Dog Bites! Ouch!

I recently came across this article and thought it was pretty interesting. 

One–third of all homeowners insurance liability claims are attributed to dog bites. The Insurance Information Institute states that in 2008 dog bites cost $387.20 million, up 8.70% from 2007. An analysis of homeowners insurance data by I.I.I. found that the average cost of dog bite claims was $24,461 in 2008 down slightly from $24,511 in 2007, but the number of claims has increased 8.89% to 15,823 in 2008 from 14,531 in 2007.  However, the cost of these claims has risen nearly 28% since 2003.

Increased medical costs, size of settlements, judgements, and jury awards are attributable to the rise in cost of dog bite claims.  More than 4.5 million people in the U.S. are bitten by dogs annually, and nearly 900,000 of those - half of them children - require medical care, according to the CDC. In 2006, more than 31,000 needed reconstructive surgery. With more than 50% of bites occurring on the dog owner’s property, the issue is a major source of concern for insurers. A dog owner who is legally responsible for an injury to a person or property may be responsible for reimbursing the injured person for medical bills, lost wages, pain and suffering, and property damage.

There are three kinds of law that impose liability on owners:

1) Dog-bite statute: The dog owner is automatically liable for any injury or property damage the dog causes, even without provocation.

2) “One-bite” rule: In some states, the owner is not held liable for the first bite the dog inflicts. Once an animal has demonstrated vicious behavior, such as biting or otherwise displaying a “vicious propensity”, the owner can be held liable. Some states have moved away from the “one-bite “ rule and hold owners responsible for any injury, regardless of whether the animal has previously bitten someone.

3) Negligence laws: The dog owner is liable if the injury occurred because the dog owner was unreasonably careless (negligent) in controlling the dog.

*Source: Insurance Information Institute. Sept 14, 2009. Avoid Being Bitten With a Lawsuit by Being a Responsible Dog Owner.

How Credit Affects Your Insurance Rates

Before I became an insurance agent, I had no idea that credit could affect my insurance rates.  I guess it's not something most people sit around and think about or even consider, but your credit can be a major factor in determining your rates.  I was given permission to use the following information by my company that you might find interesting. 
How can my credit score benefit me?

The way that you manage your credit is very important. Your credit helps determine such items as your home mortgage interest rate and auto insurance rates. A credit-based insurance score helps insurers to quote the fairest, most appropriate rate for every customer.

If my bank says I have good credit, does that mean I have a good insurance score?

Insurance companies do not look at credit the same way financial institutions do. Insurers only consider items from your credit report that are relevant to loss potential. A financial institution uses credit to assess credit-worthiness.

What factors do insurers consider when determining my insurance price?

Some of the rating factors that influence your premium include:

* age or driving experience
* how your vehicle is used
* driving history
* claims history
* make and model of your vehicle(s)
* geographic location

How does credit affect the price of insurance?
 Most insurers use a credit-based insurance score to predict insurance losses.

Studies show that considering credit creates a more accurate rate. Credit history is being used by a vast majority of insurers today. By predicting potential losses better, insurers can provide a more appropriate rate for each customer.

How do insurers determine this credit-based insurance score?
 Insurers use many factors to determine your score. Some of the more common factors are:

* Payment history (delinquencies or late payments)
* Length of time of credit history (when was your credit history established?)
* Type(s) of credit (credit cards, finance company installments, etc.)

When determining your score, gender, marital status, age, ethnicity, address and income are not considered.

When should you buy Life Insurance?

Life Insurance.  Uhg.  Bo-ring! No one wants to think about it and everyone jokes "What's in it for me?"  When I'm dead and gone what will I care?  Most people just put it off and say they'll get it later, which is usually too late.  We insure our cars and houses, but we over-look insuring the most important asset of all - ourselves!  We buy auto and home insurance for what might happen.  We buy life insurance for what will happen! 

True story:  Recently had a lady contact my office for life insurance.  She's in her 40's with two young sons.  Her husband, also in his 40's, recently had a heart attack and died (how many times have we heard stories like this?).  He had changed jobs and had not picked up the group life insurance offered by the company.  He had no other life insurance.  ZERO.  Needless to say, she was devastated.  Since her husband was the major bread winner, she will be struggling.  She now has a major policy on herself and smaller policies on her two sons.  She wanted to make sure if the unforeseen happened to her, her sons would be taken care of. 

Another true story:  Had a 78 yr old lady call my office wanting a small burial policy ($5000).  No big deal, right?  She was diabetic and had high blood pressure.  I called underwriting and they said no way due to her age and existing medical issues.  She will likely be turned down by most insurers, or if some company will write it, the premiums will be sky high.  She has no money and lives with her daughter.  So when she goes to meet the Lord (hopefully), someone (daughter) will have to come up with several thousand dollars for burial costs. 

So when should you buy Life Insurance?  As soon as possible.  Life insurance rates are based on your current age and physical condition.  Start adding on things like high cholesterol, diabetes, high blood pressure, etc., and the rates start climbing.  If you buy life insurance at an early age and in good health, you lock in the best rates (usually dirt cheap).  Wait till you are 45 and have some medical issues, and you will be paying a lot more for less coverage just to make it affordable.  

One more true story:  I had a young lady in her mid 20's contact me wanting life insurance because she was about to have a major operation.  Married with one young child.  Sorry, couldn't help her.  It is unlikely any company will insure her until after her operation and she has completely recovered.  Kinda like car insurance, you can't have an accident and then go buy auto insurance.  It doesn't work that way.  Plus, if she goes to buy life insurance after the operation, any company will want to know all about the surgery, which will probably result in her getting higher rates, especially if there's a possibility of a reoccurring condition.  

I could go on and on.  I've heard every excuse:  I can't afford it; I'll wait till I lose some weight; I've got enough (hey dude, $25,000 is plenty for my stay-at-home wife and 3 small kids, right?); I'll wait till next year; I'll wait till I quit smoking; I've got it through my job (yes, until you get laid off or change jobs with no benefits, and then you are 50 yrs old with high cholesterol). 

Okay, one more story.  I still laugh about this.  Earlier this year, a lady got out of her car at my office with cigarette in hand.  She stood in front of my office door untill she finished her cigarette, then smashed it out on the ground and came in.  She was in her 50's, over weight, and obviously a tobacco user.  She needed life insurance but quickly bawked at the rate and left.  Let's say she smokes 1 pack a day at $3 a pack (which may be cheap, I don't know).  That translates to $1095 per year, just on cigarettes.  The yearly amount on the life insurance?  About $550.  But, we all have our own priorities, don't we? 

So go ahead and look at your life insurance coverage for you, your spouse, your kids, and talk to your agent to make sure you are properly covered. 

A Liability Umbrella Policy Can Protect Your Ass-ets!

Most people I talk to daily have never heard of an "umbrella" policy, or if they have, they don't know what it is, or they just think it is something that they don't need.  

You work hard, have a nice house, nice cars, investments, savings accounts, in other words, you accumulate assets over time.  An asset is any item of economic value owned by an individual or business, which could be converted to cash.  

So what happens if you get in an accident, you hurt someone, get sued, go to court and a jury awards more to the plaintiff than you have coverage for?  Your insurance company strokes a check for your policy limits and everybody is happy, right?  Not so fast. 

You recall what happened to OJ Simpson and Richard Scrushy after their civil trials?  The jury/judge awarded the plaintiffs large sums of money.  Since there was apparently no cash to settle the judgments, the plaintiffs have a right to seize the defendant's personal property (assets), as well as the ability to collect any future earnings.  

A liability umbrella policy is excess liability coverage over and above your auto and home liability limits, often starting at $1 million, that will help protect your assets in case the unthinkable happens.  A million dollar umbrella policy cost on average about $15 per month, or to break it down even further, about fifty cents per day!  (Cost vary depending on number of cars, age of drivers, at-fault accidents, violations, etc). 

True story that recently happened to one of my policyholders who agreed to let me tell his story:  My policyholder loaned his van to his brother who needed to move some stuff.  His brother rear ended a vehicle on I-285 in Atlanta.  He hit the car in front of him so hard, the lady's seat broke and she was taken by ambulance to the hospital.  About 2 months later, my policyholder got a letter in the mail from the lady's attorney advising that his client had $181,000 in medical bills, and to let him know how he intended to settle the claim.  The amount of bodily injury coverage on his auto policy?  $50,000.  Let's say the case goes to court and the lady is awarded $750,000 for her medical bills, pain and suffering, lost wages, inconvenience, mental anguish, emotional distress, and future rehab.  The attorney has every right to go after my policyholder's (and his brother's) personal assets. 

You might wonder why my policyholder would be liable since his brother was driving.  The titled owner of a vehicle can be held liable for the negligent acts of a permissive driver, and the owner's insurance is primary.  (Think about your kid at college letting his friends drive his/her car titled in your name.  Your kid's friend has a wreck driving your car- YOUR insurance pays!)

I had talked to my policyholder on several prior occasions about increasing his coverage, and the need for an umbrella policy.  He always told me he just didn't see the need.  After this incident, he said he wished he had listened.  Of course, he now has an umbrella policy.

Look into getting an umbrella policy.  Is peace of mind worth fifty cents a day?

Neighbor's tree fell on my property! Who pays?

Well, since it is storming outside tonight, I thought it would be a good time to clear up one of the most common misconceptions when it comes to homeowner's insurance.  I am asked about this all the time. 

Let's say a storm comes through with high winds and your neighbor's tree falls over and smashes your wood fence, the kid's playset, takes out your deck, and part of your roof.  When the storm clears, you go over to your neighbor and politely ask for his insurance information.  After all, it was his tree that damaged my property!  You start to envision that new playset, a new roof, new fence, and heck, might as well expand the deck while we're at it since his insurance will be paying for it, right?  Wrong! 

Sorry to say, but your neighbor's insurance will not be paying for your damage.  You will have to file a claim on your own policy, and yes, your deductible will be applied too.  This kind of occurrence is considered an act of God, beyond your neighbor's control.  Unless your neighbor's tree was dead or rotten, you notified them about the danger it poses to your property in writing and requested they do something about it, they are not legally liable for your damage. 

What is GAP insurance?

Everyone is so excited when they drive that new car off the car lot.  There's nothing quite like that new car aroma.  Problem is, that new car depreciates as soon as you drive off the dealer's lot.  A vehicle is considered a "used" car once the title is transferred from the dealer to the buyer.

So, what if you finance 100% of the cost of a vehicle with no down payment for 60 months or more?  (Don't laugh, this happens all the time.)  In the first few years, your monthly payments are comprised mostly of interest, so the principal is not declining much (kind of like our homes).  If you have a wreck and total your car, the insurance pays your car loan off, right?  Not all the time!

Let's say you still owe $10,000 on your car, but the car's book value is now $8000.  If your car is totaled, the insurance company generally pays the book value ($8000) to the lien holder less your deductible.  Who pays the difference between what you owe and what your insurance company paid?  You do!  Unless you bought a Gap policy. 

A Gap policy pays the difference between what you owe and what the car is worth.  These policies can be purchased from the car dealer, or from an insurance agent (like me!), for a minimal cost.  They last for the length of the loan and may even pay your deductible if your car is totaled.

So keep this in mind when you buy your next car, or you know someone who might be looking to purchase.  A Gap policy may save you a lot of headaches!

Alabama Insurers Raising Rates

Article in the Birmingham News Friday Sept 11th:

Farmers Insurance Group:  Statewide 25.7% average rate increase effective Oct 16th with "specialty" policies rising 35% on average. 

State Farm Fire & Casualty:  Statewide 19.1% average rate increase effective Nov 1st for new business and Jan 1 for existing policies.

Alfa:  Statewide 5.8% average rate increase effective Sept 1 and 6.5% increase for customers of the smaller Alfa Mutual General Insurance Company. 

Hey, don't shoot the messenger.  Just call me for a quote!

Uninsured Motorist in Alabama

Did you know Alabama ranks 3rd in the nation for the number of motorist on the highways who are not carrying the minimum amount of liability insurance as mandated by the state?  Approximately 1 in 4 motorist on the highways are not carrying any liability insurance.