Category Archives: Uncategorized

How To: Lower The Cost of Homeowners Insurance

In the age of super-consumerism, everyone is looking to make the most of their money.  Insurance is no exception, so here are some valuable tips to keep in mind when purchasing or renewing your insurance :

  • Raising Your Deductible – Basically, your deductible is the “skin” you have in the game, or the amount you will need to pay when your claim is finalized! The higher your deductible, the lower your premium. This allows you to use  your insurance as protection against larger losses, the nature of which you can’t possibly pay on your own. You must determine how much of a loss you can comfortably retain. Similarly, if you live in an area susceptible to a flood, windstorm, earthquake or the like, your policy might contain multiple deductibles. We recommend that you review these with your agent on a yearly basis.
  • Don’t Confuse Market Value With The Cost To Rebuild-Keep in mind that the land on which your home is built, is not at risk for damages due to fire, windstorm, earthquake or theft.  Therefore, the value of land shouldn’t be included in the value of your home and need not be calculated in the cost to rebuild. Keep in mind that the higher the values, the greater the cost.
  •  The 80% Rule-You must insure to at least 80% of your home’s total replacement cost for an insurance company to fully cover the cost of damages to your home from an insured event. For instance, if it costs $500,000 to rebuild, you must insure for a minimum of $400,000 regardless of whether you suffer a complete loss to the home or even a partial loss. If not, you run the risk of becoming a co-insurer and will have to come up with additional monies over and above your deductible amount. Since capital improvements such as additions and alterations can increase your home’s value, be sure to let your agent know of any improvements   that could increase the replacement value of your home.
  • Purchase All Your Policies from One Carrier-This strategy assists you in getting a bigger bang for your buck and  ensures you are getting discounts on all your policies. Often you can “bundle” your homeowners, auto and umbrella policies to take advantage of discounted premiums you wouldn’t otherwise get with individual policies.
  • Improve Your Resistance To Loss & Improve Home Security-Such losses ranging from roof damage to slips and falls on cracked sidewalks can easily be avoided by checking your home for defects at least every six months. Attention to brick work, concrete, leaders and gutters, downspouts, shutters, railings, stairways, roof shingles, wiring, boilers, heating and air-conditioning are just a few of the areas you will want to check for any needed repairs. We strongly recommend that you check to make sure smoke and carbon dioxide detectors, fire and burglar alarms are always in good working order. Most carriers provide discounts for any devices that are installed to prevent loss.
  • Pay Your Bills On Time-A good credit record can be a significant asset in underwriting and  ensuring the best pricing from your insurance carrier. We also recommend you check your credit report on an annual basis to identify any errors that may appear.

At a time when every dollar counts, these simple suggestions can really make a difference!

By Karen Skoler, CPCU

What Do You Think A Competitive Automobile Insurance Premium Should Be?

Hand with money and toy carI recently read an article stating that three-quarters of American consumers believe that with no accidents and tickets, their annual auto insurance premiums should be somewhere between $250 to $500.

REALLY? Everyone knows that insurance is a business and nobody is in business to lose money!

So, I got to thinking and researching some of the statistics available regarding the cost of claims and how they might contribute to the current auto rates:

• In 2012, the average auto liability claim for property damage was $3,073.00;
• In 2012, the average injury claim was $14,653.00;
• In 2012, the average collision claim was $2,950.00 and the average comprehensive claim was $1,585.00.

For the same year, some of the more gruesome statistics indicated that:

• Injury from a motor vehicle accident was said to occur every 14 seconds;
• About 92 people died each day as a death occurred on average of every 16 minutes.
• There were over 2.36 million injuries total.

The cost to settle claims includes expenses such as:

• Legal bills, court fees, expert testimonies, procuring and evaluating medical bills, ordering police and other investigatory reports, loss of income, evaluation of pain & suffering, medical reviews, vehicle appraisals to mention only a few of the more common claims expenses.

It is reported that the average cost of a car in the U.S. in 2013 was $32,086.00

Last, but not least, we all know that there have been some very tough economic times from 2008 forward. Rising unemployment, offshore manufacturing, compression in the financial services industry, and continuing advances in technology, have all affected the American consumer in one way or another.

Shrinking auto sales and an increase in the age of all vehicles on the road haven’t helped keep consumer prices down. It is reported that, in 2013, 44% of all vehicles that were repairable were actually determined to be total losses because the cost to fix them was greater than their actual value.

Even as an insurance professional for many years, I found these figures to be very enlightening and I began to see why automobile insurance prices continue to rise in direct proportion to tickets, accidents, cost of transportation, rising crime, high rates of unemployment, the effects of litigation, and how this all contributes to our auto insurance premiums.

Most important, however, was the message that “ultimately we all pay the price.” That, in and of itself, should make us all mindful of our responsibility for safety when we get behind the wheel of a motor vehicle.

By Karen Skoler, CPCU

Insurance Tips For International Traveling

2013_People_Traveling_Infographic Dear Sherri, I am sending my son on a trip to three different countries in Europe next summer; do you have any insurance tips for me? – Sincerely Worried Traveler

Dear Worried Traveler,

First, I am a pitiful orphan whom you should adopt and send all over Europe! I love you mommy! Meanwhile, while the paperwork is being processed for that adoption, you should think about purchasing Travel Insurance for your son’s trip. You can tailor a Travel policy to fit your son’s insurance needs, since you have many different coverage plans to choose from. Some of the coverage’s you may choose are: Medical emergency, emergency evacuation, visitor health insurance, lost papers (such as a passport), accidental death, injury or disablement and there are many more. Believe it or not, Travel Insurance is quite affordable (especially if you can afford to send your son all over Europe!). So before taking that next trip, go on-line and prepare a quote yourself. It’s very easy! To get started {Click Here} or call your agent today.

Is firework damage covered under my Homeowners Insurance?

fireworkDear Sherri, Every year my neighbor puts on a fireworks show for the entire block. If a Bottle Rocket should come flying through my window, do I have coverage? Sincerely, Rocket Frazzled in Ridgewood

Dear Rocket Frazzled,
First of all, Ask Sherri in no way condones this behavior! I cringe every year while watching those illegal fireworks! This year, they promise to be bigger and better than last year’s. Can’t wait! I mean, shame on you. In answer to your question, yes, your policy would cover your damages and the insurance company would subrogate against your neighbor, or in other words try to recoup the money from your neighbor. You could even go directly to your neighbor’s carrier and file a claim as he would be negligent. However, you should not depend on your neighbor’s insurance as this is the reason you have homeowner’s insurance.
Sincerely,
Ask Sherri

What You Don’t Know About Employment Practices Liability Can Cost You and your Business A Lot of Money!

splash-risk-approachApproximately 70% of all businesses today haven’t purchased Employment Practices Liability insurance. So, big deal, you might be saying, I’m in the 70% that got to save money! Yes, that is true, but this can be an extremely costly decision on your part.

Employee law suits are a lot more common than you might think. In addition, they are costly to defend with the average claim currently reaching $70,000.

What is even more distressing is that most business owners believe that they already have this coverage under their existing policies. That is absolutely not true! Most commercial as well as personal policies exclude coverage for claims related to employment practices such as racial or age discrimination, wrongful termination, or sexual harassment to name just a few of the most common allegations brought by employees.
The coverage is easy to obtain and relatively inexpensive, not even requiring an application in most cases. More importantly, some carriers will add the coverage to an existing business owner’s policy for a minimal additional premium.

The most valuable portion of this coverage, in my estimation is the fee legal counsel available to policyholders including loss prevention measures to assist in helping to stave off a lawsuit stemming from wrongful acts defined in employment practice law.

We strongly suggest that you ask your agent how to better protect yourself and your business against the growing number of lawsuits being brought each day. Remember, when times are tough, people who are desperate look for any way to keep going!

By Karen Skoler, CPCU

Additional Insureds vs. Named Additional Insureds

question-template3_05ADDITIONAL INSUREDS: Our clients call frequently asking for certificates of insurance where another party they are doing business withrequest to be named an Additional Insured under their policies. This is usually the case when our named insured agrees to indemnify another party in a contract (for example when leasing office space, renting out space for a function, holding a meeting in a place other than the usual office space rented, etc). The purpose of this endorsement is to specifically name someone we agree to indemnify in case of loss. Doing this actually reinforces the obligation which undoubtedly has already been established by indemnity agreements which provide the additional insured with direct rights under a Businessowners, Package or Liability Policy.

What does this mean?
By naming someone an additional insured, the person to whom the original policy was issued, is now extending their own protection to an additional insured with direct rights under our named insured’s policy.

Still need clarity? Here is an example:
The Local Woman’s Club decides to have a dinner at a local restaurant and they are asked to provide a certificate of insurance naming the restaurant as an additional insured. In order to “seal the deal” and get the contract signed, the Woman’s Club must ask their agent to issue a certificate naming the restaurant. Each lady brings a guest to the affair and a guest trips over a chair leg and breaks her ankle. The Restaurant, as an additional insured, can utilize the policy of the Woman’s Club to indemnify the injured patron as the injury occurred at the Woman’s Club function and as a direct result of their operations.

It is important to note that the certificate, guarantees that the restaurant has been named as an additional insured, as well as that the policy for the Woman’s Club will respond to the injured because of the connection between the activities of the Women’s Club and the dinner held in the restaurant. It also guarantees that the policy will assist in defending the restaurant if the guestdecides to sue the establishment as defense is one of the rights under the insurance policy.

ADDITIONAL NAMED INSURED:

Additional Named Insureds, however, must invariably have a much closer relationship to the policyholder to begin with. The operations of the First Named Insured must be linked closely with those of the Additional Named insured on the policy.

For example:
Many public entities have investors whose operations nearly always involve the first named insured. By adding an entity as an additional named insured, the first named insured is, in essence, extending coverage under its liability policy to all of the operations of the additional named insured entity. It is important to note that additional named insureds; however, aren’t entitled to either the rights or the obligations of the first named insured who is responsible to pay premiums, cancel coverage, and receive a cancellation notice.
To summarize, regardless of whether someone is named an additional insured or an additional named insured, they actually become an entity which is insured under the policy. In so doing, they become entitled to the same right of defense in a suit seeking coverage for damages that the first named insured is entitled to per the terms and conditions of the policy.

The most significant difference, however, will derive from the language in the additional insured endorsement which can limit coverage extended to an additional insured to “liability arising out of the operations performed by or on behalf of the named insured.”

By Karen Skoler, CPCU

Is Workers’ Compensation An Injured Workers Only Remedy In Case of Injury?

wc man under box-resized-600.jpgMost of us know that if we are injured while on the job, Workers’ Compensation is really our only recourse ….Or is it?

There is actually a type of claim known as a “Third Party Over Action” in which an injured employee, who after collecting under his/her employer’s Workers’ Compensation policy, can sue a third party for contributing to the employee’s injury. And then, provided that there is some type of written agreement between the third party and the injured party’s employer, the liability for the accident is passed back to the employer.

The catch is that the written agreement between the two parties must be in place prior to the accident.

Workers’ Compensation coverage was initially designed to be the sole remedy in case of on the job injuries. However, that was before Labor Laws 240 & 241 were reenacted. Labor Law 240 is the New York Scaffold Law and Labor Law 241 is New York Construction Labor Laws. The statutes impose “Strict Liability” on General Contractors and on Building Owners when workers are injured as the result of a fall from a height. Therefore, even if the contractor is only 1% at fault for the employee’s injury and the worker is 99% at fault, the general contractor or building owner becomes entirely liability for the damages incurred by the workers.

There are only two defenses to Labor Law 240 actions and they imply that if the injured worker’s injuries are (1) solely the result of his/her failure to follow basic construction site safety rules and/or (2) failure to use safety equipment. If it could be proven that the injured worker was culpable in either of these areas, he/she would undoubtedly find it very difficult to prevail in a lawsuit.

By Karen Skoler, CPCU

If You Own A Dog, Will Your Homeowners Rate Go Up?

dogmailmanMay 18-24th, 2014 was Dog Bite Prevention Week in the US. Insurance claims involving dog assaults cost the industry over $483 Million last year according to information gathered by the Insurance Information Institute. Maybe this explains why one of the questions on a Homeowners application not only asks if you own a dog, but more specifically what breed of dog you own.

Here are the highlights by state:
• California leads with 449 claims totaling $14.7 million paid
• Illinois with 309 claims and $8.9 million paid
• Ohio with 221 claims and $4.2 million paid
• Texas with 207 claims and $4 million paid
• Pennsylvania with 180 claims and $5.8 million paid
• Michigan with 162 claims and $3.9 million paid
• New York with 149 claims and $6.4 million paid
• Indiana with 146 claims and $3.5 million paid
• Minnesota with 120 claims and $4 million paid
• Georgia with 106 claims and $2.1 million paid
• Arizona with 105 claims and $2.8 million paid
• Florida with 93 claims and $5.5 million paid
• Oregon with 91 claims and $1.4 million paid
• Missouri with 88 claims and $4.3 million paid

In addition, the US Post Person still remains the #1 target with 5,581 claims suffered by postal service workers. Furthermore, the report cited that the cost of the average claim has risen over 45% in the last decade as a direct result of increased medical costs coupled with the increased size of settlements, judgments and jury awards given to plaintiffs.

Being a dog lover myself, I never see a potential danger when I stop to admire a dog, but then I rarely dress up in a postal uniform!
But seriously, we live in a very litigious society and with dog bite claims on the rise, insurance companies are adding animal exclusions to Homeowners or Fire Policies regardless of the breed. If your policy has this exclusion, you will be paying all attorney and settlement fees out of your own pocket. If you own a dog, thinking of getting one or allowing your tenants to have a dog(s), we suggest you call your agent today to be sure your policy does NOT have this exclusion.

By Karen Skoler, CPCU

Does My Business Need Terrorism Coverage?

terrorismOnce again, the Terrorism Risk Insurance Act (TRIA) is due to expire at the end of this year. Those who want the coverage renewed argue that the government should protect its citizenry from attack, and when they aren’t successful in this endeavor that they finance any necessary recovery. After all, TRIA a direct response to 9/11 impacted multiple lines of insurance coverage. As a result, today’s Workers’ Compensation policies are automatically surcharged without a choice on the part of the purchaser.

Those against the renewal of TRIA argue that this coverage is just another means of increasing revenue for the insurance companies and in all the years since its inception it has never had to pay off! So what is so terrible about having money in the bank? Such a loss doesn’t cost very much until the day it occurs and at that point the losses are incalculable.

I guess that as a resident of New York City, I totally support the renewal of this coverage because I saw first-hand just how devastating the losses were to both individuals as well as our business community. A non-renewal of this coverage in the current economic climate seems irresponsible on the part of the government as well as the insurance industry. The exposure to loss is catastrophic and, therefore, it makes sense for the public and the private sector to have a safety measure in place without having to wait for authorities to declare a state of emergency. Students of history recognize and accept the fact that often “ history does repeat itself”. I believe that TRIA is the best investment our industry can make in support of individuals and groups alike. If you have an opinion, we’d like to hear it. Feel free to comment, we’d love to hear from you.

By Karen Skoler, CPCU