Protect Yourself from Identity Theft This Tax Season

With tax season upon us your personal information is floating around everywhere and identity thieves are working overtime to steal it.  From social security numbers to employer and income information, it’s an identity theft nightmare waiting to happen. Unless, of course, you’re a thief. Then it’s identity theft paradise.

Don’t think it can happen to you?  According to Javelin Strategy and Research, 8.4 million U.S. adults were victims of identity fraud in 2007.

Here are some tips to help you stay safe this tax season:

  • Choose your tax preparer carefully. Ask for referrals from friends and coworkers.
  • Beware of unsolicited emails claiming to be from the IRS. Such emails often contain links that automatically download software designed to steal your passwords and account information.
  • Protect your Social Security number. Don’t give out your Social Security number if it’s not necessary.
  • Guard your mailbox. Your mailbox is a treasure chest for crooks this time of year. If someone gets a hold of your tax forms they’ll know your social security number, your employer and how much money you made last year. If you don’t yet have a locking mailbox, now would be the perfect time to get one.
  • Watch the websites you visit. If you use online tax services, just be sure you are dealing with a legitimate site. Clone websites can be easily set up by scammers with the sole purpose of harvesting your personal information.

Tax season is ripe for identity theft, but you don’t have to be a victim. By keeping the above tips in mind, you can get through tax season without putting yourself at an increased risk of identity theft.

National Council on Compensation Insurance Says Younger Workers Are More Accident Prone

According to a study conducted by the National Council on Compensation Insurance, younger workers have more injuries and illnesses than older workers; but older workers have higher costs per claim. The researchers discovered that age is an important factor in overall claim costs, but the significance of age on claims frequency has lessened. This has been interpreted to mean that age may not play an important role in future frequency trends. However, the relationship between age and claim severities is basically unchanged.

Factors associated with age, such as average wages, claim durations, lump-sum payments, injury diagnoses, and number of medical treatments, comprised a large part of the reason for the differences in the severity of claims between younger and older workers. The differences in wages and duration of claims were the principal reasons for the differences in the amount of payouts between younger and older workers. Differences in wages accounted for approximately one third of the differences in the amount of payout, while the differences in the duration of claims accounted for almost one half the difference.

Older workers experience more high cost injuries, such as injuries to joints like rotator cuffs and knees. These were more commonly experienced by workers aged 45-64.  Workers aged 20-34 more commonly experienced ankle sprains. Carpal tunnel syndrome and injuries to the lower back are among the top 10 diagnoses for workers of all ages. The researchers pointed out that the differences in the types of injuries only comprised about a quarter of the difference in medical severities between younger and older workers. The real factor influencing the difference in medical severities between older and younger workers was the significantly higher number and different mix of treatments within a diagnosis. This alone accounted for 70 percent of the difference.

Less than 10 percent of the difference in medical severities is due to a slightly more costly mix of treatments for older workers. This was reflected in small differences in the average prices of different types of medical services. The greater number and different mix of treatments also contribute to the longer duration of payments for older workers.

As for trends in loss costs, the researchers noted that the baby boomers’ impact was apparent when the data was viewed historically, but the major impact of this aging workforce has probably already occurred and employers should not anticipate that the aging workforce would present a major problem in terms of future claims costs.

Understanding the Benefits of Insurance Scoring

Most people realize their credit affects their ability to get mortgages, car loans, and other types of debt. However, businesses use personal credit histories in many other ways. Employers use it when considering job applicants. Landlords use it to evaluate prospective tenants. Increasingly, insurance companies are using it to develop an “insurance score,” a number that reflects the quality of a customer’s credit history. The companies’ research has shown  that people with good insurance scores tend to submit fewer insurance claims than people with poor credit histories. Because of the predictive value of credit history, many insurers now obtain an applicant’s insurance score during the underwriting process.

Some consumers are concerned about insurers using their credit information in this way. However, the use of scoring actually has many benefits for insurance consumers.

Insurance scoring speeds up the underwriting process. Before insurers began using scoring, underwriting decisions could sometimes take days. Internet technology allows an insurance company to obtain your score within seconds, which cuts the decision time down to just a few minutes. Many insurance agents are able to obtain a company’s approval almost instantly.

Scoring uses the facts about a person’s credit history to enable underwriters to make objective decisions. Scoring does not take into account a person’s race, nationality, gender, marital status, or other factors that the person cannot control. It focuses only on how that person has used credit in the past. The insurance application still asks about factors such as gender and marital status, but the insurer uses those answers only to correctly classify the person and ensure that it charges the proper rate. Scoring looks only at numbers, resulting in decisions that are much fairer. People of widely differing incomes and backgrounds who have similar insurance scores are treated the same way.

Scoring recognizes that a person can make up for past mistakes. Just as he can improve his driving record by becoming a more careful driver, a person can improve his insurance score by reducing debt and making payments on time. Old mistakes lose importance as time passes; scoring gives more weight to recent actions than it does to older ones. As the score improves, the person can benefit from lower rates and more companies interested in insuring him.

Scoring also increases the availability of insurance. Many companies use different pricing “tiers,” built around specific policyholder criteria. Scoring makes the use of tiers easier because it is an objective factor. If a company has five pricing tiers, and an applicant’s score is too low to qualify for the best one, the company might be able offer insurance to that person in one of the other tiers. It gives companies alternatives to simply rejecting the application.

Because scoring is an automated process, it makes the underwriting process more efficient for insurers. This lowers their costs and allows them to charge lower rates. Also, because it allows insurers to more accurately predict losses, they can control their losses and keep their rates lower.

Studies have shown that most people have good credit scores. Because of this, most people benefit from insurance scoring. They pay lower rates for home and auto insurance then they would otherwise. People who want to earn better rates can more easily fix their credit history than they can fix their driving records, which generally keep traffic violations for at least three years. Scoring gives insurance companies another tool to ensure their rates are fair, so that customers more likely to file claims pay more for their insurance.

Knowledge Is Power When It Comes to Keeping Safe Around Power Lines

In an article titled Alarming Statistics: Reducing Common Injuries and Maintaining Safety Practices that appeared in the May 2007 issue of Electrical Contractor, author Darlene Bremer noted that exposure to electricity remains a major cause of death among construction workers. So much so that it accounts for an average of 143 construction worker deaths each year.

Many workers are oblivious to the potential electrical hazards in their work environment, which makes them extremely vulnerable to the danger of electrocution. Sometimes it is a matter of not being familiar with the environment, and not knowing the location of all the energized power sources from overhead and underground power lines.

However, this isn’t always the case. Many instances of electrocution result from workers failing to follow proper safety procedures when working around power lines. The most common cause of electrocutions is when workers using cranes, metal ladders, scaffolds, conveyors, front-end loaders, dump trucks, or other equipment or materials come into contact with an overhead power line. It is not uncommon for workers to die while performing what appears to be an activity that isn’t normally associated with accidents, such as unloading supplies from a truck, or moving ladders from the side of a structure. The problem arises because of poor planning or temporary inattention to surroundings, which causes contact with high voltage.

OSHA has established the following guidelines to help keep you safe when you have to work near power lines:

·   Keep a distance of 10 feet or more between you, your equipment and any power lines.

·   Survey the site for overhead power lines before you begin working.

·   Keep a minimum distance of 10 feet plus 1/2 inch for each 1,000 volts over 50,000 volts between power lines and any part of a crane if the energized power lines are 50,000 volts or more.

·   Request an observer to assist you where it is difficult to maintain the desired clearance by visible means.

·   Be sure that the observer’s only job is to help you maintain the safe clearance.

·   Treat overhead power lines as if they were energized whenever you are working near them.

·   Call the electric company to find out what voltage is on the lines if you are not sure.

·   Ask the electric company to either de-energize and ground the lines or install insulation while you are working near them.

·   Make sure ladders and tools are nonconductive. 

Safety Is the Watch Word When You Choose a New Car

There it is, that shiny new car you’ve had your eye on for the longest time. It finally has a sticker price you can afford, so what’s stopping you from buying it?  Before you sign on the dotted line, make sure your dream car isn’t destined to become a death trap for you and your family.

What safety features should you be looking for when shopping for a new auto? Start with these features:

Air bags.   Front air bags are standard on all new vehicles. Crash sensors connected to a computer react to a collision by triggering the bags. They inflate instantaneously and deflate immediately after the crash.

Antilock brakes.  Prevents wheels from locking up during hard braking, especially on slippery roads. By preventing lock-up, the driver maintains control while braking.

Brake assist.   Senses the speed or force with which the brake pedal is depressed. This allows the computer to decide if the driver is trying to make an emergency stop. If so, it boosts brake pressure.

Traction control.  Limits wheel spin when you accelerate so that the drive wheels have maximum traction. Some traction-control systems only operate at low speeds, while others work regardless of speed.

Safety-belt features.  Adjustable upper anchors for the shoulder belts keep the belt across the chest instead of the neck to prevent neck injuries. Seatbelt pretensioners instantly retract the belts during a frontal impact to keep occupants in the best position for an opening airbag. Force limiters control the force that the shoulder belt builds up on the occupant’s chest.

Lower Anchors and Tethers for Children (LATCH).  Built-in lower anchors and tether attachment points for compatible child safety seats to be installed without using the vehicle’s safety-belt system.  Required on all new vehicles.

Electronic stability control (ESC).  Keeps the vehicle on course during a turn, to avoid sliding or skidding.

Tire pressure monitor.   Government regulations will eventually require all new vehicles to have a low tire pressure warning system.

Telematics.  By pressing a button the driver can communicate with a central dispatch center, which can track the location of the vehicle on a computer monitor to provide directions or emergency assistance.

Because safety is such a concern, the Insurance Institute for Highway Safety announced a new category for evaluating new cars, the Top Safety Pick. The award is based on the performance of vehicles in a range of crash tests.

Gold award winners included the Ford Five Hundred, the Mercury Montego with optional side air bags; the Saab 9-3; the Subaru Legacy; and the Honda Civic four-door. These cars earned high scores in frontal offset and side impact tests. They also received high marks in a test that monitors seat and head restraints in rear crashes.

Silver award winners were the Audi A6, Audi A3 and Audi A4; the Chevrolet Malibu with optional side air bags; and the Volkswagen Jetta and Passat. These vehicles received top grades in front and side crash tests, and they ranked second highest in seat and head restraint ratings.

Insuring Your Collectibles the Smart Way

If you have spent considerable time and money on a collection you probably want to ensure that it is well protected.  Homeowner’s insurance does not necessarily cover large collections and it is best to find out whether you are covered before an incident of loss, rather than after.  Most homeowner’s policies cover items such as jewelry, stamps or antiques, and value them between $500 and $2,000.  Generally, if your collection is worth more than $3,000 it is a good idea to purchase separate insurance.  Talk to your insurance provider to find out the cost of a specialized policy or ‘floater’ for your collection.  Compare this cost to that of a specialty insurer.

A specialty insurer focuses on fine collectibles and will help you determine what type of insurance is best for you.  Also, specialty insurers may charge less than most homeowner’s insurance rates.  A specialty insurer will also provide more extensive coverage for your collection, such as coverage while in transit, accidental breakage, shipping loss and fumigation from fire damage.

It is important to know what documentation is needed and when it will be required.  Some policies require documentation of the collection at the time of coverage, yet others may only want documentation in case of a claim.  The documentation requirement may be a listing of the items along with pictures, while some companies will accept a videotaped account or may require receipts of purchase.  Specialty insurers generally require an appraisal of your collection.  In some cases, you may underestimate the value of your items, so it is best to consult a qualified appraiser who can assist you in determining and documenting the value for insurance purposes.

Insurance premiums may be less if there is minimal chance of loss.  For example, if you have a valuable collection stored in your home, it might be prudent to install an alarm system.

If you own a valuable collection, make the decision to insure it and allow it to be enjoyed for generations to come.

Should I Repair That Damaged Property or Replace It?

When an individual or business buys property insurance, the primary concern is normally the replacement of the building if a fire completely destroys it. However, in many losses, a portion of the building escapes damage or machinery and equipment may be salvageable. In these situations, the policyholder and the insurance company must decide whether to repair the property or replace it altogether. The policy ordinarily states that the company will do whichever costs less. However, the answer to which costs less can become a gray area, complicated by several factors.

In some situations, the policyholder may want the property replaced, rather than repaired. For example, the business may want to replace equipment because repairing it would void the warranty. It may want to replace damaged products because buyers will be reluctant to purchase refurbished ones. The business may also fear an increased likelihood of product liability claims from these goods.

In some instances, there may be doubt as to whether repair will be less expensive than replacement. Old buildings, especially dwellings that have been converted to commercial use, may have been constructed with materials no longer in common use, such as plaster and lathe. Also, some types of machinery and equipment may be less expensive to replace because the price of a new unit has decreased, but the new unit may lack some features that the business needs.

Local laws or building codes may also affect the decision. Municipal governments often require a building to be torn down if more than a specified percentage of it needs repair, forcing the owner to replace it.

The age of the property or its components is also a factor. In the case of computer equipment, which tends to decline in price over time, replacement may well be the less expensive option. The answer may not be as clear for other types of property, such as construction equipment (assuming the policy covers such equipment for replacement cost.) A 15 year-old bulldozer that suffered damage in a rollover may be repairable, but it may also be near the end of its useful life. The same may be true of the electrical system in a 30 year-old building; perhaps only 20 percent of the wiring suffered damage, but it might be less expensive (and better loss prevention) to update the entire system.

Finally, buildings constructed decades ago may have architectural features, such as gables, atriums, or balconies, which are not important to the owners. Replacing the building with one lacking these features may cost less than repair.

If the policy provides Business Income or Extra Expense coverage, the company must weigh the impact of the repair/replace decision on them. For example, assume that fire has destroyed 60 percent of a building, forcing the business to shut down. Replacing the building with a similar one in a location ten miles away will cost 50 percent more than repairs would, but the business could resume operations there in three months, as opposed to a six-month shutdown if the building is repaired. When the company considers all of the applicable coverages, it may well find that replacement is the less expensive option.

Ultimately, the policyholder must negotiate the repair/replace issue with the insurance company. A business owner who is unhappy with the company’s proposed settlement should follow the steps listed in the policy for contesting it. The firm’s insurance agent can be a valuable ally at claim time, as she is familiar with the process and may be able to intervene on the firm’s behalf. Working together, all parties should be able to decide on an approach that quickly gets the business back to normal.

At What Amount Should I Set my Auto Insurance Deductible?

While almost everyone would like to save on their auto insurance, it can be a big mistake to be penny-smart, dollar-foolish. The dollar amount you set your comprehensive and collision deductibles at will be one of the most important decisions you make during the purchase of auto insurance. In turn, the deductible amounts you set will be one of the main determining factors in the amount of your monthly premium.

Any insurance policy covering comprehensive and/or collision will contain a deductible. Most deductibles are $1,000, $500, $200, or $100 dollars; but deductible amounts do vary by state. Deductibles are the cost you will pay out-of-pocket during an insurance claim. For example, let’s say that your deductible is $500 and you’re involved in an auto accident that causes $4,000 dollars in damage to your vehicle. You will be responsible for paying the initial $500 and the insurance company will then pay the remaining $3,500. On the other hand, if your deductible is $100, then you will only pay $100 before the insurance company pays the remaining $3,900. As you can see, a higher deductible means you pay more out-of-pocket and a lower deductible means you pay less out-of-pocket after an accident. As a general rule, lower premiums are associated with higher deductibles and higher premiums are associated with lower deductibles.

It can be difficult to weigh what premium amount you’re willing to pay now against what deductible amount you’ll be willing to pay for any future claim. Be sure to take into account your comfort level; income, savings, and credit lines; driving history; and your vehicle’s value as you make your decision on the deductible amount.

Choosing a high deductible/low premium or low deductible/high premium will greatly depend on what you can reasonably afford. Imagine that you had an auto accident today – would you have funds from your household income, credit lines, and/or savings to use as your deductible? If so, what financial impact would using funds from these sources have on your family and how much would you be comfortable using to pay the deductible? If the deductible you have in mind (or already in place) is higher than what you have available or feel comfortable using, then it should be lowered. On the other hand, if you have the funds easily available to pay a higher deductible amount, then you can raise the deductible and save money on your premiums.

You also need to ask yourself how much risk you are willing to assume. Will you continue to be prepared to cover the deductible amount you set? If not, are you willing to risk having a high deductible and bet on not getting into an accident?

How often you expect to make a claim on your insurance is another factor to consider. While accidents are unpredictable and no driver wants to think they’re a bad driver, your driving history speaks for itself. If you’ve had a history of frequent fender-benders or accidents, then it could be best for you to opt for the higher premium/lower deductible option. On the other hand, the lower premium/higher deductible could be a better option if your driving record is excellent or only has a few infrequent driving incidents. You might also consult your insurance agent on what the average deductible is for your driving experience and the age of your vehicle.

Don’t forget to review your auto insurance deductible at least once a year. Ask yourself if your financial situation has changed since the deductible was set and if the deductible amount is still something you could comfortably pay if you had an auto accident today.

The bottom line is this: don’t let purchasing car insurance confuse or overwhelm you. Take your time to assess your finances and circumstances to figure out what you feel comfortable with paying on both a monthly basis and at any given time an accident should occur. If you have any questions or concerns, don’t hesitate to consult your auto insurance agent.

Getting a Handle on Your Insurance Company’s Stability and Strength – A Brief Guide to the Rating Agencies

Long before 9/11, insurer stability was an important but overlooked factor in the insurance purchase decision.   Now, after 9/11, it can no longer take a back seat to issues like coverage or price.  Insurer insolvencies are on the rise as old liabilities such as asbestos come back to haunt some companies, and newer exposures such as corporate scandals, accounting irregularities and toxic mold threaten to keep actuaries busy for years to come.  With the above in mind, how does one factor the financial strength of insurance companies in to the buying decision? 

The answer lies somewhere between Standard & Poors, Moody’s, Duff & Phelps, Fitch and the granddaddy of them all, A.M. Best. All the aforementioned companies provide some kind of measure of insurer stability and financial strength.  All use different scales, different factors and somewhat different terminology in their analyses.  Invariably, all the rating agencies use a mixed bag of criteria to develop their ratings and they all do comprehensive analyses of the companies with a “Readers Digest” version often available online for free. 

Let’s take a quick tour of the A.M. Best rating structure just to get a taste.  As always, your agent is a good source of information regarding the companies you are insured with or contemplating insuring with, but feel free to browse the Best, S & P or any of the other websites for your own edification as well.

A.M. Best (

A.M. Best provides ratings according to financial strength and size.  There are sixteen distinct financial strength ratings which are further boiled down to ten general descriptors, such as “Superior”, “Excellent”, “Very Good”, etc.  It’s worth noting that many in the insurance industry consider anything below “Excellent” to warrant caution, especially if it is the result of a recent downgrading from a higher rating.  Such a downgrading often precedes a further downgrading so it is important to look into the history and see what the rating has been over the past two or three years or longer.

In addition to the above general descriptors, there are further categorizations within the A.M. Best rating structure.  The “Superior”, “Excellent” and “Very Good” rating descriptors and their respective ratings all comprise the “Secure” category of ratings.  Everything else gets lumped into the “Vulnerable” category.

A.M. Best also has financial size categories that measure the company according to factors such as statutory surplus, a measure of the capacity of the company to pay claims.  Larger companies with higher statutory surplus will end up on the higher end of the scale, which tops off at XV (15) while smaller, less well-heeled companies will end up on the lower end, starting at I or 1.   A company with an A++(XV) rating by A.M. Best receives top honors and would appear to be the “best” bet for the long haul.  Though financial stability is an important factor, other factors, like a good reputation for paying claims should weigh in the decision making process.  Again, talk to your agent and find out more about the companies you are considering purchasing coverage from.  They will be happy to give you insight into the history of the company and point you in the right direction to access available resources to help you make an informed decision.  While there are no crystal balls that can predict the future outlook for your insurer of choice, there are certainly benefits to making an informed purchase decision. 

Study Shows Driving while Drowsy is Dangerous

The Prevalence and Impact of Drowsy Driving, a brand new study by the AAA Foundation for Traffic Safety, indicates that two in every five surveyed drivers admit that they have fallen asleep at some point in time while driving. Of those drivers responding in the survey, over a quarter admitted being so sleepy as to have had difficulty keeping their eyes open during their past month of driving time.

The study was partly based on the responses that 2,000 Americans gave to telephone surveys. According to the responses, researchers found that one in ten drivers reported falling asleep in the past year of driving. The researchers pointed out that one of the biggest mistakes made by drivers is simply underestimating just how tired they really are and overestimating their capability of dealing with tiredness while driving.

Another portion of the analyzed data was derived from crash data that the National Highway Traffic Safety Administration (NHTSA) collected during 2008 and 1999. From this data, researchers estimated that 16.5% or around one in every six fatal road and highway crashes involved someone driving while drowsy. More than half of all driving while drowsy accidents involved a single vehicle leaving its appropriate traveling lane. It further found that lane departure accidents were almost seven time more likely than alternative types of drowsy driver crashes. Thirteen percent or around one in every eight of road and highway vehicle crashes required hospitalization. Other interesting statistics among crash-involved drivers include:

* Men were 61% more likely than women to have been drowsy.

* Those drivers under 25-years-old were 78% more likely to be drowsy than their counterparts over 40- years-old.

* Single drivers were 81% more likely to have been drowsy than those with a passenger.

Researchers say that the main component is attitude, as there seems to be an overwhelming amount of drivers that are indifferent or complacent about driving safety; highway and roadway crashes and tragedy are seemingly acceptable and thought of as the price to be paid for enjoying the extensive mobility afforded to Americans. There doesn’t seem to be any consideration by drowsy drivers toward the fact that they are not only placing themselves at a risk, but putting every single person on American roadways and highways at risk too.

In relation to travel, experts suggest starting off early and getting a good night’s sleep instead of starting extended travel following a regular work day. Using common sense about driving and tiredness is also recommended – if tired, don’t start driving and if driving tired, do whatever necessary to remove oneself from the roadway until rest is obtained.