As we head into the 3rd month of the hurricane season it looks like we may get some storm related weather from Isaac. Isaac isn't predicted to hit our area until late Sunday or early Monday with the storm tracker giving us variables on which way he may go. With a predicted Sunday approach, now would be the best time to get your emergency box and plan into place.
The National Weather Service states that history teaches that a lack of hurricane awareness and preparation are common
threads among all major hurricane disasters. By knowing your vulnerability and
what actions you should take, you can reduce the effects of a hurricane
disaster.
Hurricane risks come in many forms, including
storm surge, heavy rainfall, inland flooding, high winds, tornadoes, and rip
currents.
The National Weather Service provides forecast maps, links for storm readiness as well as other emergency information. Visit their website at: http://www.nhc.noaa.gov.
http://www.nws.noaa.gov/os/hurricane/resources/TropicalCyclones11.pdf Is the direct link to get valuable information on what to stock in your emergency box, what to take to a shelter, how to prepare your home for storm impact and so much more. Print a copy and keep in a safe place.
http://www.floridaclaimnumbers.com/ is a website with Insurers who set up toll-free numbers to assist policyholders with their hurricane claims. Print a copy or at least make note of your insurance providers claim number to keep with you along with your policy dec page as power may be lost leaving you with no access to websites. Calling your insurer directly is best. If your insurance company has an "app for that" download it on your phone for easier access.
The American Red Cross http://www.redcross.org/ also has valuable tips and information on where emergency shelters are located. Try to make arrangements for your pets as shelters aren't typically in the position to allow pets.
http://www.floridadisaster.org/index.asp provides more emergency and shelter information including shelters set up for special needs cases with a county to county breakdown.
For those of you who own horses this website offers information on how to prepare your barn, your property and your horses for a hurricane as well as where you can take them if you need to evacuate. http://www.floridahorse.com/hurricane/hurricane.html
In any emergency situation, the first and most important thing anyone should do is to use common sense and...
Stay safe!
Friday, August 24, 2012
Tuesday, July 31, 2012
Errors & Omissions Insurance
When evaluating the need for E & O coverage, a business should consider its relationship to their clients. If you are in the business of providing a service to your clients for a fee or remuneration, you potentially have E & O exposure.
Consider what would happen if the service you provide is not performed correctly, late or not as promised. What would the resulting problem cost your client in terms of money or their reputation?
No one is perfect, and even the best employees or subcontractors acting on your behalf can make mistakes.
If a mistake is made causing harm or damage to your client, E & O coverage can help protect you from defense costs and/or financial damages awarded against you.
These types of losses are not usually covered by your general liability policy; and by not purchasing separate E & O coverage, you may be taking a financial risk.
Even if not found at fault, litigation is both time consuming and expensive.
There is no standardized insurance industry policy language for E & O coverage. What might meet one business's professional exposures may not meet yours. Carefully review the coverage being offered being certain that it fits your needs and exposures. Your insurance agent can be of great assistance in making sure you make a sound decision.
A properly purchased E & O policy can protect you from your mistakes and the mistakes of employees and independent contractors you hire.
As reported by John Bures, National Underwriter P & C
Consider what would happen if the service you provide is not performed correctly, late or not as promised. What would the resulting problem cost your client in terms of money or their reputation?
No one is perfect, and even the best employees or subcontractors acting on your behalf can make mistakes.
If a mistake is made causing harm or damage to your client, E & O coverage can help protect you from defense costs and/or financial damages awarded against you.
These types of losses are not usually covered by your general liability policy; and by not purchasing separate E & O coverage, you may be taking a financial risk.
Even if not found at fault, litigation is both time consuming and expensive.
There is no standardized insurance industry policy language for E & O coverage. What might meet one business's professional exposures may not meet yours. Carefully review the coverage being offered being certain that it fits your needs and exposures. Your insurance agent can be of great assistance in making sure you make a sound decision.
A properly purchased E & O policy can protect you from your mistakes and the mistakes of employees and independent contractors you hire.
As reported by John Bures, National Underwriter P & C
Tuesday, July 10, 2012
Egads! My teen has a drivers license! Now what?
It's an exciting time, and a rite of passage, when your teen begins to drive. But as a parent it's also a time of worry as you send them off, trusting that they've developed the right driving skills.
To help with the process, we've provided some important information and facts that you can share with your teen as you guide them in becoming a safe driver.
- What are six principal reasons that contribute to teenage driving problems?
- Drinking and driving: In 2008, 31 percent of the teen drivers who were killed in motor vehicle crashes had been drinking; 25 percent had a blood alcohol content of .08 or higher.*
SpeedingTeenagers':crashes and violations are more likely to involve speeding than those of older drivers. In 2008, 37 percent of 15- to 20-year-old male drivers involved in fatal crashes were speeding.**
Driving at night: 50 percent of all teen deaths from motor vehicle crashes occurred between 3 p.m. and midnight.***
Seat belts:Teens have the lowest rate of seat belt use for all drivers; this rate becomes worse when there are other teens in the car.*
Weekend accidents: 56 percent of teenagers' fatalities in motor vehicle related crashes occurred on Friday, Saturday or Sunday.***
Texting/Cell phone use and Driving: Based on a 2009 study, while teenagers are texting
they spend about 10 percent of the time outside the driving lane they’re supposed to be in.
Studies on texting and driving have also concluded:
Talking on a cell phone while driving can make a young driver’s reaction time as slow as that of a 70-year-old.
Answering a text takes away your attention for about five seconds. That is enough time to travel the length of a football field.
Each year, 21% of fatal car crashes involving teenagers between the ages of 16 and 19 were the result of cell phone usage. This result has been expected to grow as much as 4% every year.
Almost 50% of all drivers between the ages of 18 and 24 are texting and driving.
Over one-third of all young drivers, ages 24 and under, are texting on the road.
Teens say that texting is their number one driver distraction.
they spend about 10 percent of the time outside the driving lane they’re supposed to be in.
Studies on texting and driving have also concluded:
- What can you do as a parent?
- There are several steps you can take to increase your teen's safety:
- Choose vehicles for safety, not image. Ensure that the car has airbags and antilock brakes.
- Provide new drivers with plenty of supervised driving practice, even after they have obtained a license.
- Mandate safety belt usage.
- Even if your state's graduated licensing law doesn't already mandate it, restrict the number of passengers allowed to ride with your teen driver. Crash rates increase sharply when a teen driver has passengers, particularly other teenagers.
- Enforce "no drinking and driving" rules.
- Emphasize that safe driving requires your teen's full attention.
- Enforce no texting or calling while behind the wheel.
- Place restrictions on nighttime driving and enforce the curfews set by the local towns.
- Enroll new drivers in a driving school to educate them about cars, driving conditions and driving techniques. This will prepare teenagers for the road, and it could reduce accidents.
- Discuss and reinforce responsible driving behavior with teenagers. Because teenagers are new drivers, they simply don't have the behind-the-wheel experience necessary to understand the dynamics associated with driving a motor vehicle. There's a vast difference between riding in the passenger seat and being the one behind the wheel.
By teaching teenagers responsible driving behavior, you can help prevent accidents. We encourage you to discuss safe driving with your teenager—it could be one of the most important conversations you have.
*2008 Young Drivers Traffic Safety Fact Sheet. National Highway Traffic Safety Administration, National Center for Statistics and Analysis
**2008 Speeding Traffic Safety Fact Sheet. National Highway Traffic Safety Administration, National Center for Statistics and Analysis
***Centers for Disease Control and Prevention. Youth Risk Behavior Surveillance - United States. 2007 [online] 2009. National Center for Chronic Disease and Health Promotion (producer)
Friday, June 29, 2012
Don't Drown Your Car
If you live anywhere in the North or Central Florida regions, you have most likely felt the affects of Tropical Storm Debby.
A slow moving storm she was delivering up to 30 inches of rain within 24 hours. Flooded streets were common with some completely washed away.
With this event it seems only timely to recap this reminder from AAA:
1. As little as one foot of water can "float" most vehicles
2. Two feet of rushing water can sweep away most vehicles-including SUV's and PU's
3. Repair costs for damage caused by driving through standing water can range from several hundred to several thousand dollars
Beware of risng waters. When you encounter standing water on a roadway, your safest course of action is to turn around.
No matter how familiar you are with the road, never drive through standing water-at any depth-as it could cause serious damage. Never try to restart your car if it stalls in standing water. Call for a tow.
The potential damage to a vehicle driven through standing water can be severe including the risk of flooding the engine, warping brake rotors, disabling power steering and causing an electrical short.
If you don't know how deep the water is, don't drive through it.
AAA's advice to motorist during tropical storms or any severe weather event is basic common sense: If you don't NEED to be on the road, stay put and wait the storm out. Your safety and the damage that could be caused to your vehicle isn't worth the risk.
To learn more about driving safer-no matter the weather-visit AAA.com/trafficsafety.
A slow moving storm she was delivering up to 30 inches of rain within 24 hours. Flooded streets were common with some completely washed away.
With this event it seems only timely to recap this reminder from AAA:
1. As little as one foot of water can "float" most vehicles
2. Two feet of rushing water can sweep away most vehicles-including SUV's and PU's
3. Repair costs for damage caused by driving through standing water can range from several hundred to several thousand dollars
Beware of risng waters. When you encounter standing water on a roadway, your safest course of action is to turn around.
No matter how familiar you are with the road, never drive through standing water-at any depth-as it could cause serious damage. Never try to restart your car if it stalls in standing water. Call for a tow.
The potential damage to a vehicle driven through standing water can be severe including the risk of flooding the engine, warping brake rotors, disabling power steering and causing an electrical short.
If you don't know how deep the water is, don't drive through it.
AAA's advice to motorist during tropical storms or any severe weather event is basic common sense: If you don't NEED to be on the road, stay put and wait the storm out. Your safety and the damage that could be caused to your vehicle isn't worth the risk.
To learn more about driving safer-no matter the weather-visit AAA.com/trafficsafety.
Tuesday, June 5, 2012
Flood Insurance...Buy Now!
Get FloodSmart: Protect Now With Flood Insurance
2012 Hurricane Season Begins May 2
Release Date: May 1, 2012WASHINGTON, D.C. -- Every year, thirty days from the start of hurricane season, FEMA officials urge U.S. residents to prepare their homes and businesses for the heightened flood risks associated with hurricanes and tropical storms. This year, FEMA is placing more urgency in this message due to the expiration of the National Flood Insurance Program (NFIP) on May 31, 2012, the day before the 2012 hurricane season begins on June 1st.
The authorization for the National Flood Insurance Program is scheduled to expire on May 31 unless Congress acts in advance to reauthorize it. The NFIP makes federally backed flood insurance available to homeowners, renters and business owners. The NFIP identifies areas of flood risk; it encourages communities to implement measures to mitigate against the risk of flood loss; and it provides financial assistance to help individuals recover rapidly from flooding disasters.
"Flood insurance is essential to help protect against the devastating effects of flooding, and the time to act is now," said David Miller, Associate Administrator for FEMA's Federal Insurance and Mitigation Administration. "As we approach a potentially active hurricane season, FEMA is urging Congress to reauthorize the NFIP and send a clear signal to citizens, communities, and private sector partners that the federal government will continue to support our nation's efforts to manage flood risk."
Flooding is the most common and costly natural disaster to affect every state across the country. Severe weather has already brought significant flood events to many states in the U.S. As we continue to monitor conditions and respond to these events, we must also look forward to summer and hurricane-related weather patterns that will heighten flood risks for many.
FEMA also stresses that flood risks associated with hurricane season extend beyond the Gulf and Southeastern coasts. The largest amounts of rainfall from hurricanes are often produced by slow moving storms that stall out miles from a shoreline as did Tropical Storm Lee in 2011. In addition, last year Hurricane Irene caused major flooding over much of the mid-Atlantic and Northeast when it moved inland, with high winds and torrential rains.
FEMA is urging residents to purchase flood insurance now. Flood insurance is available through more than 85 insurance companies in nearly 22,000 participating communities nationwide. Most everyone can purchase flood insurance – including renters, business owners, and homeowners. Flood insurance is also affordable. The average flood insurance policy is around $625 a year. And in moderate- to low- risk areas, homeowners can protect their properties with low-cost Preferred Risk Policies (PRPs) that start at just $129 a year. Individuals can learn more about their flood risk by visiting www.FloodSmart.gov or calling 1-800-427-2419.
FEMA's mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.
Would you Remember? Take a Picture!
As a homeowner, have you ever noticed how much stuff you and your family have collected over the years?
Opening a closet door in any part of your home reveals clothes, sports equipment, holiday decorations and other various items.
As you became more successful you have added to your art collection or own better quality items.
As your family grew, so did your accumulation of "stuff".
Maybe you own lots of "stuff" simply because you can't part from what you have.
With that being said, if there was a fire that took all of that away, would you remember what all you had?
I doubt it.
Would you want your insurance policy to respond in replacing it?
Certainly.
If you cannot remember what you had, how can it be replaced?
Modern technology and the various gadgets people are using now can save many hours of undue stress and frustration when trying to deal with a total loss.
To assist policy holders, many insurance companies offer inventory checklists on their websites. There are also many available on the web and a quick search on any of the search engines such as Google or Bing! will bring up a variety to select from.
With your digital camera or your smart phone in hand, enter each room of your home and start taking pictures of EVERYTHING. Open closet doors and take a photo. Take pictures of your art, your furniture, your dishes and decorations. If you own it and it is in your home, snap a picture!
Complete an inventory list including the pictures then provide copies via disc or flash card to your agent as well as keeping copies somewhere safe such as a safe deposit box.
If all you find time to do is to take the pictures, do it! Kids are a great asset in this type of project. Most have become tech savvy by age 6 and operating a camera or smart phone for them is quite simple. Plus they take part in learning the importance of documenting what they own. A learning lesson disguised as fun. A win-win for everyone!
Now, if you do suffer a catastrophic loss, you'll have the ability to access the documents that will trigger your memory on what "stuff" you owned PLUS you can provide that documentation to your insurance carrier.
Photo documenting is the easiest and most efficient way to keep an inventory of what you own.
Opening a closet door in any part of your home reveals clothes, sports equipment, holiday decorations and other various items.
As you became more successful you have added to your art collection or own better quality items.
As your family grew, so did your accumulation of "stuff".
Maybe you own lots of "stuff" simply because you can't part from what you have.
With that being said, if there was a fire that took all of that away, would you remember what all you had?
I doubt it.
Would you want your insurance policy to respond in replacing it?
Certainly.
If you cannot remember what you had, how can it be replaced?
Modern technology and the various gadgets people are using now can save many hours of undue stress and frustration when trying to deal with a total loss.
To assist policy holders, many insurance companies offer inventory checklists on their websites. There are also many available on the web and a quick search on any of the search engines such as Google or Bing! will bring up a variety to select from.
With your digital camera or your smart phone in hand, enter each room of your home and start taking pictures of EVERYTHING. Open closet doors and take a photo. Take pictures of your art, your furniture, your dishes and decorations. If you own it and it is in your home, snap a picture!
Complete an inventory list including the pictures then provide copies via disc or flash card to your agent as well as keeping copies somewhere safe such as a safe deposit box.
If all you find time to do is to take the pictures, do it! Kids are a great asset in this type of project. Most have become tech savvy by age 6 and operating a camera or smart phone for them is quite simple. Plus they take part in learning the importance of documenting what they own. A learning lesson disguised as fun. A win-win for everyone!
Now, if you do suffer a catastrophic loss, you'll have the ability to access the documents that will trigger your memory on what "stuff" you owned PLUS you can provide that documentation to your insurance carrier.
Photo documenting is the easiest and most efficient way to keep an inventory of what you own.
Monday, May 7, 2012
Life Insurance...Do I need it?
Everyone needs life insurance, if only to pay for final expenses. People with children or family members who are financially dependent on them may need more life insurance than others.
Perhaps the best way to answer the question "Do I need life insurance?" is to ask yourself "Would my family be able to continue on in their current living arrangements without financial burden if I were no longer around?"
If you answered no or even maybe, then you need life insurance.
Life insurance comes in various forms. It is a promise made by an insurance company to pay a death benefit to a beneficiary on the death of the insured, in exchange for premium payments from the policy holder.
Two of the most popular life insurance policy types are term life and whole life.
Term life insurance typically has the lowest out-of-pocket expense. It does not provide permanent coverage but instead provides a death benefit for a specified period of time (the "term").
Whole life insurance is designed for permanent coverage on the life of the insured. With a whole life insurance policy , the premium is guaranteed not to increase and the death benefit is guaranteed for life. It also has a cash value that can be accessed for various needs. Whole life insurance may pay dividends to policyholders. The dividends can be used to purchase additional coverage, reduce the premium, pay back loans or may be received in cash.
Most people ask "What type of life insurance policy would be right for them?"
Answering that question will depend on your financial situation, your needs, goals and your expectations for the future.
Having this discussion with a licensed insurance professional will help determine what type of policy will best fit your needs.
Perhaps the best way to answer the question "Do I need life insurance?" is to ask yourself "Would my family be able to continue on in their current living arrangements without financial burden if I were no longer around?"
If you answered no or even maybe, then you need life insurance.
Life insurance comes in various forms. It is a promise made by an insurance company to pay a death benefit to a beneficiary on the death of the insured, in exchange for premium payments from the policy holder.
Two of the most popular life insurance policy types are term life and whole life.
Term life insurance typically has the lowest out-of-pocket expense. It does not provide permanent coverage but instead provides a death benefit for a specified period of time (the "term").
Whole life insurance is designed for permanent coverage on the life of the insured. With a whole life insurance policy , the premium is guaranteed not to increase and the death benefit is guaranteed for life. It also has a cash value that can be accessed for various needs. Whole life insurance may pay dividends to policyholders. The dividends can be used to purchase additional coverage, reduce the premium, pay back loans or may be received in cash.
Most people ask "What type of life insurance policy would be right for them?"
Answering that question will depend on your financial situation, your needs, goals and your expectations for the future.
Having this discussion with a licensed insurance professional will help determine what type of policy will best fit your needs.
Friday, April 13, 2012
Choosing the Right Insurance Company for your Business
Choosing the right insurance company for your business can be more complex than is readily apparent. For example, the lowest price may not be the best value. As insurance agents we understand that the price of a policy is important however, so is financial stability, service and reputation. We recommend looking for financially strong companies that can offer products that meet your needs at a competitive price.
When purchasing a policy based on price alone, you could suffer consequences ranging from unpaid claims due to poor service to insolvent carriers resulting from under-pricing.
When considering the best policy for you, consider the following:
Type of Product: The type of policies purchased by most business entities include but are not limited to property, general liability, umbrella and director & officers (D&O).
(Workers Comp and Commercial Auto will be discussed in a future article)
When shopping for insurance coverage, be ready to provide information about the type of company you need insurance for along with any questions you may have so that your insurance agent can guide you in making an informed decision on your coverage options.
Price: Premiums paid for any insurance policy is an important consideration. When business owners have been surveyed, over 50% felt it was "very important". Like any other purchase, price is relevant to value.
Variables that influence the cost of an insurance policy include liability limits, deductibles, where the insured property is located, characteristics of the property, type of business...the list goes on.
Every company applies their underwriting and pricing criteria based on these factors, with premiums varying from insurer to insurer. When your agent provides you quotes, they'll offer an explanation of the price differences.
Service & Reputation: A reputation for good customer service, efficient and friendly claims management and the ease of doing business with often ranks toward the top of the list when shopping for insurance. When it comes to claim response, insureds are looking for fairness, speed of response and speed of payment.
Industry Expertise: Your agent will place you with a company that specializes in your industry. Choosing a company that is inexperienced could negatively impact your coverage and service.
Licensing: Not all insurance companies are licensed to write coverage in every state. Your agent will recommend an "admitted carrier" for your state. This means that the company is licensed and regulated by the state. When coverage is difficult to find, your agent will work with insurers that write surplus lines. Surplus lines are written by "non-admitted" carriers. They are not licensed to write coverage in the state but can write coverage for policies that most admitted carriers will not cover. It is important to note that these carriers are unregulated by the state, freeing the insurer of any premium and policy form regulations.
The process of purchasing insurance for your business can be long and at times feel complicated.
Look for an agent who has the experience and expertise to guide you in making the right decision on your insurance coverage.
Drexal Harris has been a licensed insurance agent in Florida for over 40 years. His agency, Baker-Harris Insurance is one of the oldest in Tallahassee specializing in all forms of insurance.
Information for the above article was provided by Zurichna.com and naic.org
When purchasing a policy based on price alone, you could suffer consequences ranging from unpaid claims due to poor service to insolvent carriers resulting from under-pricing.
When considering the best policy for you, consider the following:
Type of Product: The type of policies purchased by most business entities include but are not limited to property, general liability, umbrella and director & officers (D&O).
(Workers Comp and Commercial Auto will be discussed in a future article)
When shopping for insurance coverage, be ready to provide information about the type of company you need insurance for along with any questions you may have so that your insurance agent can guide you in making an informed decision on your coverage options.
Price: Premiums paid for any insurance policy is an important consideration. When business owners have been surveyed, over 50% felt it was "very important". Like any other purchase, price is relevant to value.
Variables that influence the cost of an insurance policy include liability limits, deductibles, where the insured property is located, characteristics of the property, type of business...the list goes on.
Every company applies their underwriting and pricing criteria based on these factors, with premiums varying from insurer to insurer. When your agent provides you quotes, they'll offer an explanation of the price differences.
Service & Reputation: A reputation for good customer service, efficient and friendly claims management and the ease of doing business with often ranks toward the top of the list when shopping for insurance. When it comes to claim response, insureds are looking for fairness, speed of response and speed of payment.
Industry Expertise: Your agent will place you with a company that specializes in your industry. Choosing a company that is inexperienced could negatively impact your coverage and service.
Licensing: Not all insurance companies are licensed to write coverage in every state. Your agent will recommend an "admitted carrier" for your state. This means that the company is licensed and regulated by the state. When coverage is difficult to find, your agent will work with insurers that write surplus lines. Surplus lines are written by "non-admitted" carriers. They are not licensed to write coverage in the state but can write coverage for policies that most admitted carriers will not cover. It is important to note that these carriers are unregulated by the state, freeing the insurer of any premium and policy form regulations.
The process of purchasing insurance for your business can be long and at times feel complicated.
Look for an agent who has the experience and expertise to guide you in making the right decision on your insurance coverage.
Drexal Harris has been a licensed insurance agent in Florida for over 40 years. His agency, Baker-Harris Insurance is one of the oldest in Tallahassee specializing in all forms of insurance.
Information for the above article was provided by Zurichna.com and naic.org
Tuesday, April 10, 2012
Rental Car Coverage
As summer approaches, our office begins handling the daily call(s) in regards to rental cars and whether the insurance should be purchased. David Thompson of the Florida Association of Insurance Agents (FAIA) had published an article addressing rental car coverage and we have been granted permission to re-publish. Although the following article was written a few years ago, the information provided is still valid.
Rental Car Coverage and your Personal Auto Policy (PAP)
A very common question posed to insurance agents by a client is, "Should I buy that rental car insurance coverage?" If only there was a simple answer to this question! The quickest (and perhaps safest) answer an agent can give is, "Yes, buy the coverage." It takes a complete understanding of the question, as well as knowledge of the coverage provided by a Personal Auto Policy (PAP) in order to answer the question. Plus, the agent needs to know what coverages may or may not be provided by the rental company's collision/loss damage waiver, and perhaps there is even coverage provided by a credit card company. Finally, rental companies sell as many as five or six different types of coverage or waivers so the question may not be, "Should I buy the coverage," but, "Which coverages, if any, should I buy?"
First a few disclaimers. Information here can't possibly account for every situation, and specific coverage questions should be analyzed individually. Next, this discussion is based on the 1998 and 2005 versions of the Insurance Services Offices PAP. Many companies may use a modified version of this or earlier policy editions, and some companies may have their own proprietary forms that provide little or no coverage for rental vehicles. (Answers would differ greatly if the 6/94 PAP edition were used to analyze coverage.) While many states have similar laws, this analysis is based on Florida laws; other states may differ. Finally, a reminder that no coverage exists under the PAP outside the United States, Canada, Puerto Rico, and U.S. territories and possessions.
The PAP provides a variety of coverages for an individual who rents a vehicle in both personal use and business use situations. To best answer the "should I buy" question, each coverage will be addressed individually.
LIABILITY: In simple terms, liability coverage follows the named insured, resident spouse, and "family members" while they use any vehicle, including a rental vehicle. (The policy states coverage is provided for the "ownership, maintenance or use of any auto or trailer.") If the rental is for personal use, coverage applies for the rental of any vehicle with four or more wheels that is designed for road use, even a U-Haul moving truck. Liability coverage provided by the PAP would (in most cases) be excess coverage, applying after any coverage that might be provided by the rental firm. (However, most rental contracts in Florida make the authorized renter/driver's auto liability coverage primary up to a certain limit, meaning an at fault accident is paid first from the renter's auto policy.) If the purpose of the rental is business use then liability coverage applies only for a private passenger automobile, pickup, or van --- but not for a vehicle such as a "box truck" or motor home. Extended rentals, such as those over perhaps 15-20 days should be referred to the company to determine if the "furnished or available for regular use" exclusion applies. The "Extended Non-Owned Coverage" endorsement (PP 03 06) is available if the company indicates a coverage problem in this instance.
MEDICAL PAYMENTS: Coverage is essentially the same as described for liability coverage with one exception. Under the 1998 form, if the client rents a pickup truck or van (even a mini-van) for business use there is no medical payments coverage provided by the PAP. The 2005 form provides coverage in this situation automatically. Should there also be medical payments coverage provided by the rental firm, (an unlikely event) then medical payments coverage provided by the PAP will be excess over that coverage.
PERSONAL INJURY PROTECTION (PIP): Each of the dozen or so states with a PIP law is different and this discussion involves only Florida PIP. As long as the client rents a vehicle with four or more wheels that is designed for use on the road, then PIP coverage applies while the client, spouse, and family members are anywhere in Florida. Should an injury occur, the client would get his own PIP and no other PIP. (If the client does not own a Florida "PIP vehicle" then he would get PIP of the rental firm.) PIP coverage out of state is not provided in a rental vehicle. The only time that PIP coverage applies out of state is when the insured, spouse, or family member is occupying their own automobile.
UNINSURED MOTORIST: Again, this discussion pertains only to Florida, as each state is different. The short answer here is that there are no coverage issues with UM coverage. It does not matter if the client has stacked or non-stacked UM --- they can collect UM while occupying the rental vehicle. Coverage applies in state or out of state; personal or business use; in any type rental vehicle. Should the rental firm carry UM (again a very unlikely event), then the UM coverage provided by the PAP would be excess coverage.
PHYSICAL DAMAGE COVERAGE: Finally, the REAL reason the client is calling likely is, "If I wreck the car itself will my policy pay?" The client must have at least one auto insured with collision and other-than-collision (comprehensive) coverage for the rental vehicle to be covered. Coverage applying to a rental vehicle is the "broadest coverage" of any auto insured on the PAP. If the client has a policy providing only liability, medical payments, PIP, and UM, there is no coverage for the rental vehicle itself in the event of damage. The type of vehicle rented is of concern too, since physical damage coverage applies only for private passenger autos, pickups, and vans. Not covered are larger vehicles such as "box trucks" which means that the U-Haul and Ryder type trucks rented by clients are not covered for physical damage. In such cases the client should be advised to purchase coverage from the rental firm. As long as a private passenger auto, pickup, or van is rented, coverage applies for both personal and business use, anywhere in the policy territory. (Again, note there is no coverage in common vacation spots such as Mexico, Europe, and the Bahamas.) When coverage applies, it is subject to the deductible and all other policy conditions will apply. It's interesting to note that a damaged rental car is covered up to the actual cash value of the rental car without regard to what type vehicle the client owns and insures. For example, the client owns a seven-year-old Ford with an ACV of $2,500 and rents a $35,000 Lincoln. If the client wrecks the Lincoln causing a total loss, the PAP pays the $35,000 less deductible. (Note however there is a limit of $500 payable for damage to non-owned trailers in the 1998 form and $1,500 in the 2005 form.) There is coverage for "loss of rental use" imposed by the rental firm up to $20 per day with that amount increasable by endorsement. Coverage also applies for other "administrative charges" imposed by the rental firm. However, the total of loss of use charges plus administrative charges will be paid to a maximum of $600 unless the policy has been endorsed for a higher limit. Coverage provided by credit cards varies from card to card and agents should refer questions about coverage provided under the card to the issuing bank. Coverage is generally very limited and may not be nearly as broad as a client believes it to be.
So, all that being said should the client buy "the insurance" from the rental firm? For the sake of this discussion let's assume that the only "insurance" in question is the "collision damage waiver" typically offered at prices of $12.99 to $22.99 per day. Clients could rely on their own PAP for coverage to a damaged rental car, in which case they would be filing a claim under their own policy. (Note too, damage could be from a hit and run vehicle or damage to the rental car while it was parked at a shopping center.) Damage to the rental car would be paid by the PAP subject to the client paying the deductible, any loss of use charges over $20 per day, and any administrative expenses that (combined with loss of use charges) exceed $600. Additionally, the client has had to involve his or her own time, agent, and policy in covering the claim. Had the client chosen to purchase the "collision damage waiver" from the rental firm, he would (in many cases anyway) walk up to the counter, drop the keys down, and say, "Gee, I wrecked your car, I am so sorry. I need another car and, by the way, I bought your coverage."
Here are a few of the many reasons that clients are better off by purchasing the damage waiver offered by rental car firms:
BOTTOM LINE: The client is always better off to purchase the "loss damage waiver" coverage offered by the rental firm. Whether they choose to pay the often outrageous price for this coverage is, of course, their final decision.
~David Thompson, FAIA
September 2008
This article contains copyrighted information of the Florida Association of Insurance Agents (FAIA) and is used with permission. Please call Baker-Harris Insurance at 850-386-1420 if you have any further questions about this article. FAIA is not staffed to take consumer calls.
A very common question posed to insurance agents by a client is, "Should I buy that rental car insurance coverage?" If only there was a simple answer to this question! The quickest (and perhaps safest) answer an agent can give is, "Yes, buy the coverage." It takes a complete understanding of the question, as well as knowledge of the coverage provided by a Personal Auto Policy (PAP) in order to answer the question. Plus, the agent needs to know what coverages may or may not be provided by the rental company's collision/loss damage waiver, and perhaps there is even coverage provided by a credit card company. Finally, rental companies sell as many as five or six different types of coverage or waivers so the question may not be, "Should I buy the coverage," but, "Which coverages, if any, should I buy?"
First a few disclaimers. Information here can't possibly account for every situation, and specific coverage questions should be analyzed individually. Next, this discussion is based on the 1998 and 2005 versions of the Insurance Services Offices PAP. Many companies may use a modified version of this or earlier policy editions, and some companies may have their own proprietary forms that provide little or no coverage for rental vehicles. (Answers would differ greatly if the 6/94 PAP edition were used to analyze coverage.) While many states have similar laws, this analysis is based on Florida laws; other states may differ. Finally, a reminder that no coverage exists under the PAP outside the United States, Canada, Puerto Rico, and U.S. territories and possessions.
The PAP provides a variety of coverages for an individual who rents a vehicle in both personal use and business use situations. To best answer the "should I buy" question, each coverage will be addressed individually.
LIABILITY: In simple terms, liability coverage follows the named insured, resident spouse, and "family members" while they use any vehicle, including a rental vehicle. (The policy states coverage is provided for the "ownership, maintenance or use of any auto or trailer.") If the rental is for personal use, coverage applies for the rental of any vehicle with four or more wheels that is designed for road use, even a U-Haul moving truck. Liability coverage provided by the PAP would (in most cases) be excess coverage, applying after any coverage that might be provided by the rental firm. (However, most rental contracts in Florida make the authorized renter/driver's auto liability coverage primary up to a certain limit, meaning an at fault accident is paid first from the renter's auto policy.) If the purpose of the rental is business use then liability coverage applies only for a private passenger automobile, pickup, or van --- but not for a vehicle such as a "box truck" or motor home. Extended rentals, such as those over perhaps 15-20 days should be referred to the company to determine if the "furnished or available for regular use" exclusion applies. The "Extended Non-Owned Coverage" endorsement (PP 03 06) is available if the company indicates a coverage problem in this instance.
MEDICAL PAYMENTS: Coverage is essentially the same as described for liability coverage with one exception. Under the 1998 form, if the client rents a pickup truck or van (even a mini-van) for business use there is no medical payments coverage provided by the PAP. The 2005 form provides coverage in this situation automatically. Should there also be medical payments coverage provided by the rental firm, (an unlikely event) then medical payments coverage provided by the PAP will be excess over that coverage.
PERSONAL INJURY PROTECTION (PIP): Each of the dozen or so states with a PIP law is different and this discussion involves only Florida PIP. As long as the client rents a vehicle with four or more wheels that is designed for use on the road, then PIP coverage applies while the client, spouse, and family members are anywhere in Florida. Should an injury occur, the client would get his own PIP and no other PIP. (If the client does not own a Florida "PIP vehicle" then he would get PIP of the rental firm.) PIP coverage out of state is not provided in a rental vehicle. The only time that PIP coverage applies out of state is when the insured, spouse, or family member is occupying their own automobile.
UNINSURED MOTORIST: Again, this discussion pertains only to Florida, as each state is different. The short answer here is that there are no coverage issues with UM coverage. It does not matter if the client has stacked or non-stacked UM --- they can collect UM while occupying the rental vehicle. Coverage applies in state or out of state; personal or business use; in any type rental vehicle. Should the rental firm carry UM (again a very unlikely event), then the UM coverage provided by the PAP would be excess coverage.
PHYSICAL DAMAGE COVERAGE: Finally, the REAL reason the client is calling likely is, "If I wreck the car itself will my policy pay?" The client must have at least one auto insured with collision and other-than-collision (comprehensive) coverage for the rental vehicle to be covered. Coverage applying to a rental vehicle is the "broadest coverage" of any auto insured on the PAP. If the client has a policy providing only liability, medical payments, PIP, and UM, there is no coverage for the rental vehicle itself in the event of damage. The type of vehicle rented is of concern too, since physical damage coverage applies only for private passenger autos, pickups, and vans. Not covered are larger vehicles such as "box trucks" which means that the U-Haul and Ryder type trucks rented by clients are not covered for physical damage. In such cases the client should be advised to purchase coverage from the rental firm. As long as a private passenger auto, pickup, or van is rented, coverage applies for both personal and business use, anywhere in the policy territory. (Again, note there is no coverage in common vacation spots such as Mexico, Europe, and the Bahamas.) When coverage applies, it is subject to the deductible and all other policy conditions will apply. It's interesting to note that a damaged rental car is covered up to the actual cash value of the rental car without regard to what type vehicle the client owns and insures. For example, the client owns a seven-year-old Ford with an ACV of $2,500 and rents a $35,000 Lincoln. If the client wrecks the Lincoln causing a total loss, the PAP pays the $35,000 less deductible. (Note however there is a limit of $500 payable for damage to non-owned trailers in the 1998 form and $1,500 in the 2005 form.) There is coverage for "loss of rental use" imposed by the rental firm up to $20 per day with that amount increasable by endorsement. Coverage also applies for other "administrative charges" imposed by the rental firm. However, the total of loss of use charges plus administrative charges will be paid to a maximum of $600 unless the policy has been endorsed for a higher limit. Coverage provided by credit cards varies from card to card and agents should refer questions about coverage provided under the card to the issuing bank. Coverage is generally very limited and may not be nearly as broad as a client believes it to be.
So, all that being said should the client buy "the insurance" from the rental firm? For the sake of this discussion let's assume that the only "insurance" in question is the "collision damage waiver" typically offered at prices of $12.99 to $22.99 per day. Clients could rely on their own PAP for coverage to a damaged rental car, in which case they would be filing a claim under their own policy. (Note too, damage could be from a hit and run vehicle or damage to the rental car while it was parked at a shopping center.) Damage to the rental car would be paid by the PAP subject to the client paying the deductible, any loss of use charges over $20 per day, and any administrative expenses that (combined with loss of use charges) exceed $600. Additionally, the client has had to involve his or her own time, agent, and policy in covering the claim. Had the client chosen to purchase the "collision damage waiver" from the rental firm, he would (in many cases anyway) walk up to the counter, drop the keys down, and say, "Gee, I wrecked your car, I am so sorry. I need another car and, by the way, I bought your coverage."
Here are a few of the many reasons that clients are better off by purchasing the damage waiver offered by rental car firms:
- Loss settlement: The PAP provides actual cash value loss settlement. Many rental car firms hold the renter responsible for the "full value" of the vehicle, most likely as determined by the rental car firm.
- Diminished value: Many rental car contracts hold the renter responsible for the diminished value of a vehicle that has been damaged in an accident. The rental car firm determines this diminished value and the PAP does not cover diminished value.
- Deductible: The PAP has a deductible, typically ranging from $250 to $1,000. The insured is responsible for that amount, even if not at fault. For example, if an insured came out from a store to find the rental car damaged by a hit-and-run driver, the insured must submit the claim to his PAP and pay the deductible.
- Excluded vehicles: The PAP provides no physical damage coverage for a vehicle other than a private passenger auto, pickup, van, or trailer. Those who rent larger vehicles such as moving trucks and motor homes have no coverage under the PAP for damage to those vehicles. The value of these vehicles can easily exceed $100,000.
- Excluded drivers: There may be a driver exclusion form present on the PAP. By adding that person as a driver to the rental car contract and purchasing the damage waiver, coverage can be provided.
- Demand for immediate payment: The rental car firm may require immediate payment from the renter if a vehicle is damaged, perhaps by charging their credit card for an estimated amount. It may take several weeks, or longer, for the PAP to make payment.
- Loss of use charges: While the PAP does provide coverage for loss of use charges at $20 per day to a maximum of $600, it's seldom that a rental car is that inexpensive. If the damage waiver is declined, the insured is responsible for excess loss of use charges.
- Administrative charges: Rental car firms often impost an administrative charge when a vehicle is damaged. The PAP covers these charges, but only up to a limit of $600, which is a combined total for loss of use and administrative charges.
- Policy territory: As stated earlier, there is no coverage under the PAP for popular vacation locations like Europe, Mexico, and the Caribbean. Those who rent in locations like these certainly should purchase the damage waiver.
- PAP surcharges: Submitting a claim (even one for an unattended parked vehicle that was damaged) under the PAP may result in a premium increase. While any claim involving a moving vehicle and/or possible third party injury or damage claim should always be reported, purchasing the damage waiver may allow the customer to avoid submitting a claim for the unattended vehicle type claim.
- Hail, wind, etc.: Most rental car contracts hold the renter responsible for any damage to a vehicle, even an act of God claim. Imagine coming out to find a rental car significantly damaged by hail, only to find the rental car firm saying, "You owe us the money."
- Life simplification: Admittedly, the cost of the damage waiver could be viewed as "highway robbery" by some. That cost must be weighed against the ease of turning a damaged rental car. Simply drop the keys down and walk away, leaving the rental car firm with the problem.
BOTTOM LINE: The client is always better off to purchase the "loss damage waiver" coverage offered by the rental firm. Whether they choose to pay the often outrageous price for this coverage is, of course, their final decision.
~David Thompson, FAIA
September 2008
This article contains copyrighted information of the Florida Association of Insurance Agents (FAIA) and is used with permission. Please call Baker-Harris Insurance at 850-386-1420 if you have any further questions about this article. FAIA is not staffed to take consumer calls.
Friday, March 30, 2012
Home Values and Insurance
Over the past 5 years, many of our insureds have seen the market value of their home decrease significantly so we aren't surprised when they call with the request to reduce their coverage to follow the reduced market value of their property.
Market value is what a buyer is willing to pay for your home. This value is based on location, age of the dwelling, location of amenities such as good schools, shopping, entertainment and the commute time/distance to places of employment.
While these factors can increase the value or in some instances decrease the value of a home, none of these factors determine the replacement cost. Your insurance policy is based on replacement cost.
In most cases, the market value of your home does not reflect the cost of replacement. With the rising cost of construction materials and associated labor, the replacement cost of homes from a total loss will most likely be much higher than their market value. As the cost of petroleum continues to rise as well as lumber, the products made out of those commodities also rise which causes the price to increase to replace the structure.
Living in Florida, we are also faced with natural disasters in the form of hurricanes. Shortages in materials after a hurricane or any other natural disaster where many homes have been affected cause prices to increase.
As insurance professionals we explain to our clients the difference between market value and replacement cost and with their help, we determine what the replacement cost will be for their home based on Replacement Cost Estimators (RCE).
Companies such as MSB and ISO have developed detailed replacement cost estimating tools to help insurance professionals and our clients determine what is a reasonable estimate of what it would cost to replace their home.
It is important to realize that the replacement cost of your home can change dramatically from year to year if a significant event such as a hurricane occurred or you have made any changes to your home such as an addition.
If it has been several years since the policy has been put in force, before your renewal, take 15 minutes to complete the RCE with your agent as well as taking time to review your other coverages. The service is free and can prevent further stress if a claim arises. Just like you, we don't want you to be under insured.
With your input, the RCE completed with your agent is the best tool in computing the replacement value of your home.
Market value is what a buyer is willing to pay for your home. This value is based on location, age of the dwelling, location of amenities such as good schools, shopping, entertainment and the commute time/distance to places of employment.
While these factors can increase the value or in some instances decrease the value of a home, none of these factors determine the replacement cost. Your insurance policy is based on replacement cost.
In most cases, the market value of your home does not reflect the cost of replacement. With the rising cost of construction materials and associated labor, the replacement cost of homes from a total loss will most likely be much higher than their market value. As the cost of petroleum continues to rise as well as lumber, the products made out of those commodities also rise which causes the price to increase to replace the structure.
Living in Florida, we are also faced with natural disasters in the form of hurricanes. Shortages in materials after a hurricane or any other natural disaster where many homes have been affected cause prices to increase.
As insurance professionals we explain to our clients the difference between market value and replacement cost and with their help, we determine what the replacement cost will be for their home based on Replacement Cost Estimators (RCE).
Companies such as MSB and ISO have developed detailed replacement cost estimating tools to help insurance professionals and our clients determine what is a reasonable estimate of what it would cost to replace their home.
It is important to realize that the replacement cost of your home can change dramatically from year to year if a significant event such as a hurricane occurred or you have made any changes to your home such as an addition.
If it has been several years since the policy has been put in force, before your renewal, take 15 minutes to complete the RCE with your agent as well as taking time to review your other coverages. The service is free and can prevent further stress if a claim arises. Just like you, we don't want you to be under insured.
With your input, the RCE completed with your agent is the best tool in computing the replacement value of your home.
Friday, March 23, 2012
Take A Quiz!
As a lifelong insurance agent, I have fielded many questions about what is covered under the typical auto, health or homeowners policy. Unfortunately, these questions are often asked AFTER a catastrophic event or when a claim needs to be made. Sometimes our insured is surprised to find out that what they thought was covered was indeed not.
At our agency, we often find ourselves reminding our clients that information that they gathered from the web may not apply to our state and to our policies. When reading the various articles about saving money on insurance, we suggest talking with your agent too.
Maybe you have had changes in income, size of family, or added an addition to your current home. Without sharing this with your agent, you may find yourself under-insured or worse, not insured at all.
As quoted by Kiplinger:
You buy insurance to protect your finances from life's surprises. But unless you know the finer points of your policies, you could be left with another surprise -- no coverage where you thought you had it.
Take a moment to test your knowledge about your insurance policy by taking the quiz on the Kiplinger site: kiplinger.com. Once on their webpage, scroll to the insurance tab, then to quizzes on the left side.
Even this simple quiz makes assumptions, such as that you are a homeowner or that you have a basement. Each policy, each state may or may not automatically have certain coverages. As I stated earlier, call your agent to confirm exactly what your policy provisions provide.
If you think you need to adjust your policy, call us! We'll be glad to help.
At our agency, we often find ourselves reminding our clients that information that they gathered from the web may not apply to our state and to our policies. When reading the various articles about saving money on insurance, we suggest talking with your agent too.
Maybe you have had changes in income, size of family, or added an addition to your current home. Without sharing this with your agent, you may find yourself under-insured or worse, not insured at all.
As quoted by Kiplinger:
You buy insurance to protect your finances from life's surprises. But unless you know the finer points of your policies, you could be left with another surprise -- no coverage where you thought you had it.
Take a moment to test your knowledge about your insurance policy by taking the quiz on the Kiplinger site: kiplinger.com. Once on their webpage, scroll to the insurance tab, then to quizzes on the left side.
Even this simple quiz makes assumptions, such as that you are a homeowner or that you have a basement. Each policy, each state may or may not automatically have certain coverages. As I stated earlier, call your agent to confirm exactly what your policy provisions provide.
If you think you need to adjust your policy, call us! We'll be glad to help.
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