NAIC REPORTS NJ AUTO PREMIUMS CONTINUE TO DROP BUT REMAIN THIRD HIGHEST IN THE U.S.

DECEMBER 30, 2010 -- A recent article in the Newark Star-Ledger reports that while insurance rates for New Jersey drivers have continued to drop for the fourth year in a row, car insurance rates in the state remain the third highest in the nation. The average annual premium for a driver insured in in New Jersey fell to $1,197 for the last year in which numbers are available (2008), down from $1,227 the year before. Average premiums for NJ drivers typically include liability, comprehensive and collision coverage.

Many auto insurance companies are being creative in how they write policies to protect their customers. It makes sense to talk with your insurance representative to make sure you are adequately covered and whether you can save money on your premiums based on how, when, and how far you drive.

The NAIC (the National Association of Insurance Commissioners) is an organization of the chief insurance regulatory officials of all 50 states, the District of Columbia and five U.S. territories. 

• Here is a link to the complete article in the Newark Star-Ledger:   http://www.nj.com/business/index.ssf/2010/12/car_insurance_drops_but_still.html
•  Here is a link to the NAIC web site: http://www.naic.org/

 

Monitor Your Teen's Driving

NOVEMBER 15, 2010 -- Automobile accidents are easily the leading cause of death for teenagers across America, according to the National Highway Traffic Safety Administration (NHTSA). Drivers (both boys and girls) between the ages of 16 and 19 have the highest average annual crash and traffic violation rates of any other age group. NHTSA data also show that unaccompanied 16- and 17-year-olds crash nine times more often than adults.

Research indicates that young novice drivers tend to underestimate the crash risk in hazardous situations. Teen drivers also tend to take more risks while driving, partly due to their overconfidence in their driving abilities.

One way for parents to reduce their teen's chances of being involved in an auto accident is to use new technology to monitor their driving characteristics and provide appropriate feedback.

A number of "black box" products are now available on the marketplace to facilitate monitoring drivers. These small devices (often the size of a pager and starting at around $280) can be simply installed into the auto your teen drives by plugging them into the Vehicle Data Link Connector (on 1996 and new vehicles). They can detect and record your teen's speed, aggressive driving such as "jack-rabbit" takeoffs, failure to wear a seat belt, unsafe backing techniques, driving locations, monthly mileage, and driving times. Thus, if your teen's curfew is at midnight and they get home at 1:00 a.m., you will know it.

With some of these products, you can simply pop the memory card out of the "black box" and plug it into your PC to display the reports and graphs. You can then review the results with your teenager, providing a great educational opportunity based on solid, technology-driven evidence. Research indicates that this type of monitoring and coaching pays off big dividends in the form of safer teen driving. Numerous companies offer these products in the marketplace, with some of the more sophisticated ones costing upwards of $1,000. A few insurers offer discounts for families who utilize these devices.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2010 International Risk Management Institute, Inc.

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Read the NHTSA's "A Comprehensive Approach to Teen Driver Safety"

HOMEOWNERS MUST PROVE DAMAGE WAS CAUSED BY THE COVERED PERIL

SEPTEMBER 25, 2010 – A recent “Case of the Month” article by Patrick B. Omilian of Goldberg Segalla, LLP, highlights the importance for homeowners of proving which specific damages have been caused by which covered peril, when substantiating a claim with their insurance company.

Property owners usually substantiate the amount of the damage but neglect to provide proof of specific cause of the damage. Attorney Omilian emphasizes that the insured must provide detailed proof that damage was caused by “a specific covered peril” in order to obtain coverage for such damage.

In the specific case, Bayle v. Allstate Insurance Company, No. 09-30161, decided by the Fifth Circuit Court of Appeals on August 11, 2010, the court settled the question of “when a house is damaged by both covered and non-covered perils, who bears the burden of proving which specific damages are covered and which are not?”

The insured homeowners had a home in Louisiana that suffered severe damage from Hurricane Katrina in 2005. Most of the damage was caused by flooding and some was caused by wind.  The homeowners provided Allstate with proof of the amount of the damage. Allstate’s experts, however, explained which damages were caused by flood and which were caused by wind, and their evidence proved persuasive.

In Patrick B. Omilian’ summary of the case, he emphasized that:

“This case reaffirms the principle that where an insured and an insurer dispute the amount of benefits that an insured is entitled to when damage is caused by both covered and non-covered perils, the insured must specifically prove that damage was caused by a covered peril in order to obtain coverage for such damage.”

And he recommended that clients reviewing the terms of their insurance policies should clearly understand “the difference between the wind coverage provided by the homeowner’s policy and the water damage coverage provided by the flood insurance policy…” and that they “should periodically be reminded of the fact that their homeowner’s policy does not cover storm surge or other flood losses.”

* The complete Bayle v. Allstate Insurance Company opinion by the Fifth Circuit Court of Appeals can be found here:

http://www.ca5.uscourts.gov/opinions/pub/09/09-30161-CV0.wpd.pdf

* Attorney Patrick B. Omilian, of Goldberg Segalla, LLP, (in Buffalo, New York) who writes the “Case of the Month” column for IRMI’s Personal Lines Pilot newsletter, can be reached here: http://www.irmi.com/expert/authors/omilian.aspx

LAST WEEK’S STORMS PROVIDE A NECESSARY REMINDER

SEPTEMBER 19, 2010 – New Yorkers and those of us in the tri-state metropolitan area can count ourselves lucky that we only experience tornados and hurricanes upon rare occasion.

But the experience of last week, in which two tornados and a macroburst with wind speeds of up to 125 mph hit our area with literally no warning, should give everyone pause.

Luckily the fatalities were limited. And our sincerest condolences to anyone whose loved ones were killed or seriously injured. The cleanup and restoration of utilities and power continues into this week.

This experience and particularly its suddenness should remind all of us to make sure that our homeowner’s policies provide sufficient coverage in the unlikely event of another tornado or wind storm. Talk to your insurance agent or broker to make sure that you are covered for damage by storm or wind, even if you are in an area in which such a storm is unlikely.

In preparation, make an inventory of your possessions and store it in a safe place, to aid you in filing a claim with your insurance provider.

Our experience of the last week should teach us those lessons.

* Here is a link to the Insurance Information Institute’s Guidelines “In Case of a Tornado” to protect yourself and your family:

http://www.iii.org/articles/in-case-of-a-tornado.html

* And here is a link to the NOAA’s National Weather Service Storm Prediction Center:

http://www.spc.ncep.noaa.gov/products/watch/

ISO Announces New 2011 Homeowners Program

APRIL 16, 2010 -- Insurance Services Office, Inc. (ISO) Announced the Filing of its New 2011 Countrywide Homeowners program, with a proposed May 1, 2011, Effective Date for Most Jurisdictions.

• Liability coverage for certain electric toy vehicles is added via an exception to the motor vehicle liability exclusion. Thus, an off-premises loss arising from a low-power electric toy vehicle (including those designed for small children to sit in and "drive") is now covered.

• An exception is added to the liability exclusion for expected or intended injury losses.  The exception granting BI coverage resulting from the use of reasonable force by an insured to protect persons or property is broadened to now include property damage coverage.

• The replacement cost loss settlement for certain non-building structures on the residence premises (HO 04 43) endorsement is broadened to provide replacement cost loss valuation (previously on an actual cash value basis) for in-ground pools, hot tubs, and therapeutic baths.

• The water back-up and sump discharge or overflow (HO 04 95) endorsement is amended to reinforce that the water backup and sump discharge coverage is limited to water or waterborne material originating from within the insured's dwelling.

Reprinted with permission from www.IRMI.com. Copyright 2000 - 2010, IRMI, Dallas, TX.

ACORD Introduces New Insurance Certificate Forms

Tips for Dealing with the New ACORD Insurance Certificate Forms

December 2009 -- In late 2009 and early 2010, ACORD (the Association for Cooperative Operations Research and Development) introduced new certificate of insurance forms with an effective date of December 2009. The new forms do not contain the pledge of previous forms that the insurer will "endeavor to mail __ days' written notice to the certificate holder." They simply state that "... should any of the above described policies be cancelled before the expiration date thereof, notice will be delivered in accordance with the policy provisions."

Below is a summary of how standard policy notice provisions operate. State laws regarding cancellation sometimes require that the length of the notice be altered somewhat, but they do not generally affect who must be given notice.

• Only the "first Named Insured" of most types of liability policies will be notified of cancellation or intent not to renew.

• Additional Insured under liability policies will receive no notice whatsoever.

• Mortgage holders and loss payees on property policies will be notified 10 days before the insurer cancels for nonpayment, 30 days before it cancels for any other reason, and 10 days before it non-renews the policy.

• No one will be notified if the first Named Insured (rather than the insurer) cancels or non-renews an ISO policy.

This, of course, presents problems for the contracting parties, both for those who want to make sure that insurance is in place and for those who need to show they are complying with the insurance provisions of the contract. It also places agents and brokers in the very difficult position of being expected to provide a service that they are not able to perform.

Unfortunately, there are no perfect solutions to these problems, but here are a few thoughts for mitigating them to some extent:

• Certificate holders might request that the insured vendor, lessor, or contractor ask its insurer to issue an endorsement providing notice of cancellation to the certificate holder. It is unlikely that all insurers will be willing to comply, however.

• Certificate holders could modify their contract with the insured to require that the insured give them immediate notice if the policy is canceled or non-renewed. This has the obvious drawback of depending on the very party who is nonperforming to report the situation.

• For a variety of legal, risk management, and business reasons, agents and brokers should not generally sign manuscript or ACORD certificates that have been modified to include a required notice of cancellation to the certificate holder.

In this age of ever improving technology, it is a shame that the insurance industry cannot or will not develop a workable solution that meets the legitimate business needs of insured, certificate holders, and agents/brokers.

Reprinted with permission from www.IRMI.com. Copyright 2000 - 2010, IRMI, Dallas, TX.

How Will the New Financial Regulations Affect My Insurance Coverage?

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Insurance When You Are Starting Your Own Home-based Business…

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