Archive for the ‘car claim’ Tag

Winter weather tips – damage & injury prevention   1 comment

Good afternoon!  Seeing as how the Pittsburgh area is forecast to experience record low temperatures tomorrow & Friday, I thought I would put together a short blog with links for useful tips to prevent damage to your home and to keep yourself & your pets from getting injured.

Winter

Cold temperatures coming soon!

Hope you find the information useful!

Prevent freezing pipes

Pre-storm preparations

Things to do during a storm

Post-storm damage prevention & maintenance

All-around maintenance and preparation ideas

Tips to protect yourself when outside in cold weather

Good resource with multiple links & other info

Pittsburgh Winter

The Insurance Dogger doesn’t seem to mind the cold!

Advertisements

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

 

A review of personal insurance – Auto insurance (physical damage)   3 comments

Dog Blog

I’ve been waiting for a little while now….

OK OK I know that I said I’d be back to finish up auto coverages a few days ago.  Business being what it is, it’s taken me a little while.  But here we are, and off we go!

Last week we reviewed liability and injury coverages.  This week, we are going to review the coverages in place to protect the damages to your vehicle itself and ways to save on them.

  • Collision  – Even though this is “backwards” from how the coverages appear on your policy, it’s easier to explain starting with Collision.  Collision provides coverage for your vehicle when it collides with some other inanimate object, or is hit by another moving vehicle.  In the state of PA, unfortunately, that includes when your car is hit by a shopping cart.  Some examples of collision claims:  if your car is parked and gets hit by another car (or shopping cart!), you hit a patch of black ice and slam into a tree, or you are at fault in a multi-vehicle accident.  Ways to save – see note after Comprehensive
  • Comprehensive (Comp) – Comprehensive is most easily explained as “all other covered forms of physical damage to your vehicle,” hence the name.  In PA, comprehensive coverage does pick up one type of accident that would otherwise be considered a collision – hitting an animal or pedestrian.  These damages would be covered by comprehensive.  Other examples of comp claims:  if your car is stolen, catches on fire, suffers flood damage, a tree falls on it, etc.  Windshield and other glass damage is covered by comp (unless caused by a non-animal collision).  Ways to save – Easiest and most common way to save is by increasing your deductible.  Be wary of two things, though – first is that collision is far more expensive than comp, so it’s far more effective to increase your collision deductible.  Second is that you should be aware that the savings by increasing the deductible will not offset (in one year) the increased out of pocket cost in the event of a claim.
  • Comp or collision pay for a total loss of the vehicle based on the depreciated (Blue Book) value of the car.  All other (partial) losses are paid based on the actual expense of repairs (less the deductible).
  • Rental Reimbursement (RR) – RR provides coverage if you need to pay for a rental car as a result of a covered comp or collision claim.  In other words: you have a covered claim.  Your vehicle will be in the shop for two weeks.  You need a car in the interim.  You pay for a rental vehicle.  RR coverage will reimburse you for the cost, up to specified daily limits and maximum duration (typically, $30 a day for 30 days).  Ways to save – only real way to save here, outside of not purchasing it at all, is to carry lower per day limits.
  • Towing & Labor (T&L) – T&L provides coverage in the event that you need some form of roadside assistance (change a flat tire, charge a dead battery, keys locked in your car) or need to be towed for virtually any reason (mechanical breakdown, run out of gas, etc).  No real way to save here, it’s generally very inexpensive to begin with.  Only thing to consider – if you are paying for this AND AAA or some similar road service, be aware you may be paying twice for the same coverage.
  • Gap Coverage – This provides coverage for new cars that are purchased using a car loan.  As noted above, in the event of a total loss to your car, the policy will only pay for the depreciated value of the vehicle, NOT the loan amount.  Typically, the loan amount is higher than the depreciated value, creating a “gap” in coverage.  Gap coverage fills the void by paying for the difference.  This coverage can be purchased through the dealership or on your auto policy.  Compare BOTH terms and pricing before choosing where to buy the coverage!

That about does it for this review.  There are other liability and physical damage coverages available, but these are by far the most common (at least in PA).

Relax

So just relax and enjoy the ride – knowing you are well covered!

A review of personal insurance – Auto insurance (liability)   Leave a comment

Miss me

Hi everyone! Did you miss me?

Hey everyone!  It’s been too long since we’ve posted anything.  We’ll try to blend the purpose of this post between a good mix of information and ways to save.  Since our prior posts focused on business insurance, we’re going to start in a more widely useful direction – personal insurance.

Auto insurance is, at least in the state of PA, a legal requirement – but probably far less than you think.  In fact, state regulations only require that you carry liability coverage for the bodily injury and property damage of others, as well as your own personal medical expenses.  The limits required by the state are similarly low – only $15,000 per person & $30,000 per accident for bodily injury, $5,000 for property damage, and $5,000 for medical expenses.

Here are some of the coverages you can purchase, as well as ways to save on them:

  • Bodily Injury (BI)BI covers your liability for injuries people NOT in your vehicle sustain in the event of an accident for which you are at fault.  BI claims can get very tricky in PA.  If you are responsible for an accident that injures the passengers of another vehicle, typically the medical payments coverage on the policy on the OTHER (non-responsible) vehicle responds first.  It can quickly get convoluted, so in the interest of brevity, contact your agent for additional details of how coverage applies in the event of an injury.  Ways to save – see notes after Property Damage.
  • Property Damage (PD) PD covers your liability for the damage done to the property of others in an accident for which you are at fault.  For example, if you rear-ended a slower moving vehicle, back into a parked car in a parking lot, or take a turn too quickly and end up in someone’s front yardWays to save in general, liability coverages are the most difficult to reduce your costs on – the most convenient way to save is by lowering your limits.  However, especially if your driving record is clean, you won’t save as much by reducing limits as you might think.   Other ways to reduce your rates include changing driver/vehicle assignments on your policy (the youngest driver on the oldest car, for example), purchasing a safer car, or doing something to reduce your daily (commute) or annual mileage.
  • Uninsured/Underinsured Motorists (UM/UIM) – this coverage is similar to BI but in reverse.  If you or your passengers are injured in an accident where another party is at fault, and that party either does not have any BI coverage (uninsured) or they don’t have enough BI coverage (underinsured) to pay for your injuries, UM/UIM will pick up the difference (up to your policy limits).  Ways to save the best way to save without reducing your limits (if you have multiple vehicles on your policy) would be to reduce your limits and add stacking.  Stacking multiplies your UM/UIM limits by the number of vehicles on your policy.  So, if you have two cars on your policy, and carry $50,000/$100,000 unstacked limits, you can reduce your limits to $25,000/$50,000 and stack the coverage.  You will maintain the same total coverage (as long as you have at least two vehicles!) and pay less.
  • First Party Benefits (FPB) I will address these as a group, as they are typically lumped together in a batch on your policy.  Additionally, they can be combined into one large limit for the whole group of coverages, instead of having separate limits for each.  This is typically called blanketing coverage.  I digress – the four FPB coverages are medical expense, income loss, accidental death, and funeral benefits.  Each FPB coverage pays if you or your relatives (residing in your home) are injured or killed in an accident, regardless of who is at fault.  Medical Expenses operates similar to health insurance – covering your actual medical & rehab costs.  Income loss operates similar to disability coverage – covering your lost wages if you are injured in an accident and are unable to return to work.  Accidental Death and Funeral Benefits, similar to life insurance, provide coverage in the event you pass away as a result of an accident.  Ways to save in order to get higher limits for less money, consider purchasing the combination option, where you get one lump sum for all four coverages, which you can divvy up as necessary.  For example, instead of maintaining higher limits on each individual coverage, consider carrying combination coverage of $100,000 or $177,500.  Additionally, if you already have health, disability, or life insurance, consider reducing or removing the applicable coverages from your policy.

In the interest of your sanity and keeping this short, I will stop for today.  We’ll review the physical damage coverages you can purchase on your vehicle itself tomorrow.
In the meantime:

Sammy Dog Blog

Keep on riding!

What the Hail?!   Leave a comment

Hail

Wow! Thank goodness we didn’t see anything the size of these babies!

Some timely advice for local Pittsburghers who endured the relatively uncommon pelting of hail yesterday:

Worried about hail damage? Don’t be!

– Virtually every building (home or business) policy includes coverage for hail damage, even if you have a named perils policy.
– Same for auto policies – if you carry comprehensive, you have coverage for hail damage.
– If you are concerned about hail damage on the roof of your building – DON’T get up there to check it yourself! Hire a professional.  Also, make sure its either someone you trust, or is reputable and in good standing in the BBB or Angies List.

It wouldn’t be a bad idea to be present for the inspection. Sadly, some of the less-reputable “contractors” will go onto people’s roofs with a ballpeen hammer and create some “hail damage” of there own to get some quick and easy repair work.

In addition, if you have a chip in your windshield, get it fixed now before it becomes a crack!  If you carry comprehensive on your auto policy, and the chip is about the size of a quarter, most policies will pay for the repair with no cost to you.  Once it turns into a full blown crack, and it needs to be replaced, then you would pay your comp deductible and the company pays the balance.
Other questions or concerns? Talk to your agent!

(Photos courtesy of Hail Events & Scott Blair)

Windshield

Probably going to need replaced….

Windshield

Another probable replacement…..

A defense for the insurance industry…. based on my own experience   Leave a comment

I wrote this blog on the day that the incident occurred.  I decided to wait a few weeks and give myself time to cool down so I wouldn’t be posting in anger.  Nearly a month after the fact, I’m keeping it intact, as it’s mostly not about anger so much as it is informative about what’s going on out there.  On with the show:

Hello estranged readers!  (all 3 of you)

I’m going to describe an incident in my life today, to defend my industry.  I’m going to eliminate many of the identifying details; the situation is on-going.  However, I think the lesson it holds is an important one.

Very simply, one of my vehicles is in a repair situation that normally would be resolved via the insurance company.  It is, however, being paid out of pocket by the party responsible.  To make a long story short, I was told by the garage that I am being charged a higher rate for my repair.

When I asked why, I was told “Because the insurance companies will pay the higher rate.” 

“How is this a defense of the insurance industry?!  They are paying higher rates than necessary when they could negotiate reductions in cost!”  you might ask.

“While that may be accurate on the surface, there are some factors at play that make that not necessarily correct.”  Sammy would rebut.

To make it as straight forward as possible – the increased cost that’s being charged is lower than cost of negotiating the correct amount.  If an insurance company were to take the time and manpower necessary to haggle for better prices, they would pay more for the hourly pay/salary of their employee than the increased cost of repair – in my case, about $75 total.  It may not seem like much, and in my case, it’s not.  But when you multiply that by hundreds of cases a month (see “A form of insurance fraud” at bottom), every month of the year, well, you can see how it adds up.

One very important point needs made – not every repair shop operates in this fashion.  I was not aware this was going to be the case in my situation, or I would not have gone to the garage that I did.  Now, I’m stuck overpaying (albeit slightly), but I’m aware that it happens, and I’m aware that I need to be more wary of where I go to get repairs done.

Most importantly, I want you all to be aware that in a world of rising insurance costs, it’s not simply a case of the insurance company raking you over the coals.  Insurance companies are being nickel and dimed in this fashion quite often, and there is no simple solution to the problem.  To be blunt, some repair firms will take advantage of this situation, and that results in all of us paying higher rates for insurance.

And to the shop in question, Sammy only has one thing to say:

**Pbbbbbb**

**Pbbbbbb!**

4 ways NOT to save on your insurance (and what you should’ve done) – Part 4 (Severity)   2 comments

Insurance Claim

Sammy attempts to demonstrate a major claim

This week Sammy and I are going to finish up our discussion on how your claims history affects the premium you pay for your insurance policies.  As you may recall, last week we discussed how the number of claims that you file can drive up your premium.  This week, we are going to discuss how the severity (ie – total dollar value) of individual claims affects your premium.

Just a quick search on Google   and you will find there is a lot of information out there about severe (major) insurance claims – the top causes of major homeowner’s claims, other blogs about major insurance claims, and even a website that lists the top 10 biggest insurance claims ever.  When reviewing a large claim, especially in light of your future premiums, companies will generally consider a couple factors.

  • Cause – I’ll make this as simple as possible.  In the event of a large claim, the cause of the claim can be a factor that is considered with regard to premium change – although, this primarily applies to business insurance.  Basically, if you have a large claim, but it’s not something that would be considered “your fault” (ie – a weather claim, an uninsured driver hits you),your agent can make an argument with the underwriter that this large claim was something outside of your control and not easily prevented.  It’s not always successful, but it’s still worth having a discussion.
  • Prior Claims – This ties into cause, in a way.  If you have a large claim, but no prior claims, your agent can again make an argument that this was a one-time event that could happen to anyone, especially if you were not at fault.  It’s definitely not always going to be successful, but it helps.  However, if you have a couple prior claims, regardless of size, it makes it much more likely that you will see a premium increase (or potentially a non-renewal notice) upon expiration of your current term.
  • Loss Ratio – Loss ratio is the calculation a company makes to determine your “net” expense to them.  The most simple calculation takes the total dollar amount paid on every claim you’ve ever had while insured with that company (for THAT particular line of coverage – auto, home, etc), and divides it by the total amount of premium you’ve paid while insured with them (again, for THAT line of coverage).  For example, let’s say you had a $1,000 claim and a $45,000 claim.  You’ve been insured with the company for 25 years, and paid $23,000 of premium.  Your loss ratio calculation would be $45,000 + $1,000 = $46,000, divided by $23,000. $46,000/$23,000 = 2, or 200%.  Another example – the company paid out $8,000 in claims, and you’ve paid in $16,000 in premium.  $8,000/$16,000 = .5, or 50%.   Obviously, the higher your loss ratio is, the more likely it is your premium goes up.  This is one argument for having longevity with a company – the longer you stay, the lower your loss ratio will be – and thus, the greater chance that a loss, even a large one, will not have a dramatic effect on your premium.

One last thought – claim history is something which “travels” with you.  Similar to your driving record with the DMV or your credit score, ALL insurance companies provide claims information with a central database.  When you change insurance companies, the new insurance company will contact the central database and have access to basic information about all of the prior claims that were filed.

In summary – two different factors are the biggest influence on how your claims history can affect your annual premium – frequency and severity.  Obviously, the more that you do to reduce those two factors, the more favorable your insurance premiums will be!  I’ll stress filing numerous small claims – the more small claims that you file, the less flexibility there will be in the pricing of your coverage.

A little dry these last two weeks, but I hope it helps you to understand how insurance works!

insurance blog

Man, I’m worn out! That’s a lot of info

Wanderlust Travel & Photos

Seeing the World One Trip at a Time

UncoveringPA

UncoveringPA - Travel Pennsylvania Beyond the Amish and the Steel

Take Back Roads

Seeking authentic American experiences, one back road at a time

Natalie Breuer

Natalie. Writer. Photographer. Etc.

Rare Historical Photos

And the story behind them...

coldbike

Cycling with kids, sometimes in the cold.

German is easy!

The blog for all who want to learn German...

frugalfeeding | Low Budget Family Recipes, UK Food Blog

n. frugality; the quality of being economical with money or food.

A Dog's Blog

Sammy Bo Journey, Insurance Dogger

Bucket List Publications

Indulge- Travel, Adventure, & New Experiences

The Butchered Pig

Food and musings...

Denise Minger

Rescuing good health from bad science.