Tips for a safe and enjoyable holiday season

To start your holiday season, here are some highlights from our blogs with tips for shopping safely – both in the store and online – for keeping your home and property safe and for protecting your family during the holidays. 

With the holiday season fast approaching, many of us will be out shopping and enjoying the festivities. In this joyous atmosphere, we also need to be aware of our surroundings and develop a safe routine because unscrupulous individuals may be out to take advantage of our festive mood.

Tips to reduce risk when shopping online

Cyber Monday, the Monday after Thanksgiving, has become the biggest online retail shopping day of the year. In 2012, Cyber Monday shoppers racked up $1.46 billion in sales, a new online record, according to comScore. Because of the explosive growth each year in online holiday sales, shoppers need to be extremely diligent in making digital purchases. Scammers with fake websites and emails are lurking out there to separate you from your money. Your identity is also at risk.

Choose your card wisely to protect your money
Many people find it convenient to use credit or debit cards rather than carry cash or write checks for each purchase. Recent headlines concerning account information breaches should be of concern to card users. Important differences between credit cards and debit cards may affect your decision about which to use for your purchases.

‘Tis the season for giving…and insuring
The holidays provide us with good reasons for presenting special – and often valuable – gifts to our loved ones. In the excitement of surprising someone with a gift that makes a big impression, remember that properly insuring expensive gifts can bring you peace and joy long after the holiday season is over.

A gift of prevention keeps the holiday memorable
You want your holidays to be memorable, but for the right reasons. Help ensure your holiday is safe and happy by observing these simple – but essential – tips to help safeguard your loved ones and belongings.

 

 

Housekeeping tips to prevent dryer fires

Could you live without your clothes dryer? For many people, the clothes dryer is indispensable, but an improperly installed appliance could easily catch on fire.

 

According to the U.S. Fire Administration, fire departments respond to roughly 2,900 clothes dryer fires each year, with an estimated $35 million in property damage. The leading cause of these fires was the failure to properly clean the dryers (34 percent), followed by dust, fiber and lint (28 percent) and clothing (27 percent.)

Try these easy tips to keep your dryer in good shape:

  • Have your clothes dryer professionally installed
  • Clean the lint filter before and after each load of laundry
  • Clean lint out of the vent pipe every six months
  • Replace coiled-wire foil or plastic venting with rigid, non-ribbed metal duct
  • Inspect the venting system behind your dryer for restrictions, and make sure the outdoor vent flap opens when the dryer is operating
  • Keep the area around the dryer free of items that can burn
  • Don’t overload the dryer
  • Don’t dry items made of foam, rubber or plastic
  • Have a professional inspect gas dryers annually to assure that supply lines and connections are intact and free of leaks

A clothes dryer that is not working properly has an increased risk of catching fire. Signs your dryer might need service:

  • Clothes are taking longer than one cycle to dry
  • Clothes come out hotter than usual
  • There is no visible lint on the lint trap
  • Dryer repeatedly stops during a cycle
  • The top of the dryer is hot to the touch while running

Ready for snow? Clear the path

Ready for snow? Clear the path 

As a property owner, you want to do whatever you can to welcome visitors to your home or business and keep your family, employees and customers safe. Snow and ice on walkways, roadways, driveways and parking lots can present extra challenges during winter months.

Have a plan to stay ahead on snow and ice removal to minimize slips, falls and automobile accidents outside your home or business. Also protect against slip and fall hazards in interior vestibules, entrances and walkways by removing water, placing rugs or adding signage. You may want to contract with a commercial snow removal service for larger properties or businesses.

AT YOUR BUSINESS
  • Create a snow removal plan that involves your staff, a contractor or a combination of the two to remove water, ice and snow.
  • Maintain adequate supplies of snow-melt chemicals and sand.
  • Mark all encumbrances and obstructions that may not be visible to snow-removal equipment.
  • Identify emergency equipment such as fire hydrants, standpipes and post indicator valves – cast iron vertical indicator posts designed to operate the control valve of an automatic fire sprinkler system.
  • Contract with a snow removal firm if your employees are not capable of adequately removing snow. Make sure the snow removal company has appropriate insurance coverage and adds you as an additional insured under its policy. .
  • Consider how you’ll remove snow accumulation from the roof. Will it be done by employees or by a contractor? If a snowblower is used, be sure to set the height of the snowblower shave plate high enough to prevent damage to underlying roofing material.
AT HOME
  • Be aware of local regulations about clearing sidewalks. Some communities have snow removal ordinances that require homeowners to remove snow within a specified time period (often 24 hours) from the part of the city sidewalk that adjoins their property. Homeowner and condo associations also may have specific rules about snow removal.
  • Take care when shoveling to protect your back. Occupational Safety and Health Administration guidelines suggest pushing snow rather than lifting it whenever possible and taking frequent breaks to avoid frostbite or exhaustion.
  • If you use a snowblower, protect yourself and others from carbon monoxide dangers. Don’t try to clear clogs by hand. Consult the Consumer Product Safety Commission’s Snow Thrower Safety guidebook.
  • You may choose to salt your sidewalk, driveway or parking areas for safety. If you are concerned about environmental effects of salt, the Utah State University Cooperative Extension Service has a guide to deicing compounds and environmentally friendly alternatives.

When is A Vehicle Considered a Total Loss?

When and whether a vehicle involved in a collision is considered to be “totaled” for first-party insurance purposes is an issue of great angst and confusion for most consumers. We hear horror stories about older, functioning automobiles being “totaled” simply because the frame is bent or other seemingly minor and hidden damage occurs. Even insurance professionals can get turned around navigating the maze of rules and regulations regarding the act of “totaling” a vehicle under a policy. But it needn’t be all that complicated. This article will hopefully help take the guess-work out of when a car can be “totaled.”

Typically, cars are considered to be “totaled” when the cost to repair the vehicle is higher than the actual cash value (ACV) of the vehicle. Practically speaking, however, it is not always practical to repair a vehicle, even if the cost of repair is less than its ACV. A vehicle worth $4,000 requiring $3,000 in repairs might be considered “totaled” by an insurer even though the cost of repair is less than its value before the accident. Insurance companies will typically consider such a vehicle to be a total loss, even though the repairs are only 75 percent of ACV.

While the procedure varies slightly from state to state, the insurance company will typically take ownership of the totaled vehicle (known as “salvage”) and may obtain a “salvage title” for the vehicle. After it pays it’s insured the pre-loss ACV of the vehicle and forwards the certificate of ownership, the license plates and a required fee to the Department of Motor Vehicle (DMV), the DMV then issues a Salvage Certificate for the vehicle. In some cases, the vehicle is repaired, re-registered with the DMV, and then classified as a “revived salvage” or “salvaged” vehicle. Of course, if the insured wants to keep the “totaled” vehicle, the insurance company will deduct the value of the salvage from the claim payment.

The criteria for deciding when a car is a total loss and when it can be repaired vary from insurance company to insurance company and might even be dictated and controlled by state statute or regulation. Further complicating the issue is the fact that insurance companies do not all use the same sources for determining the value of a vehicle. The threshold used by your insurance company to make this determination can be discovered by calling your insurance agent. Insurance professionals, on the other hand, have to be familiar with these rules, criteria, and thresholds in all 50 states.

In determining whether a vehicle is totaled, insurance companies will calculate the total loss ratio (cost of repairs/actual cash value) and then compare this ratio to limits set either internally within the company and/or regulated and established by state law. It is also sometimes referred to simply as the damage ratio. Some states dictate how high this damage ratio needs to be in order to be able to declare a vehicle a “total loss” and be eligible for a salvage title or certificate. This is referred to as the Total Loss Threshold (TLT). In order to total a vehicle, the total loss ratio must exceed the established percentage. If the TLT is not dictated by the state, an insurance company will usually default to something known as the Total Loss Formula (TLF) which is:

Cost of Repair + Salvage Value > Actual Cash Value

If the sum of the first two quantities is greater than the ACV, the car can be declared a total loss. As an example, a damaged 2002 Toyota Echo with 185,000 miles in good condition has an ACV of approximately $2,800. Total repair costs are estimated at $2,000, for a damage ratio of 72 percent. This car would be considered a total loss in Arkansas, where the TLT is 70 percent, but not in Florida where the TLT is 80 percent. In Illinois, the TLF would be used and, if the salvage were worth $700, the car would not be totaled ($2,000 + $700 < $2,800). Of course, states utilizing the TLF rely on and defer to the judgment and opinions of licensed appraisers. Individual state laws provide the following with regard to the TLT:

States frequently dictate this TLT as part of legislating salvage titles. As an example, in Wisconsin, § 342.065(1)(c) reads as follows:

(c) If the interest of an owner in a vehicle that is titled in this state is not transferred upon payment of an insurance claim that, including any deductible amounts, exceeds 70% of the fair market value of the vehicle, any insurer of the vehicle shall, within 30 days of payment of the insurance claim, notify the department in writing of the claim payment and that the vehicle meets the statutory definition of a salvage vehicle, in the manner and form prescribed by the department.

Many states have exceptions to these rules for older vehicles which tend to complicate the issue. Typical policy language regarding total losses is as follows:

We will pay the cost to physically repair the auto or any of its parts up to the actual cash value of the auto or any of its parts at the time of the collision. The most we will pay will be either the actual cash value of the auto or the cost to physically repair the auto, whichever is less. We will, at our option, repair the auto, repair or replace any of its parts, or declare the auto a total loss. If, the repair of a damaged part will impair the operational safety of the auto, we will replace the part.

Understanding the procedure behind declaring a vehicle a total loss isn’t always a prerequisite for successful subrogation. But there are occasions when the third-party tortfeasor and its liability carrier or attorney will question the amount of damages you are looking to subrogate. In such instances, a working knowledge of this area of insurance becomes indispensable.

 

 

Rate Cut Included in Michigan Car Insurance Plan

House Republicans are proposing a revised overhaul of Michigan’s auto insurance system and to guarantee a 10 percent cut in premiums for two years.

The plan unveiled Thursday does away with unlimited medical benefits for people catastrophically injured in car accidents.

Most drivers could instead buy $10 million in personal injury protection, and proponents say nobody should reach the cap.

Low-income motorists could pick a cheaper option covering up to $50,000 in medical expenses. Motorists’ health insurance or Medicaid could pay for treatment when caps are hit.

Gov. Rick Snyder helped unveiled a proposal to cap medical coverage at $1 million last April, but the legislation stalled.

Michigan is the only state that offers unlimited medical benefits for catastrophic injuries and rehabilitation. It costs motorists $186 a year.

Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed

WC Rates on Downward Trend

Workers’ compensation rate decreases are encouraging, but may not translate into lower prices for employers right away.

Workers’ compensation rates are finally beginning to reverse an upwards trend. Fifteen out of 20 rate and advisory loss cost filings submitted by the National Council on Compensation Insurance (NCCI) so far this year have displayed decreases. Nine out of 10 filings submitted in the risk assigned market have also reflected decreasing rates.

“It really is a fascinating dynamic,” said Eric Silverstein, risk management leader at Lockton’s Dallas office. “We’re getting close to a tipping point where, if you look at the number of states that have passed through rate decreases, it’s getting close to a majority.”

Those decreases, however, may not translate into lower prices for employers right away.

“At our annual conference, we use certain buzzwords. A couple years ago, we said the numbers were ‘conflicted.’ Last year we called them ‘encouraging.’ This year they are ‘balanced,’” said Peter Burton, senior executive for state relations at NCCI.
Rate changes in NCCI-rated states range from an increase of 6.8 percent in D.C. to a decrease of 10.4 percent in Kansas. While a handful have posted increases or no change at all, the majority will propose rate reductions going into 2015.

“Florida just went down 2.4 percent. Oklahoma has significant reform and was down about 15 percent,” Silverstein said. “So it will vary by state and by class code within each state as well.”

“However, that doesn’t necessarily reflect into price decreases for all buyers,” he said. “Insurers have a certain amount of flexibility in their underwriting process, and they won’t necessarily use that filed rate, depending on what the particular state regulations are.”

The price that companies ultimately end up paying will be determined by their respective risk profiles. Those with positive profiles will reap the benefits of the decreased rates, while those with poor risk profiles could end up paying more.

Regulators, Silverstein said, file their rates based on results from preceding years, but insurers will ultimately price their products to anticipate future fluctuations as well.

Nonetheless, the rate decreases are encouraging signs of a softening and more competitive workers’ comp marketplace.

Economic and Market Forces

The improving economy is partly to thank. Rising employment means bigger payrolls and bigger premiums. $42 million in workers’ comp premiums have been written this cycle, which runs from July 1 to the end of next June, according to Burton.

“This is the third year in a row it’s gone up,” he said.

Good underwriting results have also contributed, as well as a decline in injury rates. According to the Bureau of Labor Statistics, “No private industry sector experienced an increase in the rate of injuries and illnesses in 2012.” The injury and illness incidence rate for 2012 was about 3.4 cases per 100 full-time workers, which “continues the pattern of statistically significant declines that, with the exception of 2011, occurred annually for the last decade.” According to Burton, some states have seen injury rates fall by as much as 58 percent.

“The frequency of loss is down,” Silverstein said. “We experienced that with our clients, and it’s now being recognized by the rating agencies.” As the economy improves, however, frequency could potentially climb up again alongside rising employment rates.

Medical and indemnity cost increases are also slowing down, contributing to the trend. Medical costs have risen an average of three percent, down from seven percent increases in past years; indemnity payments have risen only two percent, down from consistent five percent increases over the past 10 years.

The growing popularity of closed formularies could also be contributing to reduced medical costs, Silverstein said. Closed formularies deny coverage for any drugs not included in the program, such as brand name prescriptions for which cheaper, generic versions exist. Early results from states that have adopted them show reduced costs associated with prescription drugs.

“We have another 16 filings to go, and they could be different,” Burton said. “Every state is its own microcosm. But predominantly we are seeing decreases.”

Non–NCCI rated states are witnessing the same trend.

In April, the Pennsylvania Department of Insurance and Labor & Industry announced a 5.15 percent workers’ compensation rate reduction.

Pennsylvania Insurance Commissioner Michael Consedine said in a press release, “As a result of this action, we estimate that Pennsylvania employers will experience annual savings in workers’ compensation insurance costs of approximately $140 million.”

This is the third time the state has reduced rates since 2012, saving approximately $410 million for employers. Consedine called this a “very positive trend.”

In California, the Workers’ Compensation Insurance Rating Bureau (WCIRB) governing committee voted on Sept. 4 to reduce the rates originally recommended in its mid-August Pure Premium Rate Filing. The vote was based on the WCIRB Actuarial Committee’s review of new insurer experience complied in late June which shows “lower than anticipated loss development in the second quarter and some moderation in the 2013 indemnity claim frequency growth,” according to a statement from the Bureau.

The amendment to the filing proposes premium rates that average $2.77 per $100 of payroll, down from $2.86 per $100 that was recommended in August. Even with the decrease, however, the new rate is $0.20, or 7.9 percent higher than the overall industry average of $2.57 as of July 1, 2014.

Some states will see much more significant decreases. Oregon’s base rate, for example, will decrease by an average of 5.3 percent next year, on top of a 7.6 percent decline in 2014. Employers will pay an average of only $1.27 per $100 of payroll in 2015, seven cents down from 2014.

As Okla. Insurance Commissioner John D. Doak said, “When employers pay less for workers’ compensation insurance, they can more easily grow their business, hire additional workers and expand local economies.” Over the past two years, Oklahoma has decreased its loss cost levels by about 22 percent.

Katie Siegel is a staff writer at Risk & Insurance®.