Changes Coming To Your Next NC Homeowners Insurance Policy Renewal

Effective April 1, 2014, every homeowners insurance policy in NC is changing as it renews.  No, this isn’t an April Fools joke, but for a few unwary homeowners, this will be no joking matter.  And while most of these changes are minor, there is at least one big reduction in coverage that could affect many people.  Here’s a summary of the changes to this form but as always, my advice is that everyone read their policy carefully and consult with their agent for any questions they may have.   

·         A sublimit of 10% of your personal property coverage amount will now apply to any personal property located in a storage facility.  This is the most significant change and could catch some homeowners by surprise should they have valuable items stored in a storage unit.  If you have personal property stored in off premises storage units, then you should contact your insurance agent before your next renewal and make arrangements to protect that property.

·         The new NC homeowners form has a new sublimit of $250 that applies to antennas, tapes, wires, records, disks, and other media in or upon a motor vehicle.  For those of you with valuable CD collections traveling around in your car with you each day, just know that you are now going to be unprotected.  Might I suggest you convert them to mp3 files and put them on a jump drive or perhaps subscribe to a streaming service? 

·         For business personal property located away from your residence premises the sublimit  is increasing from $500 to $1500.

·         The theft peril as regards Personal Property located in student housing  is being modified to allow coverage to apply as long as the student has been there in the past 90 days instead of the previous 60 days.

·         The incidental low power recreational vehicle liability coverage has been modified to expressly exclude motorized scooters used off of your residence premises.  If you are one of the many intrepid souls saving gas by driving your scooter to work take note; you will now need to purchase liability coverage for your scooters.

At Clinard Insurance Group, we want every insurance buyer to be an informed consumer.   We insure thousands of families all across North Carolina, helping them with their homeowners insurance, auto insurance as well as business insurance and life insurance.   If you would like help with any of your insurance needs, please give us a call at 877-687-7557.

An Insurance Policy That Monitors Your Driving – Are You Willing To Trade Your Privacy For Discounts?

No one likes an annoying back seat driver.  But could you stomach one that stayed quiet and just used observations of your driving habits to determine your auto insurance rates?  Well that time may be coming soon.   Insurance companies are beginning to build momentum in the field of using telemetrics as the primary actuarial data source for auto insurance rates.  Telemetrics, the science of measuring data created by your driving habits has the goal in mind of a more accurate auto insurance rate for each driver.

Insurance industry executives and underwriters have long wished for a better way to predict which clients will cause losses on their insurance policies.  In the world of auto insurance, the tools that insurance companies have had at their disposal in the past have been relatively crude.  Decisions about your driving ability and safety are currently based on information such as the kind of car you drive, your age and number of years driving, your past traffic violations and past auto insurance claims.  For instance, get a few speeding tickets and even though you’ve not filed a claim, in N.C., your auto insurance rates will skyrocket.  And yet I’ve seen quite a few clients with a high number of speeding tickets who never had an accident or filed an insurance claim.  Or take the example of teen drivers.  Not every new driver has accidents, but the insurance company simply has no way of knowing which child carries the greatest risk so they just have to charge huge inexperienced operator rates to all new drivers..  But what if the insurance company could watch young driver every time they head out in the car?  Would they then be able to make better decisions about which young driver is most likely to cause an accident and thus charge each a fairer rate?

Enter telemetrics, the newest underwriting science in auto insurance rates.  While this science has been around for a few years already, very few insurance companies have studied or adopted it.  That may be about to change.  State Farm Insurance, one of the largest auto insurers in the country is testing the use of telemetrics in several states and has indicated that they plan to roll this out to all states soon.  This strategy, should it succeed for State Farm, is bound to push this trend amongst all auto insurers much more quickly.  So what is telemetrics exactly?  Well, telemetrics is the gathering of data about your driving habits via small telemetric devices which plug into the car’s diagnostic ports.  This data is then sent to the insurance company and analyzed to determine if your driving habits indicate that you deserve  a discount refund on your rates for safer driving.  Right now these programs are focused on offering cash back discounts for good driving behaviors but are not designed to generate additional rate increases for the drivers who don’t make the grade.   That approach is almost certain to change should this form of auto rating, often referred to as usage rating become more common.    For now, this new technology is still in a testing phase and insurance companies would be hard pressed to get people to sign up to be monitored if they risked higher rates for doing so.

So what data are insurance companies collecting with telemetric programs?  Generally speaking they claim to monitor your speed, the number of miles your drive, the times of day that you drive, as well as your acceleration and deceleration habits and how hard you take turns.  What they currently claim not to monitor is seat belt usage, the exact vehicle location the car’s speed relative to the posted speed limit at that location. 

Telemetrics as a car insurance rating and underwriting tool is not without its critics.  The fears and complaints deal primarily with privacy issues in this data collection process.    Collecting this much data on U.S. drivers certainly puts insurance companies in a powerful position.  While they don’t currently plan to collect detailed data about where you have traveled, as telemetrics become more commonplace it can be assumed that more and more data will be collected.  This does create a slippery slope scenario where once you have given over your privacy to insurance companies, over time the data they collect on you could become more detailed and broader.  And once the data is compiled and collected, it could fall into the hands of law enforcement or even your separated spouse’s divorce lawyer or some other civil liability suit attorney.  And what about hackers gaining unauthorized access to insurance company data and using this information to harm you in some way?  And one other aspect of the slippery slope theory says that as more and more people accept the loss of privacy in order to try for more discounts, those who wish to maintain their privacy may have to pay higher insurance rates just to do so.  Would this be fair? 

Clinard Insurance Group is an independent insurance agency, located in Winston Salem, NC.  We insure thousands of families and businesses all across North Carolina, South Carolina, Tennessee and Georgia.  If you would like help with your auto insurance,  home insurance, life insurance or business insurance needs, please feel free to call us, toll free, at 877-687-7557.

How Many New Cell Phones Have You Had Since You Last Updated Your Life Insurance Policy?

All of us who are old enough to remember the days before cell phones, will probably agree that how they have evolved over that time is nothing short of miraculous.  If I showed a person from 1982 what I can now do with my phone, they would think I was a magician.  Think back to the early days of cell phones when they were huge, clunky, expensive devices that could really only accomplish one task – making a phone call.  Similarly, the lowly life insurance policy has been evolving on an equally dynamic path, however fewer people have taken notice of these changes.  And as you read on, you will see that it has been in the best interest of the life insurance industry not to tell you quite as much about these changes.   But there is no doubt about it, if you have an old life insurance policy, and if you are also healthy, then you might benefit greatly from an upgrade.

One of the biggest revolutions in the life insurance industry began in the early 1980’s, with a brand new product called Universal Life Insurance.  Universal life policies had an advantage over traditional cash value policies in that they were much more flexible.  For instance, with a universal life policy you could allow the cash value build up to take the place of the death benefit or you could even let it pay your premiums for you for a while if you had enough cash value in your policy.   The next evolution of this tool allowed for the cash value to be invested in funds that mirrored the stock market, generating huge returns in bull markets but of course creating problems for policy holders in bear markets.

If you have a cash value life insurance policy in force, whether it is fully paid up or even if you are still paying premiums each month, please read on, this article could make you a lot of money.   Let’s take a look at some of the issues that make a switch to a more modern policy an important issue for you to consider.

A good place to begin would be with mortality tables.  These are tables which attempt to predict how long the average person will live given their current age. These tables are used to develop the rate you will pay for your life insurance protection. Now, when you purchased your cash value life insurance policy, it is more than probable that your insurance company calculated the premium that they charge you each month using mortality tables that are now out of date.   People are living longer now than they were just a few years ago and longer lifespans will generate lower life insurance rates.  But if your policy is locked in to an old mortality table, then you paying rates that anticipate that you will live a shorter lifespan than now may be the case. If you were to replace that policy with one just like it that used more modern mortality tables then you should see a reduction in your cost of life insurance even though you are older now.

Administrative costs – People who own cash value life insurance policies that are 15 years old or older may be paying for clerical workers who have long since been sent home.  Let me explain.  Older life insurance policies have built in administrative costs to cover the clerical costs of maintaining those policies.   You see, back then life insurance companies, which were very slow to automate operations and embrace computer technology, had not automated a number of their clerical functions, even simple ones like adjusting the growth or interest on the cash value of your account.  Using hundreds and even thousands of clerical persons to handle this was very expensive.  With all of those clerical employees they had to rent office space and maintain premises as well as offer benefit programs to keep these employees.  Most of that is all gone now and computers have taken on these tasks.  But, if you have an older policy, those expenses are still built into your rates and you are now paying for ghost employees and empty office buildings. And these expenses are pure profit to your life insurance company.  I hope your life insurance company is sending you a nice gift each Christmas because they have to love you for hanging on to that expensive policy which has huge profits built into it for them.   A new policy will save you from this expense.

Indexing – the new way to grow your money.  Most of the older, cash value life insurance policies have very rigid investment plan that severely limit how your money can grow.  Indexing, in the context of life insurance, refers to a technique where your money is invested in very safe, low yielding investments for the most part, while the insurance company purchases options on stock market indexes with a small portion of your funds.  When the stock market goes up, they can convert these and capture a nice percentage of the stock market gains.  What this means for you in general terms is that your cash value can now earn a large percentage of any stock market gains while avoiding any losses when the market goes down. When it comes to long term investments like the cash value in your life insurance policy, avoiding losses is often more important to long term success than capturing gains.  Indexing is a powerful tool that can help you end up with a lot more money in the long term inside your life policy.

Long Term Care – some cash value life insurance policies can now allow you to use a portion or even all of your life insurance death benefit before you die to use on long term care for yourself as you age and become unable to care for yourself.  This is a powerful feature because it does not require you to move to a long term care facility to collect the funds.  You can use your life insurance death benefit before you die to help allow you to continue to live in your own home and hire care givers to help you stay there as long as you are comfortable with that.  When you need to move to a long term care facility you can use the money for that as well.  Most long term care policies are not this flexible and besides, their cost is very high.  Here you are just using your death benefit as a living benefit for yourself.

Retirement Distribution Option – this new feature is found on fewer new policies but is catching on and may soon be very much more common.  Some of these new cash value life insurance policies let you to create a bucket where you can dump in money for your retirement, either from a 401k or from non tax deferred funds, for instance if you sell your home or inherit money.  Either way, the advantage is that you will be able to create a lifetime income that you can’t outlive.  This means that as long as you are alive you will receive monthly payments no matter how much that adds up to over your life time.  And the real power of this bucket is that you will be able to generate a much higher monthly dollar amount than any other method of distribution will allow.  This could make a big difference in your retirement lifestyle.

Clinard Insurance Group, located in lovely Winston Salem NC is dedicated to helping all insurance buyers become better informed consumers.  We insure thousands of families all across North Carolina.  If you would like help with your home insurance, your auto insurance, your life insurance or even your business insurance, please call us, toll free, at 877-687-7557.

NC Homeowners Insurance Rate Making – Is The Fox Running The Hen House?

The NC homeowners insurance market is in real turmoil.  Rate making for homeowners insurance rates, traditionally the bailiwick of regulators, is being undermined a long forgotten loophole.  This is creating a huge change in the way that insurance companies in NC are pricing their home insurance product.  If the regulators in this state don’t take some action soon, then this creeping process will undermine the rate making process completely and leave us with a sorry hybrid rate making system that means some homeowners will be paying far more than their share for their home insurance and it could create a large population of uninsured homes with the homeowners unaware of their lack of protection.

Homeowners insurance rates in North Carolina have long been regulated by the NC Rate Bureau and the NC Insurance Department.  This process has required insurance companies to file the rates for their products and then wait for them to be approved.  For many years now, the Rate Bureau has established the maximum rate levels that insurance companies could charge for home insurance.  This maximum rate level is called bureau rates.   During the time that home insurance was attractive to insurance companies, the rates that insurance companies filed were at deep discounts to the bureau rate, in some cases as much as 60% below bureau rates.  But in the past two years we have seen a sea change in the appetite for home insurance business from insurance companies operating in North Carolina.  Over the last decade, while they were bidding  down the rates in a competitive feeding frenzy for market share,  the climate seemed to change around them.  The heavy losses of 2011 in our state were a big wake up call.  And when a few large companies take action, it doesn’t take long for all the smaller companies to run scared and follow their lead. So, most home insurance companies in NC have switched their approach from one of seeking more new home insurance business to trying to find ways to get rid of the policies that they have.

A big part of the journey to restore profitability to NC homeowners insurance has led the insurance companies to try to find ways to charge higher rates on home insurance policies.  This strategy pretty quickly ran them up against bureau rates.    But there is a way around the Rate Bureau’s established maximum rate.  The law states that if the insurance company receives a signed form from the homeowner that gives them permission to charge rates higher than the Rate Bureau maximums, then rates can go as high as the insurance company wants to take them.  The form that homeowners can sign to give their insurance company the right to charge them rates above the NC Rate Bureau rates is called the consent to rate letter.

The consent to rate loophole was originally designed to give the insurance companies a way to charge a more appropriate rate to the rare situations where a homeowner has some inherent risk that makes them unattractive to insurance companies.  It is meant as a way to help homeowners with higher risk to be able to obtain some insurance, even if it is expensive.   It was meant to be used only rarely, to solve the one of a kind problems.    

The real problem now is that with our current rate structure in NC, the rates are just too low in the eyes of the insurance companies doing business here.  And the only choices that the insurance companies have are to either cancel policies or have their clients sign consent to rate letters.  They need higher rates for home insurance in our state to continue to write home insurance in our state.  But using the consent to rate letter to attain this goal is a bit like trying to open the battery cover on your cell phone using only a hammer.  In the process you destroy the phone.  The consent to rate letter is a clunky, unwieldy tool to increase rates.  With the current overuse of this technique, the consent to rate letter has just become a way to do an end run around the rate making regulatory power that the Rate Bureau is supposed to control.

So how does this work for the homeowner?  Well, if you are one of the unlucky ones selected by your insurance company to sign a consent to rate letter, then you will receive one with your homeowners insurance renewal bill.  If you sign this form, then you will be agreeing to a huge increase on your premium, one substantially higher than the maximum rates supposed to be allowed by the Rate Bureau.  On the other hand, if you don’t sign and return the consent to rate letter, then your home insurance policy will be cancelled by your insurance company.  So it is sort of an all or nothing approach, and even a bit random.  Some homeowners will escape completely; perhaps because they have never filed a claim or because their auto insurance policy is making enough money for the same insurance company to make up the difference.  Others will pay far more than our current regulatory system of rate making anticipates that they should pay.  This subdividing of the insurance marketplace for homeowners insurance will, over time, put great stress on the system.  In addition, there is the very real risk that many homeowners will not fully understand the consent to rate letter and may fail to return it.  They then will not receive a renewal bill and may only discover their lack of home insurance after a large loss has occurred.  And large, uninsured losses are not good for our economy or our society.

The real solution would probably be to have the Rate Bureau increase homeowner’s insurance rates, particularly the maximum rate, much more quickly than we have seen.  Their slow movement in this direction can be understood when you frame their choices in the light of an election year.  Now that the elections are behind us, I would like to see the Rate Bureau address this issue and take back control of the rate making process, or perhaps just scrap it completely and let insurance companies charge the prices that they want without requiring a consent to rate letter from the customer.  It is clear to me that the hybrid system that we are stuck in right now is not good for consumers or insurance companies.

If you find a consent to rate letter from your insurance company with your next renewal, I would advise that you not blindly sign and return it.  There may be other options available to you.  Here’s what you should do. First call your agent and find out exactly why you were on the list to receive a consent to rate letter.  Then ask if your agent has any other options for you that might allow you to buy your home insurance policy at a rate below bureau rates.  If you are still not satisfied, give us a call at 877-687-7557 and we will help you find a solution that works best for you.

At Clinard Insurance Group, located in Winston Salem, NC, we insure thousands of families all across North Carolina.  We will be happy to take your questions on your home or auto insurance and help you better understand just what your options are for the future with these policies.   We can help you with your auto insurance, your home insurance, your life insurance and even your business insurance.  Give us a call; you will be glad that you did.

The Consent To Rate Letter – Additional Confusion For The Consumer

You may have come across one of my previous blog articles decrying the confusion caused by the North Carolina insurance industry’s consent to rate letter.  If you missed them, click here, or here to read a few.   All of these articles though will lead to one very important point for you to remember:  If you receive a consent to rate letter from your insurance company, do not blindly sign and return it.  This is because doing to just gives them carte blanche to charge you insurance rates that are likely to be far higher than you will need to pay for your home or car insurance policy.   This article will focus on just one more feature of this letter that has caused confusion among consumers and left them facing higher rates than they ever expected to have to pay.

I want to start though with a quick background lesson on why North Carolina has a consent to rate form as a part of its insurance system.  Here in North Carolina, the rates for homeowners insurance and auto insurance as well as many other types of insurance policies, are heavily regulated.   Generally speaking, rates are approved or not by the NC Insurance Department as the maximum rates that can be charged for various types of insurance policies.  The insurance companies then file their rates as deviations, or discounts below the maximum rates.  Very few people will pay the maximum allowable rates for their homeowners insurance or their car insurance.  Occassionally though, an insurance company may feel that they would need to charge a specific client more than the maximum allowable rate because that client is perceived to carry a higher risk of loss for the insurance company.  In order to charge rates above the maximum allowed rate, they must have the client’s permission in writing.  And in cases where that client understands that their risk is higher and also has nowhere else to go to obtain insurance, then this is a good arrangement.    Unfortunately the consent to rate letter, once a rare occurrence is now a work around for many insurance companies to get higher rates out of their customers than the Insurance Department would allow.  This has happened in North Carolina in particular because the rates that are allowed have come to seem inadequate by many insurance companies after all of the money they lost to storms in 2011.  Many now use a consent to rate letter on huge swaths of their books of business just to circumvent the rate making process.    This should make it clear that signing a consent to rate letter without checking around for a better rate is almost always going to mean that you will be left paying far more for your insurance policy than you would otherwise have to pay.

Now that we are seeing such widespread use of the consent to rate form in NC, I felt that it was appropriate to let you in on another aspect of this letter that has misled some insurance consumers.   I am talking about the estimated maximum premium that is shown in the letter.  If you receive a consent to rate letter to sign, you will probably see that there is a mention of the estimated rate that you will be expected to pay if you sign the letter.  While this price might appear to be an accurate estimate, often it is far from the total that you will be paying if you sign the letter.  This is because many insurance companies will simply print the new, higher, base rate on the letter.  But the  base rate does not include the additional costs of endorsements to your policy that help to make your policy unique to your needs.  Perhaps you added towing coverage to your auto insurance policy or you have added guaranteed replacement cost coverage for your dwelling to your homeowners insurance policy.  When the consent to rate letter shows a new price for your policy that doesn’t include these other endorsements and the charges that go along with them then you might find that the bill you receive after you sign the letter is quite a bit higher than the estimate shown on the consent to rate form.  This has led to many cases of double sticker shock, once when you read the letter for the first time and yet another shock when you actually receive your updated, consent to rate renewal policy with rates higher than those estimated on the original letter.

The consent to rate letter is a work around procedure caused by the regulations that North Carolina requires for the insurance rating making process.  It can be confusing and downright misleading.  If you receive a consent to rate letter from your insurance company, I would advise that you call your insurance agent right away and try and understand why you are receiving this letter and what other options you may have for your insurance policy.  If you don’t get an answer that suits you, please call us and we will help you find a better solution.

At Clinard Insurance Group, we have many options available to our policyholders as well as to others who are faced with a consent to rate letter decision.  We still have options for writing homeowners insurance in NC without the auto insurance to support it.  Please feel free to call us, toll free, at 877-687-7557 and we will work to help you explore options that don’t include signing over a consent to rate letter to your insurance company. 

Changes To The NC Personal Auto Insurance Mult-Car Discount

The multi-car discount is one of those discounts that is nearly universal for families and as such, no one thinks much about it.   The savings presented by this discount generally runs in the 20% to 25% range but for the most part, most people won’t notice it unless it is taken away.  And for some families in NC this is just what is about to happen.

There is a strong underwriting logic behind the multi-car discount which has been part of the NC personal auto insurance policy for more than 40 years.  This logic is that when you have more than one car in the household, then there will be times when both of drivers will be riding together in the same car.  That means that the other cars on the policy are not being used at that time and for that you deserve a lower rate than the policyholder who only owns one car and that car is used for each and every errand.

As times have changed and more households have become two income households, one phenomenon that has occurred is that some households wanted separate policies for their own cars so that they could pay their bills separately from one another.  This approach of I pay for mine and you pay for yours has created  the need for two different auto policies in the same household.   If you think about it though,  even when this happens, the underwriting logic of the multi-car discount is still and so this household still deserves the multi-car discount on both auto insurance policies. And  Insurance companies have generally adapted to this new financial reality and happily applied the multi-car discount to both policies even though each policy may only have one car listed on it.   But those rules have now changed.

Effective March 1, 2012, the NC Rate Bureau has issued a revision to Rule 4.D which clarifies the intent of the multi-car discount.  The Rate Bureau now requires that there be two or more cars listed on a North Carolina personal auto insurance policy in order for the discount to be allowed.  So the two budget households with two different auto policies will be in for some sticker shock when their auto insurance policy renews the next time.  Losing this discount will generate an additional rate cost of up to 25% on each policy!  Will the additional costs of insurance force the separate budget households to cozy up a bit more with one another?  I’m betting that it will.

This new rule change does have a few exceptions.  For instance, in NC, state law limits then number of vehicles that you can put on a personal auto insurance policy to 4.  So, households with a 5^th car or even more, will have to purchase a second auto insurance policy.  When this happens, the multi-car discount is allowed to be applied to both policies as one of the rule exceptions.  The other exception happens when one of the cars is co-titled in another name of a policyholder in the household.  If this exception exists, then the multi-car discount can be allowed on both policies.

At Clinard Insurance Group, located in Winston Salem, NC, we insure thousands of vehicles for families all across North Carolina and South Carolina.  We try very hard to keep the insurance buying public informed of changes in the industry so that they can be more informed consumers of insurance.  If you would like help or advice with your auto insurance, your home insurance, your life insurance or even your business insurance, I hope you will call us toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com. 

Flood Insurance – Will Your Policy Work For You When You Need It?

People in flood prone areas depend on their flood insurance policies to give them peace of mind and protection if the big one comes and they get flooded.  But very few of these buyers of flood insurance know that there is no guarantee their policy will be renewable when it expires?  Flood insurance is made affordable by a program is sponsored by the federal government.  The laws that created the National Flood Insurance Program and that allow this program to exist are currently tangled  up in other bills and debates that leave some doubt as to whether or not we will have a National Flood Insurance Program after May of this year.

You may be asking yourself why the federal government is mixed up in an insurance program in the first place.  Well, flood insurance is a different creature in the insurance world because with flood insurance, only those that need it most (those who live in flood prone areas) are the only ones who will ever consider buying a policy.  And since homeowners who have no flood risk at all (those who live at the top of a hill) will never want to buy a flood insurance policy, the insurance companies selling flood insurance will always face an adverse selection process when they sell flood policies.  This adverse selection process makes the cost of flood insurance nearly unaffordable as there is no subsidy at all from the lower risk buyers.  So the federal government steps in with a subsidy and the NFIP.

The NFIP must be continually reauthorized by Congress periodically as its charter expires.  The most recent extension for the NFIP was passed at the on Dec 23, 2011 but this extension only authorizes the program through May 31, 2012.  Without a further authorization of the program, the NFIP will cease to function after that day.   Now this kind of congressional deadline is nothing new, in fact the current extension is the 15^th one since 2002.  In 2010 the NFIP was allowed to lapse four different times, creating 53 days in 2010 when you could neither purchase a new flood insurance policy nor renew an existing one.   And I’d bet that most of the homeowners who lost coverage during that time were at best only dimly aware of the new risks they were taking on the day their policies became invalid.

There are several reasons why the NFIP reauthorization is getting this band aid type treatment.  And most of these reasons are unrelated to the NFIP itself.  The debt limit issues that the government ran into in late 2011 led to this current short term extension instead of a multi-year solution.  And the bill to extend the NFIP charter into 2016 is unfortunately tangled up with a few political hot potato items such as tax rates and the Medicare payments to doctors debate. 

Remember that your homeowners policy will not cover flood losses.  This is also true with your businessowners policy for your business.  In order to be protected, you will need to purchase a flood insurance policy.  If you have already bought a flood insurance policy, then you should  keep a close eye on your mail or stay in touch with your agent to make sure that your policy remains in force after May 31^st.  At this point there is no certainty that you will be protected on June 1^st.

At Clinard Insurance Group, situated in beautiful Winston Salem, NC, we can help you with your flood insurance needs.  We can also help you save money on your auto insurance, your home insurance and your business insurance.  Give us a call, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.  

Volunteer Wrongful Acts Insurance Coverage – Should You Add This To Your Homeowners Insurance Policy?

America is a land of volunteers.   Almost everyone you know has volunteered somewhere at some point in his or her life and many people have regular work as volunteers each week.  But have you ever considered that your volunteer work could  get you into financial  trouble?  There are several areas of liability that can arise from volunteering from acts as a director or officer of a non-profit all the way down to minor clerical errors that could lead to personal liability risks for the volunteer.  Here I discusses a relatively new insurance coverage form that can be added to some homeowners insurance policies called volunteer wrongful acts insurance coverage.

Let’s start with a definition.  What is a wrongful act as defined by the volunteer wrongful acts coverage endorsement?  The endorsement defines this term as an actual or alleged error, misleading statement, act or omission, neglect or breach of duty committed by any insured during the policy period in the insured’s capacity as a volunteer.  If we break that definition down we see that the act must have occurred as the result of your volunteer work and that it can be either an alleged or an actual error.  It could even  be an omission or simply a breach of your duty as a volunteer.

I think an example is a good way to understand this risk and the insurance protection we are discussing.  Assume that you are a treasurer for a local nonprofit and you make an honest error in calculations that indicates that the nonprofit has more money to spend on a project than they actually have in the bank.  The project is approved based on your numbers and contracts are signed and the project gets underway.  Soon it is discovered that your error is going to generate huge expenses for your nonprofit due to the contracts that were signed for the project.  Suddenly you find yourself on the wrong side of a lawsuit with your nonprofit for the cost of these damages.  If you had added volunteer wrongful acts coverage to your homeowners insurance policy, then you would have protection for this loss. 

If this sounds like a coverage that you need, then you should contact your insurance agent and have them add it to your homeowners insurance policy.  Be sure that you understand the limits of coverage that can be provided.  Not every insurance company will allow this endorsement to be added to the policy and most will have limitations on how much protection you can buy.   So even though you may have a $300,000 personal liability limit on your homeowners insurance, this endorsement may limit you protection to $50,000 or perhaps $100,000.   You should also ask if your umbrella insurance policy will pick up coverage where this endorsement leaves off.  In most cases I have found that it will not do so.

Volunteering is a wonderful act of generosity and we should all encourage this kind of behavior as much as possible.  Unfortunately the law can still put you in a vulnerable position when you volunteer so you need to make sure that you have the protection you need to make sure that you are just giving your time and not your personal assets. At Clinard Insurance Group, in Winston Salem, NC we can help you add this protection to your homeowners insurance policy.  Please call us toll free, at 877-687-7557 or visit us online at www.ClinardInsurance.com.   

Your Life Insurance Premiums – Are You Paying The Salaries of Workers Who Have Already Been Fired?

Most people who are still paying premiums on older life insurance policies are paying for long gone data entry workers. When I first entered the insurance business, back in the early 80’s, one of the truths that was preached by the older guys was that everyone should purchase as much life insurance as they can afford and do it as soon as possible and then plan to hang on to that policy for the life. The reasons were that you never know when you might die or get sick and become uninsurable of course, but the other reason was because life insurance rates were always going to be more expensive the older you got. This makes good sense, even now, I mean the older you get the more likely you are to die.

But a strange thing occurred in the life insurance industry over the past 30 years that no one ever considered back then. It turns out, that for most people who are in good health; life insurance rates may actually be going down as they get older. Now this seems counterintuitive but there are a couple of reasons for this. I’ll explain them for you

Life insurance rates are driven by lots of things but mostly there are two important factors. The two things that have a huge impact on life insurance rates and which have changed dramatically in the recent past are mortality tables and the expected expenses in the policy. Let’s take a quick look at each of these and how changes in them might now represent a huge opportunity for you save some money on your current life insurance policies.

Life expectancy has been increasing steadily with improving safety, medical technology and patient care and preventative medicine. As this changes, we see corresponding changes in the mortality tables that used to calculate the rates on life insurance policies. But remember, since a life insurance contract by nature is a long term contract, all the calculations have to be done at the beginning of the policy and these remain unchanged over the life of that policy. So, if 15 years ago your life expectancy was 2 years less than it is today, this means that your 15 year old life insurance policy rates are based on old data. A similar new life insurance policy, with rates based on an updated mortality table, would likely cost you less money each year for the same or better protection.

Now let’s look at how technology changes life insurance rates. Thirty years ago, when I first got into the insurance business, life insurance companies employed vast numbers of data entry clerical staff to make calculations and updates on life policies regarding their cash values, surrender values and other features that change over time. Today, those same calculations are done in seconds by computers. Close your eyes for a moment and just envision floor after floor of empty desks and cubicles in the buildings of these large life insurance companies. Yeah, those workers are gone and have been gone for nearly a decade but you are still paying for them. Remember who earlier I explained that life insurance contracts, because of their long term nature, have to include all of the expected expenses from the beginning for the life of the policy. The longer you hang on to these older policies, the more money the life insurance company makes and the more you spend over and above what you might need to spend on a newer, more modern life insurance contract. Makes no sense for you to continue to do this does it?

So what do I see from day to day from my vantage point in this business? Well, usually, people in good health who come to us and want us to update their older life insurance policies end up with several options, all of which are good. In most cases they can reduce or eliminate their life insurance premiums, or keep on paying the same premium but let their new policy build up a much larger cash value. Also, in most cases they can add a long term care rider to a new life insurance policy for free.

The take away message here for you is that if you have a life insurance policy that is 10 or more years old, you really should take 5 minutes of your time and give us a call and let us take a look at your situation. It is unusual when we are unable to provide better coverage at a lower cost. I know that messing with life insurance is boring and paperwork seems like a hassle, but the next time you worry about how much of your money is burning away with these increasing gas prices, I want you to remember this easy way to perhaps put some money back in your pocket. For more help with your life insurance needs, please call Clinard Insurance Group, toll free, at 877-687-7557. Or you can visit us on the web at www.ClinardInsurance.com. We will be more than happy to help you figure out if you are still paying the salaries of workers who were fired years ago.

Clinard Insurance Donates $690 to Local Charities

Thanks to the help of the Clinard Insurance Group family of customers, we were able to donate $690 to local nonprofit groups in January of 2011. This is possible through our referral rewards program which designates a $5 charitable donation for each and every referral that we receive throughout the year each year.

Here’s a quick overview of how our Referral Rewards program works. Any time that we receive a quote request that was referred to our agency we do 4 things. First of all, we send a $5 treat gift card to the referring client, just as a way of saying thanks. These cards are from Wendy’s, Starbucks, Krispy Kreme and various other places. Next we put the referring client’s name in our monthly drawing for a $50 gift card to the restaurant of their choice. We also put their name in the hat for a chance to win $1000. The winner of that drawing is announced in early December each year. Last of all, we donate $5 to a local charity. Our customers can vote on their favorite charity by calling us, or by completing the form online here.

So this year we had $690 to give away and we delivered that to the following three local nonprofits:

Sunnyside Ministries – This organization is engaged in providing emergency help to families in South Central Forsyth County and Northern Davidson County who are in need of help due to financial crises.

Second Harvest Food Bank of Northwest NC – This organization collects perfectly edible food that might otherwise end up in a garbage dump and they then distribute this food to those in need across an 18 county area.

Crisis Control Ministry – This organization is engaged in helping people in crisis to meet essential life needs and to become self sufficient.

Each of these groups received a check for $230 thanks to the generous referrals of our clients in 2010. To watch a video of Gina Carlson delivering these checks, please click here.

For 2011, we are going to do it all over again. Your referrals not only help Clinard Insurance Group, but they work directly to help promote and support some of the many fine nonprofit organizations that are right here in NC. We thank all of you who referred your friends and family to us last year and we hope that many more of you will refer your friends and family to us in 2011. Thanks for your support.

The source information for this blog was taken from other articles which can be found in their entirety at www.InsuranceAnswerGuy.com.

All North Carolina homeowners now face a personal burden for beach house hurricane losses.

The North Carolina State Legislature is crafting legislation, House Bill 1305, that will push the burden of catastrophic hurricane losses of beach property on to the backs of all unsuspecting property owners statewide. While there are some positive changes in this legislation, it feels like to me that they are sticking it to the people who are not there watching this legislation be made, and that is all the people who own property in North Carolina that is not coastal property.

The good news here is that the NC legislature has finally admitted that the North Carolina Beach Plan is broken and needs a fix. The Beach Plan insures $75 billion worth of property in coastal areas and has a meager $1.5 billion in reinsurance and reserves to pay claims. Clearly if a large storm hits our coast, there will not be enough money to pay the claims. To find out how we got to this point and read more details of this problem, click here.

The major parties working on this legislation are the coastal property owners and their lawmakers and the insurance companies. Right now, if a storm hits and the beach plan goes under, the bill must be paid by all the insurance companies doing business in North Carolina writing homeowners insurance and other property insurance including commercial property policies. This assessment is presently unlimited and this unlimited exposure is scaring the insurance companies in North Carolina into taking dramatic action which impacts all of their policyholders. One drastic example is the consent to rate letters that some major insurance companies are now sending to their homeowners policyholders.

House Bill 1305 which sailed through the house on July 15th will take care of some of the uncertainty for the insurance companies. Right now the insurance companies face the uncertainty of unlimited assessments to bail out the Beach Plan after a major storm. If this bill becomes law, then their assessments will be limited to $1 billion per storm. Still quite a lot of money but now it is a number that they can plan for. So all in all, I think the insurance company lobby did a pretty good job of getting what they wanted.

But if you add another billion dollars to the amount available for a major storm, you will see that we still now have only $2.5 billion to protect over $75 billion in assets. So where does the rest of the money come from? Well the biggest chunk is a new storm assessment that can be added to every property insurance policy in North Carolina. If this bill becomes law, and we have a major storm, then you can expect to see an extra charge added to your homeowners insurance of up to 10%. And it is unclear in the wording of the bill as to whether or not that is a one time charge or can go on and on until the Beach Plan is made whole again. The open ended nature of the wording leads me to believe that this charge could remain on your policy for years and years to come.

Those owning property at the coast, who are insured through the Beach Plan, will have to give up something as well. In the event of a major storm, they will face a deductible of no less than 1% of the total value of the property. There is a clause that allows for even higher deductible percentages if needed.

I disagree with the legislators who say that our coastal property is a state treasure for all of us and all of us living in this state should be on the hook to support the coast. I think that the fairest solution is to raise the rates on beach property to more accurately reflect the risks and let those who own property or rent property at the beach carry the burden. In South Carolina the Beach Plan rates are about 10 times what ours are and their Beach Plan is adequately funded. This is the fairest way to handle this problem. In all cases of insurance, the system works best when those in control of the exposure are the ones who pay for the insurance.

At Clinard Insurance Group in Winston Salem, NC we work hard to make sure that all of our clients are informed insurance consumers. If you have any questions about how this might affect your homeowners insurance policy, or if you need any other help with any of your insurance policies, please call our office, toll free, at 877-687-7557 or visit us online at www.ClinardInsurance.com.

The source information for this article was taken from www.insuranceanswerguy.com.

Car Insurance Marketing Cheap Tricks – This One Could Ruin You

In the world of cheap trick marketing gimmicks, this one could put the auto insurance consumer in a world of hurt. I recently saw an ad on TV by an insurance company advising the customer to go online and build their own policy. And the hook line was, you choose how much you want to pay each month and we will build your policy to that price. This sounds like the consumer is choosing their own price but the opposite is true.

As much as the online direct writing insurance companies would like you to believe otherwise, auto insurance is a complicated contract between you and the insurance company and there are many elements to this contract that make it a poor do it yourself project. How many online clients are going to take the time to read the fine print of the conditions, terms and exclusions of the auto insurance policy? The answer is very few. And those that do will not have the experience in the ins and outs of this industry to understand exactly how this will affect them after an accident or a loss.

If you fall for the marketing ploy that you can name your price and the online wizard will create a policy for you to match that price, you are immediately discounting the primary value of a car insurance policy. That is to protect your assets. The only people who should view insurance as only a price to be paid to keep the car on the road are those who have no assets and no dependable source of income. They are the only people in a position to walk away from their financial responsibilities if they cause and accident and injure other people or damage other people’s property.

So how will the insurance company write you a policy to meet your chosen price? Simple really, they will cut your protection down to the point where they can meet that price. And this may or may not reflect what you need to protect your hard won assets if you cause a large loss. Please don’t try and do it yourself when it comes to buying insurance. Choose an agent that can help you through the process. Better still, choose and independent agent who can help you access many different insurance markets to get you the exact protection you need and the lowest possible cost.

At Clinard Insurance Group in Winston Salem, NC, we work very hard to develop personal relationships with all of our clients. We take all the time that each client needs to discuss their own personal insurance needs to help create for them the right policy, not just one based on the lowest price. If you are tired of going it alone, or if you don’t feel your current agent is giving you all the help you need, please feel free to call us, toll free, 877-687-7557 or visit us online at www.ClinardInsurance.com.

The source information for this article was drawn from information at www.insuranceanswerguy.com

NC building and construction contractors – Here’s just what those uninsured subcontractors will do to you and how you can prepare yourself to minimize

It is a fact of life in the construction business. Almost all construction contractors, from the general contractor all the way to the landscape contractor will occasionally have to hire an uninsured subcontractor. There are hidden costs to this arrangement but knowing them in advance can help you prepare for the costs and minimize the damages to your insurance program.

It’s helpful to understand, from the beginning, that insurance companies don’t like for their clients to hire uninsured subcontractors. The reason is that they feel that your control over a subcontractor is much reduced and therefore losses are more likely. If they are uninsured, then the exposure for those losses is pushed on to your insurance company. And that makes you a less attractive risk for your insurance company.

So hiring uninsured subs causes two big problems that can generate increased insurance costs for you. Both are things you can prepare for if you do your homework in advance. And by taking the steps I will outline below, you can possibly reduce the cost to zero for each of these problems. And remember, if you use a subcontractor that is insured, be sure to take the appropriate steps to obtain a valid certificate of insurance. To read more about what you need to know about insurance certificates, please click here.

The first problem that uninsured subs will cause for you is increased insurance premiums on your general liability insurance policy and your workers compensation insurance policy. This is a stealth increase because if you don’t take steps in advance to protect yourself, then by the time you find out how much your subcontractor costs you, the sub may be long gone and your chances or wringing it out of the him or her will be nil. If you are unable to produce a valid certificate of insurance on a subcontractor, then when your policy is audited by the insurance company at the end of the policy term, they will include as payroll, the full amount of cost that you paid to the uninsured subcontractor.

You can defend against this problem by withholding from the amount you pay the uninsured subcontractor an amount equal to or greater than the amount you will be charged by the insurance company at audit. To understand how much to charge, you should contact your agent and find out the rate per $1000 of payroll for the subcontractor’s classification on both workers compensation and general liability insurance. I would suggest that you add an amount over the rates you face to cover your administrative expenses of handling this transaction.

The second problem caused by uninsured contractors has to do with the insurance company’s reaction to finding out you have used them. As I mentioned earlier, insurance companies do not like for their clients to utilize uninsured contractors but their appetite for them will vary. Check with your agent first and find out just what percent of payroll or gross sales paid out to uninsured subs will be tolerated by your insurance company. Some may not tolerate any and still others may be willing to let you go as high as 50%.

It is important to know in advance how high you can go so that you don’t break your insurance company’s rules unknowingly. If they find out on audit that you have been using more uninsured subs than their underwriting guides allow, they may cancel your policy or take away discounts that will result in much higher rates for you. In this case it is better to ask permission first then to ask for forgiveness later.

Remember, when you deal with an uninsured subcontractor you are now allowing them to use your insurance for their risks. Over the long term this is not advisable because they could cause a loss that is so catastrophic it might destroy your ability to get insurance at all, or it may create a high experience modification factor on your workers compensation policy that might cost you a lot of money for the next 3 years. It is always best to deal with subcontractors that have their own insurance.

Clinard Insurance Group, in Winston Salem, NC specializes in helping small contractors of all types all across North Carolina. If you would like a second opinion on your business insurance or if you need help with your general liability policy or your North Carolina workers compensation policy, please feel free to call us, toll free at 877-687-7557 or visit us on the web at http://www.thecontractorshelper.com/.

Contractors – 5 Tips For Getting The Best Audit Outcome On Your General Liability And Workers Compensation Insurance Policies

All building contractors working in North Carolina who carry either a NC general liability insurance policy or a NC workers compensation insurance policy, or both, probably know that these insurance policies are subject to an annual audit. What few contractors understand is that they have the power to stack the deck in their favor when it comes to that audit. And since some of the audit process is subjective, this can mean money in your pocket if you are a building contractor. Here are 5 tips that will put you on the road to more successful insurance audits.

Let me start by emphasizing that insurance auditors are people just like any other. If you grease the path for them and make their job easier, then they are much more likely to cut you some slack in the audit process and this can end up saving you a lot of money. So, what are those 5 tips?

Tip # 1 – Have Those Insurance Certificates Ready. I just can’t preach this enough. Do not allow any subcontractors on to your job site until they have provided you with a current certificate of insurance. And more than that, be sure that the limits on their general liability insurance policy are at least equal to your own policy limits. And if you have a workers compensation policy, make sure that their certificate shows that they have one as well. Last of all, check the policy dates on the certificate to be sure that they are current and active. If any policies will run out while these subs are still on the job, make sure that you also obtain an updated certificate. Put copies of all of these certs in your audit file. If the auditor shows up at your office and you don’t have your certs ready, he will charge you for the subcontractor payroll and leave it up to you to fix it later. And usually, fixing it later takes a lot more of your time.

Tip #2 – Take Some Time To Study Your Classifications. First of all, take the time with your agent to understand all of the classifications on your general liability insurance policy and your workers compensation insurance policy. Make sure that you understand the nuances of each class code and that your policy is set up accurately. If you are going to fudge the gray area between two similar classifications, understand that you might not get it past the auditor and you should have funds ready should you fail.

Tip #3 - Have The Audit Done and Ready To Hand Over. Once you have done your homework on your classifications, set up a spreadsheet to dump the payroll for each employee each week into the correct classification. You will want to keep a spreadsheet for both the workers compensation and the general liability policies. If you have done this correctly, you will be able to hand that spreadsheet over to the auditor and essentially all of the auditor’s work is done. This is more likely to keep them from digging around in your books to find new problems to share with the underwriters that can cost you in increased premiums.

Tip #4 - Keep The Overtime Payroll Separate. The NC workers compensation insurance policy allows you to avoid paying premiums on the extra overtime pay. But, to keep from paying work comp rates on this payroll, you must have it segregated. I suggest that you add a column on the work comp spreadsheet that you are keeping to show the amount of payroll that is overtime bonus and deduct it from the total payroll for each classification.

Tip #5 - Always Schedule the Audit for Friday Afternoons. This one may sound a little goofy but it works. If the auditor shows up at your office on Friday afternoon, and you can put all the information in his hands with up to date spreadsheets and copies of all subcontractor certificates, then he is more likely to accept your figures and get on home for the weekend. The less time he spends digging around in your books and your operations, the less likely he is to find a surprise that the underwriter doesn’t like which means higher insurance costs for you.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping all kinds of contractors with their insurance needs, from general liability insurance and workers compensation insurance to commercial auto insurance and equipment insurance. If you would like help with your commercial insurance program, please feel free to call us, toll free at 877-687-7557 or visit us on the web at www.thecontractorshelper.com.

The information for this article was pulled from source information found at www.insuranceanswerguy.com.

Homeowners Insurance – don’t let that escrow account bite you.

As a convenience (and a way to earn more money for bankers) the insurance escrow system was set up many years ago. This technique of having your home insurance policy premiums paid by your mortgage servicing company looks like a great deal for the consumer but in fact there are several traps in this procedure that the smart consumer must avoid. At Clinard Insurance Group, in Winston Salem, NC, we want all insurance buyers to be informed consumers so if you have an escrow account associated with your home mortgage, read this short article to make sure you stay out of these traps.

First of all, even though the escrow account seems like a real convenience for the consumer, keep in mind that the banks make money on these accounts and so they cost the consumer money. Sure, you have your insurance and taxes etc rolled up in your monthly house payment but remember that the bank has collected all of this money (usually 16 months or more of expenses) ahead of time. In other words, they are making interest on your money. In addition, if you have scheduled items on your homeowners insurance policy like jewelry, or fine arts, the bank is escrowing funds ahead of time on the premium associated with these items when these items, along with your personal contents inside the home, are not what you borrowed money against in the first place.

The real problem with your escrow account paying your homeowners insurance premium is that it puts your homeowners policy into “out of sight, out of mind” mode. This is dangerous for several reasons. Most people, upon receiving their annual homeowners renewal policy don’t even give it a sidelong glance, they just toss it in their insurance file. But, these same people, when forced to get the checkbook out and pay for that home insurance policy renewal bill, then take the time to look at the bill and hopefully ask questions. Questions like – “How does this renewal premium compare to what I paid last year?” and “How much coverage am I buying when I write the check to the insurance company for this renewal?” This should eventually prompt a call to their insurance agent to get these questions answered.

At Clinard Insurance Group, we often find with our new clients coming to us to purchase homeowners insurance, that if their policy has been paid by escrow for many years, they are often paying far too much for their insurance coverage and in some cases they have too little protection because they haven’t taken the time to review and update their policy each year. If your homeowners insurance policy is paid each year by your escrow account, then it is important that you take the time to review your coverage with your personal agent each year to make sure that your rates are staying competitive and that your coverage amounts are appropriate for your situation. If you have any questions at all about your homeowners insurance in North Carolina, please call us toll free at 877-687-7557 or visit us on the web at http://www.ClinardInsurance.com.


The information for this article was collected from the website blog, www.insuranceanswerguy.com.

Tips For Making Your Cell Phone Battery Last

Every time you get a new phone you find more and more features crammed into this tiny device. For the most part, this is a good thing, except that these features are a drain on your phone’s battery and the battery technology has not kept up with the increase features. So what do you do when you need to conserve your phone battery because you are away from home or away from your charger?

Here are some tips and tricks that might help you make your phone battery last a bit longer when you need it the most.

Disconnect What You Don’t Need.
Many phones come with an option to connect to a Bluetooth device, such as a headset or hands free speaker in your car. When the Bluetooth is turned on, the phone is constantly searching for the Bluetooth devices and this can drain power. Also, if your phone has the ability to connect to the internet by a Wi-Fi wireless device, you can turn that off as well when you don’t need it.

The Apple Iphone comes with the option to switch between 2G or 3G mobile technology. Switching to 2G will slow down your internet connection and make Web surfing slower but it will increase your battery life tremendously.

Pull That Memory Card

Many phones now feature slots for external memory cards to carry photos and music. The phone uses a small amount of power to access those memory cards even when you are not using them. Therefore, if you are trying to conserve battery life and you don’t need to access the memory card, take it out of the phone.

Slow Down Email Updates

If your phone has email capability, then this feature can drain your battery even when you are not sending or receiving any emails. This is because the phone is going out and checking for updates on your email very often. If your phone uses Windows Mobile, you can change the frequency of the email updates and this will extend your battery life considerably.

Don’t Work That Antenna To Death
Believe it or not, your phone’s antennae requires battery strength as well. If your phone is dying, make it easier for the antennae to do its job. Keep your phone out in the open. Putting it in your pocket or purse will require more battery power for the antennae to function. Also, when you are using the phone, pay attention to where the antennae is so that you don’t block it with your hand. And if you are in an area where your phone is roaming or has poor service, then turning it off may save more battery than letting it roam continuously. Roaming is a big drain on battery life.

Final Tips

Get in the habit of dimming the backlight on the screen when you aren’t using it. Backlighting for one minute is roughly the battery use equivalent of one hour of standby time. Also, keep in mind that setting the phone to vibrate means more power use. Vibrate uses more power than a regular ringtone so only use the vibrate mode when you simply can’t avoid it. And last of all, keep the phone cool. Phones are designed to run best at 77 degrees Fahrenheit. The battery is more sensitive to heat than cold and on average a temperature increase of 5 degrees will cause your phone to lose 5% more power. So if you can, don’t leave your phone in the sun or in a hot car.

By combining all of these tips and tricks, you may find that you can more than double the battery life on your phone.

At Clinard Insurance Group in Winston Salem, NC, we work hard to give our clients a much richer experience than simply a monthly insurance bill. To see just what free products and service we provide our clients, visit our wiify page. To read more of our lifestyle tips and tricks, please visit our lifestyle blog at http://www.clinardinsurance.com/lifestyle/tabid/32965/default.aspx


The information for this article was sourced from the Clinard Insurance Group lifestyle tips and tricks blog.

Contractors: Your General Liability Policy Might Be A Source of Funds For You

Recently, times have been hard for many different types of building contractors. With jobs more scarce, many have had to lay off workers or they simply haven’t been able to keep people on full time. At Clinard Insurance Group, in Winston Salem, NC, we have seen our contractor clients’ payrolls shrink dramatically and while that indicates hard times, it also presents an opportunity for these businesses. If you are a contractor in the building industry with shrinking payrolls, then your general liability and workers compensation insurance policies could now be a source of ready cash for you.

To understand just how this works, remember that both the North Carolina general liability policy and the NC workers compensation policy are rated based on payroll. What this means is that the building contractor estimates his payroll for the coming policy year at the beginning of the policy term. Many of these estimates are based on the actual amounts of payroll found on the previous year’s audit. With that in mind, many construction contractors are carrying payroll levels on their policy many times greater than the actual payrolls they are running in this down cycle of our economy.

If you are a business owner in this situation, you can wait until the final audit of this policy term and receive your refund then. The problem with this approach is that you will have to wait for the policy term to end, and then you will have to wait several more months for the final audit to be completed. In addition, you might have to continue to make monthly or quarterly payments on your policies that are overcharging you now because your payrolls are overstated.

But there is a better way. Take a look at your general liability policy and your workers compensation policy and look up the payrolls that you are being charged for on each policy. Now estimate what your total payroll will be for the full policy term. You can request that the insurance company reduce your payrolls on your policy to this new level and that will generate an instant refund check to you, or it will reduce the amounts of your remaining installments. Voila, instant cash flow.

One word of warning here. Be sure that you leave enough payroll on your policy so that you don’t generate an additional premium due after the final audit. Doing that can put a huge crimp on your cash flow as I explained in an earlier blog. I call that problem “the audit trap” and you can read that entire blog by clicking here.

At Clinard Insurance Group in Winston Salem, NC, we specialize in helping all types of North Carolina based building contractors from Graders to Painters and everyone in between with their general liability and workers compensation insurance needs. If you would like help with your construction related insurance policies, please call us, toll free at 877-687-7557 or visit our contractors helper site at http://www.thecontractorshelper.com.

The source material for this article was pulled from http://www.insuranceanswerguy.com

Homeowners – Before That Contractor Starts Work, Get The Insurance Certificate

At Clinard Insurance Group in Winston Salem, NC, we make it a top priority to help our friends and clients with information that helps them protect their assets. One mistake many homeowners make is to let a contractor begin work at their home without first checking to be sure that this contractor has the right insurance protection for his or her business. There is a quick and easy way to do this and this practice is standard in most business to business (B2B) type transactions.

Before you let that plumber or landscaper or any type of repair worker begin a job at your home, you should first determine that they have insurance protection so that if someone is injured, or your property is damaged, you don’t have to file anything under your homeowners insurance policy. Simply ask them to have a certificate of insurance sent to you. This is a simple task, all the contractor will have to do is ask his insurance agent to email, fax or mail you a copy of this certificate.

Once you receive the certificate of insurance, what then? Well, there are a couple of things you want to look at closely. First of all, make sure that your name and address is .listed in the certificate holder section. And make sure that the certificate came from the contractor’s insurance agent and not from the contractor himself. This will increase the odds for you that the certificate is genuine and that the listed insurance coverage is actually in force. Believe it or not, there is an active market selling fake insurance certificates, I have even seen them for sale on ebay.

These certificates break down the insurance protection by policy type, so there will be a section for General Liability Insurance, Workers Compensation Insurance, Business Auto Insurance and Umbrella Insurance. Next you want to check and be sure that there is a policy number showing in the General Liability Insurance Section and in the section for Workers Compensation Insurance. These are the policy types that will be most important to homeowners..

Once you have verified that your contractor has these two types of policies in place, take a quick look at the limits of coverage. A North Carolina workers compensation policy will pay claims based on the statutory regulations so you won’t really need to worry about the limits there. But in the general liability insurance section, you want to be sure that the amount of coverage showing is high enough to satisfy you. Think about the worst case scenario of damage that this contractor could do to you, your family or your property and make sure there is enough of a limit there to pay for that loss.

Many homeowners just hire contractors to work in their home without giving insurance any thought at all. But some contractors cut corners and may not have enough insurance or any insurance at all. If they cause you a large loss to your health or your property, you may find yourself with no recourse. At Clinard Insurance Group in Winston Salem, NC, we want all of our homeowner clients to be safe from an un-insured contractor. If you have a certificate of insurance and are not sure how to read it, please contact us by calling, toll free 877-687-7557 or visit us on the web at http://www.clinardinsurance.com/ and we will help you understand exactly what the certificate your contractor gave you covers.

The source information for this article was pulled from http://www.insuranceanswerguy.com/.