Uncovering Common Misconceptions About Flood Insurance Coverage

According to the National Flood Insurance Program (NFIP), flooding is this country’s most prevalent natural disaster. In the years between 1995 and 2004, flood losses in the U.S. averaged $867 million annually. There are about 4.7 million citizens who have taken advantage of the government’s flood insurance protection, however large numbers of at-risk Americans still refuse to find coverage.  After hurricane Katrina last summer, when nearly 80% of New Orleans was underwater, it is surprising that people would not seek such coverage, since their homeowner’s policies do not insure them against floods.

Part of the problem stems from the innate sense that if it’s offered by the federal government, applying for it must be: a) tied up in red tape, and b) too complicated due to all the exclusions. Both of these statements, however, are not true. Let’s examine some of the commonly held beliefs about flood insurance:

·   You can’t buy flood insurance if you are in a high-risk area.  Flood insurance is available to all homeowners and businesses in any community that participates in the NFIP. You can check to see if your community participates by visiting https://www.fema.gov/fema/csb.shtm. The only issue which would prevent you from obtaining flood insurance is if you reside in a Coastal Barrier Resource System location, or a location that is designated as an Otherwise Protected Area. Land that falls under these two categories are undeveloped areas along coastlines. The flood insurance program doesn’t provide coverage in these areas to discourage settlement where there is an extreme risk not only for flooding, but potential loss of life.

·   You can only get flood insurance if you are a homeowner.  Condominium/co-op owners, apartment dwellers, and commercial/non-residential building owners can purchase NFIP coverage. There is a maximum of $250,000 worth of coverage on a one-family residential building. The maximum per-unit coverage limit on a residential condominium/co-op association building is also $250,000. Contents coverage for any residential building is limited to $100,000. Commercial/non-residential structures can be insured for a maximum of $500,000. You can also insure the contents of commercial buildings up to $500,000.

·    You have to wait 30 days for flood insurance protection to take effect. Usually there is a 30-day waiting period from the time a policy is purchased until you are covered. However, there are some exceptions. There is no waiting period if you already have a flood insurance policy, but need more coverage to increase, extend or renew a loan, such as a second mortgage, home equity loan, or refinance. Coverage is effective immediately, as long as you pay the premium at or prior to loan closing. There is a one-day waiting period when additional coverage is requested because of a map revision. This applies when the NFIP revises the map so that a non-Special Flood Hazard Area becomes a Special Flood Hazard Area. Coverage must be purchased within 13 months following the map revision to be applicable for the reduced waiting period.

·   You can get Federal Disaster Assistance even if you don’t have your own flood insurance policy.  The Federal Disaster Program will only provide coverage to uninsured individuals or businesses if the affected area is declared a federal disaster area, which occurs less than 50% of the time.  Statistics show the awards average about $4000 dollars and most are made in the form of a Small Business Administration Loan, which must be paid back with interest.  Furthermore, the award recipient must carry flood insurance for the duration of the loan.

To learn more about the terms of flood insurance coverage, log on to https://www.floodsmart.gov/floodsmart/pages/faq_policy.jsp.

Source: FEMA Publication F-216 (08/04) and www.floodsmart.gov

Does Your Builders Risk Policy Cover Soft Costs?

Work on the new office complex was progressing on schedule. The owner had lined up tenants for two-thirds of the space and was in talks with several others. The general contractor expected to finish construction on time. All that changed when fire broke out on the first floor late one afternoon. It spread from a stack of drywall awaiting installation to a pile of scrap plywood, where the wind picked up the flames and carried them to the structure. Drywall, insulation and plastic wiring all soon ignited. Firefighters were able to contain the blaze and limit the damage. However, it would now take an additional two months to complete the project because the contractors would have to clean up the debris from the fire and ensuing water damage, order replacement materials, and re-do much of the first floor’s construction. The owner faced the certainty of thousands of dollars in lost rents and additional interest on the construction loans.

The owner and general contractor had purchased a builders risk insurance policy to cover damage to the project. They would have coverage for the lost rents and interest expenses if the policy included special protection known as “soft costs coverage.”

Soft costs are costs or reduced income resulting from a delay in a project’s completion. They include expenses such as:

* Lost rents

* Additional interest on loans

* Additional real estate taxes

* Additional advertising costs

* Additional insurance premiums

Some builders risk policies have this coverage built in, while others provide it only if the insurance company adds it and charges an additional premium. The insurance covers the named insured for loss of income and additional expenses that result from direct physical loss of or damage to the covered property. There is no coverage unless the peril causing the loss is one that the policy covers for direct damage. For example, the policy will cover losses caused by fire but not losses caused by faulty workmanship. The lost revenue and extra expenses must accrue during the period starting a specified number of days after construction would have been complete if no loss had occurred and the date construction actually was complete. Some policies limit this period to no more than six or 12 months.

Soft costs coverage may provide one limit of insurance that applies to all covered losses, or it may have separate limits for different types of losses. For example, one company’s policy defines “soft costs” as loss of rental income, loss of gross earnings, additional interest and finance expenses, and additional expenses. The policy could have separate limits for each of these categories. A waiting period deductible applies, though some policies may apply a dollar deductible to losses that occur in a lump sum, such as legal fees. Some policies may also set a maximum amount that they will pay for any one month. They do not cover certain types of losses, such as those caused by strikes, breach of contract, design errors and omissions, lack of funds for repair or reconstruction, building laws and ordinances, and others.

The insurance company will determine the value of a loss by calculating the actual amount of income lost or extra expenses incurred during the delay period because of the delay. It will pay the amount of the loss or the amount of the insurance purchased, whichever is less.

A contractor should work with a professional insurance agent or broker experienced in arranging builders risk insurance. To make sure that the coverage terms and limits are appropriate, the contractor and broker should review the building contract, financing agreements, construction schedules, and other related documents. The type and amount of coverage will vary from one project to another, so it is important to give careful attention to each job’s particular circumstances.

The Impact of Moving Violations and Driver’s License Points on Your Insurance Premiums

Americans love to hear about point systems. After all, many involve us earning desirable rewards, discounts, and freebies. However, not all point systems are about earning something desirable.

In most states, you earn points on your driver’s license after being ticketed for moving violations like running a red light or stop sign, illegal u-turns, unsafe lane changes, and so forth. While no driver relishes the thought of paying moving violation tickets, the financial implications are actually much broader when the points accumulate. This could be in the form of higher insurance premiums or even the suspension of your driving privileges. The details of the point system vary by state. For example, some states assess points to drivers that are at fault in an auto accident. That said, most point systems will assess points one of two ways:

1. One point per basic moving violation, with two points being assessed for speeding violations that involve the driver substantially exceeding the posted speed limit. Drivers assessed either eight points over three years, six points over two years, or four points over one year will have their license suspended.

2. Two points for incidences like slightly breaking the speed limit, an illegal turn, or other minor driving violation. Drivers with more serious moving violations, such as running a red light or stop sign, will be assessed three to five points. Drivers that are assessed 12 points within a three year period will have their license suspended.

Should you get a moving violation ticket, you’ll want to look for the vehicle code violation number on the front of your ticket and contact your state department of motor vehicles. Be sure to ask the number of points, if any, the violation carries; how many points you already have; and how many points will result in a license suspension.

These points can cause your insurance premiums to increase by 20% to 30%. Most insurers will regularly review the driving records for all their customers. Depending on your insurer’s policy and state’s laws, some insurers may be able to raise your premiums for just a single point. Most insurers will allow one moving violation every couple of years before they raise your premiums, but check with your insurer to determine their specific policy.

Can I Avoid/Remove Points?

You can contest the ticket. This may be especially prudent if your points are nearly suspension levels. Keep in mind that contesting the ticket is an iffy proposition in that avoiding the point will depend on you being successful.

An option that offers more certainty in avoiding the point is paying the ticket and attending traffic school. However, some jurisdictions will not allow anyone ticketed for driving fifteen m.p.h. or more over the speed limit to attend traffic school. If you’re eligible, then you may need to attend anywhere from once a year to once every two years, depending on your jurisdiction. Some states will require a court appearance or visit to the court’s clerk to enroll in the class, while other traffic schools are completed online. Some traffic schools give you the basic information with a splash of humor to make it less boring, while others may require you to sit through eight hours of lecture and films on gruesome accidents. In any case, it shouldn’t be too big a sacrifice when you consider the alternative higher insurance premiums from the point(s) going on your record.

Driver education courses, such as a defensive driving class, can help you remove existing points from your license. The department of motor vehicles for your state can give you a listing of applicable options.

In closing, insurers typically either avoid risk or charge exorbitant premiums to take it on. Having a number of moving violations is a strong indicator that you have habits that could lead to costly accidents and claims, and would therefore be a risk to insure. Most insurers do understand that humans err occasionally, but you’ll have the best chance at keeping your rates down by avoiding traffic violations altogether. 

Taking the Mystery Out of Surplus Lines

It is probably safe to say that most people do not know the difference between “surplus” (also referred to as Non-Admitted, E & S or Excess & Surplus) and “admitted” lines.  However, understanding the important similarities and differences will help make you an informed insurance consumer.

Many insurance consumers are completely untouched by the surplus lines marketplace.  Still others purchase coverage from surplus lines carriers unaware of that fact.  If you buy coverage from a Lloyds of London syndicate, you may think you are simply buying from a foreign insurer, but in fact, you may be buying coverage from a US based subsidiary of a large insurance company. 

Surplus lines insurers operate in hard and soft markets, but they thrive when admitted companies withdraw from the marketplace leaving them to fill the void in certain coverage lines.  According to the National Association of Professional Surplus Lines Offices, Ltd.(NAPSLO), while the property/casualty industry grew by 11% during 2001, the surplus lines portion of the industry grew by nearly 35%, reflecting the hardening of the market and the contribution of the events of 9/11.    

Following are a few highlights of the differences between surplus lines and admitted:

·        Admitted insurers usually have to file and receive approval for their rates and policy forms in most states in which they operate.  Some states only require that rates be filed, others require only forms.  Some require the insurer to withhold a product from the marketplace until they have received approval. Other states allow what is called “use and file” meaning the insurer is free to use the form and rates, but must file them with the state and if necessary, make any changes that the state requests in order to comply with its rules and regulations.  Surplus lines insurers do not have to go through this rigorous process and can react more quickly to changing internal and external conditions and events.

·        Surplus lines insurers must work with surplus lines brokers to comply with certain state required filings such as surplus lines taxes, which vary, but usually range between 2 – 4% of the premium.  Surplus lines brokers also file affidavits acknowledging what is called a diligent search that states the insured risk was submitted to the admitted market but received declinations from those specific carriers.  Admitted insurers bear the responsibility of paying whatever state taxes are required.  These taxes are figured into their pricing models so the premium you pay includes any tax payable to the state.  In the case of surplus lines, all taxes and fees are built on top of the basic premium.

·        Admitted carriers must comply with state requirements for policy language, most notably, cancellation and non-renewal requirements.  While most admitted policies require a 30 or 60 day notice to the insured if the carrier intends to cancel or non-renew the policy, most surplus lines insurers reserve the right to cancel or non-renew for any appropriate reason.  Despite this difference, and the language to this effect built into the admitted policy, surplus lines insurers are in many states required to adhere to the same standards. Despite the freedoms they enjoy, there are a myriad of rules and regulations that surplus lines insurers must contend with, including a rigorous and costly state licensing system that puts the insurer on the map as a “white-listed” carrier.

·        Probably the most noticeable difference between the two insurance types is the availability of funds to pay for claims should the carrier become insolvent.  If you buy a policy from a surplus lines insurer, you should be aware that the state guaranty funds will not apply should your carrier’s insolvency leave you stranded when a claim occurs.  Not so with admitted carriers.  However, NAPSLO points out that in 2002, as has been the case in previous years, the median Best’s Rating for surplus lines carriers was A, versus the industry as a whole, which maintained a median rating of A-.   Naturally, it becomes more important to monitor your carrier’s rating with a surplus lines policy.

While the differences are many, the nuts and bolts of both types of policies are virtually identical.  Different compliance endorsements attached to admitted or surplus lines policies will be the only differences you notice.  While the preference, all other things being equal, should always be admitted, there are many reasons to feel comfortable with a surplus lines policy, particularly if it is backed by a financially sound and stable insurance company.  Many surplus lines companies have been paying claims for decades, and in some cases, centuries!

Just Because You’re a Renter Doesn’t Mean You Don’t Have Insurance Needs

Many renters mistakenly believe that they don’t need renter’s insurance or view it as an expensive luxury. However, insurance needs aren’t negated just because one happens to be renting their home.

For those not familiar with renter’s insurance, it’s an insurance coverage that protects the renter from property losses from damages like water and fire. It also provides protection for liability risks, such as lawsuits brought by the landlord of the property, pet attacks, falls and slips, and guest accidents. This type of coverage is available in most areas and has an average $20 monthly premium rate for around $500,000 dollars worth of liability coverage and $20,000 dollars worth of property coverage.

Trusted Choice, a network of financial and insurance service firms, recently found in a survey that almost 25 million American home renters didn’t have any insurance coverage to protect themselves from losses and that most renters have limited, if any, knowledge of renter’s insurance.

Eight percent of the respondents without renter’s insurance had never heard about renter’s insurance before. Meanwhile, 17% said they weren’t aware that they needed renter’s insurance and 26% percent felt that renter’s insurance was too costly.

According to the study, some renters also mistakenly believed that their insurance needs were covered under the insurance policy held by their landlord. In reality, landlords don’t typically insure anything other than the building and infrastructural elements like HVAC systems and elevators. Other losses incurred will be directly on the renter’s shoulders. Even negligent actions caused by one tenant, such as a fire, that affects other innocent tenants in the building aren’t typically covered by the landlord’s insurance.

Other key findings of the study included:

* Fifty percent of the surveyed renters owned pets. Thirty-two percent of the non-pet owners had renter’s insurance. Although renters that own pets have a higher liability exposure than renters without pets, a mere 26% of the pet owners had renter’s insurance.

* Eighty-nine percent of the surveyed renters owned at least one expensive electronic device, such as a computer, camera, digital recorder, or home theater system. This group was more likely to have a renter’s insurance policy than those that didn’t own such devices.

* Fifty-three percent of the surveyed renters owned at least one form of exercise or sports equipment, such as a skis, bicycles, or a home gym system. This group was more likely to own renter’s insurance than those that didn’t own such equipment.

* Only thirty-one percent of the renters operating a home business from their apartment, condo, or other type of rental unit had renter’s insurance.

What Should You Consider When Shopping for Lawyer’s Professional Liability Insurance?

Controlling expenses is an important consideration in the management of any law firm, so it isn’t unusual that a firm shopping for liability coverage would take premium rates into consideration. However, even though rates are important, they shouldn’t be the overriding factor in your decision to purchase a particular policy. There are a number of other aspects you should consider to ensure you receive the best coverage for your premium dollar.

The first of these considerations is whether your policy has eroding coverage.  In some liability policies, the coverage limits include defense costs. When you file a claim, the amount of coverage for settling the claim or paying a judgment against you decreases as you incur defense costs. This type of policy is referred to as having defense costs “inside” the policy. There are policies in which the defense costs are “outside” the policy, which means they are not subtracted from the amount of coverage. In some cases, policies with outside defense costs have a cap after which the defense costs are subtracted from coverage limits.

The second consideration is whether the policy deductible includes defense costs. If the deductible is only applied to liability, the insured firm doesn’t have to pay it until there is a settlement/judgment. However, if the deductible includes defense costs, the insured pays as soon as defense expenses begin to mount until the deductible is paid in full.

Another condition that you will want to note is whether your carrier can settle a claim without your consent. Some policies have what is known as a “hammer” clause that prevents the insurance company from settling without the consent of the insured. There is an extenuating circumstance to this clause in that, if the insured refuses to consent, the carrier is only liable for the amount for which it would have settled.

You also need to determine if your policy gives you the right to select your own defense counsel. More than likely, if you are a small firm your carrier will retain the right to choose your defense counsel. This doesn’t mean that you won’t have any input at all. Most insurance companies have a panel of defense attorneys and generally allow the insured to select from this panel. Larger firms can typically select their own counsel but the carrier must approve.

All current Lawyer’s Professional Liability policies are issued as “claims-made” policies, which means that a claim must be made and reported to the carrier within the life of the policy. To prevent coverage gaps if your firm is changing policies, you should select a new policy that has a “prior acts coverage” clause. This will extend your coverage so that any claims that existed before the new policy started will be covered. If you don’t have prior acts coverage, your former claims-made policy will not cover claims that developed after it expired and your firm will be without coverage for those claims.

A number of changes in both federal and state court procedures have made sanctioning more commonplace. The cost to defend your firm against a sanction or to pay the monetary penalty associated with it can be extremely expensive. That’s why you will want to ensure your liability policy provides coverage for these occurrences.

The final consideration is whether the policy requires a new deductible if there are multiple claims made in the same policy year. Some policies only require the deductible to be applied to the first claim made in a given policy year. Other policies treat the deductible on an aggregate basis. The policy will stipulate a specific deductible dollar amount per claim, with a cap on the total deductible dollar amount in the aggregate that the insured will have to pay before coverage begins. If neither of these scenarios is spelled out in your policy, your coverage most likely requires applies deductible for each claim.

Tweens Need Seat Belts When Riding in the Back Seat

Child safety experts have always emphasized the vulnerability of young children in the event of a crash. Parents are continually schooled in the media about the proper use of car seats and booster seats. The federal government even established guidelines for parents of young children; recommending that parents place infants up to 20 pounds in a rear-facing child seat and toddlers weighing between 20 to 40 pounds in a child seat with a harness. Children weighing more than 40 pounds who aren’t at least 4 feet 9 inches tall should be in a booster seat.

However, when a child grew beyond 4 feet 9 inches tall, usually around the time they reached eight years old, there was no parental guidance from the government in place to protect them in the event of a crash. No longer considered as having the same level of vulnerability as they once did, children between the ages of 8 and 12 years old seemed to get lost in the cracks when it came to auto safety practices. The only recommendation the government made was to have them ride in the back seat until they reach the age of 13.

Experience proved that wasn’t enough. More than one pre-teen, or “tween,” passenger between the ages of 8 and 12 is killed in a motor vehicle crash every day and three times that number are injured, according to the Fatality Analysis Reporting System. In light of these statistics, it is no wonder that safety organizations like the Automotive Coalition for Traffic Safety are asking questions about how frequently tweens are wearing their seat belts and whether or not they’re sitting in the back seat. National fatality data demonstrate that of the more than 400 tweens killed in crashes each year, approximately half are not wearing a seat belt and one-third are riding in the front seat.

To verify these statistics, the Automotive Coalition for Traffic Safety conducted surveys in Dallas, Texas and Joplin, Missouri.  Researchers discovered that of the children polled, about one-third said they sat in the front seat. Even more significant was the fact that half of the 12-year-olds surveyed said that they sat in the front seat. About 63% of the Joplin tweens questioned said they always wore their seat belts, with 53% of the Dallas children stating the same. Surveys were completed by more than 400 children in both cities and had a margin of error of 5 percentage points.

The most alarming discovery that came out of this project was that belt usage in these two locations fell far below the national use rate of 82%. It was also successful in highlighting the problem of why tweens had such a significant death rate as a result of car crashes.

Despite so much bad news, the survey showed how easily parents could improve these results. The Joplin survey revealed a strong parental influence when it came to wearing a seat belt. Nine out of ten children whose parents always wear seat belts followed the example their parents set; however, only six out of ten children whose parents wear seat belts sporadically always wear their belts.

That’s why both the federal government and the Automotive Coalition for Traffic Safety recommend that parents serve as role models and always wear their seat belts. They also recommend using incentives like letting children choose the radio station in exchange for sitting in the back seat and wearing their seat belts. Parents should ban the use of handheld electronic games in the car if children insist upon sitting in the front. Parents also need to remind children that the law requires they wear a seat belt.

Flood Damage to Cars Isn’t Always Easy to Spot

Wherever you find disaster, you almost always find someone attempting to profit. Following hurricanes Katrina and Rita in the summer of 2005, thousands of water-damaged vehicles showed up in car lots all across the southern United States, many with no visible problems.  They were sold outside of the hurricane’s heavy-hit areas, to avoid suspicion of flood damage.  Though in excellent physical condition, these refurbished cars could still be prone to problems, which is why concealing their disastrous history is against the law.

A “flooded” vehicle is one that has been submerged or partially submerged in water to the extent that damage to the body, engine, transmission or differential occurs.  However, even though physical damage is visible within hours of the flood, it could take weeks or even months for the car to exhibit symptoms of damage with the transmission, on-board computer or electrical systems within the dashboard, anti-lock brakes, airbags, and other safety functions.

Even though most state laws require that the buyer be informed in writing of previous flood damage to a vehicle, there are still several cases each year where the buyer believed they were getting a great deal on a great car.  Despite a flawless exterior, there are other ways to spot a flood-damaged vehicle.

To prevent yourself from being taken advantage of in this situation, here are some basic guidelines in spotting a flood-damaged car:

·        Check the engine, trunk, glove compartment, and the floor beneath the carpeting for signs of sand, silt or moisture.

·        Examine all of the computerized and electrical components of the vehicle, including lights, gauges, air conditioning, wipers, turn signals, radio, etc.

·        If you suspect the car may be flood-damaged, ask the seller directly. 

·        If you are still unsure, have the car examined by an independent mechanic.

Protect Yourself Against the Hazards of Welding

Since hazardous conditions like high heat and toxic fumes are central to welding, it is no surprise that without strict safety procedures, injury, short- or long-term illness and potentially even death could occur when welding.  Though there are more than 80 different types of welding processes, each with its own set of concerns, many safety precautions are common. 

The central elements of welding make it dangerous in many different ways.  The welding “smoke” often contains extremely toxic substances such as arsenic, silica, carbon monoxide, lead, chromium and ozone which can produce acute and chronic conditions to just about any part of the body depending on which substance is present.  Conditions associated with welding are asthma, emphysema, lung cancer, skin diseases, hearing loss, chronic gastrointestinal problems and reproductive risks.  Some components of welding fume, for example cadmium, can be fatal in a short amount of time.

Furthermore, the intense heat from welding and sparks can cause burns, eye injuries and heat stroke.  The intense light can cause eye damage and increased skin cancer risk, not just to the welder, but to co-workers if it reflects off surrounding materials.  Excessive noise exposure can permanently damage a welder’s hearing.  Welders also have a high rate of musculoskeletal complaints including back injuries, shoulder pain, tendonitis and carpal tunnel syndrome. 

OSHA standards cover many aspects of welding, including welding safety and safety training, welding in confined spaces, ventilation, fire and electrical safety and protective equipment.  Welders should receive extensive training on the safe use of equipment, safe work practices and emergency procedures, and insist on safe working conditions before they weld.

Before beginning a welding job, the hazards for that particular environment need to be identified since risks vary based on the type of welding, materials to be welded and environmental conditions.  Make sure you know what you are welding before you start.  OSHA requires that employers keep material safety data sheets (MSDSs) to identify the hazardous materials used in welding, and the fumes that may be generated.  Only after identifying the hazard can appropriate safety controls be implemented.

Some general precautions to take include:

·  Keep areas clear of equipment, cables and hoses and use safety lines or rails to prevent slips and falls;

· To prevent fires, only weld in areas that are free of combustible materials;

· Be aware of the symptoms of heat stroke (fatigue, dizziness, loss of appetite, nausea, abdominal pain).  Protect against it through appropriate ventilation, shielding, rest breaks and frequent drinks;

· Wear hearing protection in excessively noisy environments.  OSHA requires employers to test noise levels and, in many instances, provide free hearing protection and annual hearing tests;

· Prevent musculoskeletal injury through proper lifting, changing positions, working at a comfortable height and minimizing vibration;

· Prevent electrical shock by wearing dry gloves and rubber-soled shoes, using an insulating layer on surfaces that can conduct electricity and by grounding the piece being welded and the frame of all electrically powered machines;

· Guard all machines with moving parts to prevent clothing, hair or fingers from getting caught;

· Always wear personal protective equipment including fire-resistant gloves, high-top hard-toed shoes, leather apron, face shields, flame-retardant coveralls, safety glasses and helmets;

· Use shielding to protect other people in the work area from the light of the welding arc, heat and hot spatter;

· Maintain proper local exhaust ventilation and general ventilation;

· Store work clothes separately from street clothes since and have them laundered by the employer since they may be contaminated with highly toxic materials; and

· Receive yearly medical exams.

Because dangerous levels of toxic fumes can build quickly in a confined space, all workers who enter hazardous areas, either on a regular basis or in an emergency situation, should be trained on use of safety equipment, rescue procedures, self-contained breathing apparatus and proper methods of entering and exiting a confined space.  Additional special safety precautions are also necessary for various other specialized welding including high-pressure gas welding, laser welding and electronic beam welding.

Practice Safe Winter Driving Techniques

In case you haven’t noticed, winter has arrived and with it comes ice, snow, slippery roads, and poor visibility. Winter driving is necessary and nothing can be done to avoid it.

While the best advice is to not drive at all, that’s not an option for most of us.  If you must drive, here are some simple precautions you can take to minimize the risk of accidents and injuries:

  • Decrease your speed and leave yourself plenty of room to stop. You should allow at least three times more space than usual between you and the car in front of you.
  • Brake gently to avoid skidding. If your wheels start to lock up, ease off the brake.
  • Turn on your lights to increase your visibility to other motorists.
  • Keep your lights and windshield clean.
  • Use low gears to keep traction, especially on hills.
  • Don’t use cruise control or overdrive on icy roads.
  • Be especially careful on bridges, overpasses and infrequently traveled roads, which will freeze first. Even at temperatures above freezing, if the conditions are wet, you might encounter ice in shady areas or on exposed roadways like bridges.
  • Don’t pass snow plows and sanding trucks. The drivers have limited visibility, and you’re likely to find the road in front of them worse than the road behind.
  • Don’t assume your vehicle can handle all conditions. Even four-wheel and front-wheel drive vehicles can encounter trouble on winter roads.

If you should lose traction:

  • Take your foot off the accelerator.
  • Steer in the direction you want the front wheels to go. If your rear wheels are sliding left, steer left. If they’re sliding right, steer right.
  • If your rear wheels start sliding the other way as you recover, ease the steering wheel toward that side. You might have to steer left and right a few times to get your vehicle completely under control.
  • If you have standard brakes, pump them gently.
  • If you have anti-lock brakes (ABS), do not pump the brakes. Apply steady pressure to the brakes. You will feel the brakes pulse — this is normal.

If you should get stuck:

  • Do not spin your wheels. This will only dig you in deeper.
  • Turn your wheels from side to side a few times to push snow out of the way.
  • Use a light touch on the gas, to ease your car out.
  • Use a shovel to clear snow away from the wheels and the underside of the car.
  • Pour sand, kitty litter, gravel or salt in the path of the wheels, to help get traction.
  • Try rocking the vehicle by shifting from forward to reverse, and back again. Each time you’re in gear, give a light touch on the gas until the vehicle gets going.

Don’t Forget Insurance for Your Organization’s Cyber Risks

The federal Internet Crime Complaint Center received over 330,000 complaints in 2009, and more than a third of them ended up in the hands of law enforcement. The damages from those referred to the authorities totaled more than a half billion dollars. The Government Accountability Office estimated that cyber crime cost U.S. organizations $67.2 billion in 2005; that number has likely increased since then. With so much of business today done electronically, organizations of all types are highly vulnerable to theft and corruption of their data. It is important for them to identify their loss exposures, possible loss scenarios, and prepare for them. Some of the questions they should ask include:

What types of property are vulnerable? The organization should consider property it owns, leases, or property of others it has in its custody. Some examples:

* Money, both the organization’s own funds and those it holds as a fiduciary for someone else

* Customer or member lists containing personally identifiable information, account numbers, cell phone numbers, and other non-public information

* Personnel records

* Medical insurance records

* Bank account information

* Confidential memos and spreadsheets

* E-mail

* Software stored on web servers

Different types of property will be susceptible to various threats, such as embezzlement, extortion, viruses, and theft.

What loss scenarios could occur? The organization needs to prepare for events such as:

* A fire destroys large portions of the computer network, including the servers. Operations cease until the servers can be replaced and reloaded with data.

* A computer virus infects a workstation. The user of that computer unknowingly spreads it to everyone in his workgroup, crippling the department during one of the year’s peak periods.

* The accounting department discovers a pattern of irregular small funds transfers to an account no one has ever heard of. The transfers, which have been occurring for almost three months, were small enough to avoid attracting attention. They total more than $10,000.

* A vendor’s employee strikes up a casual conversation at a worker’s cubicle and stays long enough to memorize the worker’s computer password, written on a post-it note stuck to her monitor. Two weeks later, technology staff discover that an offsite computer has accessed the human resources database and viewed Social Security numbers, driver’s license numbers, and other personal information.

In addition to taking steps to prevent these things from happening, the organization should consider buying a cyber insurance policy. Several insurance companies now offer this coverage; while no standard policy exists yet, the policies share some common features. They usually cover property or data damage or destruction, data protection and recovery, loss of income when a business must suspend operations due to data loss, extra expenses necessary to maintain operations following a data event, data theft, and extortion. However, each company may define these coverages differently, so reviewing the terms and conditions of a particular policy is crucial. Choosing an appropriate amount of insurance is difficult because there is no easy way to measure the exposure in advance. Consultation with the organization’s technology department, insurance agent and insurance company may be helpful. Finally, all policies will carry a deductible; the organization should select a deductible level that it can afford to pay and that will provide it with a meaningful discount on the premium. Once management has a thorough understanding of the coverages various policies provide in relation to the organization’s exposures, it can fairly compare the costs of the policies and make an informed choice.

Computer networks are a necessary part of any organization’s environment today. Loss prevention and reduction techniques, coupled with sound insurance protection at a reasonable cost, will enable an organization to get through a cyber loss event.

The Many Colors of Insurance Fraud – And How to Prevent It

According to the Coalition Against Insurance Fraud, a division of the Insurance Resource Council, one in five Americans or 45 million people say it is okay to defraud an insurance company in certain circumstances.  Furthermore, according to a 2008 Four Faces study by the IRC, consumer tolerance of of specific insurance schemes has increased over the past ten years. To be more specific, the study says there is a decline in the number of Americans who believe it is unethical to:

  • misrepresent facts on an insurance application to lower their premiums (82 percent today, down from 91 percent in 1997);
  • file a claim for damage that occurred before the damage was covered (85 percent, down from 91 percent);
  • inflate a claim to cover the deductible (84 percent, down from 91 percent); and
  • misrepresent an incident in order to be paid for an uncovered loss (84 percent, down from 92 percent).

Insurance fraud comes in many different shapes, colors and sizes.  The one common denominator is that, regardless of the form it takes, it costs insurers, and ultimately you, the consumer, billions of dollars per year.  What are some of the different types of fraud that take place and what can be done to prevent it?

Insurance fraud cuts a broad swath through the insurance industry and can occur anywhere in the insurance transaction from fraudulent applications for coverage to fraudulent filing of claims.  Insurance fraud is not only committed by the insurance buyer, but by attorneys, physicians, and other third parties to the insurance transaction.  Even insurance company employees have been caught bilking their employers. Following are some sobering statistics:

  • Fraudulent and abusive auto-injury claims are a costly problem. Fraud and “buildup” added $4.8 billion to $6.8 billion in excess payments to auto injury claims in 2007. That means 13-percent to 18-percent increases in payments under private-passenger auto policies from 2002. (Insurance Research Council, Nov. 2008)
  • Auto insurers lost $16.1 billion due to premium rating errors in private-passenger premiums in 2007. Premium rating errors account for 10 percent of the $166 billion in personal auto premiums. Fraud accounts for a portion of these losses. Some drivers will seek to lower their premiums by schemes such as deliberately misrepresenting mileage driven, how the vehicle is used and where it’s registered. (Quality Planning Corporation, 2008)
  • More than $2.4 billion in recoveries for fraud, waste and abuse in federal healthcare programs are expected for the first half of FY 2009 (October 2008 through March 2009). Some 1,415 individuals and organizations also were excluded from federal programs for fraud abuse; 293 criminal actions were brought, as were 243 civil actions. (Semiannual Report to Congress, Office of Inspector General, Department of Health and Human Services, Office, 2009)
  • Medicare and Medicaid lose an estimated $60 billion or more annually to fraud, including $2.5 billion in South Florida. (Miami Herald, August 11, 2008)
  • Medical identity theft comprises about 3 percent (249,000) of 8.3 million overall victims of identity theft. (Federal Trade Commission, Identity Theft Survey Report, 2007)

With the advent of the Internet, an aging population, and other trends making insurance fraud a lucrative business, it will be difficult to completely eradicate the problem. Federal and state authorities, insurers, and consumer watchdog groups are all working diligently to stem the tide of insurance fraud.  Here’s what you can do:

  1. First, and most obvious is to not commit fraud.  The temptation to lie on an insurance application to get a better rate, an example of what is called soft fraud, should be tempered by the fact that it increases the risk of insurers canceling or even rescinding coverage upon evidence of the fraud, not to mention the legal implications.
  2. Ask for detailed medical and repair bills and examine closely for unusual or suspicious charges.
  3. If you are involved in or witness an accident that appears to be of a suspicious nature, and you feel that it may have been staged, report the incident to local law enforcement.
  4. Report fraud when you become aware of it.   If your state does not have a hotline, your insurance company probably does.  So does the National Insurance Crime Bureau.  A hotline exists for Medicare and Medicaid, and you can go on the Coalition Against Insurance Fraud’s website for further information on reporting fraud (www.insurancefraud.org).
  5. As with credit card and social security numbers, guard your insurance identification card numbers and report any theft.

In It for the Long Haul

The market for trucking insurance, like most other insurance markets, has taken a hard left turn since 2001. Under the circumstances, it is best to know and understand what underwriters are looking for when sifting through insurance applications.  Knowing what looks favorable, what looks bad and what looks just plain ugly, can be the ticket to affordable quality coverage. 

One thing that has remained fairly constant over the years is the importance underwriters place on a company’s financial shape.  Motivated in part by concerns about the capacity of insureds to pay high deductibles, underwriters prefer to see solid financial strength.  But there are other reasons too.   The consensus among underwriters is that there is a correlation between financial strength and stability, and attention to detail.   In other words, if you have the financial resources to pay employees more and put more into the upkeep of your fleet, you will experience fewer problems leading to fewer accidents or other types of covered claims. 

It is a simple concept, but one that is complicated by some of the facts of life.  Depending on your company’s size and structure, your financial goals might not be in sync with what underwriters expect to see.  For example, if you choose a Subchapter S corporate structure, your goal might be to show as little profit as possible – a possible red flag to an underwriter.   A financial statement is a snapshot and your accountant, preferably a CPA, is not only your photographer, but your stylist as well.  Look to them for recommendations about balancing your financial goals, tax strategies and the need to present your company in the best possible light.

Because financial analysis of trucking companies can be tricky, there is a company that provides the service to underwriters. Formed as a subsidiary of a Manhattan based truck insurance defense law firm in the 1970s, it uses a select grouping of key financial indicators to rate companies on a six-point scale from “Satisfactory” to “Unsatisfactory.”   This system is not that different from the ratings companies, such as AM Best give insurers.  

How do they get financial information for trucking companies?  For large, public companies like Old Dominion, this data is readily available from public financial disclosures.  For privately held companies, it often comes through voluntary disclosures from trucking firms who are aware of the need to provide such data to secure coverage.

Whether you provide the financial data to your agent, the carrier, or to a third party, the quality of the financial information is as important as the quantity.   A CPA audited financial statement is costly, but the best source of data because it is viewed as the most credible.  An alternative to the audited statement is a CPA compilation, which follows a less rigorous standard, but is the next best thing to an audited statement.  For underwriting purposes, the most important elements of the financial statement are the income statement and balance sheet.  If you have no other alternative, your most recent tax return should have all the elements needed for the review. 

Besides financial statements, providing complete details on your loss history is important.  This might not always be easy, especially if you have been insured with a company no longer in business or that has exited the marketplace.  Ask your agent for help in securing these loss runs or determining alternative formats to provide accurate information.  

Insurers are also swayed by loyalty.  Underwriters may reject a submission out of principle if the trucking firm has been shopping for the best price each year and continually moving around from one insurer to the next.  Exceptions  are granted for the obvious forced move, i.e., insurers exiting the marketplace. 

Besides the above, insurers look for good safety and loss control programs, tight control of owner-operators, if applicable, and a well-maintained fleet of trucks with experienced drivers (with clean driving records).  These are the elements that will invariably get you to the finish line safely and in record time year after year.  

Protect Your Child While Driving

When transporting children in your vehicle (whether they are your own children or others), it is important to ensure that they are properly restrained.  Remember that cars are designed to comfortably and safely seat adult-sized passengers, and child restraints are designed to compensate for this.

In 2003, 5% of all traffic fatalities were children under 14 years old.  Most children were killed because they were not correctly placed in the seat belt, car seat, or booster, or had let themselves out of the restraint. In fact, many had been riding completely unrestrained.

It is extremely important that all children under 12 always ride in the back seat. This was true even before the arrival of airbags, and is especially true now.  Infants and young children should never be in the path of an airbag.  In the backseat, the child is also afforded more distance before they hit anything hard, in the event of a crash. 

Most states have child restraint laws, which specify the ways in which each age group should be restrained in a car.  Unfortunately, many leave a gap for children aged 6-12: children who are too large for child safety seats and too small to fit into vehicle-equipped seatbelts. The best idea is a booster seat, which boosts the child up about four inches, enough for them to fit perfectly into the seatbelt. This is recommended until the child is large enough to fit comfortably and appropriately into an adult-sized chair and seatbelt.

Falling Asleep at the Wheel: Tips for Avoiding Driver Fatigue

There are many dangers that can contribute to car accidents, but driver fatigue is by far one of the largest.  Falling asleep behind the wheel is a serious problem, causing more than 100,000 accidents per year, according to the National Highway Traffic Safety Administration. For most of these fatigue-based crashes, the culprit is monotony on the road. Interstates and high-speed or long, rural highways, for example, are the most frequent areas where drivers fall asleep. Studies done by the NHTSA have proven that driving with fatigue is equally if not more dangerous than driving intoxicated, with very similar results: impaired reflexes, blurred vision, inability to stay focused, etc.  The NHTSA has estimated that drivers falling asleep at the wheel cost about $12.5 billion annually in insurance claims and medical costs.

There are several common-sense tips for staying awake, especially when driving long distances, or at night.

·        Make sure you’re well rested, beginning your trip only after having at least seven to eight hours of sleep.

·         Avoid driving alone on long-distance trips. Passengers can both share in the driving and providing conversation, which can help you stay awake.

·        Be an active driver. Avoiding prolonged use of cruise control. Using it in moderation will help you stay more alert.

·        Allow yourself ample time to reach your destination so you can take advisably frequent breaks. Try to stop about every two hours, or every 100 miles. Make a point of getting out of the car and walking at least a short distance.

·        Driving for long periods at night makes fatigue much more likely. By avoiding traveling during these hours, you escape the glaring dashboard and road lights. That alone will help decrease your risk of highway hypnosis.

·        Finally, if you’re losing the battle against fatigue, stop and sleep at a motel or well-guarded rest stop.

Workers’ Comp Employer Costs Rose Faster Than Benefit Payments in 2004

According to a study released in July 2006 by the National Academy of Social Insurance, employer costs for workers’ compensation grew faster than combined cash and medical payments to injured workers in 2004, the most recent year for which data is available. Combined benefit payments for injured workers increased 2.3 percent in 2004 compared to prior year levels, while employer workers’ compensation costs rose by 7.0 percent for the same period.

Combined benefit payments fell by 3 cents for every $100 of covered wages, from $1.16 to $1.13. The chief contributor to this decline was the state of California, where benefits dropped by 10 cents per $100 of covered wages. Nationally, premiums paid for workers’ compensation insurance rose by 3 cents per $100 of covered wages, to $1.76 in 2004. The increase was the smallest annual increase since 2001.

Despite the recent rise in costs, both costs and benefits in 2004 remain far below their peak levels. Total benefits were at their highest in 1992 at $1.68 per $100 of covered wages, 55 cents higher than the 2004 figure. Employer costs were highest in 1990 at $2.18 per $100 of covered wages, 42 cents higher than in 2004.

Since 2000, the rise in benefit payments has resulted from increased spending for medical care. Spending for medical treatment rose from 47 cents in 2000 to 53 cents per $100 of covered wages in 2004. Spending for cash payments to workers remained the same during this period at 60 cents per $100 of wages.

There are specific actions employers can take to curb workers’ compensation costs. The first step is to examine accident records for the past three years. Take each year’s reports and examine as a whole. While reviewing look for specific accident causes and note hazards that should be remedied. You should also be looking for injury repetition and in which department injuries frequently occurred.

The next step is to conduct a physical analysis of the workplace. Utilize your health and safety committee as the catalyst, but be sure workers are also involved. Look for equipment hazards that need replacement or repair. Then search for environmental hazards such as chemical exposures, noise, temperature and ventilation issues.

The third step is to look for task or ergonomic hazards. Request employee input to encourage workers to take ownership of safety in their departments. When workers provide input, make sure actions resulting from their suggestions are documented in health and safety committee minutes and posted on bulletin boards in common areas. If employees do not feel their suggestions matter, they won’t bother to suggest improvements in the future.

Home Buyers: Make Securing Homeowner’s Insurance a Top Priority

At long last, your loan package has been approved, your closing date is just days away, everything you own has been packed, and all that remains is a quick call to your insurance agent to line up a homeowner’s policy. That’s when the bad dream can begin. 

Your agent may inform you that your new home is uninsurable because of a history of insurance claims filed by the previous owner. Despite home inspections and various required real estate disclosures, this could happen to you.

Securing homeowner’s insurance used to be one of the last tasks a buyer undertook before closing. In reality, it should be one of the first.

Before issuing a policy, insurers always check a property’s claims history. Water damage claims are red flags, of course, but homeowners can also set off alarms simply by inquiring about their coverage, without ever filing a claim.

Most insurance companies research past claims through a shared database called CLUE, which stands for Comprehensive Loss Underwriting Exchange. When you apply for homeowner’s insurance, the insurer will request a CLUE report to ascertain whether you or the seller have filed any claims during the past five years. Even if you currently own a home and have a squeaky-clean claims history, if you buy a house with multiple claims filed against it, you may not be able to obtain insurance coverage.

Regrettably, you cannot order a CLUE report if you are not the homeowner. However, you can ask the seller to order a copy of the report as a contingency to your offer.

If you are ever denied insurance because of past claims, you can request a free copy of your CLUE report. In the event of a dispute with your insurer, you have the right to ask that your account of the events be included in the report. If you are simply curious about your home’s history, you can order a copy from ChoicePoint, the company that manages the CLUE database.

It pays to spend the time and effort to educate yourself about homeowner’s insurance when seeking affordable coverage. Consider the following ideas: 

  • Learn the rules regarding homeowner’s insurance renewals in your state. Regulators of some states exercise   control over when an insurer can refuse to renew your coverage.
  • Pay for small losses yourself. Insurers take notice of customers submitting frequent small claims.
  • Think twice before calling your agent or insurance company. When you place a call, the insurer opens a claims file on you regardless of whether you actually file a claim.
  • Increase your deductible and consolidate insurers. To reduce your homeowner’s insurance premium, consider raising your deductible. Also, most insurers offer discounts if you insure both your car and home with them.

Examine your credit record. In addition to your past claims history, insurers often use your credit score to determine whether to issue you a policy.

Know How to Manage a Chemical Spill to Limit Injury and Exposure

No one plans on a chemical spill but because accidents can occur, the time to figure out how to manage a chemical spill isn’t after a spill happens but before.  Because different chemicals can have different harmful effects and must be handled in a unique way, contingency planning is the best way to minimize potential problems.

It goes without saying that our work around hazardous substances should always be designed to minimize the risk of their accidental release.  Prior to working in a specific environment around specific chemicals, you should make sure you understand the physical, chemical and toxicological properties of the potentially hazardous substances and the appropriate emergency procedures including:

·  How to report the emergency involved (ie. chemical spill, fire and/or injury)

·  The location and use of emergency first aid equipment

·  The location and use of spill control equipment and fire extinguishers

·  Contact information for those responsible for the work site

Handling a spill depends greatly on the scope of the chemical release, other hazardous conditions present and the type of chemical.  Always adhere to the specifics of the safety program.  Some general safety guidelines for small spills that are not immediately dangerous to the environment or individual’s health include:

·  Notifying other personnel in the area about the spill and any appropriate evacuation needs;

·  Attending to any individuals who have been injured or potentially exposed;

·  Taking appropriate measures, without the risk of injury or contamination, to confine the spill; and

·  Cleaning up and disposing of the spill contents using appropriate procedure.

Remember that more widespread or dangerous spills or conditions require a different approach including:

·  Notifying other personnel about the spill and to evacuate the area;

·  Immediately attempting to remove or protect victims in a manner that does not risk additional injury or contamination.  Request help if necessary; 

·  Locating to a safe area and calling 911 to report the emergency; and

·  For dangers that extend beyond the immediate environment, activating any fire or safety alarms, evacuating the wider vicinity and securing any entrances into the area.

If hazardous or regulated materials are unintentionally released to the environment, special regulatory reporting may be required.  Be sure to note as best you can the chemicals involved, the quantities released and the time of the incident so it can be reported accurately to the appropriate environmental agencies. 

While chemical spills are not intended, by taking safety measures, their scope and impact can often be limited.

Protect Yourself from the Risks of Yard Sales

With the arrival of warm, balmy weather, yard sales begin to pop up everywhere. While a yard sale may transform your spring cleaning chores into a profitable day of getting rid of unwanted items, it can also create a setting for a legal nightmare. For example, you’re legally liable if someone at the yard sale slips, trips, or falls and injures themselves. Such scenarios are exactly why you must know what your homeowner’s insurance covers before you take on the responsibility of inviting yard sale-goers onto your property.

Most standard homeowner’s policies will provide $100,000 dollars worth of liability coverage for property damage or bodily injury that is caused to others by those living in the home. The coverage amount can be used to cover your legal defense and any resulting monetary judgments against you.

No-fault medical coverage is another feature of your homeowner’s insurance liability protection. It usually provides between $1,000 to $5,000 dollars worth of coverage. This feature can help you avoid lawsuits from a person injured on your property since it will allow them to directly submit their medical-related bills to your insurer for payment.

The above may seem adequate enough for a yard sale, but given today’s litigious mentality, it may be prudent for you to add to your liability protection. You might consider raising your homeowner’s policy’s liability coverage to at least $300,000 to $500,000, depending on your specific needs and property. An excess liability or umbrella policy can provide additional protection and won’t typically cost more than $350 a year for $1,000,000 worth of coverage.

The Insurance Information Institute has an excellent guide on the insurance needs for various types of yard sale events:

* Charity or fundraiser event – your homeowner’s insurance policy will most likely be adequate coverage during an event to raise money for a charity or non-profit. However, you might also consider contacting the entity to ask if they have any insurance protection to extend to you for the event.

* Occasional or one-time events – the occasional yard sale that’s designed to sell personal items that you no longer want is also typically covered under your homeowner’s policy, but do consult your insurance agent to ensure you’re adequately covered.

* Multiple, frequent yard sales – a separate business liability or in-home business policy should be considered if you’re planning to have multiple yard sales.

When Good Employees Go Bad: Why You Need Employee Dishonesty Insurance

An employee in a high school’s finance department steals $279,000 to support her gambling habit and cover her mortgage payments. A bank employee in Pennsylvania allegedly embezzles $750,000. The former CEO of a Colorado insurance brokerage pleads guilty to stealing $353,400 from the brokerage’s employee benefits plan. The office manager of a Texas law firm gets four years in prison for forging checks and depositing client payments in her personal bank account.

When people become desperate, they may succumb to temptation and turn to crime. The FBI reported that one in 28.2 employees was caught stealing from an employer in 2007, and that was before the worst of the recent economic downturn. Vendors’ employees and other visitors to an organization’s premises may also have the opportunity to steal computer equipment or network passwords.

Most business property insurance policies cover losses resulting from some types of crime. For example, they will cover the cost of cleaning up graffiti that vandals spray paint on an exterior wall or the value of merchandise burglars steal, plus the cost of repairing the damage they did breaking into the store. However, insurance companies did not design these policies to cover money stolen from a cash register or deposits never made to a bank; in fact, the policies almost never cover employee crime. For this reason, every organization should consider buying crime insurance.

Employee dishonesty insurance, often called fidelity coverage, pays for losses due to employee theft of money, securities, and other property. It covers property the organization owns or leases, property of others in the organization’s custody, and property for which the organization has legal liability. Insurance companies can provide one amount of insurance that applies separately to each loss, regardless of how many employees were involved in the theft and regardless of whether the employer can actually identify the responsible employees. Alternatively, the policy can contain a list (known as a schedule) of either employee names or positions with a separate amount of insurance listed next to each one. The policy can cover permanent, temporary and leased employees for up to 30 days or more after they terminate employment. Some companies will extend coverage to certain non-employees who may have the opportunity to commit theft, such as equipment support technicians, consultants, and vendors.

Many policies include a “prior dishonesty” clause. This immediately cancels coverage for an individual employee if the organization discovers that the employee has committed a dishonest act, including acts other than theft and acts he committed prior to his current employment. Even relatively minor dishonest acts will eliminate coverage for that employee. Some insurance companies will amend the policy to cover certain individuals on a case-by-case basis, so the employer should work with the insurance agent and company to arrange coverage.

Insurance companies offer this coverage either as a separate policy or as part of a package policy. If it comes as part of a package, the employer should carefully review the policy to determine whether the amount of insurance provided is adequate. Package policies often come with certain insurance limits built in, and they may or may not be enough for a given situation. For example, a package policy that automatically provides $100,000 coverage may be fine for the smallest of businesses, but it would have been way too small to cover the losses described at the beginning of this article.

Employees can either make a business successful or drag it down. No organization wants to believe that its workers would steal from it, but unfortunately some of them will. To make sure that they have adequate protection, all employers should work with a professional insurance agent and purchase employee dishonesty coverage. With the right insurance, the organization and its trustworthy employees will survive a large loss caused by the untrustworthy few.

Vulnerable Homeowners Negligent About Flood Insurance

Quite a bit of attention is being paid lately to floods and the devastation they leave behind. In the wake of Katrina, more and more questions have been raised about what kind of preventative measures would have lessened the catastrophic effects of such an event.  How well equipped are individual homeowners to handle financial consequences on their own, as opposed to relying solely on agencies like FEMA to provide them with economic assistance? Are Americans taking advantage of the nation’s flood insurance program?

That’s what FEMA wanted to know. The agency worked through the American Institutes for Research (AIR) to commission a study. AIR is a not-for-profit organization that conducts research on social issues and provides technical assistance in the fields of health, education, and workforce productivity. AIR coordinated the study, which was conducted by the Institute for Civil Justice and the Infrastructure, Safety and Environment division of the RAND Corporation. It was intended to be part of an overall evaluation of the flood insurance program.

In the course of their work, the researchers discovered that most homeowners buy flood insurance only because it is required. Only 20% of homeowners living in the areas most vulnerable to floods buy federal flood insurance when they are not required to do so. The study went on to reveal that just 1% of Americans living outside designated flood zones buy federal flood insurance even though the possibility of being victimized by flood is a real threat.

Only 50% to 60% of the 3.6 million single-family homes in the most highly affected areas are legally required to buy federal flood insurance. The remaining homeowners in these areas and the nearly 76 million single-family homes outside these areas are not required to buy flood insurance.

The study put the greatest emphasis on exploring the demographics of flood insurance purchasers. About 63% of homeowners living in areas subject to coastal flooding purchase flood insurance. Approximately 35% of homeowners living in areas that are only affected by river flooding buy flood insurance. The researchers surmised that the disparity might be the result of a perception of having less risk or that coverage available for basements is limited, and basements are prevalent in inland areas subject to river flooding. The report recommended that this aversion to flood insurance by those living in inland areas be studied, to search for an explanation or possible causes.

The study also looked at purchasing habits along geographic breakdowns. In the South, 75% of homeowners who carry flood insurance also have contents coverage. Only 16% of homeowners with flood insurance in the Midwest and 49% in the Northeast have contents coverage.

Clearly homeowners everywhere need to reassess their exposure to flooding.  If you have questions about obtaining flood insurance for your property, please give us a call.

Traffic Violation Cameras and Your Auto Insurance Premium

With the sudden presence of traffic violation cameras (red light, speeding, aggressive driving) in states across the country, many Americans feel that their privacy is violated.  Others believe that this is a government ploy for fundraising, or to replace the local police department.  Many people are curious as to the effect a red light camera violation will have on their insurance premium.

Since initiating the program a few short years ago, participating cities have seen very promising results from their investments.  Many have seen a 40% decrease in violations since starting the program.  Fines can be anywhere from $35 to $200, depending on the city in which the violation was issued and the speed over the legal limit at the time of the photograph.

If you are found in violation, the cameras take a picture of your car, with a motion-triggered shutter, which captures an image of you in your vehicle in addition to a zoomed-in image of your license plate.  Some cameras even take a few seconds of video.  Once the data is analyzed, you are issued a ticket through mail.

Some drivers have contested that if the vehicle owner is not the driver at the time of the violation, they should not have to pay the fine.  Most cities allow residents to appeal the citation in this situation.  Other states, however, hold the vehicle owner responsible regardless of who was driving.

There have been a few reports that suggested the cameras increase traffic accidents.  This is both true and false.  As the lights change from green to yellow, drivers begin to panic.  To avoid receiving a traffic violation, they are inclined to stop much more suddenly, which could cause minor rear-end collisions, and fender-benders.  However, more serious side-impact and head-on collisions caused by drivers speeding through red lights have significantly decreased.  As these crashes were much more hazardous, and resulted in far more injuries, the cameras are still viewed as a positive implementation.

Since violations are usually issued as a civil penalty, in most cases they do not result in changes to your insurance premium or points on your license, except in extreme cases.  Driving safely, however, will always result in better insurance rates.

A Quick Guide to Understanding Insurance Policies

There is little disagreement among policyholders that an insurance policy is an insanely boring piece of literature.  Too often we get our policy and until we have a claim, it is filed with barely a second glance. Is there a way to make reading insurance policies more interesting and more productive?  Let’s try.

To make your policy interesting to read, we are going to go on a scavenger hunt.  Find a pen, pencil, or highlighter; open up your policy; and let’s begin.  We will break down the typical insurance policy into the following parts:  1.) Declarations, 2.) Definitions, 3.) Covered Perils, 4.) Exclusions, 5.) Conditions, and 6.) Endorsements or Riders. Get used to looking in this particular order, regardless of how your policy is arranged.  Because of the nature of insurance policies, you will not overlook anything by going out of the policy’s inherent order; so do not worry about jumping from page to page.

1.      Declarations – The declarations page(s) comprises the who, what, when, and where of your policy.  Look for the named insured, the address, limits of coverage, deductible or retention levels, and listings of forms that might apply to your coverage as well.  Make sure that all the personalized information is correct and all the forms match the ones quoted with your policy.  This should always be your first stop. 

2.      Definitions – Not all policies have a definition section, but most have defined terms.  Hunt down the definitions in your policy, see what the defined terms mean, and to be truly thorough, find those defined terms as they are used in the policy to see if the definitions make sense. 

3.      Covered Peril(s) – Regardless of what type of policy you have purchased, it will always have a specific covered peril or list of covered perils.  It may be called “Coverage Agreement,” “Covered Perils,” or something similar.  (NOTE:  A typical auto policy has as many as six distinct coverages, each with their own terms, conditions, exclusions, and so on.Coverage agreements can also include additional coverages related to the covered peril, i.e., legal defense and other expenses paid by the company in a liability policy. 

4.      Exclusions – Virtually all policies have exclusions, which are usually found in a section entitled “Exclusions” or “What We Do Not Cover.”  Common exclusions include exposures that are deemed uninsurable by law or uninsurable by the insurance company.  Punitive damages, for example, are not insurable in some states because of the act that precipitated the punitive damages. Other exposures, such as asbestos liability, are simply undesirable to the insurer and excluded accordingly. Often, policies have “carve outs” built into the covered peril section or elsewhere in the policy, so look for these exclusions too.  For example, the policy might have a definition section with a definition for “Damages” or “Covered Damages.”  Damages might be stated to include monetary loss suffered by a third party (for a liability policy) and defense costs, but not to include fines, penalties, or punitive damages assessed against the insured. 

5.      General Conditions – All policies have what are called general conditions or common policy conditions if there is more than one coverage section to the policy.  Typical conditions that apply are “Policy Territory,” “Cancellation,” and “Other Insurance” clauses. 

6.      Endorsements or Riders – Many policies have endorsements or riders added to the basic policy to account for variations by state, updates to the basic form, or elements that are peculiar to your situation and require tailoring of coverage. 

Now that you have gone through your policy, the final step is to ask questions.  If there are no questions, move on to the next policy, start with the declarations and don’t stop until you hit the riders.  I guarantee it will be a page-turner!

The Big Freeze: How to Prevent Freezing Pipes

Imagine waking up on a frigid winter morning, throwing on your bathrobe and stumbling down the stairs to make a pot of coffee—only to find your kitchen is filled with water. Each winter, about a quarter of a million families find themselves in scenarios like this all because of water pipes that freeze and burst.

Not only can a pipe eruption ruin your day, but it can also cause thousands of dollars of damage to your home. Your furniture, carpet, photos and floors could be completely water-logged and even ruined from a single bursting pipe. As a matter of fact, just a three millimeter crack in a pipe can dump up to 250 gallons of water in your house in a single day. Whether your home is outfitted with copper or plastic PVC pipes, no one is immune to pipe bursts—both of these pipes can rupture.

Fortunately, you can take a few precautions to protect your pipes and avoid the hassle of a messy, expensive pipe burst. If you want to steer clear of the rising flood waters, follow these simple steps: 

Bundle up those pipes: Before winter arrives, take time to insulate all the exposed pipes in your crawl spaces, garage and attic. Because these pipes are open to the elements, they are more vulnerable to freezing. Don’t be shy with the insulation—the more you use, the less likely your pipes will freeze and burst.

Use heat tape or thermostatically-controlled heat cables to wrap your high-risk pipes. Make sure the product is approved by an independent testing organization, such as Underwriters Laboratories, Inc. Use exterior tape for outside pipes and interior tape for indoor pipes, and carefully follow all the installation instructions.

Seal the cracks: Look for air leaks near your pipes. If arctic air seeps through even a tiny crack, your pipes can quickly freeze and burst. To keep the cold out and the heat in, seal up every leak with caulk or insulation.

Put the garden hose away: Before the temperature plummets below freezing, disconnect your garden hose and shut off the indoor valve.

Bump up the thermostat: Never set your thermostat below 65 degrees in the winter. The temperature inside the walls and attic, where your pipes are located, is much colder than the inside of your house. If you let the indoor temperature drop below 65 degrees, your exterior wall pipes are at high risk of freezing and bursting.

Let the water trickle: Turn on one faucet in your home and let warm water drip throughout the night. Even a tiny trickle of water can help prevent your pipes from freezing. If possible, use a faucet on an outside wall.

Protect your home when you’re gone: If you’re going out of town, ask a friend or neighbor to check your house each day. Tell them to look for any signs of a burst pipe and make sure it’s warm enough to prevent pipes from freezing.

If you don’t have anyone who can check your home, consider shutting off and draining your water system before you leave. Keep in mind that if you have a fire protection sprinkler system in your house, it will be disabled when you shut off the water.

Know the signs of a pipe freeze: If you turn on your faucet and no water comes out, this could be a sign that your pipe is frozen. Leave the faucet on and call a plumber.

You may be able to thaw the frozen pipe yourself with a hair dryer. Start warming the pipe as close to the faucet as possible, working toward the coldest part of the pipe. Never try to thaw pipe with a torch or open flame.

Deal with the pipe burst: If your pipes freeze and burst, turn off your water at the main shut-off valve and leave the water faucets on. Call a plumber right away.

You should also call your insurance agent or company as soon as possible. Although your insurance adjuster doesn’t need to see the spill before you clean it up, you should at least inform them of your situation.

Move electronics, furniture, carpet and other items away from the water. Start mopping up the water and try to make temporary repairs to protect your home from further damage. Be sure to save all of your receipts for any money you spend related to the pipe burst. Your insurance company may be able to reimburse you for temporary repairs. Try to avoid making expensive permanent repairs until your insurance adjuster has a chance to assess the damage.

Obviously, no one wants to deal with the costly and messy aggravation of a pipe burst. To avoid this nightmare, take the proper measures to protect your pipes and your home. However, it’s also important to ensure your family is prepared to act swiftly and smartly if a pipe does rupture.

Worker Found Eligible for Compensation from Seizure Related Injury

In an August 2006 ruling, Connecticut’s Supreme Court ruled that the claimant in the case of Michael G. Blakeslee Jr. vs. Platt Brothers & Co, who was injured when co-workers tried to help during a seizure, is entitled to workers’ compensation benefits. Typically, workplace injuries caused by a seizure wouldn’t be eligible for compensation because the injuries arise from the medical condition itself and not from conditions in the work area. In the Blakeslee case, the claimant received two dislocated shoulders on February 13, 2002, when three co-workers tried to restrain him during his seizure. He had fallen near a large steel scale, and then started flailing his arms and legs as he regained consciousness.

The claimant filed a workers’ compensation claim contending that because the actual injury resulted from the restraint, and not the seizure itself, the shoulder injuries should be covered. The claimant argued that an injury received during the course of employment is eligible for compensation even if infirmity due to disease originally set in motion the final cause of the injury. The claimant also asserted that an injury inflicted by a co-employee is eligible for compensation, unless the injured employee engages in unauthorized behavior or the injury is the result of an intentional assault.

Initially, a workers’ compensation commissioner decided that Blakeslee was not entitled to workers’ compensation benefits. The commissioner determined that the claimant’s injuries resulted from a chain of events set off by a grand mal seizure unrelated to his employment. A workers’ compensation review board agreed with the finding. The review board stated that there is a prerequisite requirement for eligibility for compensation, which the claimant overlooked. The cause of the injury must arise out of the employment and work conditions must be the legal cause of the injury. The review board contended that the claimant’s seizure caused the need for first aid, which caused the injury. There was no element of the claimant’s employment involved.

Five out of seven Supreme Court justices reversed the board’s ruling. They were not persuaded by the argument posed by Platt Brothers, and the employer’s insurer, Wausau Insurance Co., that finding for the defendant would be in direct opposition to public policy because it would prevent employees from assisting co-workers in future medical emergencies. The majority noted that the co-workers restrained Blakeslee to keep him from harming other employees as well as himself. Their actions benefited the employer. The action was directly related to the employment and would therefore be eligible for compensation.

The two dissenting justices argued that the Supreme Court should not have accepted review of the case.

Renter’s Insurance – A Small Investment for a Potentially Large Benefit

If you’re currently renting a house or apartment, you should strongly consider an investment in renter’s insurance. No one likes to think about the possibility of a fire or a burglary, but these are real possibilities. 

Burglars can break in while you’re away and steal your computer, entertainment system, jewelry, and other valuable items. Without renter’s insurance, you will have thousands of dollars in out-of-pocket costs to replace the stolen items. By contrast, if you have renter’s insurance, you will promptly receive a check that covers either the replacement costs for the stolen items or the current value of the items-depending upon which type of insurance policy you’ve purchased.

Maybe you believe there is little risk of a burglary in your geographic area, but what about the risk of fire? Fires strike randomly and can begin in electrical wiring over which you have no control. It’s unpleasant to contemplate, but you could come home to find that everything you own has been destroyed. With renter’s insurance, you would have a check in hand quite soon to begin refurnishing your life.

Yet another scenario for which renter’s insurance can be of enormous benefit is personal liability. If a visitor is injured in your home, for example, by falling down the steps, you could be liable for her medical bills. Renter’s insurance would cover this liability.

Some renters are under the impression that their possessions are covered by their landlord’s insurance. This is rarely true. Typically, the landlord’s insurance covers loss or damage to his property, not yours. Your landlord’s insurance also covers his liability in case anyone is injured on the property, though not always injuries inside your apartment.

Most renters can get comprehensive coverage for a few hundred dollars per year, depending on where they live. Considering the risks covered by renter’s policies, this is a low cost for the potential benefits.

Before speaking with an agent about renter’s insurance, look around your house or apartment and take an inventory of items you would need to replace in the event of a catastrophe. Take note of high value or difficult to replace items such as antiques, furs, jewelry, or expensive art. Before you get a policy or immediately thereafter, you should record information on all your high value items, including details about the make, model, serial number, age, and costs (both purchase and current replacement). It may also help to have photos of these items for identification purposes.

A basic policy usually pays only for the actual cash value of your items at the time they were lost. In other words, they would be valued not at what you paid for them originally or what it would cost to replace them, but at their actual value as used items. So a 3-year-old computer would be covered for its initial cost minus depreciation. Since computers depreciate quickly, yours may be worth little by the time it’s 3-years-old, so your insurance proceeds will be limited.

If you have expensive items like electronics that are subject to depreciation, you should consider replacement cost coverage. With this type of policy, you would be reimbursed for the current cost of buying a new equivalent item. Thus, in our example of the $2,000 computer at 3-years-old, you would receive a check that would enable you to buy a new computer. Of course, replacement cost coverage is more expensive. It’s up to you to decide which type of coverage-actual value or replacement cost-best fits your needs and budget.

Like most other insurance policies, your renter’s policy will have deductibles. A deductible is an amount of loss you will have to absorb yourself before receiving any money from the insurance company. For example, let’s say you have a policy with a $500 deductible. You have cameras you bought for $2,000 several years ago. If you have replacement cost coverage and the cameras are lost in a fire, you would receive a check for $1,500 from the insurance company. Of course, you can lower your insurance premium by accepting a higher deductible, but this means if there is a loss, you must absorb more of it from your own pocket.

Renter’s insurance usually does not cover damage from floods or earthquakes, but you may be able to get endorsements for these and other “acts of God.” An endorsement extends the perils covered by your policy. Obviously, you must pay an extra premium for the extra coverage.

Be sure to discuss any special high value items, such as antiques, furs, and jewelry with your insurance agent, since you may need extra coverage for these.

As mentioned, a basic renter’s policy includes liability coverage should someone be injured in your rented home or apartment. As with car insurance, there is a per-incident limit on this coverage, and you should make sure this is high enough to protect your assets.

Perform Lockout/Tagout Safety Measures While Servicing Machinery

As one of approximately three million workers who service and maintain equipment, you need to know how to prevent the serious risks of unexpected machinery startup or the release of hazardous energy.  While the risks are significant, by following OSHA’s lockout/tagout safety standards, an estimated 50,000 injuries can be prevented each year. 

Hazardous energy comes in multiple forms which include; the kinetic or mechanical energy of moving parts, potential energy stored in pressure vessels, gas tanks, hydraulic or pneumatic systems, electrical energy from generated electrical power, static sources or electrical storage devices such as batteries, high or low temperature thermal energy from mechanical work, radiation, a chemical reaction and electrical resistance.

While performing installation, maintenance, service or repair work near or related to hazardous energy sources these factors can lead to a dangerous situation and, are preventable:

–        The failure to completely de-energize, isolate, block, and/or dissipate the hazardous energy source,

–        Failure to lockout and tagout energy control devices and isolation points after the hazardous energy source has been de-energized, and

–        Failure to verify that the hazardous energy source was de-energized before beginning work.

Our OSHA-compliant hazardous energy control program helps to promote a safe working environment for employees.  The central goal of the program is to help you know how to identify at-risk tasks and conduct appropriate methods for controlling hazardous energy.

Our safety program is very comprehensive and includes the following general safety measures.  Safe work practices must begin before work commences and be applied at every step.  All sources of hazardous energy must be identified, labeled and then de-energized and dissipated, and all energy-isolating devices must undergo lockout and tagout to prevent startup and blocking.  We have developed the specific method of energy control based on the form of energy involved.  Workers must verify, using appropriate testing equipment, that all energy sources are de-energized before work begins. 

After work is complete, a designated individual must inspect the completed work to verify it was performed correctly using the correct replacement parts and that all personnel are clear of danger points before re-energizing the system.  Re-energized equipment should be closely monitored for several operating cycles.  The lockout/tagout program requires individually assigned locks and keys to secure the energy control devices.  Locks and tags must be removed only after workers have been cleared from the danger points and only by the workers who installed them.

Hazardous energy is a powerful force, however when diligently following our lockout/tagout safety program a safe working environment is created for all employees.

When Should You Get Car Insurance for Your Teen?

As soon as they start learning to drive, whether they are starting with a learner’s permit or going straight to the license, you should inform your insurance company to have them added to your policy.  This is usually much more cost-effective than placing them on their own policy, especially if you are a safe driver with a clean record.  They will also be eligible for more coverage under your policy.

Statistics show that teens are more prone to accidents than those in other age groups, so starting out with the right amount of coverage is extremely important.

When your child goes to college, unless they are taking a car with them, you will probably want to switch them to “occasional drivers” under your policy.  Some other considerations:

·   You may qualify for a multi-policy discount if your child’s car is covered under your policy.

·   You may also qualify for a discount during the time your child is away at college.

·   Encourage your child to earn good grades, and take a driver training course.  Some insurers discount due to good grades, and for completion of training courses.

·   Serve as a good role model; your child will learn by example, so it is important to demonstrate good driving habits early on (i.e. not talking on the phone, using seatbelt, not drinking and driving.)

The Number of Uninsured Drivers Continues to Rise

Here’s a sobering statistic you might not be aware of: nationwide, when a person is injured in a car accident, the odds are about one in seven that the driver that caused the crash is uninsured. According to a recent Insurance Research Council (IRC) study, the estimated percentage of uninsured drivers rose from 12.7% in 1999 to 14.6% in 2004. The IRC studied data provided by eleven insurance carriers, which represents approximately 58% of the private passenger auto insurance market in the United States.

Uninsured Motorists, 2006 Edition looks at trends in the percentage of uninsured drivers by state from 1999 to 2004. In 2004, the five states with the highest uninsured driver estimates were Mississippi with 26%, Alabama with 25%, California with 25%, New Mexico with 24%, and Arizona with 22%. The five states with the lowest uninsured driver estimates were Maine with 4%, Vermont with 6%, Massachusetts with 6%, New York with 7%, and Nebraska with 8%.

The researchers estimated the number of uninsured drivers by using a ratio of insurance claims made by persons who were injured by uninsured drivers to claims made by persons who were injured by insured drivers. The study also includes recent statistics broken down by state on the frequency of claims made by uninsured motorists, the frequency of claims of bodily injury, and the ratio of uninsured motorists to bodily injury claim frequencies.

Given these statistics, it’s a good idea for people to protect themselves in case they are in an accident with someone with either no coverage or not enough coverage. That’s why the insurance industry developed Uninsured Motorist Insurance and Underinsured Motorist Insurance. Requirements for carrying this coverage differ from state to state. However, in general, states that are considered “no fault” auto insurance states mandate both types of coverage.

Uninsured Motorist insurance protects you when the other driver has no coverage. In order for your Uninsured Motorist coverage to help, the uninsured driver must be the person responsible for causing the accident. The types of coverage provided under this policy include:

·        Uninsured Property Damage: Covers you when the insured vehicle sustains property damage, but the at-fault driver has no insurance.

·        Uninsured Motorist Bodily Injury: Covers you, the insured members of your household and your passengers for bodily/personal injuries, damages or death caused by an uninsured at-fault driver. If you get into an accident in which the at-fault driver has no insurance, your policy will pay your medical expenses, up to the stated limits of your policy.

Underinsured Motorist insurance protects you when you are in an accident with a driver who does not have enough liability coverage. Again, this coverage only helps if the underinsured driver caused the accident. The types of coverage provided under this policy include:

·        Underinsured Motorist Property Damage: Covers you when the insured vehicle sustains property damage, but the at-fault driver is covered by a policy with a liability limit insufficient to cover all the damages.

·        Underinsured Motorist Bodily Injury: Covers you, the insured members of your household and your passengers for injuries, damages or death caused by an at-fault driver whose insurance is insufficient to cover the entire expense. If you have an accident with a driver whose policy limits are too low to pay all your damages, your policy will pay the difference up to the stated limits of your policy.

If you haven’t reviewed your insurance coverage recently, talk to your insurance agent to review any gaps in your coverage. You may be putting yourself and your family in greater risk than you realize.

Strategic Loss Prevention Practices Help to Prevent Cargo Theft

Although you may not hear much about it on the evening news, according to the FBI, cargo theft is on the rise and represents a threat to both our economy and our national security.  Over the past five years, criminals involved in this type of activity have become more sophisticated, and more violent, in their methods. Due to this uptick in criminal behavior, the price tag associated with cargo theft is increasing.  In fact, the Major Theft Unit in the FBI’s Criminal Investigative Division estimates that cargo theft costs U.S. businesses up to $30 billion a year. Such estimates may not present an accurate scope of the problem because businesses are often reluctant to report thefts out of concern for their reputations or because they fear insurance premiums will increase.

Although there is no magic bullet that guarantees you will never experience a cargo theft, there are steps trucking companies can take to reduce the risk.

  • Fence the entire physical premises of lots to make entry difficult. There should also be closed-circuit cameras, alarm systems and guards who monitor the surveillance cameras.
  • Place high-security locks on trailer doors and air-brake lines.
  •  Use GPS systems and other technology to track trucks and cargo.
  • Check the driving records and criminal backgrounds of all new drivers as part of your pre-employment screening process.
  • Work with your insurer to identify routes with a lowered possibility of cargo-theft.
  • Require drivers to drive at least 4 hours before their first rest stop. If a thief was close behind, they may lose interest while waiting for the driver to stop.
  • Ask drivers to notify their dispatcher prior to stopping. After they pull over, they should be sure their engines have been shut off so that waiting thieves can’t drive away easily while they are inside the rest stop.
  • Develop reciprocal agreements with clients to allow your drivers to park loaded trucks at the clients’ secured facilities while en route. You can also establish this kind of agreement with other trucking companies.
  • Place bills of lading in a secure location and designate a single person to control their distribution to the drivers. Bills of lading reveal details about what a truck is hauling. If a driver is working in collaboration with thieves, he can look at a bill of lading and tell thieves what cargo is being shipped, when it is due to leave, and the number of the trailer in which it will be packed. 
  • Never make a truck’s trailer a billboard for what is inside. While you may be promoting your products on the trailers to generate new business, you are also advertising the contents to cargo thieves.

Cargo theft may be a reality of the trucking industry, but you don’t have to assume that it is an inevitable cost of doing business. You can reduce your vulnerability if you follow these common sense precautions to make thieves work harder to steal your valuable freight.

Don’t Get Stuck Paying for Costly Storm Clean-Ups

Following a damaging fire, thunderstorm, hurricane, tornado, ice storm, or other disaster, one of your first concerns will be the structural damage your home has suffered and how to repair and restore it back to its original condition. In most cases, your homeowner’s insurance policy will pay for the labor and materials to repair your home and for you to temporarily live somewhere else while your home is uninhabitable.

But, what about the mess that the disaster has left behind? You may have anything from destroyed furniture and appliances to soaking wet insulation and lumber that must be cleaned up and disposed of somehow. Of course, this certainly isn’t an expense or a task that a homeowner wants to be worried with after a disaster. The good news is that your insurance policy may also pay for the expensive cleanup and disposal process.

A typical insurance policy will cover a reasonable expense for you to remove the debris from your property, but the damage must be caused by one of the causes of loss that your insurance policy insurers against. For example, let’s say your insurance policy covers fire and a fire has damaged your master bedroom, closet, and entry hallway. In the process, your clothes and bedroom furniture were also destroyed by a combination of fire, smoke, and water. Since your insurance policy covers fire, it will also pay for all your belongings and building materials destroyed by the fire to be removed from your property. On the other hand, do keep in mind that most typical insurance policies don’t cover losses caused by earthquakes. Depending on your insurer, this coverage may be added for an additional premium.

The cost of debris removal is included in the insurance amount covering your home, but if the amount of home damage and debris removal exceeds what your policy will pay, most policies will usually provide an additional amount for you to remove the debris.

A typical policy will also cover the cost to remove fallen trees on your property. The amount is usually up to $1,000 for multiple fallen trees and up to $500 for a single fallen tree. However, the coverage only applies with certain circumstances. Removal of fallen trees owned by you, the policyholder, are usually covered if they fell as a result of a windstorm; the weight of snow, sleet, or ice; or a hail storm. Removal of a neighbor’s tree that has fallen on your property is usually covered if it fell from fire; wind and hailstorms; vandalism; the weight of snow, sleet, or ice; and such. The fallen tree must have damaged a structure that is already covered by your policy, such as your home, fence, garage, or porch, for the coverage to pay for the removal. There are a few limited exceptions to this rule, such as if the fallen tree is blocking the driveway to the home or a handicapped person’s accesses to the residence. Otherwise, a fallen tree on your property will be your financial responsibility to remove.

Keep in mind that homeowner’s insurance policies can vary from insurer to insurer. Be sure to review your policy carefully to make certain you have the extent and amount of coverage you need. Don’t forget to confirm that you have enough insurance to cover both repairs and removal. If any of the provisions in your policy aren’t perfectly clear to you, then you should ask your insurance agent to thoroughly explain it. If your agent can’t explain your policy to your understanding, then it might be time to look elsewhere for coverage.