Save Money by Avoiding These Costly Insurance Mistakes

When it comes to purchasing insurance, fear is an important motivator. We are justified in our worries about protecting assets such as homes and automobiles, and we buy insurance to protect our financial integrity. Despite our best efforts, sometimes our insurance does not offer full financial protection. This is not necessarily because there is a problem with the insurance policy; it can be a result of human failure. When purchasing an insurance policy, many people fail to look at the true level of coverage that is necessary to restore assets to their pre-disaster conditions.

Below are five common insurance mistakes to avoid at all costs:

*Trying to do it all on your own – Shopping for insurance is complicated, and it is best to seek professional advice. While it is fine to use the Internet to educate yourself, you should ultimately work with an independent agent who can offer multiple options for your consideration. An agent will help you untangle the complex issues involved in purchasing the proper amount of coverage to meet your needs.

*Buying into the hype – If it sounds too good to be true, it probably is. Where insurance is concerned, you often get what you pay for. A company that promises large discounts is most likely offering less coverage.

*Slicing it too thin– In a difficult economy, many people try to cut their living expenses to the bone. While it may be prudent to cut out some of the “extras” we enjoy such as eating out and going to the movies, reducing an insurance policy is risky. If and when disaster strikes, you’ll be glad you didn’t cut back on insurance premiums, which can result in thousands of dollars of uncovered damages.

*Neglecting regular protection reviews – Consider how much your life can change in a short amount of time. For instance, has the value of your home gone up or down in the last few years? Has a new car been purchased or has a teenager just gotten their driver’s license? Has an adult child finished their higher education? These are just a few of the changes that can cause either an overlap or gap in your insurance protection.

*Restricting your options – There are quite a few insurance companies that advertise a “one size fits all” approach to insurance. In some cases, these companies do not have your best interests at heart. It is best to consider multiple options, rather than limiting yourself to one choice.

Preventing Fatalities from Work-Related Road Crashes

One of the least known facts about work-related fatalities and injuries is that motor vehicle crashes are one of the leading causes of death and injury in the workplace. The National Highway Traffic Safety Administration (NHTSA) observes that motor vehicle crashes kill more than 2,100 people while they are working and injure another 353,000. The average job-related motor vehicle crash costs an employer $16,500. 

Research conducted by The U.S. Bureau of Labor Statistics in 2003 discovered that crashes involving vehicles on public roadways were the leading cause of work-related fatalities. Crashes accounted for almost a quarter of all fatal work-related injuries.

Preventing employee roadway fatalities presents some unique challenges. The roadway is not a closed environment where conditions can be easily monitored. If employers want to prevent work-related roadway crashes, they must combine traffic safety principles and safety management practices. Employers can promote safe driving by providing workers with safety information and by establishing and enforcing driver safety policies.

It is fundamental to start by assigning a key member of the management team the responsibility of enforcing a comprehensive driver safety policy. An important part of that policy is enforcing the mandatory use of seat belts.

Workers shouldn’t drive irregular hours or for an excessive amount of time after their normal working hours. Workers should be instructed to never conduct business on a cell phone while they are driving. Insist that employees obey speed limits and follow applicable driving regulations.

Be vigilant in monitoring that workers assigned to drive on the job not only have a valid driver’s license, but also one that is appropriate for the type of vehicle driven. Check the driving records of prospective hires, and continue to perform periodic rechecks after they are employed. Maintain accurate records of each worker’s driving performance.

Employee education plays a vital role in any roadway crash prevention program. Educate workers on how to recognize driver fatigue and what strategies they can use to combat it. They should also be taught how to avoid in-vehicle distractions. Provide additional training to workers operating specialized motor vehicles or equipment in the correct procedures of operation. Place emphasis on the need for workers to follow safe driving practices both on and off the job.

It is also important that your vehicles offer the highest possible levels of occupant protection.  Be sure that part of your prevention program also involves implementing a structured vehicle maintenance program.

Use Technology to Make a Home Inventory

We purchase insurance to protect us from what might happen. Hopefully we go through life, never having to make a claim against our homeowner’s or auto insurance policies. We know that the monthly or annual fee is in our best interest, even as we hope to never need its services. Taking home inventory should be just as important. This worthwhile task is yet another method of protecting ourselves against something that may never happen, but could. Yet few people place as much importance on taking home inventory as they do on increasing their homeowner’s policy coverage. While most insurance agents inform their clients about the significance of taking home inventory, it is rarely performed. Homeowners may put the task on their to-do lists, but as time goes by, and their busy lives take priority, it simply never gets accomplished. The result can be a very expensive one indeed.

So now that I realize the significance of taking home inventory, how do I get started? At first glance, it seems pretty simple. Go through your home, room by room, taking pictures of your personal belongings and documenting their approximate value. No problem, right? The problem lies in Step 2: Storing your photographs and data. Unfortunately, for many people, Step 2 involves placing their beautifully detailed data in a storage box under their bed, or in filing cabinets in their home office. The files are safe and sound, until the house burns down, is burglarized, or gets filled with murky flood waters…rendering the information completely useless. This common occurrence is as ironic as it is sad. But in today’s technological world, it should never happen.

Now that you understand how technology can make taking home inventory as secure as it is easy, your next step is to find the best web site or software for your unique needs. Secure servers allow you to document all of your belongings and access them with ease, and they eliminate the need for a physical location in which to store them.

Important factors to consider when deciding on the most suitable home inventory site:

While many options boil down to personal choice, the options below are helpful regardless of your unique situation.

*Make sure your site or software allows you to quickly and easily select information about the products in your home.

*It is very helpful if the system is pre-populated with items, based on room and category. For example, Bedroom: Bed, Dresser, Night Stand, Lamp, etc.

*You may want to look at the total amount of inventory you have by room, or you may want to see items by category, or it’s possible you prefer a complete list of everything within your home. Look for functionality that allows all of these searches.

*And absolutely be certain that there is secure data storage within the web site or software. This cannot be stressed enough.

Below are some home inventory web sites to assist you in the process. I have listed them in no particular order, and included a short review of each.

This site provides free, secure online storage in an easy to use format. The system is very user friendly, not overly complicated. There is a guided tour to help you navigate the system, and a video tutorial if you are someone who learns by watching. The only thing I didn’t love about this site is that you have to actually sign up to get most of the information. There is a FAQ page, but it wasn’t as easy to find as on some of the other sites.

This site appears a bit “fancier” at first glance, but when you begin reading, it becomes apparent that it’s just as user friendly. In fact, I much prefer the FAQ page, which allows you to get a lot of information without first having to sign up. However, there is no video tutorial. This site is also free.

This site is very user friendly and provides a lot of information prior to signing up. It is also free. As with the other sites, Stuff Safe allows you to print and download reports quickly and easily. The FAQ page on this site is also easy to find and navigate. However, as with the What You Own site, Stuff Safe does not have a video tutorial.

In addition to helping in the event of a theft or disaster, a home inventory also helps you determine the appropriate amount of insurance protection. Even better, it can help you settle insurance claims faster. The actual task of performing a home inventory is quite simple. Basically, you should start with the most significant items (fine jewelry, electronics, furniture and family heirlooms, among others), and add the less expensive items, such as clothing, at the end. For every item you list, take a photograph, give a description of the item, list the date of purchase, approximate replacement value, and any other relevant information (such as serial number, make, or model). Upload this information to the home inventory software of your choice, and voila! You can rest assured that in the event of theft or disaster, you’ll be many steps ahead of the game when it comes to recovering your losses and getting your life back on track. 

Protecting Your Business from Natural Disasters with a Disaster Recovery Plan

Of the U.S. companies that are victim to a man-made or natural disaster, the Contingency Planning Research Strategic Corporation says 43% never reopen their doors and 29% are out of business within the following two years. A study by Touche Ross found that companies without a disaster recovery plan only have a 10% or less survival rate. Business owners should be seriously asking themselves whether or not they have an adequate recovery plan for disasters.

There are three crucial areas that all disaster recovery plans should cover:

1. Physical Resources

Of course, the physical assets of a business, such as equipment, electronics, office furniture, and the building itself, are things that usually can’t be quickly or easily replaced if they’re damaged during a disaster. The following are questions that an adequate disaster recovery plan should answer:

* Are there at least three days worth of emergency supplies on hand to carry the business immediately following the disaster?

* What steps can you, should you, and will you take to protect physical assets?

* How would physical assets hold up against various disasters – flood, hurricane, tornado, fire, earthquake?

* Who will assess the damage to physical assets following a disaster?

* Has a list been made to prioritize the replacement of key physical assets and what suppliers or companies should be contacted for the replacement?

* Is access available from an off-site backup system if data and electronics are damaged and how often should backups take place?

* How will important documents and records be kept secure and protected?

* Is an alternative facility an option to resume operations if the primary location is unusable and what location and type of facility would be needed?

2. Human Resources

All employers know that their employees are one of their business’s most vital assets. Therefore, employee safety and the resulting personnel issues that follow a disaster should be a top priority. The following are questions that an adequate disaster recovery plan should answer:

* Have all staff been adequately instructed on the disaster recovery plan?

* How will staff find safe shelter?

* How will contact be maintained with staff during and after the disaster?

* Are current contact numbers for all staff, vendors, suppliers, and clients available at an off-site location and how will this list be maintained and updated to stay current?

* Have staff members been identified to assume mandatory or key roles should other employees not be able to resume their roles?

* Are staff members assigned to form a crisis management team?

3. Operation Continuity

This component is about getting the business back up and running after the disaster. The following are questions that an adequate disaster recovery plan should answer:

* Does insurance, in particular business interruption insurance, provide adequate coverage?

* What amount of cash will be available for emergency contingency expenses?

* If the facility isn’t usable, then where should an alternative command center be located to coordinate the recovery?

* Is there an alternative list of suppliers to use in the event regular suppliers aren’t operational?

* What should be done for clients and customers during and after a disaster?

Employers might further assign specialized teams to be in charge of some of the tasks related to the above points. For example, a post disaster recovery team could manage recovery tasks like getting the business up and running quickly; an administrations team could handle areas like logistics, transportation, and emergency and survival gear; a public relations team could make public announcements and field inquires; a client/supplier communications team could advise vendors and clients of the business’s status; and an IT team could be responsible for software and hardware issues.

Remember, disasters can strike with little, if any, warning. Business owners can keep themselves off the wrong side of the statistics by being prepared and being able to get themselves up and running as soon as possible.

Available Discounts Can Lessen Your Auto Insurance Premiums

Personal automobile insurance can be expensive, but did you know that insurance carriers offer discounts that can ease the burden?  Ask your insurance agent about the types of discounts available. Keep in mind that not every discount listed below is available in every state or with every carrier:

Defensive Driving Discount – Reduce your risk of accidents by taking a defensive driving class, and many insurers will give you a discount on premiums. These courses usually last from 5 to 6 hours and train you to recognize road hazards and how to react in enough time to prevent accidents. The fee is about $20.00, but successful completion can earn you a 3-year, 10 percent discount on liability, medical payments and collision coverage.

Good Student Discount – Earn good grades in school and your carrier may reward you. That’s because statistics show that good students make better drivers because they are more mature and reliable. Many states allow a 5 to 10 percent discount if your student driver makes good grades, usually an overall “A” or “B” average in high school or college.

Good Driver Discount – Maintain a clean driving record, and you can save money. If a carrier’s risk is lowered, it will pass the savings on to you.

Home/Car Discount – Purchase both your homeowners and automobile insurance from the same carrier, and you may receive a discount of 10 percent or more, which will lower the premiums on both policies.

Multiple Car Discount – Insure two cars with the same carrier, and you may be eligible for a discount on both cars’ coverage.

Model-Related Discounts – Buy a car that has been assigned a high safety/anti-theft rating. Industry agencies rate every car model based on its collision history and the number of injury and theft claims associated with it. The higher the rating, the more probability of insurance premium discounts. Choosing a car with a lower rating can significantly raise a premium because of the higher risk factor.

Protection from Physical Damage/Theft – Choose options that protect your car from physical damage and theft, and you may receive a discount. Many insurers reward consumers who reduce risk by opting for anti-lock brakes, airbags, alarm systems and other security devices.

Low-Mileage Discounts – Use public transportation to commute to work, and your carrier may offer you a discount. That’s because the less time you spend on the road, the less of a possibility there is for an accident.

Can Your Car Insurance Survive a Storm?

With winter coming to a close, it’s time for many parts of the country to start preparing for tropical storms. Such storms can cause massive amounts of damage, not only to your home, but also to your car. Do you have enough auto insurance coverage to withstand that kind of destruction?

The Insurance Information Institute (I.I.I) says that even with comprehensive auto coverage, you may not be fully protected. Comprehensive coverage will pay for losses caused by fire, falling objects, catastrophic storms, vandalism, or animals. It will also protect your car against flood damage.

What you may not be aware of is that even with comprehensive coverage, your auto insurance does not automatically pay for a replacement rental car while your car is being repaired, or while waiting for an authorization from your insurer to purchase a new one.

That’s why it’s important to review your car insurance annually with your insurance agent to determine the extent of your coverage. It’s also a good time to talk about the need for additional coverages such as rental car reimbursement.

Here are a few more tips if your car suffers storm damage:

  • Report damage as soon as possible. If your car is not drivable, your agent or claims center may be able to save you time and money by having the car towed directly to the repair facility instead of to a temporary storage facility. In addition, arrangements may be made immediately to provide you with a replacement rental car, if your policy includes this coverage.
  • Know what your deductible is, as well as any additional charges you will be expected to pay before you authorize any repairs. Be sure your insurance adjuster, claims representative or repair facility appraiser reviews the damage with you and explains the repair process, including the use of original or generic auto parts.
  • Ask about warranties on repairs. You should also find out if your insurer has a repair facility referral program that offers a written limited or lifetime repair warranty backed both by the repairer and insurer for as long as you own your vehicle.
  • Do business only with a reputable insurer. Obtain insurance from companies that have a proven track record of handling auto insurance claims effectively. Get a referral or contact your local Better Business Bureau or State Department of Insurance.

Purchasing a Collision Damage Waiver on Your Rental Car Makes Sense

Although the fees can be considerable, it may be a good idea to purchase a collision damage waiver the next time you rent a car. You may believe you have enough protection from your Personal Auto Policy (PAP); however, that’s just not the case. Your PAP covers the lesser of the actual cash value of the car or the minimum amount to repair or replace it. Your contract with the rental car company may require you to reimburse them for the full value of the vehicle. You would have to make up the difference out-of-pocket. The PAP also does not pay for any increased value of new parts replacing old ones, or any diminution of value, meaning if the market value of the vehicle after repairs is less than that before the accident, you would have to make up the shortfall.

Another area where the waiver can be of great importance is in the settlement process. Your insurance company has the right to inspect and appraise the damaged car before repair or disposal.  However, the rental company is not bound by the terms of your policy, and it may opt to complete the repairs immediately. This would result in your not being covered because you didn’t comply with the terms of the policy.

The rental agreement may require immediate reimbursement for damages. Without the waiver, they could charge your credit card. This can create a significant debt and put you over your credit limit.

Rental agreements often make the renter responsible for any loss in value beyond normal wear and tear, regardless of the cause or who’s at fault. Your PAP doesn’t cover this contingency unless you insure at least one vehicle for both collision and other-than-collision coverage.

You could be responsible for the rental company’s loss of income on the damaged car. Your policy has limited coverage for these charges. The same is true for any administrative or loss-related expenses such as towing, appraisal, claims adjustment, and storage fees you may be charged.

Your PAP is considered excess coverage if:

·   Any coverage is provided by the owner of the auto.

·   There is any other applicable physical damage insurance.

·   There is any other source of recovery applicable to the loss, such as travel policies, credit card coverage, etc.

This can create a controversy over who pays, which can result in litigation. Keep in mind that many states have statutes that may govern this eventuality.

The PAP does not provide physical damage coverage for vehicles that are not private passenger cars, pickups, vans, or trailers. The use of covered vehicles is limited to the U.S., its territories and possessions, Puerto Rico, and Canada. If you rent a trailer, coverage is limited to $500.

The PAP may have limitations on use of vehicles that are not excluded by the rental agreement collision damage waiver. The PAP may also exclude certain drivers or may apply only to designated individuals. The collision damage waiver will probably also only apply to certain individuals, but operators for which no PAP coverage is available may be protected under the rental agreement by adding them as designated drivers.

The PAP will typically include a deductible in the range of $100-$500 or more. In addition, payment for damage to a rental car may result in a significant premium increase because of surcharges or loss of credits. Having a collision damage waiver will protect you from paying increased premiums.

Consider Preemployment Testing to Reduce Employee Lawsuits

Employees who sue their employers for discrimination, denial of workers’ compensation benefits, or unfair employment practices can harm a company, not only economically, but its reputation as an employer and a corporate citizen. One method being used more often by businesses to reduce employee lawsuits is preemployment testing. Implementing this process correctly can result in hiring employees who are not only best suited for the job, but by reducing employee lawsuits, you could lower the cost of your employment practices liability insurance.

Though preemployment testing has been proven effective in identifying individuals who are likely to file lawsuits, unfortunately, many employers fear they can be sued for just administering such tests. But, by vigilantly preparing and evaluating preemployment tests and conducting them uniformly, the practice can be a valuable, additional tool in selecting the right employees for your company.

Preemployment testing can include skills tests, endurance tests, physical agility tests, psychological tests, integrity tests, and educational proficiency exams. Employers with 15 or more employees are required by the federal government to monitor the impact of all tests – formal, informal, oral or written, objective or subjective – to insure that they do not negatively affect specific population groups.

Generally to be legally administered, preemployment tests must meet certain criteria. They must measure qualities and traits that have high relevancy to job performance; the content of a test must reflect the skills required to do the actual job; and if the test is designed to measure a certain trait or characteristic, determining the value of having such a trait must relate directly to job duties and performance.

Before developing preemployment tests or hiring a testing firm, you should determine if these tests are really necessary. If you find them necessary, you should meticulously document the reason you are conducting the preemployment test.  Keep thorough statistics to measure any adverse impact on specific populations, which could produce discrimination problems. Eliminate any test parts that are producing negative results.

Testing for disabled applicants demands that additional guidelines and restrictions be followed. Disabled applicants who have sensory, manual, or speaking disabilities must be administered tests that reflect their skills, aptitudes, and the factors required to do the job, and not their disabilities. Special arrangements must be made to test the disabled. Such arrangements may include providing a reader, sign interpreter, large print or Braille, giving the applicant more time to complete the test and making testing facilities easily accessible. Testing applicants for AIDS before and after a conditional job offer is not wise and could lead to serious legal difficulties, unless a genuine business requirement exists that would rule out a person with AIDS from performing the job.

According to a survey sponsored by the Chubb Group of Insurance Companies, 26% of executives at privately held companies reported an employee or former employee had sued their companies, and 22% reported having an employee file a discrimination or harassment complaint with the Equal Employment Opportunity Commission or other state agency during the past few years. Furthermore, 44% of executives said it is likely that an employee or former employee will sue their company in 2004, and 50% said it is likely that an employee will file a complaint with the Equal Employment Opportunity Commission this year. More than half the executives surveyed estimated it would cost more than $100,000 to settle an employment discrimination or harassment lawsuit. Ten percent said it would cost at least $1 million.

Conducting proper preemployment testing can not only reduce discrimination claims, but also help you hire productive staff, and decrease absenteeism and staff turnover.  If you have not already considered employment practices liability insurance, give us a call for more information about this important coverage.

Take Steps to Winterize Your Home Now

When preparing for winter’s arrival, most people immediately think of snow tires and protection from wet and icy roads.  But what about your home?  Although you may take great care in winterizing your car with snow-tires, anti-freeze, wiper fluid, flashlights and blankets, what kind of prevention have you taken regarding your house?  If your home is not properly winterized, it can easily become a source of both property and liability claims. Take steps to bring your home up to par before the first snowflake falls.

First, make sure your coverage is adequate to minimize the risk of a wintertime claim:

Winter Insurance Checklist

  • ·  Is your homeowner’s coverage sufficient?  If your house was recently upgraded, it may not be.
  • ·  Is your vacation property coverage adequate?  What if someone uses the property in your absence and is injured?  Will your coverage pay for damage that may occur while it is unattended all winter?
  • ·  Do you own a snowmobile?  Many high-end snowmobiles require insurance above and beyond what most homeowners think about.
  • ·  Are you planning a winter vacation that requires expensive items such as fine jewelry for a trip to France, or snow skis and equipment for Vail?  Be sure your personal property endorsements measure up.
  • ·  How about your college student?  Is he renting an off-campus town home?  If so, you should think about liability insurance for that dwelling, as well as all the winter hazards that apply to the family home.

Next, think about minimizing wintertime hassles, and avoiding needless claims that can be easily avoided.

Winterizing Checklist for Your Home

  • ·  Take time to clean or replace heating filters before turning the systems on.  Make sure your units have been professionally serviced.  If you don’t have smoke alarms, install them now. You may also want to consider carbon monoxide alarms.
  • ·  Inspect storm doors and windows.  Cracked gaskets or cracked glass?  Make the repairs.
  • ·  Remove or cover and seal window air conditioning units until spring.
  • ·  Examine the sidewalk in front of your house and all walkways and handrails to make certain they are in good repair. Maneuvering through snow and ice is hard enough without having to step gingerly on broken pavement or to remember not to grasp shaky handrails.  Also, having everything in good repair may help limit your liability in the event of a mishap.
  • ·  Is your snow blower and other snow removal equipment in good working order?  Hire neighborhood help to clear your walkways if you are unable to do it yourself.  Keeping walkways clear will help ensure that no one is seriously injured on your property by winter weather conditions.
  • ·  Check around doors and windows for cracks.  If you find small gaps, fill them in with caulk. Consider hiring a contractor if bigger problems surface.
  • ·  Remove leaves, acorns, sticks and other debris from gutters before the first freeze. This will ensure that heavy winter rains and snow melt can flow freely and not damage your roof or walls. You may also wish to install gutter guards to keep all that debris from getting into the gutters next year.
  • ·  Survey your plantings.  If snow covered branches would endanger any part of your house or cars, trim them back. Consider the walkway, too, so pedestrians will not risk injury while walking in front of your house during or after a storm. 
  • ·  Examine the insulation in attics, crawl spaces, and basements.  If too much heat is escaping, it can cause ice and snow to melt too quickly to be properly carried away.  If the melt off seeps into the roofing, it can cause significant damage or even collapse. If the insulation in your basement or crawl space is sufficient for your climate, you can avoid the inconvenience and damage of frozen or burst pipes.  In unfinished spaces with pipes running through them, such as garages, wrap the pipes with heating tape.
  • ·  During the winter, set interior temperatures to at least 65 degrees.  Letting indoor temperatures drop below 65 degrees could risk pipes freezing behind the walls.
  • ·  Learn where shut-off valves are for all plumbing.  Include both the valves within each room and the main valve.  If your pipes do freeze, the more quickly you turn off the water, the less chance of pipes bursting.
  • ·  And last but not least, take similar precautions with your vacation home. Make sure all pipes are drained and the toilet empty so expanding ice cannot crack the porcelain.

Where winterizing your home is concerned, the effort to prevent problems before they occur is well worth the expense! 

E-conomy, E-mail, E-coverage?

As companies expand the use of the Internet as an everyday business tool, they open themselves up to additional risks, including online copyright infringements, computer viruses, Web site business interruptions, and more. These problems leave companies open for potentially devastating financial setbacks.

Consequently, insurance companies are now offering policies that provide coverage for many Internet-related exposures. Intended to meet the needs of companies that have some Internet exposures (not dot-coms), the policies are expected to be available in more than 30 states this year. Most cover the following risks:

· Internet-related and advertising injury coverage protection for liabilities arising out of a computer network, including the Internet

· Worldwide coverage extending to the entire Web site, and including Web site advertising for others via banner ads and links

· Electronic vandalism for data damaged by hackers or viruses

· Virus damage and Web site vandalism that cover data and equipment damaged by viruses

· Coverage for business income and extra expense losses due to the alteration of a policyholder’s Web site

· Coverage for loss of income or extra expenses incurred because of an interruption in Internet service, Web hosting, or e-mail access

· Good faith advertising expense that covers advertising costs incurred to regain customer faith after a covered loss

Industry experts predict coverage for Internet-related exposures will be nationwide by the end of the year, but they caution policy buyers to ask questions and make sure they understand the policy before purchasing it. As with all insurance purchases, it is best to discuss coverage needs in detail with an insurance agent.