakota, and there were more than 50 reports of tornadoes in several states, including Indiana, Ohio, Illinois, Wisconsin, Kentucky, Virginia, North Carolina, South Carolina, Georgia, Alabama and Tennessee. Not all of those tornado reports have been confirmed, Imy said, but he added that winds of 50 to 80 mph were very common with the storm system.

In addition to the tornadoes and late-October storm, Kulda said the southern tier of Minnesota experienced heavy rain fall beginning in late September, which produced severe flooding. He said the state typically experiences flooding in the spring when snow melts, but flooding in the fall is unusual. More than 20 southern counties were declared federal disaster areas, making them eligible for federal aid, according to the Federal Emergency Management Agency.

(By Diana Rosenberg, senior associate editor, BestWeek)BN-NJ-11-12-2010 1137 ET #)

Social Media-Companies-And The Risk for All

2010-10-18T07:44:00.000-07:00

Social media is becoming a fixture in every aspect of our lives and sometimes not by choice. Travelers Insurance has written the following article regarding the risk-exposures for companies involving Social Media and offered advice on managing the risk. I think the article is very interesting, useful and would suggest everyone consider applying some of the advice when using social media for personal use.

Social Media and Your Business-Managing Liability in an Online World (Travelers Insurance Company)

The use of social media is widespread and growing. What began as a way for people to keep in touch has morphed into a 24x7, unfiltered, online dialogue about anything and everything. Today, a company’s employees, customers and even competitors are likely to use social media. While tools like Facebook, YouTube and Twitter can be used to strengthen a company’s success, they also can open the door to unexpected liability for businesses.

I’m excited to have Kirstin Simonson author this article. She is an underwriting director with Global Technology and specializes in cyber liability risk issues.

The following brief:

• Summarizes the extent of social media use.

• Identifies the type of risk a company may be exposed to through social media use.

• Outlines a game plan to create an effective approach to manage these risks.

• Provides resources for further exploration of this important topic.

– Mike Thoma, Chief Underwriting Officer of Global Technology at Traveler

Reining in Social Media Liability

New ways of using the Internet to connect with other people are becoming increasingly popular. Facebook, YouTube, Twitter and other similar sites are reaching beyond their original teenage audiences and are being embraced by adults. The upside for businesses is that this so-called ‘social media’ is a new avenue for getting their message out and making their brand more visible. The downside, however, is the potential liability when employees, customers and competitors use social media. Although legal standards are still evolving, companies need to be aware of the risks associated with social media and take steps to protect themselves. This includes guiding employees with consistent, proactive policies. It also requires monitoring what customers and competitors say, and responding when appropriate.

Usage Growing Rapidly

The statistics regarding social media are dramatic: Facebook announced more than 300 million people worldwide use its highly popular social networking site. Twitter puts its monthly visitor rate at 55 million. YouTube claims to have surpassed 10 billion views in a single month in August 2009.

Although search remains the most popular use of the Internet, a Nielsen report found that social networking has overtaken e-mail, engaging close to 67 percent of those who go online in the United States.

To read the full content of the Nielsen report, go to:

http://blog.nielsen.com/nielsenwire/global/social-networking-new-global-footprint

Who are these avid social network users?

It’s not just the generation born into the digital world. The Nielsen study found that the greatest growth recently for Facebook has been in the 35–49 age bracket, while the increase in 50–64 year olds on Facebook has been almost twice that of those under 18. In a survey conducted on behalf of Travelers Insurance Company, close to half of the adult population indicated that they use social media.

The Nielsen report noted that about one out of every 15 minutes spent online in this country involves social networking.

Uncontrolled Messaging From Three Directions

Today, many companies see social media as a valuable component of their marketing strategy. Some use it to spread the word about new products, keep in touch with existing customers and promote awareness of the company’s brand.

Social media sites, however, are also an uncontrolled environment where a company’s employees, customers and competitors can say just about anything they want. That may lead to liability, as these three examples illustrate:

• An employee brags about his involvement with a new celebrity customer, inadvertently releasing information that jeopardizes the business relationship and the celebrity’s publicity rights.

• A customer posts an angry outburst about a company’s product. Someone from the company responds, and the comments are later cited in the product liability suit filed by the customer.

• A competitor tweets about the poor warranty service provided by the company. An employee responds in a manner which defames the competitor with derogatory language about “lying” and “cheating.”

Companies Not Keeping Up

An effective strategy for managing risk from the online postings of customers and competitors focuses on monitoring and controlling the content of any response. When it comes to employees, however, companies have the opportunity to be more directive, establishing policies that restrict the use of social networking. Few companies have done so. In the Travelers survey, about two-thirds of respondents said their companies do not have a policy regarding social media usage — or that they are not aware of one if it exists. This is a problem. The survey also indicated that one out of eight respondents post work-related information on social media websites, and 30 percent feel such postings are acceptable as long as they believe the information is true. In addition, 75 percent said they were “not at all” or “not very” concerned about online postings causing professional damage. The Travelers survey finding about the lack of policies was corroborated in a survey released by the Society of Corporate Compliance and Ethics in September 2009:

More than half of the companies had no system in place to monitor employee use of social networking sites.

Areas of Risk

Why should companies be concerned about their employees’ use of social network sites? Areas of potential liability include:

1. Exposure of the company to legal liability for defamation, harassment, privacy violations and other possible claims.

2. Leaking of proprietary information or trade secrets that may decrease a firm’s ability to be competitive.

3. Damage to the company’s reputation through false, disparaging or reckless communications.

Examples are becoming more common. In one case, a business had to defend itself against a claim of defamation because an employee used a company computer to post a negative opinion about a prior employer. In another, a medical clinic was sued when private material about a patient was posted online.

In addition to these three areas, other potential risks are still evolving. For example, in October 2009 the Federal Trade Commission issued guidelines that indicate employees may create unintended legal liability for their companies if a consumer claims a blog or Facebook posting by an employee influenced them to purchase a product that later proved defective or harmful. Other legal experts have warned that human resource departments using social media sites to uncover information about applicants may violate anti-discrimination laws when they reject hiring people
for the wrong reasons.

The FTC is a great resource for information to learn how
to manage online risks. Go to www.onguardonline.gov or
www.ftc.gov/opa/2009/10/cybersecurity.shtm.

By taking a strategic, well-planned approach to using, monitoring and responding to social networking, companies can manage risk and reduce their exposure to liability.

Managing Liability in an Online World: Crafting Your Game Plan

To effectively manage the potential risks involved with social networks, companies should take six steps:

Monitor online presence

Businesses need to understand how they are being depicted online, whether it is through their own efforts or the postings of employees, customers and competitors.

Define risk tolerance

What is the company willing to live with? If data breaches, leaks of proprietary information or defamation are involved, a company may decide it needs to have strong policies for controlling social media use and responses to others’ postings. If the company’s reputation is involved, the company may decide to be more selective about its approach, responding only when postings reach a certain level or pass a pre-established threshold.

Create a plan

Companies should have written policies that cover all forms of electronic communication, including social networks. Employees should be prohibited from making communications that are contrary to the company’s interest, are illegal or violate anti-discrimination policies. The strategy for and responsibility of responding to external postings should be outlined in advance.

Train employees to follow the policy

Communicate the policy to employees and make sure they are aware that their electronic communications at work may be intercepted, analyzed and archived by the company. Inform them about consequences for violations.

Enforce the policy

When issues arise, companies need to be consistent about enforcing the consequences outlined in the policy. This not only encourages employees to follow the policy, but also establishes a stronger argument in any lawsuit that the company took adequate steps to control social network usage.

Prepare for the unexpected

Companies should have a crisis management plan in place to handle incidents. This may include strategies for managing negative publicity, removing false postings, and arranging for cyber risk coverage with their insurance agent.

Online Resources Referenced in This Article

• http://blog.nielsen.com/nielsenwire/global/ social-networking-new-global-footprint for a summary of the March 2009 Nielsen report

• www.ftc.gov/opa/2009/10/cybersecurity.shtm

• http://www.onguardonline.gov/

• www.travelers.com/technology to find a link to Travelers August 2009 social media risk survey

About the Author

Kirstin Simonson is an underwriting director with Global Technology at Travelers and specializes in cyber liability risk issues which includes Technology Errors and Omissions coverage, Network and Information Security coverage (privacy) and Communications and Media Liability coverage.

This article is provided for informational purposes only. It does not, and it is not intended to, provide legal, technical or other professional advice, nor does it amend, or otherwise affect, the provisions or coverages of any insurance policy or bond issued by Travelers. Travelers disclaims all warranties whatsoever.

© 2010 The Travelers Indemnity Company. All rights reserved. CP-7092 New 5-10

Who’s afraid of the minimally-insured driver?

2010-07-23T09:36:00.000-07:00

A short video from Safeco Insurance Company on why everyone should increase the un-underinsured motorist coverage on an auto insurance policy.

Home Insurance Replacement/Rebuild Cost. Homeowner Beware!

2010-05-07T13:23:00.000-07:00

HOME REPLACEMENT-REBUILDING COST AND HOME MARKET VALUE ARE NOT THE SAME VALUE!

Insurance companies don't care about the market value of your home. I will restate to annoy and alarm, insurance companies don't care about the market value of your home. Insurance companies however are very concerned with the replacement cost or rebuilding cost of your home. Just about every homeowners insurance contract requires you insure your home at what the insurance company deems the replacement cost of your home. If you don't insure your home for replacement cost every homeowners insurance contract has built in coverage reductions and or exclusions. The built in homeowner insurance contract pitfalls can leave a homeowner without enough coverage to rebuild or repair after a loss.

WHY SUCH A DIFFERENCE BETWEEN MARKET VALUE AND REPLACEMENT-REBUILD COST:

New Construction Cost Savings

Typically, new homes built today are part of a housing development which allows contractors to purchase lumber, electrical and plumbing supplies in bulk at discounted prices. These large volumes make square foot costs much lower than building just one home at a time.

Home Reconstruction Cost More

Reconstruction cost – the cost to rebuild your home to original specifications with similar materials and craftsmanship – is generally more expensive than building a new home from scratch. In fact, building experts say that it costs up to 50 percent more to rebuild a house than to build new. Why? Specialized labor costs: Builders used for reconstruction require a higher skill set, as they have limited onsite mobility and must work around existing structures and power lines using smaller machinery. New codes: Rebuilding may require contractors to meet new building codes put in place since your home was originally built.

According to a new study by Xactware, a Utah company that keeps up with housing and repair costs, to rebuild a damaged home went up 3.95 percent nationwide last year(2008). The exact rebuilding cost is usually expressed in dollars-per-square-foot. For instance, to build a 2,000-square-foot home at $100 per square foot equals $200,000. To calculate the cost to rebuild your house, you'll need to know the following:

- The per-square-foot cost in your neighborhood to build and to rebuild. Keep in mind expensive extras such as high-end appliances; cabinets and other materials can put the cost per square foot upwards of $400 to $500 for very expensive homes.

- How much damage has your home sustained? Before the rebuilding process begins, the damage must be removed and disposed of and the home must be prepared for rebuilding.

A 12-by-15-foot room equals 180 square feet, and the per-square-foot cost can increase by as much as 50 percent for readying a space for reconstruction. So the $100 per-square-foot cost goes up to about $150. As an example, if 500 square feet of your home is destroyed, the replacement cost could be $75,000.

Why You Can’t Rely on Market Value

Home market values reflect today’s economic conditions (remember the 2009-2010 housing and housing derivative market melt-down), taxes and many other factors that have little to do with home reconstruction costs. Market value is also influenced by other factors such as the location of the home, the quality of the school systems and the desirability of the neighborhood.

Don't be a victim of a homeowners insurance contract reduction or exclusion, insure your home for REPLACEMENT COST-REBUILD COST.

Minnesota Homeowners Insurance Claim-Loss Problems

2010-03-03T06:44:00.000-08:00

Minnesota was the third worst profitable homeowner’s insurance market in the nation for the decade that ended in 2008. Only Mississippi and Louisiana were worse. Insurance companies lost money in 8 of the last 10 years. What are the causes? Bad Weather:

Hail Storms
Wind Storms
Tornados
Pipe Bursting Cold
Severe Snow

Overall insurance carriers posted a 19.3% annual loss for the decade. In 2008 the statewide loss ratio for homeowners insurance was 157.3% up from 123.9% in 2007 and 83.6% in 2006. This is a bad trend for homeowners in Minnesota. Look for significant increases for homeowner’s insurance premiums. If the loss ratio trending continues not only will rate increases be in store but major reductions in coverage will occur. Although I am not confident the loss ratio trending will change let’s all hope it does!

What Is An Insurance Score

2010-01-07T06:05:00.000-08:00

I am not a big fan of insurance scoring but insurance scoring is quickly becoming the insurance industries favorite tool to evaluate risk. It is important to know how insurance scores are derived and used so everyone can manage credit to their benefit.

What Is An Insurance Score

An Insurance Bureau Score is a snapshot of a consumer’s insurance risk picture at a particular point in time based on credit history report information. Since insurance scores have been proven to be highly predictive of the potential for future losses, they help insurance companies determine the likelihood that a customer will file a claim, and thus allow carriers to set rates that are accurate and appropriate for each customer. This enables carriers to offer insurance coverage to a broader range of customers. Insurance scores are used in the same way as other traditional underwriting factors. As a group, people with certain patterns in their credit history receive lower insurance scores and are more likely to experience a loss and file a claim. They are charged a higher premium to reflect that risk. This allows insurers, to give better rates to consumers with higher insurance scores, who are less likely to file a claim. Credit history helps predict the potential for future losses, but it is not the sole factor in determining the cost of insurance. It is one of several factors used to arrive at the best rate possible. The age of a driver, motor vehicle records, loss reports or application information are other important factors that are also used to determine your rates. Generally speaking, customers who have high (good) insurance scores qualify for lower rates. Insurance Bureau Scores are based solely on information in consumer credit reports. Insurers will typically ask for a current score when they receive a new application for insurance so they have the most recent information available.

An Insurance Score May Include:

Payment history
Bankruptcy, foreclosures and collection activity

Length of credit history

Amount of outstanding debt in relation to credit limits

Types of credit in use (i.e. mortgages, installment loans)

Number of new applications for credit)

Why You May Need A Personal Umbrella Policy

2009-12-21T08:00:00.000-08:00

With a Personal Umbrella Insurance policy, you get an additional layer of liability coverage beyond that provided by your homeowner's, auto, boat, and recreational vehicle policies. Coverage is usually issued in one million dollar increments.

What It Isn't

Personal Umbrella Insurance does not provide basic home, auto, boat, or RV coverage. It only kicks in after the limits to these standard policies are exhausted. In most instances, Personal Umbrella Insurance does not protect against business losses. Some homeowner's policies may allow for certain exceptions to this rule for those who have a home-based business or a home office. If not, many insurance companies offer Commercial Umbrella Liability coverage.

Who Needs It

In the past, usually only very wealthy individuals purchased Personal Umbrella Insurance. In our increasingly litigious society, however, more and more people of all income groups are considering it in order to protect their current assets and future earnings.

The following people are especially likely to benefit from Personal Umbrella Insurance:

· Swimming pool, hot tub, and trampoline owners.

· Families with young drivers.

· Sports enthusiasts (snow and water skiing, horseback riding, rock climbing, golf, etc.)

· Owners or operators of operate watercraft, off-road, and recreational vehicles.

· Owners of rental property.

· Those who frequently host recreational activities on their property.

· People who serve on non-profit boards that might be exposed to liability.

· People with large assets & potential high income earning ability.

Things To Think About

The basic question to ask yourself is whether you feel you have adequate liability coverage with your existing home and auto insurance policies. Keep in mind that both your current assets and future earnings could be stripped away by a single lawsuit. Some insurers may require you to have home and auto coverage with them in order to extend additional Personal Umbrella coverage, or they may require you to satisfy certain liability coverage limits with your existing policies. The cost of Personal Umbrella Insurance coverage depends on your coverage limits; number of vehicles, residences, boats, etc. that you own; and your location.

Auto Insurance Coverage Choices Minnesota

2009-11-18T08:23:00.000-08:00

Auto insurance will never qualify as "easy to understand" and that increases the chances you could make a costly mistake. I hope you know that your auto insurance actually provides seven primary types of coverage in Minnesota: three are mandatory and two are optional. Everybody is required to have Bodily Injury Liability, which provides coverage if you or anyone else is injured, and Property Liability Coverage, in case you damage another car or piece of property, uninsured motorist and underinsured insurance, which protects people injured in accidents caused by uninsured and underinsured motorists and Personal Injury Protection (Minnesota No Fault). Collision Insurance is an important option for more expensive cars, since it provides coverage no matter who is at fault, as is Comprehensive Coverage, which covers repairs if your car gets damaged in a non-collision related mishap. Stuff like a tree limb falling on the hood, or a run-in with a deer. A minimum amount of mandatory liability coverage in Minnesota is often expressed as 30/60/10. This means you have $30,000 worth of bodily injury coverage for each person, with a $60,000 limit per accident, and $10,000 in coverage for property damage. My advice is to not scrimp on this coverage. That may satisfy your Minnesota's minimum requirements, but you should definitely think about a policy that provides at least 100/300/100, and higher limits with and umbrella policy would be the best option. What you want to avoid is having someone sue you and come after your personal assets - such as your home or future income - to settle an insurance claim. That's putting all your finances at risk to avoid paying a more expensive premium. For about $200 a year or so, you get $1 million in protection Umbrella Policy; that's a nice bit of protection if you were to ever be sued. If you are buying an expensive car, I recommend Replacement Cost Coverage and or Loan/Lease Gap Coverage. Typical coverage only pays you the depreciated value of your car, not what it will cost you to go out and buy the same car again. Since cars start depreciating the moment the two front wheels leave the dealer lot, you might want to fork over the bucks to make sure that at least for the first few years you own your car you won't be caught short if it gets totaled.

What Type Of Coverage Do I Need for My Condo?

2009-09-14T08:32:00.000-07:00

If you have purchased a condo or co-op, the bank will require insurance to protect its investment in your home. You may, however, need more insurance to cover your personal items, liability or fees that may be charged to you regarding shared areas of the building like the lobby.

You will need two separate policies to protect your investment:

1. Your Own Insurance Policy. This provides coverage for your personal possessions, structural improvements to your apartment and additional living expenses if you are the victim of fire, theft or other disaster listed in your policy. You also get liability protection.

2. A "Master Policy" Provided By The Condo/Co-Op Board. This covers the common areas you share with others in your building like the roof, basement, elevator, boiler and walkways for both liability and physical damage.

To adequately insure your unit, it is important to know what structural parts of your home are covered by the condo/co-op association and what are not. You can do this by reading your association’s bylaws and/or proprietary lease. If you have questions, talk to your condo association, insurance professional or family attorney. Sometimes the association is responsible for insuring the individual condo or co-op units, as they were originally built, including standard fixtures. The individual owner, in this case, is only responsible for alterations to the original structure of the apartment, like remodeling the kitchen or bathtub. Sometimes this includes not only improvements you make, but those made by previous owners. In other situations, the condo/co-op association is responsible only for insuring the bare walls, floor and ceiling. The owner must insure kitchen cabinets, built-in appliances, plumbing, wiring, bathroom fixtures etc.
Also ask your insurance professional about the following additional coverages:

1. Unit Assessment.This reimburses you for your share of an assessment charged to all unit owners as a result of a covered loss. For instance, if there is a fire in the lobby, all the unit owners are charged the cost of repairing the loss.

2. Water Back-Up.This insures your property for damage by the back-up of sewers or drains. Water back-up may not always be included in a policy. Check to see that it is included.

3. Umbrella Liability.This is an inexpensive way to get more liability protection and broader coverage than is included in a standard condo/co-op policy.

4. Flood or Earthquake.If you live in an area prone to these disasters, you will need to purchase separate flood and earthquake policies. Flood insurance is available through FEMA's National Flood Insurance Program. Both flood and earthquake insurance can be purchased through your insurance agent.

5. Floater or Endorsement. If you own expensive jewelry, furs or collectibles, you might consider getting additional coverage since there is generally a $1,000 to $2,000 limit for theft of jewelry on a standard policy.

When purchasing insurance, it is important to find an agent or company that specializes in condominiums or co-ops. Also don’t forget to ask about all available discounts. You can reduce your rates by raising your deductibles and by installing a smoke and fire alarm system that rings at an outside service. If you insure your unit with the same company that underwrites your building’s insurance policy, you might also get an additional reduction in premiums.

What is Professional Liability/Errors & Omissions?

2009-06-16T13:04:00.000-07:00

Errors and Omissions Insurance protects your company from claims if your client holds you responsible for errors, or the failure of your work to perform as promised in your contract. Coverage includes legal defense costs - no matter how baseless the allegations. Errors and Omissions Insurance will pay for any resulting judgments against you, including court costs, up to the coverage limits on your policy. Errors & Omissions Insurance coverage extends to both W2 employees and 1099 subcontractors, and can be worldwide in scope. Don’t Be Fooled. Professional Liability - Errors & Omissions Insurance - coverage is not provided by a Commercial General Liability policy. Commercial General Liability does NOT provide coverage for errors, contract performance disputes or any other Professional Liability issues. Companies who have General Liability without Professional Liability - Errors and Omissions Insurance -coverage are taking a serious risk. It’s like a doctor practicing medicine without Malpractice Insurance. Mistakes Happen. Every company messes up at some point. You Can’t Be Everywhere. Sometimes you can’t personally handle every job. Errors and Omissions coverage insures not only your mistakes, but also the mistakes of the employees and Independent Contractors you hire. Most Importantly: Errors and Omissions insurance might save you from extreme embarrassment, a lost client, or worst of all, a bad reputation. I generally recommend Errors & Omissions Insurance be at the foundation of every company’s insurance portfolio. Usually it is wise to purchase the coverage prior to product launch, or when you have customers. It can be required by investors, particularly VC’s. Most businesses and industry groups can be covered under an Errors and Omissions policy.

Why Are Homeowners Insurance Rates Rising?

2009-04-08T05:40:00.000-07:00

Homeowners know that the price they pay for insurance depends on factors like type of construction, age of the home and the quality of local fire protection services. Nevertheless, it is the extraordinary number of catastrophes, the high cost of home repairs, the aging of the U.S. housing stock and the emergence of mold claims (yes, I said mold) that are pushing homeowners insurance rates upward. Mold claims—which were virtually unheard of just a few years ago—cost homeowners insurers more than $1 billion dollars last year, approximately five times the cost in 2000. During the 1990s, the frequency and severity of catastrophes began to increase dramatically. Over the past 12 years, insurers paid out more than $100 billion in catastrophe-related losses—about $700 million per month—many times more than in previous decades.(1) Catastrophes include well-known events such as Hurricane Andrew and the Northridge earthquake, but also hundreds of smaller disasters associated with tropical storms, tornados, wildfires, hail, ice and snow.(2) Homeowners insurance rates in many parts of the country continue to rise because of the extraordinary costs associated with paying these claims. In fact, virtually every part of the country is now at risk for billion dollar disasters. In dollar terms the numbers are sobering. Homeowners insurers over the past decade paid out $1.18 in losses and expenses for every $1 they earned in premiums. In 2001 alone, homeowners insurers paid out $8.9 billion more in losses and expenses than they received in premiums, the second worst year on record (1992, the year of Hurricane Andrew, produced losses of $11.5 billion). Losses in the homeowners insurance line over the past three years (2000 through 2002) are estimated at $19 billion, rivaling the $20.3 billion in insured property losses from the September 11 terrorist attack. Every homeowner knows that home repairs don’t come cheap and that home repair and rebuilding costs continue to rise. This phenomenon is a major driver of behind rising homeowners insurance rates today. Mold has recently emerged as the dominant cost driver in some states. Mold is certainly not new—it’s been around for hundreds of millions of years—but the sharp rise in mold claims is definitely a 21st -century phenomenon. Multi-million dollar jury awards, sensationalized reporting in the media and profiteering by some individuals have led to an explosion in mold claims and costs. In Texas, for example, mold claims in 2001 cost insurers more than $850 million compared to virtually nothing just a few years earlier. The number of mold claims in the state increased by 1,300% between the first quarter of 2000 and the fourth quarter of 2001 while insurer payouts through the third quarter of last year increased 1,200%. Runaway costs associated with mold claims are having an adverse affect on the availability and affordability of homeowners insurance in Texas, and increasingly in other states. California, for example, has seen a large spike in water damage claims—which often give rise to mold claims. Water claims accounted for 32% of all claims in 2001, up from 24% in 1997. Over the same period, the average cost of these claims surged by 86% from, $2,537 to $4,730.
Source: NAIC, Insurance Information Institute.

Why Do Auto Insurance Rates Rise?

2009-03-31T05:56:00.000-07:00

Vehicle owners understand that their personal driving record, the type of vehicle they drive and how much they drive influence the cost of auto insurance. Yet rising medical costs, sharply higher vehicle repair costs and soaring jury awards in vehicular liability cases are the principle drivers behind higher auto insurance rates today. In several states, fraud and abuse is pushing up the cost of auto insurance. Medical costs are an important factor in the cost of auto insurance. Each year there are more than two million car accidents involving injuries. Several people are often injured in the same accident. Typical costs for treating an auto accident victim range from $6,000 to $9,000 but can easily run into the tens of thousands of dollars. The cost of auto injury claims is rising by as much as 30 percent in some states. The $15 billion to $20 billion that auto insurers pay in medical claims each year are a very significant component of auto insurance costs and the upward trend in claims costs is an important cost driver in auto insurance today. Higher costs for hospitalization and pharmaceuticals, state regulations permitting a wide range of dubious treatments and associated legal costs are largely to blame. Higher repair costs are another significant cost driver today. A recent court decision essentially forced many insurers to suspend their use of aftermarket (generic) crash parts in automobile repairs, giving manufacturers of name-brand parts a virtual monopoly in this multi-billion dollar market. In the year following that decision, the pace of increase in the cost of motor vehicle body nearly tripled. The effective prohibition on the use of generic parts—which are of like kind and quality to name brand parts—in the repair of damaged vehicles is a factor that could ultimately add $4 to $5 billion annually to the cost of automobile insurance. Name brand parts often cost 30% to 70% more than their generic equivalent. Another court in late 2001 reached an equally unfriendly consumer decision that could have the effect of reaching deep into the pockets of drivers. The Georgia Supreme Court ruled that insurers must compensate drivers for the so-called diminished value that occurs when a car is involved in an accident, even if the car is completely repaired and functions normally. The theory is that a car involved in an accident is always worth less than one that has not, even if repaired to its pre-loss condition. Auto dealers claim that diminished value for cars involved in accidents is typically 10% to 15% of the vehicle’s resale value. If insurers must pay out an additional 10% to 15% on each claim, then clearly the cost of insurance must reflect that fact. Sharply higher jury awards in vehicular liability cases are putting additional upward pressure on auto insurance rates. The average jury award in auto liability cases rose from $187,000 in 1994 to $269,000 in 2000—an increase of 44%. Auto liability issues are much more important than people realize. About 60% of auto premiums paid in 2000— nearly $70 billion—were for liability coverages. Fraud and abuse are major problems in some states, such as New York, Florida and Massachusetts. Loopholes in New York’s no-fault insurance statutes, for example, are costing the state’s drivers nearly $2 million per day.
Source: NAIC, Insurance Information Institute.

Personal Property Inventory

2009-03-20T06:39:00.000-07:00

Would you be able to remember all your possessions in the event of catastrophic homeowners loss? Most people would say no. Don't make a terrible loss worse. Start a personal property/home inventory today. If making a personal property/home inventory seems to be daunting and expensive help is here with "Know Your Stuff". Know Your Stuff makes creating and updating your home inventory easy. And with free, secure online storage you will have access to your inventory anywhere, any time. This way you can access your home inventory from any location in the event there is a disaster and you are forced out of your home. Having an up-to-date home inventory will help you: Purchase enough insurance to replace the things you own. Get your insurance claims settled faster. Substantiate unreimbursed property insurance losses for your income tax return or to apply for disaster assistance. Please click on the link below to open a new account or to transfer your current Home Inventory to the new application. http://www.knowyourstuff.org/

Business Insurance And Personal Exposure

2008-12-30T06:04:00.000-08:00

If you're running a business from your home, you have no insurance coverage for a business exposure. Personal homeowner, auto or umbrella policies provide no coverage for business liability, professional liability, workers’ compensation, business auto, business equipment, and loss of business income. Some homeowner's policies have a business liability endorsement but this endorsement creates a larger problem. Most small business owners want to keep personal finances separate from a business liability exposure. If an insured insures business liability on a personal homeowner's policy the insured has guaranteed exposure to personal finances. All small business has to keep expenses low for survival but business insurance coverage is not the place to cut cost by going without or cutting corners on the basics of coverage. Even if the small business is a part-time supplement to personal income purchase the basic business insurance. Business general liability, business auto insurance, and worker's compensation insurance should always be purchased no matter what the size of a small business. Small business is the engine of all economies but don't let a small business dream expose a life of personal happiness and finance.

Independent Insurance Agent Advantage

2008-10-24T08:59:00.000-07:00

Today insurance companies use many different types of distribution channels to reach and sell insurance products to consumers. Distribution channels range from local offices, Internet websites, and 800 numbers. Some insurance companies have even opened direct access for consumers to make changes on policies at anytime through use of the Internet. Technology and automation have increased competition among insurance companies which has kept cost for some insurance products at historic lows. Yet even today I believe more then ever it is important for consumers to work with independent agents. Independent Agents are the best value for insurance consumers. Independent agents represent many companies to attain the best pricing, coverage, claims handling and are the only agents that provide broad insurance carrier knowledge and advice .

Insurance companies might have a broad spectrum of products but price products differently based on the appetite of exposures each company deems as most profitable. Since independent agents represent many companies they have the unique ability to advise customers through the prism of the insurance marketplace not just a particular insurance company philosophy of risk, exposure and pricing.

The time when customers need the most help is when the claim process becomes a problem. If you have an experienced independent agent you will have help. Acting as a consumer advocate independent agents are able to expose pertinent information which may resolve disputes.

If you want the best value when purchasing insurance products purchase from an independent agent.

New Blog First Topic Flood Insurance

2008-09-15T07:06:00.003-07:00

Today is my first blog entry. I hope customers and prospective new customers find the blog useful for insurance and other information.

If you are homeowner and would like to know your risk for flooding you can go to http://www.floodsmart.gov/floodsmart/. The website is a official site of the National Flood Insurance Program. Type in your address and you get a general risk assessment for your property. This information is a general tool and should not be the only information/tool used to make a decision on purchasing flood insurance. If you have questions or would like a quote on flood insurance please call or email me. I will be glad to quote flood, auto, and homeowners insurance for you and your property.