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Driverless cars – insurance for the future?   Leave a comment

Sammy driving

The Insurance Dogger isn’t sure if she’s ready to jump out of the driver’s seat just yet!

As you may have noticed, there is a lot of news coming out lately about driverless cars – Google is one of the main players in the field,  but Carnegie Mellon University made a big splash locally and nationally when it unveiled a very successful test-drive in the Cranberry area nearly two years ago.  A lot has been written in the last couple years about the various pros & cons of driverless cars, so I won’t rehash them here – a simple Google search will reveal just about anything you’ve ever wanted to know about the future of driverless vehicles.

However, as an insurance agent, one of the first things that comes to mind whenever the topic comes up is, how will the insurance policy, and the liability coverage in particular, function when it comes to insuring driverless vehicles?  This is not an easy question to answer, as there are many facets to consider, and much of it is based on speculation because the technology has not put forth a viable “ready for the public” option yet.

There are several legal considerations that, for the most part, I will set aside for now – primarily for the sake of expediency.  One of the big issues at hand is that, generally, each state has autonomy over how insurance laws & coverages are mandated.   I will address issues as broadly as possible, but the situation is still largely theoretical and developing as the technology progresses.

From an insurance standpoint, one of the largest liability concerns is the question of who is at fault (“liable”) when a driverless car is involved in an accident – is it the “driver” of the vehicle?  The engineering firm that put together the software operating the vehicle?  The manufacturer of the vehicle?  All of the above?  This is not an easy question to address, and seems to generate more questions than answers.  Was there an error in the software?  Was the driver able to manually override the vehicle and didn’t?  Did the steering system or brakes fail to receive or comprehend the instructions the software passed along?  Some of these questions will sort themselves out as the technology becomes more “concrete” and less speculative.  But the truth is, I fear, legal liability concerns will not actually be resolved until after the rubber hits the road and accidents occur.

Another concern along those lines is who is responsible for damages to the driverless car itself if it is responsible for an accident in which it gets damaged?  As above, should the software design firm pay for your damages?  The car company?  Are you responsible, as the owner of the vehicle?

A bit more disconcerting – what if your vehicle’s software is hacked?  If the vehicle is dependent upon mobile maps & directions to get from point A to point B, what if mobile/cellular service is lost?  How will the vehicles navigate, and in particular, how will it respond to the ever-changing conditions of roads and construction, closures, traffic, etc?

Lloyd’s of London published a market-watch article (along with its far more lengthy corporate report) about some of these very issues.  While the article isn’t conclusive, it does provide some key insights into considerations and factors at hand: “liability will be a key issue because autonomous and unmanned vehicles involve the transfer of control from direct human input to automated or remote control.  ‘In many cases the technology is there to create fully autonomous vehicles, but the legal and regulatory environment needs to be developed further, and public trust will also need to be fostered,’ says Maran.”

One thought I see being repeated consistently is that, ultimately, the increased safety offered by autonomous vehicles will rapidly outweigh the legal and insurance liability concerns: “Many of the routine claims that currently drive the cost of motor insurance will reduce or almost disappear entirely, explains Powell. The resulting decreased exposure for insurers would probably require underwriters to change the design and pricing of motor insurance products, he says.”

At the end of the day, because the technology is a relatively long way off, the “problems” of insuring driverless cars still bring up more questions than answers.  Regardless of the characteristics of the final product, the technology is coming, and the insurance companies that are able to quickly analyze and adapt to the new risks will be a huge step ahead of their competitors.

Some additional resources, reading, and even some videos to watch:

Insurance Information Institute study, Feb 2015

Wall Street Journal article, August 2014

Auto Insurance Center (undated)

CNBC / AllState CEO, Jan 2015

CNET / YouTube – great review of pros & cons of self-driving cars

Google self-driving car – A First Drive

Wall Street Journal YouTube article

CMU driverless car driven around Pittsburgh

Bill Shuster rides in driverless car

 

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A quick note about flooding & home/building insurance   Leave a comment

Ground water is not covered by virtually any building or dwelling insurance policies without a flood insurance policy.  This fact is very likely to come into play by early next week in the Buffalo area of western New York state as temps are predicted to rise into the 60’s and rain is being called for Sunday and Monday.

That’s going to mean a LOT of atypical water, including a lot of ground water, which is likely to cause a lot of headaches and damage for homeowners.  As mentioned above, if you do not have flood insurance, damage done to your home or other building(s) is not going to be covered.  What’s “worse” is the fact that if you do not already have flood insurance, you cannot buy it now in hopes of protecting your home from next week’s potential flooding – flood insurance policies require a 30 day waiting period for that exact reason.  The only time the 30 day waiting period can be waived is if the flood coverage is being required by a mortgage lender on a newly-purchased building.

Don’t have flood insurance and worried about the damage that could be done?  Here are a couple websites that have some useful suggestions of how you can at least mitigate or prevent much of the damage:

http://restorationindustry.org/content/protecting-your-home-after-snow-storm

http://www.kshb.com/weather/weather-news/snow-melt-could-cause-foundations-big-problems

http://www.ready.gov/sites/default/files/Spring_Flood_Fact_Sheet.pdf

http://www.ag.ndsu.edu/flood/media-resources/news-releases/before-the-flood/protect-your-property-from-downpours-snowmelt

http://www.melochemonnex.com/en/residential/articles/home_ins_winter

I hope that you find this information helpful, and if you happen to have friends or relatives in the Western NY area – please share this info with them now!

Posted November 20, 2014 by Scott in Introductions

Happy National Black Dog Day!   Leave a comment

National Black dog day

In honor of National Black Dog Day, we are formally debuting our new TV commercial featuring the Insurance Dogger!

Hope you enjoy the commercial!

Identity Theft, Flood Insurance, and antique coverage – Part Three   Leave a comment

In this final installment of our 3 part mini-series, we are going to review a little bit of information about coverage for antiques and high-value items you may have in your home.

This is a topic that I covered briefly in my post reviewing homeowner’s insurance (HOI) in general.  As discussed there, while most HOI policies provide replacement level coverage for dwelling and contents, there are very specific limitations in place regarding antique, unique, and high value items.  Replacement coverage is defined as “like kind and quality” but does not specify replacing unique items with exact or proximate matches – for example, an antique grandfather clock will typically be replaced with a newer version of the same unless specifically scheduled.

Policies and guidelines will differ from company to company, but in general, HOI policies do not provide adequate coverage for your specialty items:

Antiques:  Typically this is an item that is at least 50 years old, is out of production, and generally can be considered challenging to replace.  It can be just about anything – Griswold Cast Iron Skillets , Seth Thomas Mantel Clocks, or antique jewelry are just a few examples – and will need to be specifically scheduled on the policy to receive the appropriate level of coverage.  An appraisal will almost always be required.

Unique Items & Artwork:   Another broad category of items, this would include collectibles (like Hummel figurines), collections (like baseball cards), and a vast array of artwork – paintings, pottery, statuaries & sculptures, and more.  This coverage typically applies to higher value or difficult to replace items, will need to be specifically schedule, and will require an appraisal.

High Value Items:  This is basically a catch-all for items that don’t fall into one of the first two categories, and most commonly is non-antique jewelry.  Coverage can be placed in two ways: in a blanket format (one total limit for all pieces) for mid-level values (individual pieces typically less than $2500-$3000), or on a scheduled basis (each piece individually listed) for high value items (greater than $3000 each).  For high value scheduled items, an appraisal will be required.

These scheduled items will be covered on a policy form called “Inland Marine.”  I won’t bore you with the history of why it’s called that, but it will provide you with the more detailed and specific coverage you are seeking for your high value and unique/irreplaceable items.  For the amount of coverage purchased, especially since most Inland Marine policies or endorsements carry $0 deductibles, you will pay a relatively minor amount of premium.  I hope that you found this series to be enlightening and informative, and if you have questions, you can always feel free to email me at scott@poleskyagency.com or find me on Facebook!

The Insurance Dogger does not have a great deal of respect for delicate items!!

The Insurance Dogger does not have a great deal of respect for delicate items!!

Not funny, Insurance Dogger!  Not funny!

Not funny, Insurance Dogger! Not funny!

 

Identity Theft, Flood Insurance, and antique coverage – Part Two   Leave a comment

Hello everyone, we’re back again! This time we are going to briefly review the debacle that is flood insurance.  Operated by the National Flood Insurance Program (under the auspices of FEMA) or NFIP for short, flood insurance has gone through quite the upheaval lately.  This is due, in large part, to the fact that the program is about $20 BILLION in debt.

As a result, Congress passed the Biggert-Waters Act in 2012 in an attempt to bring the NFIP’s budget deficit back in line.  This was to be accomplished primarily by removing subsidies from policies in heavily flood-prone areas so the premium reflected the real risk of insuring a homeowner in such an area.  As you can imagine, this created quite a bit of backlash from property owners along the coast, particularly those in Louisiana.

The resultant premium increases imposed by Biggert-Waters were shocking and dramatic, far higher than what was originally predicted.  Instead of removing subsidies over time, as was initially proposed, they were yanked all at once for thousands of property owners nationwide.  For example, one of our clients saw her premium jump from a little less than $500 to nearly $3,000 in one year.

Thus Congress & the Senate recently passed the Homeowners Flood Insurance Affordability Act.  Boiled down, the HFIAA basically sets annual limitations on premium increases to attempt to raise rates in (very small) steps.  However, even a glance at FEMA’s overview page outlining the changes reveals confusing and challenging definitions and procedures.  When I called the company about getting our client’s premium scaled back due to the change, I was told, almost word for word, “We don’t know whether the new act is going to affect her premium, so we are going to wait until FEMA tells us to do something.”

Very simply, I would summarize all the changes to flood insurance this way:  Our government took a program that was quite literally drowning in debt, put together a knee-jerk and poorly executed solution, and reversed it in a similarly ineffective fashion in response to public outrage.  This article puts it all together perfectly.

The government had a chance to fix a broken program that had previously served constituents relatively well.  It had its problems, as most government programs do, but it was completely blindsided by the severity of storms like Katrina and Sandy.  Instead of scaling up property owner premiums over 5 or 10 years to more accurately reflect the risk that they carry, a “NOW NOW NOW” followed by a “LATER LATER LATER” mentality prevailed.  As usual, it will ultimately be the property owners and tax payers who foot the bill.

Sammy is this covered

Sammy thinks these flood changes are all wet….

Identity Theft, Flood Insurance, and antique coverage – Part One   1 comment

It’s hard to believe how quickly time is going by!  It seems like just yesterday that it was -30*F and now we’re nearly halfway through May already!  In  other words, I really hope you’ll forgive my lengthy absence from blogging.

Today I’m going to start a series addressing a couple different things to consider when insuring your home.  As you are certainly aware, things are moving at a pretty rapid pace these days – even for our government!  So that means there are a lot of things for you to keep up with as a home owner or renter, not the least of which are threats to the fidelity of your personal & financial identity and protecting your home against flood waters.

We’ll start with the one that affects virtually everyone – data breach and identity theft.  It’s hard to imagine that anyone hasn’t yet heard about the thieves that struck Target right before Christmas, accessing the credit information of millions of customers and having a major & long-term impact on Target, both financially and from a human resources perspective.  And, of course, there has also been the recent Heartbleed attack and the vulnerabilities of Internet Explorer.

Coupled with the dramatic increase in usage of social media , especially on smart phones, and the amount of business being done online means the chance of having your identity stolen has become dangerously high.  All you need to do is take a look at a couple statistics – here or here or here – to know that the risk now is greater than ever before.  Yet many customers do not have any form of identity theft coverage on their homeowner’s or renter’s insurance policy.  For a relatively minimal amount of premium – $25-50 a year on average – you can add typically $25,000 of identity recovery insurance.

Bear in mind, Identity Theft insurance is intended to assist you in restoring your good name by assigning you a coach or assistant to work you through the process, as well as paying for credit reports and monitoring, but not to restore what’s been stolen.  Your insurance company will, via your coach, work with the credit card companies to remove fraudulent charges and with your bank to restore what was stolen.  The final decision, though, rests with each of your financial institutions, not with your insurance company.

To summarize, for a minimal amount of premium each year, you can gain a lot of assistance in protecting your identity!  (PS – if you’re renting, and you don’t have a renter’s policy – that’s a cheap and easy problem to solve – much cheaper than you think!)

The Dog Blog

Will the real Slim Sammy please stand up?

Christmas Outtakes   Leave a comment

As promised last weeks, here are some of the more amusing outtakes from last week’s photoshoot for our Christmas “card”:

Sammy

She just couldn’t stay awake!

These next three would’ve made an amusing gif.  It appears almost as though she’s singing “Joy to the World!” like Clark Griswold.

Sammy

JOY

Sammy

TO

Sammy

THE WORLD!

This is one of my favorites of all of them:

Sammy / Mork

Nanoo Nanoo
Oh, wait – too young for that joke?

These last pictures show just how hard it is to keep Sammy’s attention, even with treats!

Sammy steps

Who’s upstairs?

Cute bored dog

Are we done yet? Pretty bored over here…

Sammy looking down

What’s that?

Sammy treats

I’m coming to get my treat now!

Sammy housetop

Up on the housetop, click click click….

(for reference on that last one)

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