Personal Perspective

Filing an insurance claim can seem like an overwhelming task, but it doesn’t have to be. The National Association of Insurance Commissioners has put together the following tips to help policyholders facilitate the process:

• Know your policy – Your insurance policy is a contract between you and your insurance company. Know the terms of that contract, including what’s covered, what’s excluded and the amount of any deductibles.
• File claims as soon as possible – Call our agency or your insurer’s claims hotline as soon as possible. Your policy might require notification within a certain time frame.
• Provide complete, correct information – Be certain to give your insurance company all the information they need. Incorrect or incomplete information will only cause a delay in processing your claim.
• Keep copies of all correspondence – Write down information about your telephone and in-person contacts, including the date, name and title of the person you spoke with and what was said. Also, keep a record of your time and expenses.
• Ask questions – If there is a disagreement about the claim settlement, ask the insurer for the specific language in the policy that explains the reason why the claim was settled in that manner. If this disagreement results in a claim denial, make sure you obtain a written letter explaining the reason for the denial and the specific policy language under which the claim is being denied. If you have a dispute with your insurer about the amount or terms of the claim settlement, you should contact your state insurance department for assistance.
• Make temporary repairs to protect property from further damage – Your auto/homeowners policy might require you to make temporary repairs. If possible, take photographs or video of the damage before making such repairs. Your policy should cover the cost of temporary repairs, so keep all receipts. Also, maintain any damaged personal property for the adjuster to inspect.
• Don’t make permanent repairs – An insurance company might deny a claim if you make permanent repairs before the damage has been inspected.
• Try to determine what it will cost to repair your property before you meet with the claims adjuster – Provide the claims adjuster with records of any improvements you made to your property. Ask the claims adjuster for an itemized explanation of the claim settlement offer.
• Don’t rush into a settlement – If the first offer made by an insurance company does not meet your expectations, be prepared to negotiate. If you have any questions regarding the fairness of your settlement, seek professional advice.

Americans can’t be parted from their cell phones, especially when they are driving. A recent survey conducted by The National Highway Traffic Safety Administration indicated that approximately 10% of drivers on the road are talking on their cell phones when behind the wheel. This is a 25% increase from 2004 levels. Sixty percent of those drivers are using handheld phones, up from 50% last year. Clearly the cell phone has gone from emergency aid to chic accessory.

Even though talking on the cell phone while driving might be de rigueur for the fashion forward, many state governments do not feel the same way. Although there is no federal law limiting cell phone use while driving, many states have passed their own legislation. For example, some states have banned the use of handheld devices while driving, but allow the use of hands-free devices. Other states have chosen to put restrictions on driver classifications, such as bus drivers or under 30 drivers, rather than create a general ban on cell phone use.

The frenzy surrounding cell phone use while driving stems from studies which indicate that drivers who talk on the phone are more likely to cause accidents. One recent study conducted by the Insurance Institute for Highway Safety found that both handheld and hands-free phones increased the risk of a crash. The test group included 456 participants who used a cell phone and were treated in emergency rooms for injuries suffered in crashes from April 2002 to July 2004. By using phone records and interviews, the Institute calculated the increased risk of a crash by comparing phone use during the 10 minutes prior to a participant’s crash, along with their phone use during the previous week.

The increased risk stems from a situation that was dubbed “inattention blindness,” by researchers David Strayer, Frank Drews and William Johnston in a 2003 study conducted at the University of Utah. They discovered that talking on cell phones while driving diverts the driver’s attention from their visual environment, making them unable to recognize objects encountered in their visual field. One would think that using a hands-free phone would be less distracting, thus not increasing the risk of inattention blindness as much as using a hand-held phone. But, the researches found that either phone type increases the risk of accident. Why? Well, current hands-free phones aren’t really hands-free. Only cell phones that are fully voice activated might be less likely to increase the risk of inattention blindness. However, further studies will need to be conducted to determine if that is true.

Meanwhile, when you are using your cell phone while operating your car, keep this in mind. In October 2004, a Virginia jury ordered Jane Wagner, a former lawyer, who was accused of driving and talking on her cell phone when she struck and killed a teenager, to pay the victim’s family $2 million. Wagner served one year in jail after pleading guilty to leaving the scene of an accident. Upon conviction, she also forfeited her license to practice law.

If you’ve recently gone somewhere on vacation and your car did not have a Global Positioning System (GPS), you probably wish it did. GPS systems have become increasingly popular as their prices have dropped. Navigationally challenged drivers who used to decipher hard-to-read maps can now rely on these small devices to help them reach their destinations. However, the popularity of GPS devices makes them particularly attractive to thieves. They are also susceptible to damage in car crashes, like any other item in a car. How will an Auto insurance policy cover a stolen or damaged GPS?

Unfortunately, standard policies provide little or no coverage for a GPS. Many older policy editions explicitly state that they do not cover losses to any electronic equipment that receives or transmits data signals. A GPS would seem to fall within that description. More recent policy editions do cover electronic equipment, but only if it is permanently installed in the vehicle. These policies provide a small amount of insurance for electronic equipment; $1,000 coverage is typical.

It is possible to buy additional coverage for GPS devices. Any car owner with equipment worth more than $1,000 should speak with their insurance agent about buying a special policy form. It increases the coverage to a specific amount shown on the form. Typically, insurance companies will not offer more than $5,000 coverage.

If the policyholder has an older edition of the policy, she will need a different form to cover a GPS. This form covers sound reproducing equipment; audio, visual and data electronic equipment; and tapes, records and disks while in a vehicle. A GPS device falls within the data electronic equipment category. Coverage applies if the unit is permanently installed in the vehicle or if it is removable from a permanently installed housing unit, designed to be powered solely by the car’s electrical system, and in or upon the car at the time of the loss. The form provides coverage for devices in cars the policyholder owns and those she rents or borrows. As with the other form, she can buy coverage in amounts up to $5,000.

The additional premium for this coverage is normally small. A rate of $4 for every $100 of coverage is typical. For example, the cost for $2,500 of coverage might be around $100.

As car buyers ask carmakers to add more and more gadgets to cars, insurance coverage for those gadgets will continue to evolve. It is unwise to assume that an insurance policy automatically provides much coverage for these gadgets. All insurance buyers should review their policies carefully. In addition, ask one of our agents questions if GPS coverage is a concern. With a GPS and the right insurance coverage, drivers can be confident that they’re going in the right direction.

Many renters assume that because they don’t own their dwelling they have nothing at risk. In fact, a 2006 survey by the Insurance Research Council found that only 43% of people who rent their dwellings said they had Renter’s insurance.

Although renters may not face the same level of risk as homeowners, they still have to protect themselves in the event a disaster strikes. Your landlord probably carries insurance, but this only protects the building – not the contents of your individual apartment or home. Renter’s insurance protects your personal property in case of fire, smoke damage, lightning, vandalism, theft, explosion, windstorm and water damage resulting from burst pipes, sprinkler systems, or malfunctioning heating/cooling systems.

The amount you receive if your belongings are damaged or stolen depends upon whether your policy is for “actual cash value” or “replacement cost.” Actual cash value coverage pays you what your property was worth at the time it was damaged or stolen, minus your deductible. Replacement cost coverage pays what it actually costs to replace what you lost, minus the deductible.

Although protecting your personal property is an important reason to carry renter’s insurance, there are other equally important reasons you should never rent an apartment without it. Renter’s insurance provides you with liability protection in the event someone slips and falls while in your apartment. If this happens to you, you are covered up to the policy’s liability limit for an award in a court judgment and for your legal expenses.

In some instances, apartments are rendered uninhabitable because of fire, burst pipes, or another disaster. If the event is a covered peril under your policy, Renter’s insurance will cover any additional living expenses you incur until you can move back into your place. However, there are certain limitations. Generally, the maximum amount you can receive is between 30% to 50% of the total value of the policy, depending upon your coverage. Your insurer will usually continue to pay while your home is being repaired or rebuilt, or until you find suitable alternative living arrangements. Some insurers cap the amount of time you can receive this benefit at 12 months, while others cover you for what they consider a reasonable length of time.

Finally, Renter’s insurance can protect you in the event you cause unintentional damage to your landlord’s property. In most instances of renter-caused damage, the landlord’s insurance company will pay for the repairs, but will seek reimbursement from the liable tenant. In this scenario, your renter’s insurance covers you for the reimbursement amount.

If you are currently renting an apartment and don’t have Renter’s insurance, call our office today to discuss purchasing coverage. Our agents can show you how simple things like raising your deductible, or installing smoke detectors and burglar alarms, can help you get great coverage at an affordable rate.

As the weather warms up, more and more riders will be hitting the streets with their motorcycles. Whether you’re a weekend rider or a hardcore road warrior, you want to be sure your valuable bike is covered for any contingency.

As a motorcycle owner, you are faced with the decision of whether to insure your bike by adding an endorsement to your Auto insurance policy, or by buying a separate policy. It’s important to understand the differences between the two so you can choose the option that best suits your needs.

An endorsement is a document that is added to a basic policy either at the time the policy is purchased, or during its term, which becomes part of the policy and increases the coverage provided by that policy. If you insure your motorcycle by adding an endorsement to your Auto insurance, you will only have one insurance bill to pay to cover both your car and your bike.

However, there are certain disadvantages to insuring your motorcycle this way. In most cases, you cannot customize your insurance with an endorsement. You are locked in to the same coverages, limits, and exceptions for your bike that apply to your car. That’s why it is important to discuss with our agents what a motorcycle endorsement covers and how it’s covered before you add it to your Auto policy.

Your insurer may offer you the choice of purchasing separate coverage for your motorcycle. While Motorcycle insurance does vary by state and insurance company, one thing remains the same: your driving history and credit score can impact your eligibility. Riding a motorcycle is a higher risk activity than driving a car; if you have a number of tickets or accidents on your driving record, you may be considered too high a risk for the insurance company to extend separate coverage.

If you qualify, there are certain advantages to having a separate policy. Because these policies are created specifically for motorcycles, they offer more coverage options. For example, a motorcycle policy allows you to choose higher liability limits than you have on your Auto insurance.

One of the great things about owning a bike is the ability to personalize it, but many of these customizations aren’t covered unless you purchase a separate Motorcycle policy. Typically, a basic Motorcycle policy will extend coverage for custom parts and equipment up to a specific limit, such as $1,000. If your custom accessories or parts are worth more than the basic policy limit, it’s a good idea to purchase additional coverage to cover those parts in case they’re ever damaged. Also, be sure to ask for a list of the specific custom parts that are covered, and any exclusions that may apply.

Keep in mind that although you will be paying a separate premium for Motorcycle insurance, you may qualify for discounts. Many insurers offer discounts for multi-motorcycle policies, mature drivers, and insuring both your auto and motorcycle with the same company. In some instances, you can receive a discount for attending safety training programs, or for becoming a certified motorcycle safety instructor.

Homeowners insurance policyholders usually have the option to insure to actual cash value (ACV) or replacement cost value (RCV). To make the best decision, the individual first needs to gain a clear understanding of the difference between the two policy options.

In a nutshell, the difference between RCV and ACV is wear and tear; otherwise known as depreciation. ACV considers that the lost property has most likely depreciated over time, and endeavors to insert depreciation into the equation. For instance, suppose the ruined property was a sofa that would cost $700 to replace. Even though the sofa was in good shape for a 10-year-old piece of furniture, it was definitely not brand new. In 10 years time, some wear and tear inevitably occurred. With ACV, the insurance company might determine that $30 of depreciation occurred each year since the sofa was purchased. In this case, the sofa would only be valued at $400 at the time of the loss. The company would pay you $400 minus any applicable deductible. In a sense, you would be paying an increased deductible in the form of the $300 of depreciation. To summarize ACV, the insured would pay the difference between the replacement cost, the amount the old sofa depreciated by, and any deductible. In essence, the policyholder is “co-insuring” that amount.

On the other hand, RCV is simply the cost of replacing the lost property with either an identical or similar piece of property. Using our sofa example, if it costs $700 to replace the sofa, the insurance company will pay you the $700 minus any applicable deductible. Even though the ruined sofa was showing its age, and could never be sold for $700, RCV allows the policyholder to recoup the value of a brand new replacement sofa.

Which option is best? This question cuts to the core of what insurance is all about: Making the insured whole again. In some cases, ACV falls short. Conversely, RCV can create an overly beneficial situation for the insured. Not including sentimental value, if the sofa is old and dilapidated, but the insurance covers RCV, it is obvious that the policyholder will benefit greatly by receiving enough funds to purchase a brand new sofa to replace the old one.

An old house that has been damaged severely by a fire could provide a more dramatic example of RCV. At the time of the fire, the house might have only been worth $200,000, because the components of the house (such as roof, flooring, HVAC etc.) were approaching the end of their life span. In this case, the house would increase in value as the old worn-out components were replaced with brand new ones. So the homeowner would be better off in terms of the value of their home, than if the fire had never occurred at all.

Some insurers stipulate that all repairs must be completed in order to obtain the full replacement cost of the property. They might decide to pay the ACV up front, and have the rest of the payment (the difference between RCV and ACV) contingent on all repair work being completed. This keeps the insured from pocketing the money and gaining financially from the loss.

There is at least one caveat regarding the benefits of RCV, however. Since the real estate market can fluctuate quite a bit, sometimes RCV turns out to be less than ACV. When the housing market is strong, and home prices are high, the actual cash value can be higher than the cost of replacing a home with one that has similar features and qualities. Therefore, the additional cost of purchasing RCV might be a bad decision. As always, consult with our agents to see which option is right for you.

On average, there are more than six million auto accidents on U.S. roads every year. Sadly, 34,017 of these crashes proved to be fatal in 2008, according to the National Highway Traffic Safety Administration (NHTSA). Based on these shocking statistics, it might seem inevitable that we’ll all suffer from an auto accident at some point. However, there are numerous precautions you can take when you’re behind the wheel to reduce your risk of having an accident. Auto insurance experts implore drivers to wear their seatbelts, drive defensively, closely follow driving laws and be considerate to other drivers. Read on for more driving safety tips that will help you steer clear of auto accidents.

Keep your eyes on the road.

When you’re behind the wheel, it’s extremely important to stay focused on the road at all times. The NHTSA reports that driving distractions cause up to 4,300 accidents every day in the U.S. That’s why you shouldn’t take your eyes off the road for even a moment, whether you’re changing radio stations or dialing a number on your cell phone. Safety experts say you should pull over to a safe place on the side of the road if you need to do any of the following:

• Pick up an item you dropped
• Change CDs
• Look at a map
• Eat or drink
• Change radio stations
• Dial a number, talk on the phone, or send a text message
• Read a newspaper
• Apply makeup, comb your hair, or take care of any other personal grooming

Just say no to road rage. Safety experts say drivers should also avoid aggressive driving. Be courteous to other cars on the road, and control your road rage. Although it might be tempting to yell and gesture at another driver who cuts you off on the highway, try to keep your cool. If you antagonize an aggressive driver, the situation could escalate quickly. If you fear that another driver is putting you at risk, call the police immediately

Try to remain polite on the road. There seems to be a common phenomenon where people who are generally well-mannered in every day life lose their sense of common courtesy when they’re behind the wheel. You probably see it every day during your commute. For example, when you turn on your signal to switch lanes, the driver in the next lane speeds up and blocks you in. Although it can be easy to lose your temper in this situation, you’re better off letting them pass than trying to cut them off. After all, countless accidents occur every day because of aggressive driving.

Top 10 safety tips. Follow these top 10 safety tips to reduce your risk of having an auto accident:

1. Never drive after you drink alcohol, even if you’ve just had one or two drinks.
2. Don’t give in to distractions, such as playing with your iPod, reading a text message, or picking up a toy your child dropped in the backseat.
3. Avoid road rage. If you come across an aggressive driver, don’t antagonize or encourage them. Keep your cool and call the police if the driver is putting other motorists at risk.
4. Keep a safe distance between your car and the vehicle in front of you. For every 10 miles per hour of your driving speed, leave at least one car length between your car and the car in front of you.
5. Try to maintain a consistent speed. Don’t continually slow down and speed up unless the posted speed limit changes.
6. Keep your car in tip-top shape. Get regular oil changes and tune ups and check the condition of your tires at least once a month.
7. Stay alert when you drive through intersections. Most accidents occur in intersections, so be sure to look left, then right, then left again to make sure it is safe to pass through.
8. Keep your side mirrors and rear-view mirrors adjusted properly. As you drive, check your side and rear-view mirrors every 15 seconds to make sure you’re in the clear.
9. Be aware of road conditions and react appropriately. For example, turn on your lights if you’re driving at dusk or dawn or in the rain. If the roads are wet, snowy or icy and you feel your car starting to hydroplane, don’t brake suddenly or turn the steering wheel. This could send you into a skid. Instead, ease off the gas pedal slowly and steer straight until you feel your tires regain traction.
10. Sign up for a defensive driving class. With the proper training, you’ll be able to react more quickly to potential accidents on the road.

When it comes to cars, is it true that bigger is always better — and safer? Based on an April 2009 study by the Insurance Institute for Highway Safety (IIHS), the answer to this longstanding question is a resounding yes. The study shows that larger, heavy-duty vehicles are fundamentally safer than smaller, lightweight cars.

Considering recent announcements, this revelation is more important than ever. This May, President Obama unveiled his massive fuel efficiency plan. Under the new standards, auto makers will be ordered to increase the fuel economy of vehicles sold in the U.S. to 35.5 miles per gallon by 2016. This means manufacturers will have to produce smaller, more lightweight, fuel-efficient vehicles.

Although supporters of the plan say it will help cut our nation’s greenhouse-gas emissions, opponents argue that the mandate will result in thousands more Americans dying or becoming seriously injured in auto accidents. Critics say that the number of auto fatalities could swell if hordes of “unsafe” subcompacts hit the road in coming years.

The physics behind car crashes

Why are bigger cars intrinsically safer? It all comes down to physics. According to the IIHS report, “These tests are about the physics of car crashes, which dictate that very small cars generally can’t protect people in crashes as well as bigger, heavier models.”

Based on the law of physics, when a large object crashes into a smaller object, the larger object creates a greater impact. This rule holds true for car crashes, as confirmed by the IIHS study.

For this study, the IIHS conducted three front-to-front crash tests, each involving a microcar or minicar colliding with a midsize model from the same manufacturer. The Institute did not use SUVs, pickup trucks, or even large cars to pair with the micros and minis in the tests. “The choice of midsize cars reveals how much influence some extra size and weight can have on crash outcomes,” the report explains.

Instead, the Institute chose pairs of 2009 models from Daimler, Honda, and Toyota because these auto makers have micro and mini models that have earned good frontal crash ratings in barrier tests.

According to the final IIIHS report, “In a collision involving two vehicles that differ in size and weight, the people in the smaller, lighter vehicle will be at a disadvantage. The bigger, heavier vehicle will push the smaller, lighter one backward during the impact. This means there will be less force on the occupants of the heavier vehicle and more on the people in the lighter vehicle. Greater force means greater risk, so the likelihood of injury goes up in the smaller, lighter vehicle.”

Real-world car crash statistics confirm this theory. In 2007, the death rate in one to three-year-old minicars involved in multiple-vehicle crashes was nearly twice as high as the rate in large cars.

Good engineering makes a difference

Despite the recent IIHS study, some experts point out that vehicle safety doesn’t come down to car size alone. They say that quality engineering and design are more important to vehicle safety than the actual car size. Added safety features, such as front and side airbags, seatbelts with pre-tensioners and force-limiters, rollover prevention mechanisms, head restraints, and crash avoidance systems can also improve a vehicle’s safety greatly.

Experts also say the size of a vehicle’s front end can determine how the car fares in a crash. If a lighter vehicle is engineered with a large front end, creating a bigger space between the front of the vehicle and the front seat, the car would be much safer. That’s because a car with a large “crush space” decreases the severity of an impact and reduces the force to the car’s occupants.

Plus, auto makers can also reduce a vehicle’s weight without losing too much structural integrity by using aluminum, titanium, or plastic. Unfortunately, most manufacturers steer clear of these materials because they carry a high price tag.

Buying insurance coverage for your motorcycle can be expensive as bikes present a higher risk than automobiles. They’re more susceptible to accidents caused by bad weather and poor road conditions. They are also less visible to other drivers, and less stable than cars.

In spite of this, you want to be sure you have sufficient coverage for your bike, because you’ve likely invested a lot of money in it. To help you find the best coverage for the best rates, the Insurance Information Institute offers the following tips:

• Get seasonal coverage – Most bikers aren’t road warriors who consistently ride their bikes all year long. If you store your bike for several months out of the year, there’s no need to fully insure it. Many insurers offer seasonal policies that cover your bike for six to nine month periods of actual usage.
• Take a motorcycle-safety course – Some states require these courses before they’ll issue a motorcycle license. Even if your home state doesn’t require it, you could be eligible for a 10% to 15% discount on your policy for completing one. Before signing up for a program, it’s a good idea to contact your insurer. Some companies only recognize certain programs. If you’ve been riding for a while, you might be able to get a discount for taking a refresher course.
• Increase deductibles – A deductible is the amount of money you have to pay before the coverage kicks in. The higher your deductible, the lower your premiums. When choosing a deductible, make sure you can afford to pay out-of-pocket for any costs that are incurred before your insurance kicks in.
• Ask about multiple bike discounts – If you’ve got more than one bike, or live with someone else who rides, you can usually get a discount. Likewise, it might be worthwhile to insure your motorcycle with the same company that covers your car.
• Install anti-theft devices – If you financed your bike, you’ve probably taken out comprehensive coverage. Comprehensive protects against theft, fire, and other damages not caused by an accident. Some companies offer a discount on comprehensive coverage if you utilize an anti-theft device.
• Maintain a good driving record – Insurance companies analyze your driving history to determine rates. How you drive a car usually indicates how you’ll ride a motorcycle. If you’ve only recently obtained a driver’s license, you might want to wait a year or two before getting a motorcycle. If you maintain a good driving record, your rates will be lower once you’re considered an “experienced” driver.
• Ride with a group – Membership in a motorcycle club, such as the American Motorcycle Association, BMW Motorcycle Owners of America, Harley Owners Group or Retreads can also save you some money on your the insurance premium.

Believe it or not, there’s a powerful source of fire right inside your home: electricity. From old defective wiring to overloaded outlets, there are electrical fire hazards everywhere we turn.

As a matter of fact, more than 40,000 residential fires are caused each year by faulty electrical wiring, according to the United States Consumer Product Safety Commission (CPSC). Tragically, defective electrical wiring systems have claimed an average of 350 lives a year for the past decade.

So, how can you ensure that your home’s electrical system is fire-proof? Follow these priceless fire prevention tips from the National Electrical Safety Foundation:

• Check your electrical cords periodically. If you find any cords that are frayed or damaged, replace them. Do not place cords under rugs or carpet.
• Make sure that your outlets and/or extension cords are not overloaded. If you notice that your lights are dimming, your heater or kitchen appliances are not working properly or your television picture is poor, this could be a sign of an overloaded circuit. Add up the wattage of all the electrical devices plugged into each circuit and keep the total load well below the circuit’s maximum capacity.
• Do not use high wattage bulbs in light fixtures and lamps that cannot handle them. Always choose the proper wattage bulb for each light.
• If you have children in your home, install child-proof electrical outlets. This will ensure that a child cannot insert something into an outlet.
• If your home is more than 40 years old, you should consider updating the entire electrical system. Because older homes often contain aluminum wiring, they are more vulnerable to electrical fires. You should replace the old wires with copper wiring, which is more resistant to electrical fires.
• Consider installing ground fault circuit interrupters (GFCI) in your kitchen, bathrooms and utility rooms. A GFCI will shut down the electrical system if it detects an imbalance in electricity, which can help protect your family against electrocution.
• Install power surge protection devices for large electrical appliances and computers. A power surge, which is a sudden rush of voltage in an electrical circuit, can damage electrical devices plugged into the circuit.
• Avoid arc faults by installing arc fault circuit interrupters (AFCI). Often caused by improper electrical connections, overheated wires or pinched wire insulation, an arc fault is a discharge of electrical currents across a gap that can lead to an electrical fire.

What to do if a fire breaks out?

If an electrical fire starts at a wall outlet, pull the plug by the cord if you can get to it safely or turn off the main switch. If the fire is small, use your home CO2 fire extinguisher. NEVER douse an electrical fire with water.

If the electrical fire is large, evacuate your home immediately and call the fire department. Be sure to notify them that it is an electrical fire. They might be able to turn off the main power source, which could keep the fire from spreading.