Why “Spending 15 Minutes or Less” Can Hurt You

Buying insurance is one of the most important decisions you’ll make. Who you buy it from can be the difference between devastation and recovery when disaster strikes.
We are grateful that you chose to buy through an independent insurance agent.
Today’s TV and media ads bombard you with the message that purchasing insurance is as simple as grocery shopping. In truth, it’s not. You can’t pick a product off the shelf and be on your way.
Finding the right coverage requires due diligence on your part and ours, something you can’t get from a 15-minute phone call, a celebrity or even a talking lizard.
 
Why do people prefer independent agents?
Consumers feel the difference. Almost 60 percent of consumers who purchased insurance through a direct channel 10 or more years ago reported switching back to an independent agent because they wanted more value, according to a 2013 study conducted by InsightExpress, an independent marketing research firm.
Consumers switched back to an independent agent because they wanted one point of contact to handle their insurance questions and needs. They wanted guidance from an experienced insurance professional, the study said.
That’s what we do. Independent insurance agents represent multiple insurance companies. We are familiar with underwriting styles and have researched the nuances of numerous policies.
 
Risk management is key
We also provide advice on the ins and outs of risk management, meaning we explain coverage options and how having or not having that coverage could impact your entire situation.
Our philosophy is to look at the big picture. We believe your insurance program is there to protect all of your assets. What you choose for one type of coverage, such as auto insurance, can have an impact on all of your assets.
Some competitors will lure you with a lower rate on a single type of insurance, but less coverage. You may think you got a deal, but you could get burned later.
When our clients ask for a quote, we don’t just do the comparison shopping and run the numbers – we strive to find the best coverage and rates for your particular needs.
 
How things go wrong
Independent agents offer a complete package, whereas some competitors are interested in only one piece. For example, they might sell auto insurance and tell you that insurance shouldn’t be “bundled.” Looking at it piecemeal instead of as an entire solution is where we’ve seen clients get hurt.
Imagine you purchased lesser coverage through a company that said they’ll take 15 minutes to save you money on auto insurance. When you signed up, the representative didn’t ask about the value of your home or tell you that your level of coverage should involve looking at the value of your assets. Later, you cause a major car accident. Your auto insurer writes a check that doesn’t cover the victim’s expenses, and with that, the insurer’s obligation to you is over. But this doesn’t cover a hurt passenger’s expenses, so he sues you for $1 million. If your home is your biggest asset, you face losing it and your savings.
 
When you work with an independent agent
In that scenario, we could have helped and suggested umbrella coverage. But with a telephone or online quote, this may not have been an option. Our agency is here for you throughout the life of your policy. We answer questions, handle issues and adjust your coverage as needed. To file a claim, you call us, not an 800 number. We advise you and walk you through the process. Personal attention is part of the package.
Our competitors are at a disadvantage because they sell for a single insurance company and are limited to the options offered by their employer. Bottom line, our competitors represent their insurance company. As independent insurance agents, we represent you. 

Driver Safe Using New Technology

There is a lot of new technology in cars to help keep you safe when driving on the road.  These tech features are only good if you know how to use them when driving.  Here is a video put together by Travelers insurance to help educate you on a few tips.

Water Damage Claims

Water damage is one of the most common reasons people make claims on their home insurance. Ruptured pipes, faulty appliances and backed-up drains often lead policyholders to inspect their homeowner policy wording carefully.

Water damage coverage in the homeowner insurance policy is a confusing subject. Usually, the damage caused by water will be covered, but the item causing the loss, such as a leaky pipe or broken appliance hose, will not be covered. While your insurance company will pay for the damaged flooring from a ruptured appliance hose, it will be the policyholder’s responsibility to replace the bad hose. Parts and appliances wear out and it is not the intent of an insurance policy to cover wear and tear.
Flood, which occurs when a nearby tributary or body of water breaches its banks and flows into your home, is not covered under homeowner insurance. You must purchase flood insurance for that. You can purchase flood insurance as long as your community participates in the National Flood Insurance Program.

Cyber Liability Insurance

As absolute dependence on computers and computer stored information grows there are new ways companies can be sued by third parties for damages.  When private information such as dates of birth, social security numbers, credit card numbers, etc are stolen off of your business’ computer systems, it is called a data breach, and they are very costly to manage.  The insurance industry has calculated this cost to be about $200 per individual whose information was taken.  Also, if a malicious virus is distributed from your computer to a customer’s computer system and causes damage, you could be held responsible for cost to repair their system.  Your basic general liability policies are not designed to pay for such claims so many times when businesses look to their business policies the coverage is not there to help with these expenses.  Because of that, insurance companies have developed a new product called cyber liability.  It is designed to step up and pay for the third party damages caused by your data breaches and damage by viruses to other’s computer system.

So what kinds of business should be looking into this new cyber liability products?  Any business with a computer, especially one that stores or interacts with any private information or distribute emails to others should look into this product.  Restaurants and retail stores that take credit cards, professional business that store dates of birth, driver’s license numbers and social security numbers, even doctors’ offices are at risk for the types of claims mentioned above.  Unfortunately, even if a business has the best firewalls and antivirus software, they still are at risk of data breaches and malicious viruses.  Cyber liability is something designed to help protect your business assets if an unpreventable claim strikes.

Employment Practices Liability

A popular insurance text starts with, “The growth of federal and state legislation dealing with employment discrimination and sexual harassment, the changing legal views on wrongful termination, and the increasing tendency of aggrieved parties to turn to the courts for settlement of such disputes have caused insurers to specifically exclude coverage for such employment-related claims in the commercial general liability policy.”

To fill this gap, a number of insurers are offering employment practices liability (EPL) coverage as an endorsement to the commercial general liability policy or as a stand-alone policy. Independently developed by each company, the EPL coverage forms vary by company, however, most policies are similar in terms and conditions.

EPL policies are usually written on a claims-made basis, which means that for a claim to be covered, it must occur during the policy term. Extended reporting periods from one to three years can be added for an additional premium.

In addition to damages paid for judgments or settlements, the cost of defense is covered. However, it is usually paid from the limit of liability, not in addition to the limit of liability. Most EPL policies specifically cover back pay. Back pay is commonly awarded to successful claimants in discrimination and wrongful termination actions.

Typically, the definition of “insured” in an EPL policy includes the corporation, its directors and officers, its employees, and, in most policies, its former employees. Some policies limit the definition of “insured” to include only managerial employees.

The deductible for this coverage ranges from $1,000 to $250,000, depending on underwriting factors. One difference from other types of policies is that the EPL policy usually requires the insured to participate in losses exceeding the deductible. The amount that the insured contributes after the deductible has been satisfied is based on the “participation rate.” Participation rates are usually 5 to 10 percent, but can reach as high as 25 percent depending on underwriting factors.

Child Booster Seats

The institute for Highway Safety has provided a method to take much of the guesswork out of selecting the proper booster seat for your child. Seat belts are designed with adults in mind- so a child booster seat is an absolute necessity, and extra care needs to be taken when securing young children.

Children usually resist wearing a seatbelt because it is uncomfortable. Boosters elevate children so that the safety belts installed in the vehicles by manufacturers will fit the child better. The booster seat allows the lap belt to fit properly over the child’s thighs and not their abdomen. The shoulder belt should fit across the middle of the child’s shoulder. Not only will the belt be more comfortable, it will provide maximum protection in a crash.

The institute’s researchers used a specially designed test dummy configured as a 6 year old child. The researchers determined the effectiveness of how a 3-point lap and shoulder belt fit the dummy under a range of configurations representing many different automobile models. Based on a range of scores, a booster seat rating was assigned to each seat.

Market Value vs Replacement Costs

Market Value vs. Replacement Cost is something that we in the insurance business discuss a lot with property owners. Depending on the economic conditions there can be a variation between Market Value and Replacement cost. Since the current economic conditions have caused such a discrepancy we at Fey Insurance thought it might be a good time to explain the difference between the two terms.

Market Value is the amount that a house is worth on the real estate market. It is what you can buy or sell the house for. As we sit in the middle of a depressed real estate market, the value of homes is down from years past. When you hear a mortgage company or title company talk about getting an appraisal they are always talking about Market Value because the lending institution is mainly concerned with what they could sell the asset (building) for.

Replacement Cost is concerned with a different valuation of a building. Replacement cost deals with the amount of money it would take to rebuild a structure using the same materials at the same location with the same style of construction. Because this is based on building materials and cost of labor it doesn’t have the large swings that Market Value has. For example, in today’s poor economic conditions, material costs have stayed pretty level meaning the Replacement Cost of a building has stayed relatively flat.

So how do these two forms of valuations play out in numbers? Let’s take an example home that is a brick structure, has four bedrooms/ two baths and is about 2000 square feet. A house like this in our area may be listed on the real estate market for about $250,000 (depending on the school district, location to town, etc) and will probably sell for about $235,000 (which would then be the Market Value). This same structure would have a different value if we used Replacement Cost. In our area the same structure just mentioned would cost about $135.00 per square foot to rebuild if a fire or tornado totally destroyed it. Take the $135.00 per square foot and multiply that by the 2000 square feet and you come up with a value of $270,000 (which would then be the Replacement Cost).

When it comes to banks and lenders they care about Market Value ($235,000 in our example) where the insurance companies, since they will have to pay to have the home rebuilt after a fire or tornado, cares about the Replacement Costs ($270,000 in our example).

So next time you see your homeowner policy or commercial building policy and look at what they are insuring your structure for don’t say to yourself, “I couldn’t sell my building for that” because the amount you are thinking of is the Market Value. Insurance companies are only interested in the Replacement Cost because they want to make sure they are able to rebuild your property and make you just as you were prior to the fire or tornado.

PIAA Takes Lead in Helping Fix Workers’ Comp Exposure for Ohio Employers

PIAA wrote the following article on 6/27/14 with news on the resent Ohio Workers Compensation program.  The article is as follows:

GOVERNOR SIGNS BILL TO PROTECT BUSINESSES WITH EMPLOYEES WHO WORK IN OTHER STATES

Did you know some states do not recognize Ohio’s workers’ compensation insurance coverage? Many Ohio business owners have no idea that they are at risk for compliance audits and fines when their employees travel to other states for business.

As of June 16, 2014, this issue is on its way to no longer being a problem. Gov. John Kasich signed House Bill 493 into law, which offers an insurance coverage solution for all Ohio employers whose employees cross state lines.
 
H.B. 493 permits the Ohio Bureau of Workers’ Compensation (BWC) to enter into an agreement with an insurer to provide limited other-states’ workers’ comp coverage for Ohio employees who are temporarily working in another state. With this arrangement in place, Ohio businesses will no longer have to fear the repercussions of aggressive states like Pennsylvania and Kentucky that do not accept Ohio’s workers’ comp because they require local workers’ comp coverage for all work performed in-state, regardless of whether coverage exists in Ohio.

While local workers’ comp coverage can be obtained in these states, it is not necessarily cost-effective. In addition, obtaining blanket cost-effective out-of-state workers’ comp coverage has been a challenge in the current marketplace where such a product is hard to find. With H.B. 493, this will soon be an issue of the past, as BWC works to create the opportunity to provide guaranteed issue workers’ comp coverage to resolve the problems many Ohio businesses have faced due to other states workers’ comp requirements.

How did this issue surface?
Independent insurance agents throughout Ohio found their trucking, contracting, plumbing and other clients were being hit with audits, fines, taxes and other compliance enforcement actions from border states because Ohio’s workers’ comp insurance was not compliant with the insurance requirements of other states. These compliance issues were putting Ohio businesses at a competitive disadvantage.
The Professional Independent Agents Association of Ohio, of which your agent is a member, created a task force of independent insurance agents who serve a variety of businesses. These agents worked with the Ohio BWC and representatives from other industries, like trucking and contracting, to develop a solution to this problem.

What’s Next?
Now that the bill has been signed into law, BWC will begin the competitive bid process to identify an insurance carrier(s) to provide limited other states’ coverage for Ohio employers who need it.

 
While this process will take some time, the outcome will ensure that Ohio businesses will finally have guaranteed access to a workers’ comp insurance product that provides the type of out-of-state coverage that will protect their business and meet their needs. Furthermore, employers and insurance agents will no longer have the burden of trying to determine all the different workers comp requirements of each and every state where work is performed, since there will be access to a workers’ comp product that is accepted in all states.

Certificates of Insurance

It is good risk management for customers to check and make sure their vendors have insurance. Because of this small business owners are often asked to prove to their customers they do indeed have insurance. When customers ask for proof of insurance what they are often asking for is a form called a certificate of insurance. A certificate of insurance gives the basic information of a business insurance policy. It tells things such as the insurance company’s name, dates the policy covers, name of the insurance agency who handles the policy and highlights the different types of liability coverages the policy has and the limits or amount of insurance in each of those coverages.

Any type of business can be asked to provide a certificate of insurance. Three areas where you see certificates of insurance most commonly asked for are construction and maintenance contractors, businesses that lease space and consultants. The reason that construction and maintenance contractors are often asked to show certificates of insurance are because their customers want to be sure if they cause injury around their premises or damage around their premises that they are covered. Also, many contractors are acting as subcontractors to other construction and maintenance companies. If their subs cause damage or injury they want to be sure they have insurance because if they do not they will then be the responsible ones.

People that lease space are asked for certificates because the owner of the building wants to make sure that if they cause damage to the building they have insurance to put the building back as it was prior to incident that caused damage. They also want to make sure if the person leasing space is responsible for someones injuries while they are visiting the building that they have insurance in place to cover those injuries.

Consultants are asked to provide certificates of insurance in order to meet contract requirements. Often, consultants sign a contract with their customers and in the contract there is always an insurance section that outlines the required coverages they must have. The best way for that customer to make sure the consultant is meeting the requirements is to ask for a certificate of insurance.

So the next time you are asked by a customer to show proof of insurance you will understand that you are being asked for a certificate of insurance. Contact your agent and let them know you need a certificate of insurance. Make sure to provide them with the name and address of the company or individual that is asking you for the certificate.