Insurance Score, What is it?

When it comes to figuring out what premium an insurance company is going to charge a person to insure them, there are a lot of factors. On a homeowner it depends on the year the house was built, where the home is located, what kind of construction is the house, etc. On auto insurance it was based on age of the driver, type of vehicle, how much you drive the car, what type of limits and deductibles you have, etc.

A number of years ago a new factor was added to this list for both home and auto insurance called insurance score. An insurance score helps insurance companies determine the future likelihood of auto or home claims. The insurance score takes into account two major categories. The first is your past claims history, meaning what claims have been reported and paid by the home and/or auto insurance company.

The second is your financial behaviors. By financial behaviors they mean things like your current outstanding debt, how much credit history you have, how often you pay or not pay bills on time, have you ever foreclosed or declared bankruptcy, how often do you apply for credit card or other loans. It does not factor in, however, your age, race, income level, marital status, etc.

So what does this insurance score do to your insurance premiums? Well, if you have a good insurance score, companies give you a break on pricing because they feel you are less likely to have insurance claims and therefore should be paying less in insurance premiums. If you have a poor insurance score, then they may charge debits to your insurance premium which can then cause your premium to increase. As mentioned earlier, insurance companies feel that if your insurance score is poor then you are more likely to have claims and therefore you should pay a higher premium.

This is great news for those with good insurance scores but bad news for those with poor scores. So, it is important to stay on top of your financial behaviors, not only so you can get a good credit score and better loan rates but also so that you can have a good insurance score and have better insurance premiums. It is important to make sure you monitor your bill paying, keep outstanding debt to a reasonable level and just have a good overall credit history.

One final thought, Fey Insurance Services is not a big fan of insurance scores but it is something that all insurance companies are using. The main reason we are not a big fan of insurance score is that there is no way to inform a customer exactly why their score is what it is. Your credit score is a big factor in determining the insurance score, and it is private information. We prefer methods all parties totally understand. However, as mentioned previously, all insurance companies are filed with the states to be able to use these scores so it is out of our control. We can simply keep you educated on how it can affect you and make you aware of the factor.

Insurance Journal Article on Cyber Liability

On March 5th, 2012 the Insurance Journal published an article called “What Insured’s Should Know About Avoiding Cyber Liability Exposures”.  It was written by Christopher Bomar of  Boomarang Data Backup.  In the article he brings up scenarios of possible insurance claims, where the gaps might be in covering such claims and how to avoid such gaps.  It is a well written article and even has a quote from one of Fey Insurance’s very own, Brian Fey. 

Please take a look at the article as it does a great job of showing the current status of Cyber Liability needs, gaps and exposures.

Article: What Insured’s Should Know about Avoiding Cyber Liability Exposures

Water In Your Basement?

This rain has caused one common phone call for our agency this spring, “I have water in the basement”. Whether it is a home, business or rental property, water has been finding its way into places it should not be; so what better topic to blog about today than water in your basement.

The first question we are asked is whether or not it is covered. This depends on a few factors. The two main factors are the source of where the water is coming from and the type of insurance policy you have. If water is coming into your basement through window wells or other opening in your basement (excluding drains), then that would be considered a flood loss which often is not covered by your normal insurance policy. In fact, even if you had a flood policy it normally doesn’t cover contents located in parts of a building that are underground, i.e. a basement. If the water is gathering in your basement because of a sump pump failure or a backed up drain or sewer than there could be coverage, as long as you meet the second factor which is having the type of policy that covers those things. Rental property policies have the most limiting coverage for water in the basement. The main coverage you need is called “Water Back up of Sewers and Drains” and many insurance companies don’t offer that on rental properties. Commercial building insurance policies have the “Water Back up of Sewers and Drains” endorsement as an optional coverage so it just depends if you purchased that option or not if you would have coverage. Homeowners polices more often than not have the “Water Back up of Sewers and Drains” included in their basic policy but if someone tried to skimp on the premium they may have taken that coverage out.

There are a few tips that we would like to let you know about as far as dealing with such a rainy spring. First, if you don’t go to your basement very often make sure that during this time of year you do take more frequent trips for inspection purposes. If you have a sump pump, check it regularly to make sure it is functioning properly. Also, make sure that drains are clear of anything that might cause blockage.

If you do have the bad luck of finding standing water in your basement make sure to give your insurance person a call. Whether it is covered or not they would have advice as to who to call for clean up. It is a good idea to try and clean the water up as soon as you can since mold can settle in after a few days. Also, if the basement is in a commercial building that stores chemicals of any kind it might be best to stay clear from the water. The water may have caused leaked chemicals to mix and could be harmful.

If you happen to be in the service area of the Metropolitan Sewer District of Greater Cincinnati you are one of the lucky few that could get free help with your water problem. Again, depending on the source of the water, they may take care of the water clean up at no cost to you. Their phone number is 513-352-4900 and their website is http://www.call.msdgc.org/.

Feds urge states to ban texting and talking on the roads

Tuesday, the National Transportation Safety Board (NTSB) announced that in their opinion texting, emailing or chatting while driving is simply too dangerous to be allowed anywhere in the United States. They are urging all states to impose a total ban except for emergincies. Presently, 35 states plus the District of Columbia ban texting while driving, and thirty states ban all cellphone use for beginning drivers. Enforcement is sketchy and no states ban the use of hands-free devices for all drivers. The NTSB says they are seeing increasing texting, cellphone calls and other distractions by drivers in accidents involving all kinds of transportation. It is common for law enforcement officers to immediately request the preservation of cell phone and texting records when an accident investigation begins. While no states ban hands-free use, the NTSB’s recommendation that hands-free use of cell phones be banned, too, will carry much weight with federal regulators, Congress and state law makers.

Flood Insurance Facts (Re post from 11/23/09)

With all the flooding that has occurred as a result of Sandy we thought this might be a good time to re post an old flood insurance blog article that gives a few facts about flood insurance.

Posted November 23, 2009
Flood insurance had its fifteen minutes of fame after the Hurricane Katrina disaster in 2005. During this time period the media was making everyone well aware that flood insurance is not part of your typical homeowner policy. Today that is still the case and with this post I would like to point out a few more facts about flood insurance.
Flood insurance is run through a government program called FEMA (Federal Emergency Management Agency). You can purchase it through insurance agency such as Fey Insurance Services but the backing is from FEMA. Typically it takes 30 days for a new flood insurance policy to go into effect. The one exception would be for a mortgage closing where flood insurance is required. So you need to plan ahead. Hearing about a big rain on the nightly news and calling your agent the next day will not work. Many people think of flood insurance when they think about what is stored in their basement. Flood insurance will only cover things such as furnaces, water heaters, washers, dryers, air conditioners, freezers, pumps and utility connections. Everything else you store down there (old cloths, furniture, carpet, TV, etc) is not covered unless those items are on the first floor of your house and the flood reaches that level.
In some cases flood insurance is required in order to get a loan. If your home or a home you are about to purchase is in a 100 year flood plain (meaning at least once every 100 years your location is under several feet of water) you will be required to purchase a flood insurance policy to close on your loan.

 

To Shovel or Not to Shovel? Here’s the law in Ohio

This is an article posted on “Ohio Insurance Institutes” website:

As far as Ohio law goes, homeowners don’t have a legal obligation to shovel sidewalks due to a natural accumulation of snow and ice, but this doesn’t mean you shouldn’t at least try to maintain them.

In December 1993 the Ohio Supreme Court upheld this law when a guest attempted to sue a homeowner in Franklin County for a slip and fall outside of the homeowner’s house.

In the case Brinkman v. Ross, the court ruled that you are walking at your own risk when Mother Nature calls. The case stemmed from a visit by the Brinkman’s to the home of the Ross’ in February 1989. Ms. Brinkman slipped outside the Ross home breaking her ankle. She sued her hosts in Franklin County Court of Common Pleas. The court threw out the complaint, indicating that it had long been established that Ohio homeowners are not obligated to remove natural accumulations of snow and ice.

The decision was reversed in the court of appeals, saying that if a homeowner knows of a hazardous condition and invites guests to visit, there is an obligation to at least warn them. The case then went to the Ohio Supreme Court where the judgment was overturned.

It’s up to your guests and other pedestrians to assume that due to the nature of Ohio winters, there’s always a risk of a slip or fall due to the natural accumulation of ice and snow.

Local snow removal ordinances

Local municipalities may invoke snow removal ordinances. If your city or township has an ordinance that requires residents to keep walkways free of snow and ice, then you have a responsibility to maintain your sidewalks. Some Ohio cities with snow removal ordinances levy fines for not removing snow in a timely manner while others issue warnings.

However, a local ordinance does not automatically implicate a homeowner if someone slips and falls on their uncleared property.

Examples of local snow removal ordinances/requirements
Below are links to information and/or ordinances for a handful of Ohio communities. The Ohio Insurance Institute suggests checking with your local municipality on any snow removal policies or requirements. Many provide this information online.

• Centerville

• Dublin

• Forest Park

• Fairfield

Host Liquor Liability (Repost)

Over the next several months there will be many reasons for businesses and individuals to host events and parties where alcohol may be served. Businesses will have parties and happy hours to celebrate the holiday season where they will be providing alcohol for employees or customers. Individuals may use the same reason to have friends and family over to celebrate and consume alcohol. Taking my party hat off for just a moment and putting my risk management/insurance hat on, let me discuss something called Host Liquor Liability.

This is a coverage that often is part of a Commercial General Liability (CGL) policy and also included in homeowner policies as long as the individual and/or businesses are not in the occupation of making, selling or distributing of alcohol for money (meaning bars, distilleries, wineries, restaurants, etc. would have a different coverage simply called Liquor Liability). Host Liquor Liability is a coverage to help protect in cases where injuries happen because of alcohol incidents. One common example would be a participant is driving drunk and as a result crashes and injures people in an auto accident. Wherever the drunk driver last consumed alcohol could find themselves facing a lawsuit for injuries that were caused by the driver. They could be pulled into the situation because it was at their event and under their supervision that this driver consumed alcohol and then got behind the wheel intoxicated and drove off.
So here is one key thing about host liquor liability that all your employees, customers and/or friends and family will like to hear: if you are going to have an event with alcohol you are best to give it away. If at your event money changes hands and people are then able to consume alcohol you would have violated the no making, selling or distributing of alcohol for money rule. If you are having alcohol at a charity event the alcohol would have to be donated for the event or have a very good paper trail showing that none of the moneys collected to get in the event went toward the purchase of alcohol. Now, if your event is going to have a cash bar you will need to look into purchasing two items. The first is a temporary liquor license from the state and the second is a Liquor Liability insurance policy. Both of those can be costly and time consuming to acquire so your best bet is to just give it away… and be more popular with your employees, customers, friends and family.

CYBER INSURANCE, PROTECTING DATA & COMPUTER NETWORKS

A risk that is not addressed by many businesses in this era of technology is protecting data.  Whether that data is your own data or that of your clients, it constantly stands at risk of theft or corruption.  We always recommend taking risk management action such as firewalls, strong passwords, management of mobile devices, etc.  However, one other risk management action we recommend is the purchase of insurance that will cover your business for network data breaches, electronic copy write infringements and computer viruses.  We strongly recommend this to businesses that deal with Personal Identifiable Information (PII) which are things like dates of birth, social security numbers, addresses, credit card information, financial information and health information.    

Your typical liability and property insurance policies do not have the type of coverage that best protect your business if you were subject to a cyber-attack or stolen data.  There are specialty policies built to help keep your business going after such claims.

Are you properly insuring your other structures?

Cincinnati Insurance Company Blog by William Maples

There’s more to your homeowner policy than just coverage for the house you live in. It also provides coverage for other structures on your property.

These may include all structures and buildings not sharing a foundation with your house. Most insurance policies provide 10 percent coverage for other structures. For example, if you insure your home for $200,000 an additional limit of $20,000 applies to all other structures. Remember that if you have a total loss, you don’t receive $20,000 for each structure, but $20,000 total for damage to all other structures. A large detached garage by itself can exceed this amount in many cases.
So how do you know you have appropriate coverage?

If you have detached structures on your land, it is best to consult with your local independent insurance agent to discuss options. A pool house, large barn, garage with living space, fence, freestanding deck and stable may fall into different categories, and your agent can help make sure you have the correct coverage to protect you in the event of a total loss.

While the chances of losing all your other structures at one time are small, you want to secure enough coverage to protect your investments. You may need more than the 10 percent standard coverage for appurtenant structures.

Also consider that many different types of structures could qualify for coverage on your policy, and it’s important to select the correct category based on usage. Your agent can advise you on the information you will need to provide to obtain the coverage that’s right for your situation.
A good example is a barn. Barns can be built in many different ways from a variety of materials. By providing accurate information on usage and construction, you can be assured that your property is protected.

If your other structure is being rented, is used for a business or was not reported, you are most likely not adequately insured. Your agent has the expertise to guide you.
Finally, don’t forget to assess how much insurance protection you need for personal property housed in your other structures. For example, a home woodshop in your barn could have valuable equipment you’ll want to protect. Ask your agent for advice.

The best way to look at it is to think of insuring your other freestanding structures the same way you would your home. You want 100 percent coverage for each structure in the event of a loss. Replacement of these structures is typically less expensive than a home, but those costs can add up and represent a significant loss.

Coverages described here are in the most general terms and are subject to actual policy conditions and exclusions. For actual coverage wording, conditions and exclusions, refer to the policy or contact your independent agent.

WSJ Article on Flood Insurance

Wall Street Journal had a very interesting article about flood insurance.   In the wake of all that is going on in the aftermath of Irene, we thought this article would be a good one to share.  As you may recall from our previous posts on flood insurance, it is run by FEMA.  What is going to even make this whole flood topic even more interesting is that the FEMA flood program expires on Sept 30th, 2011 unless the lawmakers decide to continue the program.  Stay tuned.

Click below to read the article:
As Homeowners Dive Into Pool Of Flood Insurance, Caveats Abound