What Type of Insurance Buyer Are You?

I have had some interesting conversations about insurance this past week. I have spoken to several individuals who are buying insurance because they are required to, forced to by government or by a lender. In each case these individuals have told me to only insure for the base requirements and not a penny more. I generally refer these individuals to another insurance agency because they will never be happy with their insurance plan and will definitely be unhappy with their insurance in the event of a claim. I sympathize with these people because I used to be one of them.

 You see, I did not understand that insurance is a financial tool. I thought of it as an unnecessary expense and hated paying the insurance premium which I considered a waste of my hard earned money. And, I didn’t understand how insurance paid in the event of a claim. I just assumed that insurance paid the same regardless what you pay in premium so I figured that you should pay for just the bare minimum. It wasn’t until a trusted insurance agent explained to me that insurance is a contract and you are purchasing a contract that the insurance company will honor but only to the limits of the contract and no more. So, by buying the lowest insurance limits I was ensuring that I would not be fully protected in the event of a loss. The insurance company would pay their contracted limits and I would be stuck paying the balance how fair is that?

 Here is the part that changed my perception and how I view insurance now as a tool. The difference in cost between being insured at the very basic limits and the cost to be insured properly is barely noticeable. The insurance companies don’t give you massive savings for choosing the lowest coverage. They still build in all of the fixed costs of insurance into the lowest limits of liability. So, when you increase the limits to be properly insured the increase in insurance is at a much lower rate. In fact, in some cases increasing your limits doesn’t increase the premium at all! So, why doesn’t everyone carry full limits if the cost to be properly insured is only nominally more?

If you read my previous blog posting you will know how I feel about the insurance industry focusing its entire message on price turning insurance into a commodity. Just like buying 4 rolls of toilet paper verses 12. And this reinforces consumers into believing that if you buy a little, the bare minimum you must be saving money! I know that it is counterintuitive but in insurance that simply isn’t true.

 Insurance is a tool. It helps you protect what you have allowing you to focus on creating wealth for your family. You can never get ahead by being insured poorly and ineffectually and the cost difference by being properly insured is shockingly low. Next time before demanding the bare minimum compare the cost between minimum coverage and proper coverage and you may become a convert like me.

If All Insurance Is The Same, Why Not Pick The Cheapest?

This is a dirty secret that we in the insurance industry created. It is the monster that grew too big and now we have no control over. It all started with price competition which was a good thing. It is important to be competitive and it is important to the consumer (our clients) to receive the best product possible at the best price.

 

And then something happened. In the zeal of the industry to offer the lowest price, to never be undersold we treated insurance like a commodity. The consumer (our clients) have been deluged by advertising for the past 20 years to believe that they are paying too much for their insurance and in just a few moments by quoting online or calling in to the company they can save huge sums of money over what they are paying now.

 

After decades of reinforcing only price the consumer has accepted that insurance is a commodity no different than laundry detergent, paper towel and other consumables. If all insurance is the same why not pick the cheapest?

 

In the early days of price competition insurance companies found ways to offer their products at the lowest price possible and that was healthy and smart for the industry however as more insurance carriers entered the market place featuring direct to the consumer options the message was only price and less about providing comprehensive coverage. Again, the image that was presented to our clients and the consumer was all insurance is the same so just pick the cheapest.

 

In this last decade we have observed even greater pressure to force the price of insurance down convincing the public that they are paying too much through credit scoring in most US states and the advent of picking your insurance by what you are willing to pay. You might be thinking what is the harm in that? The free market is good for everyone, isn’t it? Credit Scoring is a statistically proven concept whereby the consumer with lower credit scores is statistically shown to have higher levels of accidents and violations. Credit scoring has done a remarkable job of lowering insurance costs for those with the highest credit scores. Insurance companies advertise the insurance savings based on the very best credit scores so when they say that you could save $400 on your insurance premium it is based on those with the best credit scores however the vast majority do not enjoy those savings and this is the big lie in insurance.

 

The conversation with the public is all about price and not about the insurance coverage and this is my biggest fear. When price trumps the conversation about being properly insured you end up with the consumers not being protected during a claim. And it reinforces that insurance companies and agents are dirty rotten scoundrels trying to get out of honoring insurance when we trained the consumer (our clients) to base their decision on price alone.

 

Consider this, you are going to need heart surgery and you need a surgeon. Do you shop for the best price or for the best surgeon? You are in a legal fight that could cost you most of your family assets, do you shop for the best price or the best attorney you can afford? Think how important insurance is to the average person. It provides protection for their vehicles and for their home and personal belongings. It may even provide protection for their very lives and health. In the event of a catastrophe insurance has the ability to restore that person, family and their belongings as if it never happened. Literally, that family’s future and the assets of future generations of that family depend on the type of coverage that they have. I can promise you after many years of handling claims that not one of my clients in a serious accident or loss was worried at the time about how much they paid. So, I will continue to make certain that the insurance coverage is the first and most important topic that I have with my clients and then after we agree on proper coverage shop the market place for the best price. All insurance is not the same and price is only part of the conversation.

 

 

Choose your insurance first. Ask the hard questions and challenge preconceived beliefs about insurance to make sure you have the most comprehensive coverage. Make sure that the insurance company or your insurance agent understands what you expect in the event of a claim and settle on your insurance coverage plan first. Only after you have an insurance plan that works for you should you shop the markets for the best price. And keep in mind that your coverage plan changes as you go through life. Take the time to discuss your insurance plan with your agent each year. Be clear that you want your coverage plan to be competitive and you expect your insurance company or your agent to verify that it is. If they are unable or unwilling to do so that is when you should look for another company and/or another agent.

What About Other Types of Replacement Cost Valuation?

Recently we discussed what replacement cost valuation was and how it is calculated. Today I want to discuss extended replacement cost and how it provides for additional coverage in the event of a regional or national emergency. The value is usually represented by a percentage of the building value such as 25% or 50% extended replacement cost which would mean that the insurance carrier would provide and additional 25% or 50% replacement cost value to keep the insurance coverage within the actual cost of replacement. So if your building is insured for $100,000 and you have extended replacement cost of 25% the insurance carrier will provide for an extra $25,000 in replacement cost coverage: $100,000 X 25% = $25,000 + $100,000 = $125,000.

 

Extended replacement cost is not intended as a cure for underinsuring your building. According to the terms of your insurance policy you are obligated to maintain replacement cost on your building to a certain percentage of the actual replacement cost such as 80%, 90% or even 100%. If you recall, this is co-insurance and we discussed this in our last blog.

 

When Hurricane Katrina struck New Orleans the vast amount of rebuilding actually led to shortages of building materials regionally and around the United States. And, depending on your proximity to Louisiana it may have been very difficult to find licensed contractors who were not already on the job rebuilding. If you were unfortunate to have had a loss or a complete loss of your building during that time frame there was a real possibility that the cost to rebuild would have exceeded your replacement cost value. That means that you would have had to pay the difference.

 

Extended replacement cost steps in during crises such as the one described to ensure that there is enough coverage even during a regional catastrophe. Think of the terrible tragedies where an entire community is destroyed by a tornado or multiple communities completely destroyed by a hurricane or fire. There will be shortages of materials and qualified contractors and the cost to repair or replace your home and business will increase dramatically.

 

Discuss the insurance needs of your building with your agent to make certain that you have enough coverage now today and in the future. We hope that you never need to use the coverage but making certain that it is there will allow your family and your business to recover in the event of a crisis.

How Does the Insurance Company Calculate the Insurance Value of My Building or Home? Coinsurance

In our last blog entry we discussed types of valuations for insuring your building. One of the last subjects we covered was something called coinsurance. What is coinsurance and how does it affect my property insurance?

 

All valuation methods have coinsurance clauses in their contracts. Why this is important is the insurance carrier wants to make certain that the building or item they are insuring is insured to full value. If this wasn’t a consideration no one would insure a property item to full value but would expect to be reimbursed in the event of a loss at full value. In another words, a replacement cost valuation indicates that your building is valued at $500,000. You only insure the building to $100,000 but expect that in the event of a loss to be reimbursed for the full cost of $500,000. I know what you are thinking, that doesn’t even make sense! Why would someone insure their property for less than the value and expect to get a settlement at the full value? The truth is this happens all the time. In fact, most lawsuits are over valuation. There are a lot of reasons that owners may not select the full insurance value for their building and property and often it is simply a misunderstanding of valuation. Just like we discussed last week an owner who is convinced that the building isn’t worth any more than the tax assessed value or decides that the building isn’t worth anymore than a value a realtor told them could be shocked to find out that the actual cost to replace the building is far more. And, what happens over time? If you guessed that costs go up you would be right. So if it cost you to $400,000 to build your building twenty years ago does it make sense that it would still cost $400,000 to build it today? Of course not, but in many cases I find when working with clients that they haven’t checked their valuation in years and the coverage that they had stopped being adequate a long time ago. Unless you have inflation guard included in your insurance plan your valuation is static and will remain that way until your request the coverage changed.

 

Coinsurance applies when a building or property item is underinsured. Most insurance companies will require you to insure your building to 80%, 90% or 100% of replacement cost. If the actual cost to replace the building is more than the insurance that you carry by contract the insurance carrier can levee a coinsurance penalty. In the event of a total loss your inability to collect the full amount of replacement for the building can change what type of building that you end up with. However, in the event of a partial loss I believe that the coinsurance penalty is even more meaningful. Say that you had a partial fire loss to your $500,000 building. The damage was $150,000. Unfortunately, you have been insured for $350,000 which is only 70% of the true replacement cost of the building. Your insurance contract requires that you maintain a replacement cost value of at least 90%. Your claim will be subject to a 20% coinsurance penalty and you will not receive the full cost of the insurance settlement for the repairs. So, based on your $150,000 claim the carrier will use a coinsurance penalty of 20% which is $30,000. You will need to cover that plus you’re deductible.

 

This gets even more complicated when you have multiple buildings and values. The best way to make certain that you are adequately insured is to have a replacement cost valuation completed by your agent and company at least every two years. Ultimately, you the owner are responsible for selecting the correct insurance coverage however there are tools available to help you and your insurance agent can be a great resource in helping you to properly insure your building and its contents.

How Does the Insurance Company Calculate the Insurance Value of My Building or Home? Part II

The 2004 Cedar and Pine Ridge fires in California led to numerous homes lost to forest and brush fire. After the cleanup many of the homeowners were shocked to receive claim settlements of only a portion of the total loss to rebuild. The homeowners were under the impression that replacement cost of their home meant that they would get replacement cost at the time the home was destroyed by fire. Unfortunately, this just wasn’t the case. Many of the homeowners had insurance policies for their homes that went back 15, 20 and in some cases more than 30 years and had not made any changes to the replacement value of their homes. If you recall from last week’s blog I indicated that “Replacement Cost Value is a static value that represents the replacement value of the structure at one moment in time.” Over time the cost to rebuild or replace these structures increases however the insurance value did not. In the end there were lawsuits and the process lasted years. What is important to remember from this case is that in the end most of the suits were denied because the responsibility for making sure the structure is fully insured lays with the owner.

 

Insurance carriers use coinsurance clauses in their policy contracts to require the owner of the structure to insure to full replacement cost value. You can avoid a costly mistake in valuation by having your buildings replacement cost value updated at least every two years. You can also elect to have inflation guard set up on your policy to increase the replacement cost value of your building at a set inflationary value each year. And, you should have Extended Replacement Cost or Guaranteed Replacement Cost coverage added to your policy to ensure that spikes in the cost of materials and labor in the event of a national or regional catastrophe don’t increase the cost of rebuilding your building beyond the valuation set by your insurance contract.

 

In the next several blogs I will explain in more detail what coinsurance is and what it does. I will also cover how to get a replacement cost valuation and what the purpose of tools like inflation guard, extended and guaranteed replacement cost is.

How Does the Insurance Company Calculate the Insurance Value of My Building or Home?

I was working with a client this week on setting the replacement cost value for his home. We had an interesting discussion which led me to an idea for a series of blogs on valuation. The information is definitely not exciting but is critical for making sure that you are insured accurately and I will explain what can happen when you are not insured correctly!

 

Case law has developed over the past one hundred years to determine valuation of property such as your home, rental property and commercial buildings. It even extends beyond structures to the value of your diamond ring, your collection of antiques and other personal property. The laws regarding valuation are set by the insurance code of each state. In most states the responsibility for setting the correct valuation for insurance rests with the owner. However, if you don’t know how valuation is calculated how can you make certain you are insuring your property correctly?

 

Most building values are calculated today with Replacement Cost. There are other values available and we will discuss later in the series but we will focus on replacement cost as it is the valuation that is most widely used. Replacement Cost Value (also known as RCV) is simply what it would take to rebuild or replace a structure today with current labor costs and modern building materials. (RCV never includes the value of land).

 

Replacement Cost Value (RCV) is rarely the same as the retail value of the structure (example: the value your home could sell for). Replacement Cost Value is a static value that represents the replacement value of the structure at one moment in time. If a structure falls out of replacement cost value it will be subject to coinsurance penalties that would diminish what the insurance would provide to rebuild the structure or replace in the event of a total loss.

 

A good insurance agent will carefully consider the building characteristics of your structure and will use a replacement cost value formula to arrive at a replacement cost for your structure. This value should always be considered a recommendation as the final decision on value will always lay with the owner of the structure. In next week’s blog I will discuss more on how the insurance carrier calculates replacement cost and introduce a couple of important insurance terms such as coinsurance which can greatly affect the final insurance settlement.

Creating a Wildfire Defensible Space for Your Home

We have seen so many tragedies this past year due to wildfire’s particularly in the western portion of the United States. Taking steps now to protect your home from fire risk is a great way to lower the chance of loss when wildfire threatens the next time. I found an excellent article on the web provided by CalFire. I thought it was so well written and so important that I wanted to share with you. Visit the site at: http://www.readyforwildfire.org/defensible_space

Everyone should consider their wildfire risk regardless if they have faced wildfires in the past. In so many instances, fires have occurred in the past three years where wildfires traditionally had not been a problem. We have noted wildfires in the southeast, Texas, southwest and most all of the western states. In this case, an ounce of fire prevention is worth far more than a pound of cure!

Protect Yourself, Important Steps in an Auto Accident

One of my clients recently had an auto accident. He was at an intersection in a lane that went straight. The other party was on his right and turned left into his vehicle. They traded license and insurance information at the scene of the accident just like they were supposed to do.

 

My client was alone in his car and the other party was alone in their car. Shortly after the accident the other party claimed that my client was at fault and was supposed to turn left and instead went straight. My client informed me that was simply untrue and he was in a lane that was straight ahead and the other party made an illegal left hand turn.

 

In the end, the insurance carriers for my client and the other party agreed to just pay their own client claims because there was no way to prove who was at fault. So, problem solved right?

 

Not exactly, had the other party been found at fault it would have been their insurance that would have paid for the damage to my client. Instead, my clients insurance paid for the damage to his own vehicle which was considered an at fault accident. What is the big deal? Well, an at fault accident in most states will stay on your record for five years and you get to pay more insurance premium because of that. Needless to say my client was really upset and felt this was unfair. Some of you will say that you have accident forgiveness with your insurance carrier. That is nice and means that your insurance carrier won’t surcharge you for your first accident however that won’t protect you from the loss of a claims free discount which for most insurance companies is significant. With or without accident forgiveness you’re going to pay more.

 

Regardless who is at fault insurance is incredibly important to fix your car, fix the other party’s car if you were at fault and pay for your medical bills and the other party’s medical bills. I want all of my clients to be safe and to avoid accidents if they can. If you do have an accident, that is why we have insurance and it will be there to help when you need it. However, if you were not at fault I need some additional information to fight for you.

 

In addition to trading license and insurance information I want you to take photos. Odds are your phone takes pictures. Even the oldest cell phones have a camera. I realize that having an accident is traumatic and when it happens it is easy to forget but when it is safe to do so take photos of the accident scene. Take photos of where you were and where your vehicle is now. Take photos of the damage to your car and the damage to the other car. Take photos of the license plate on the other vehicle and of the driver of the other car and any passengers. The more information that you have will help your insurance claim and protect you if the other driver was at fault.

 

I had an accident (my first) this year. I not only took photos of the accident but my phone allows me to take video as well. I had the other driver on video saying that he wasn’t paying attention, he was texting and didn’t see me until it was too late. End of story, he was at fault. And, yes his insurance carrier tried to indicate that we shared blame until I played back the audio from the video with their client apologizing and indicating that he wasn’t paying attention. That was that, they accepted full responsibility.

Is Insurance A Big Fat Waste of Money?

I had a call yesterday from a gentleman that was looking to replace his business insurance. He was incensed that the premiums had gone up and was venting to me about how unfair the insurance community was and how insurance was a big scam to take his money. He has gone 30 years without a claim and all that money was wasted. He could have gone all that time without insurance and would be thousands of dollars richer.

 

As an insurance professional I do get calls from people who are frustrated and I do understand the frustration. And, the industry that I represent doesn’t always reflect compassion and clearly outline what insurance does and does not do. The confusion grows to anger especially when the insurance is mandated by government, a lender or another business that you need to do business with.

 

I used the following example to explain: I asked the caller if he had a home and he said yes. I asked him what the replacement cost value of his home was approximately and he said about $625,000. I asked him if he had a loan on the home and he said yes so I then stated that he probably had to have insurance on the home and he said yes and don’t get him started on the cost of homeowners insurance! I asked him approximately the cost of his homeowners insurance and he said $750. So I said you have been paying that premium for about how long on your home and he said 21 years. I said you have never had a claim and he said that was correct and all that premium he has paid over 20 years has just gone down the drain, in fact he could have burned the money and would have gotten the same value. So, I added, just to make sure that I understand you have paid about $750 per year for 21 years and never received any benefit from a claim? He said that was right. So, he had paid out $15,750 over 21 years (maybe a little less as the premium was lower 21 years ago).

 

Now it just so happened that our agency had a client whose home burned to the ground and was valued at $550,000. He had been with the company that insured him for less than 5 years and the insurance company paid the full replacement cost to rebuild the home and picked up the cost to haul away the debris from the ruined home and picked up the cost to build to current building code. In addition, the insurance company provided funds to find a temporary place for the client and his family to live. The total cost was about $600,000. The client was only out $1,000 for his deductible and the sum of his insurance payments to the insurance company for less than 5 years was $3,750. But if we use the example the caller had provided me then he could have paid for 21 years and $15,750. If our client was faced with paying $15,750 over 21 years to recoup $600,000 and his family’s financial health would he consider the $15,750 a fair investment? I guarantee you that he would and so would anyone else in the same situation.

 

There are two frames of mind when considering insurance: One, it’s an expense that costs me or, Two, it’s an investment in my family’s plan for developing wealth and protecting our assets. In the end I didn’t change the callers mind but it reminded me why I protect my clients and why I look to find value for them and why I prefer to work with clients who understand how insurance works for them and not against them.

Thoughts on Celebrating the 4th of July

I am frequently away from my family and recently traveled by auto to my home in Washington State over the 4^th of July. During the long car ride I had an opportunity to reflect on all the previous 4^th of July holidays in my life and as a child and then a young adult. Early on the holiday was about spending time with family and friends with huge outdoor BBQ’s and then of course the excitement of the fireworks show at night. In my memories the day was always sunny and hot, my mom would make us kids clean up and wear clean clothes, she would cook up a dish to pass and several pies and off we would go with my dad to the party! There would be other kids to play with, games to play, it was wonderful.

 

It wasn’t until later in life when I began to realize that those idyllic parties that I enjoyed as a child were bought and paid for by so many who sacrificed for our nation. The price of freedom is great and my experience and happy memories owes a debt to those who have served our nation and continue to serve today.

Now that I am older, the holiday is still special for the time that I can spend with my family but I have a greater appreciation for all the freedoms that I enjoy in this great country of ours. My wife Lisa is a wonderful cook, just like my mom we had loads of food, family to spend time with and of course the fireworks on the beach of the Pacific Ocean. It was a wonderful day and I am grateful to have had the opportunity to celebrate the 4^th of July.

Autonomous Vehicles – Insurance Science Fiction?

Ok, I have to admit…. I am a science fiction junky. I love all of it, the technology, the positive hope for the future like Star Trek and the scary parts like Aliens! So, I have been following with interest Google’s Autonomous Vehicles. In case you haven’t heard, Google has a fleet of vehicles driving around California and Nevada with no one on board but a computer.

 

While I am disappointed that the cars don’t fly like in Back to the Future it is pretty incredible technologically that we have self driven vehicles. Now you’re probably wondering so what? What does this mean to me and why should I care?

 

The early adopters of this technology will be business. Imagine a service company that has crews delivering products or services all day long. Instead of the employees spending their time navigating the road from point to destination they can be processing invoices, preparing for the next appointment and making calls for future appointments, answering questions by phone and email and even participating in meetings by Skype.

 

It is all about productivity and for the businesses that outlay huge sums for payroll while employees drive, they will invest in this technology and lower insurance costs because the vehicles do not speed, do not tailgate, get angry or distracted.

 

Eventually, autonomous vehicles will be a standard feature and will change the way we drive and the insurance industry will need to change with it. Watch for big changes in this category in the next five years! I can’t wait!

I Love Sunshine but It Doesn’t Love Me!

OK, this next blog doesn’t really have anything to do with insurance. I worked an outdoor BBQ recently for a service club that I belong to and while I used sunscreen on my face and neck I didn’t use anything for my scalp. I keep forgetting that I don’t have as much hair as I used to. Anyway, you guessed it; I got sunburn on the top of my head! Experts say that you only need to expose yourself to continuous direct sunlight for as little as  15 minutes to put delicate skin in danger, with the hours between 10am and 4pm, and late spring and early summer time, being the riskiest.

Natural skin color is also a factor – the fairer your skin the higher the risk of suffering sun damage which, in a worst case, can cause skin cancer but also ages appearance and can be very painful.

The Centers for Disease Control and Prevention (CDC) offers the following "easy option" recommendations for sun protection:

·         Use sunscreen with sun protective factor (SPF) 15 or higher, reapplying every two hours.

·         Wear clothing to protect exposed skin.

·         Wear a hat with a wide brim to shade the face, head, ears, and neck.

·         Wear sunglasses that wrap around and block as close to 100% of the rays as possible.

·         Seek shade, especially during midday hours.

A Claim Story

I was just calculating the number of claims that I have processed over the years as an advocate for my clients and I came up with 303. I have never had an auto accident until just recently. The odds caught up with me and I was rear ended while at a stop light waiting for the light to turn green. Normally, I am in a position to help my clients and walk them through the claims process. This time, I was responsible for using what I know to help myself and I wanted to share a few things that I did that could help you when the time comes that you have an accident.

 

My accident was low speed so I wasn’t injured however you should never take for granted that you are not injured by self diagnosis. Get checked out, make certain that there was no damage caused by whiplash or trauma. I didn’t have anyone in the car with me so there were no other individuals that I needed to check on however if there was that would have been my first duty to see to their care. And, when in doubt regarding injuries call 911.

 

My next step was to check on the individual that hit me to see if he was OK. Before I stepped out of the car I took my smart phone and set it to record video. You may not have a smart phone but you more than likely have a cell phone and that cell phone takes pictures so get ready to use it. Before I stepped out of the car I checked the condition of the road around me to make sure that it was safe. One of the number one causes of secondary injuries are drivers that get out of the cars on busy streets or highways and get hit. I saw that it was safe so as I stepped out of my car I began to record where my car was located at the intersection, where the vehicle was located that hit me. I also recorded the vehicles that were lined up behind us including their license plate numbers and the vehicles across the street and their license plate numbers (I did this to have a record of other drivers in the event of a need for witnesses). I stepped to the back and recorded the damage to my vehicle and recorded the other driver telling me how sorry he was for hitting me. He said that he had only looked down for a moment and that was when he ran into the back of me. He was concerned that I was injured and he said he was truly sorry and he had insurance. I recorded the exchange between us and then suggested that we move our vehicles to the side of the road to exchange information.

 

Once we were safely off the side of the road I took his driver’s license and his insurance ID card and I photographed them with my phone. I also took a photo of the front of his vehicle where it hit mine and license plate number. Why did I do that rather than write down the information? Because immediately after an accident your body surges with adrenalin and you are more prone to make mistakes in taking down information. A picture takes all the information at once and does not make mistakes. Take multiple photos to make certain that they all come out. I collected the other driver’s phone number and confirmed that his address was the same as what was on his insurance ID card.

 

Depending on the severity of the accident you should call 911 to report the accident. In the community where I was hit the police department does not respond to non-injury accidents and expects those involved to trade insurance and license information and allow the insurance companies to sort out damages and repairs. When in doubt, call 911 and report the accident.

 

Once I had arrived home I took detailed photos of the damage to my car. If there is any doubt at all as to who is at fault I would have immediately called my insurance carrier and reported the damage. In this case I was at a complete stop waiting for a light to change when I was hit so I rightly expected the other drivers insurance to pay for my loss. Do not wait several days to call in the claim, do it now while everything in your memory is fresh.

 

I uploaded the video and the photos to my computer and printed the driver’s license, insurance card and photo of the Ford Explorer that clearly showed the license plate. If you can’t transfer files from your phone to your computer you can still email them to yourself.

 

I called in the claim to the other driver’s insurance company and provided them with the information regarding the accident. It is important that you do not take out your frustration on the clerk or adjuster taking your information. They are only doing their job and it won’t help to be angry or threaten them. Also, it is not necessary to tell anyone that you have the whole incident on video, that is only for you to use if things go wrong.

 

Ultimately, the other driver’s insurance company was honorable and took care of the repair to my car. It was my right to go to the body shop of my choice and most states forbid an insurance company from requiring you to use a body shop that they recommend. The insurance company paid for a rental car so I could continue to go about my life during the repairs and you should always inquire about this. In the event that the accident is questionable as to who was the primary cause they can decline to cover a rental car and then it would be up to your own insurance company and only if you carry rental car coverage.

 

My car was repaired and returned to me and all worked out. I never had to use my video or detailed photos however if there had been a problem I would have provided all the data and video to my insurance agent to support my claim.

 

The moral of this story is to stay calm after an accident, deal with any injuries first and then record the accident completely before you move the vehicle unless remaining where you are could risk further injury and property damage. This applies to any accident whether it is a trip and fall, storm damage or a collision, record the accident to protect yourself and then put your agent to work to help you to return your life and property to pre-accident condition.

 

Be Prepared - Emergency Planning For Business

I spend a lot of time discussing potential disasters at home and the steps that you can take to protect yourself but what about losses at work with potentially even more serious consequences, not just because of the number of people affected but also because some companies have additional hazards that could create emergencies.

In addition to the risk to human life, there's the threat to the continuity of your business and the livelihood of your employees – and you!

Think you're ready for it? Try out this simple 10-point test from the Institute for Business and Home Safety: http://tinyurl.com/IBHS-test

Hmmm. Just as I thought – but if I was wrong, well, go to the top of the class! Check out the IBHS site, disastersafety.org while you're there. You'll find some good tips on various hazard risks and programs dealing with them. I have a lot more information to share in the coming weeks so check back!

In Dealing With Emergencies Go To The Experts

In several previous blogs I have discussed what to do and how to insure for potential loss. Today I would like to point you to two organizations that understand disaster, loss and recovery. We all know their names but did you know they have terrific websites and resources available for planning for emergencies?

When it comes to dealing with emergencies and disasters, The American Red Cross really knows their stuff. So, if you have Internet access, check out that organization's online presentation, for information on preparing for emergencies and disasters. Find it here: http://tinyurl.com/rc-ready

 

Another well known organization is FEMA, the Federal Emergency Management Agency. They produce a wide range of publications and guidance for dealing with all kinds of disasters, including incidents for which I simply didn't have the space to cover here – such as chemical alerts, landslides and tsunamis, as well as valuable advice on recovery and rebuilding after a disaster. Their website is www.fema.gov

I know that reviewing both of these websites won’t be as fun as playing “angry birds’ or checking Facebook but knowing where to look for support and information in advance of a loss is a great way to be prepared.

Health Insurance Exchanges Slow to Develop

If you have been wondering about the health insurance exchanges that states are to have ready for their citizens so am I. All citizens of the United States are to have health insurance as of 01/01/2014 and the development of health exchanges are supposed to help make buying insurance an easy experience. States could opt to form their own exchanges, or work with the Fed to develop on a partnership basis and finally not form an exchange and allow the Fed to complete for them.

 

With the requirement for health insurance for so many new customers the sooner that we know what the plans are and the prices the easier it will be for everyone to make the transition. Many of my clients have asked what is going to happen after 01/01/2014 and while I know what the law states I don’t know much beyond that. I am hoping that by this summer we will have a comprehensive listing of health insurance plans to be offered and what roll that I as an agent will play in helping my clients.

Lost or Stolen Credit Cards, Debit Cards and Identification

I stopped using checks last year and now I use a debit card exclusively. I know I am behind the curve as that is so several years ago! But, I was impressed with myself for being so current and I like the convenience as opposed to using checks. Well last week I was filling up the car at a gas station when I took a call on my phone. I finished up and jumped in the car and realized 30 minutes later at the grocery store that I had left the card at the pump. I flew back to the gas station and some Good Samaritan had taken the card into the office where it was awaiting me. I can’t tell you how panicked I was and how nerve wracking that trip back to the gas station was.

 

After the emergency was over it occurred to me how unprepared I was if I lost my wallet with my identification, debit cards, credit cards even my social security card. When you lose confidential items like credit cards, keys, and other personal documents, you also run the risk of becoming the victim of a further crime.

 

Whoever has these items might use them to steal further from you – perhaps your money, items from your home or car, or even your identity.

 

You can minimize the risk of this happening by taking prompt action. Contact the police, of course. Then you must notify the issuers of all missing credit and debit cards, check books and travelers checks.

 

This task is considerably easier if you either have a separate list (not in your wallet!) or the emergency numbers for these issuers and banks (you'll find them on the cards and other documents) or subscribe to a card security service that you contact via a single number and they will look after the rest. I of course had not done any of these things so it would have been much harder to recall what I had and who to call.

 

These cards and other documents will normally be cancelled straightaway. The notification process also usually (but not always) covers you against subsequent fraudulent use of the items – so speed really is essential.

 

You then need to contact the issuers of any other items (like Social Security, health insurers, state department of motor vehicles, and even your library) so that they are not fraudulently used, and let your insurance agent know.

 

New cards can be issued and replacement checks can be provided quickly, though replacement Social Security cards generally are not issued.

 

If it's possible you may become the victim of identity theft, you need to notify the credit reporting agencies and get a fraud alert placed on your records. It is possible to freeze your credit so no one can open an account in your name. For more information see my blog post from 08/10/2012 on “Protect Yourself from ID Theft”.

You know what Grandma always said, “An ounce of prevention is worth a pound of cure”. Now I am prepared and hopefully will never need to use it!

What To Do In The Event of a Burglary or Theft

I was just reading in the paper about a series of break-ins to local business and homeowners. Aside from the anger and frustration of being violated by having someone break into your home or business there are steps required to repair the damage and make your home or business secure. I remember when it happened to me and thought back to the steps that I learned through trial and error:
 

Here is a basic checklist of the things you should do (depending on the nature of the crime):

·         Ensure everyone is out of danger.

·         Check the well-being of anyone else who was involved.

·         Call 911.

·         Administer first aid if required.

·         Identify witnesses, if appropriate

·         After theft or burglary, try not to touch anything at the scene until the police arrive.

·         Re-secure your property.

·         Make an inventory of what has been damaged or stolen.

·         If you are a victim of crime abroad, contact the US Embassy or consulate in the host location, as well as local police.

·         Contact your insurer or agent and follow instructions for making a claim.

There are numerous other things that might be appropriate, depending on the advice of the police and your insurer. They are there to help and advise you, so try to follow their guidance.

The US Office for Victims of Crime (OVC) produces an extremely useful factsheet that covers your rights, where to get help, and details of state compensation and assistance programs. You can download it here: http://tinyurl.com/ovc-factsheet

Do you have a first aid kit?

Last night while I was washing the dishes I cut my finger. I have no idea what I cut it on but it immediately started to bleed. No problem, I was able to clean the cut and apply a Band-Aid and yes I drained the water and rewashed the dishes. I keep a small first aid kit at home and have it stocked with bandages, gauze, tape etc. For years I never felt that I needed a first aid kit and until we adopted our children and had a home study I had never kept a kit in the house. I am pretty active and I am usually bumping into something so the kit has been used often. If you don't have a first aid kit, please get one. Today, if you can. It could save a life. Plus, they're not expensive and, if you do it yourself, they're easy to put together. These days, though, you can buy ready-made kits. Drugstores and online retailers sell them but you can also buy them from your local American Red Cross Chapter or the Red Cross Store online, costing from around $15 to $50. The Red Cross also provides guidance on what you should have in a good first aid kit. Here's their list:

2 absorbent compress dressings (5 x 9 inches) 25 adhesive bandages (assorted sizes) 1 adhesive cloth tape (10 yards x 1 inch) 5 antibiotic ointment packets (approximately 1 gram) 5 antiseptic wipe packets 2 packets of aspirin (81 mg each) 1 blanket (space blanket) 1 breathing barrier (with one-way valve) 1 instant cold compress 2 pair of non-latex gloves (size: large) 2 hydrocortisone ointment packets (approximately 1 gram each) Scissors 1 roller bandage (3 inches wide) 1 roller bandage (4 inches wide) 5 sterile gauze pads (3 x 3 inches) 5 sterile gauze pads (4 x 4 inches) Oral thermometer (non-mercury/non-glass) 2 triangular bandages Tweezers First aid instruction booklet www.redcross.org

In a business, you will need something more substantial, depending on the number of employees and type of work being done. There may also be legal requirements at both national and state level. The Occupational Safety & Health Administration (osha.gov) will be able to guide you.

Basic Home Safety Tips Learned the Hard Way!

Last night before I went to bed I left some newspapers on the floor near the bathroom door. I had intended to put them in the recycling and forgot them. Naturally, during the night when I made my way to the bathroom in the dark I slipped and fell into the bathroom. Fortunately I wasn’t hurt other than feeling foolish but this morning that lesson gave me a great idea for a topic on my insurance blog. Falls are the most common cause of accidents in the home, a substantial proportion of them serious or even fatal. You can cut the risk of these and maybe save a life by:

Ensuring carpets are properly fixed to the floor (use floor-gripper tape for loose rugs on slippery surfaces, and ensure fitted carpets are fastened down). I have several of these and they are always sliding around.

 

Removing clutter, especially in busy "traffic" areas for instance, my newspapers!

Marking temporary hazards – like a ladder that people don't expect to encounter – with a piece of brightly colored cloth and removing it as soon as you're done.

Keeping floors dry or out of bounds when wet. You can buy specialty absorbent rugs for particularly dangerous areas like the kitchen, laundry and bathroom.

Installing handrails in bathrooms or wherever there are steps (including the yard) – especially important if you have older folk living with or visiting you. These are in the bathroom where I am staying and while I am perfectly able, I use them frequently.

Repairing and leveling walkways in the yard. I have one of these where I am staying now and I trip over it frequently in the dark even though I know its there!

Installing low-wattage lighting along driveways and paths that are used at night. Or, use a motion sensor light that turns the light on for you when you approach.

Fires and fumes, which I talked in an earlier blog, are another key area of home safety. In addition to the measures I recommended then, it's also important to make sure all rooms are properly ventilated, heating appliances are also inspected and serviced annually, air ducts and filters are regularly cleaned, and lint filters on clothes dryers are cleared out after each usage. Blocked lint filters and dryer vents are a major cause of fumes and fires.

 

Finally, I want to warn about keeping dangerous stuff out of reach. I'm talking here not only about your medications – prescription and over-the-counter stuff – and weapons that I talked about before. There are also other dangers you may not immediately recognize, like poisonous house plants, cleaning products and cosmetics and heavy or fragile objects that could cause mayhem if they fall or are broken.

 

This is especially important if you have young people or pets around your home. You can get a list of poisons from both the American Association of Poison Control Centers and the ASPCA Animal Poison Control Center.