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.

Walnut Cove Fire Department Achieves A Better Protection Class Code

The hard working fire department folks of the Walnut Cove Fire Department have successfully improved their fire districts official protection class rating.  And they have achieved this just a few years after they were placed probation for one year as a result of failing to meet state requirements.  Residents and property owners in the Walnut Cove Fire District should enjoy improved safety and perhaps lower property insurance rates as a result of this change.  The new class rating took effect Jan 1^st, 2014.

Several factors go into the development of property insurance rates like the construction materials, the age and what is inside the property.  But a huge part of the rating puzzle comes from the protection class rating.  This applies to all types of property insurance from homeowners insurance to dwelling fire insurance and even business insurance policies like commercial fire insurance and businessowners insurance.  Fire districts are all assigned a protection class rating number between 1 and 10.  The lower numbers indicate better fire protection and will help reduce property insurance rates while the higher numbers indicate poorer protection and thus generate higher insurance prices.   These protection class ratings are certified by the state.  In the process of evaluating these ratings, the state studies the fire department’s ability to respond quickly, whether or not they have water available at hydrants or if they have to carry the water on their trucks.  The quality of the supporting fire departments in surrounding districts can also have an impact on their protection class ratings.

In the case of the Walnut Cove Fire District, they were able to make huge strides in a relatively short period of time to reduce their protection class rating.  For owners of property located inside the city of Walnut Cove their new protection class rating will drop from an 8 to a 5.  For those in a 5 mile district surrounding the town limits, their new class rating has dropped from a 9 to a 6.  The people of Walnut Cove and in particular their fire department should be proud of this accomplishment and what it means for the safety and protection the people and property in the Walnut Cove Fire District.

If you are an owner of property located in the Walnut Cove Fire District, carefully check your next property insurance renewal policy.  If you are unable to determine your property’s protection class from the renewal policy then I suggest you contact your insurance agent to be sure that the policy renewed with the new protection class code applied to the rate.  It would not be unusual for an insurance company to miss these changes and I wouldn’t want you to miss out on the savings that your fire department has earned for you.

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

NC Homeowners Rate Increase May Be Looming – Here’s Why We Need It

NC home insurance rates underwent a 7% rate increase last July and some customers still haven’t felt this increase if their policy has not renewed since then.  Despite this, the NC Rate Bureau last Friday requested another homeowners insurance rate increase.  This new request is for an increase that averages 25.3% across the state.  Wayne Goodwin, the current NC Insurance Commissioner, has stated that he will not approve this rate increase.  This will mean that the process will require a hearing to issue a ruling one way or the other which could then be appealed to the courts.  Even though the overall requested rate increase statewide is 25.3%, the actual rate increases by territory will vary.  Some territories could see decreases of up to 2.7% while other territories, especially coastal ones would see increases as high as 35%.

The struggle between the insurance companies and the NC Insurance Commissioner over homeowners rate levels is at once political and economic.  From the comments section of the various news feeds online, I see that the general public is overwhelmingly in support of the insurance commissioner and his goal of holding down rates.  While this is an expected result, it does underscore the fact that this is a very political issue.  Since most people react to this news by considering only their pocketbook, then it is only natural for an elected politician to want to pander to their stance.  But I believe that If consumers were able to better understand the economic equation that insurance companies face, and also see how the unraveling of what used to be a stable insurance marketplace negatively affects them, then they might have a different viewpoint.   

To that end, I want to give my readers a different perspective on the negative impacts on their lives that a distorted and dysfunctional insurance marketplace can generate.    Here  I will share with you here an insider’s view as to what has already happened and what I think we can expect if we continue down this path of infighting between the NC Insurance Commissioner’s Office and the NC Rate Bureau over NC property insurance rates.

You need to know that the NC Rate Bureau is an entity that is owned by the member insurance companies who sell insurance in our state.  Its goal is to pool loss data for statistical purposes and to use that data to generate rates for many types of insurance policies.  This large pool of insurance claim and loss data should, in theory, allow the rate bureau to make rate requests that are more accurate than any one insurance company could generate with their own partial loss data.  And what the Rate Bureau is telling us is that the losses in our state for homeowners insurance are far exceeding the premiums that the insurance companies are allowed to charge to pay for them.

From my perch as an insurance agency owner, I have witnessed a number of big changes taking place in the home insurance over the past 3 years.  Compared to the decade leading up to 2010, our current homeowners insurance marketplace is currently dysfunctional and getting worse each month.  The burden of these changes has fallen squarely on the insurance agent’s shoulders to be sure, but they are also falling disproportionately on the shoulders of the customers who become caught up in the tangled mess that inadequate rates leave behind.

The first beginnings of change came in late 2011 when the largest insurance companies changed their underwriting rules such that they would no longer write new homeowners insurance policies without the supporting auto insurance for that same customer.  This is because while the home policy was statistically guaranteed to lose money for them,  there was enough profit in auto insurance to cover those losses.  Shortly thereafter, smaller insurance companies, not wanting to be left holding the bag, changed their rules to match those of the big boys.   Today you would be hard pressed to find an insurance company willing to write a new policy on your home without demanding the insure your autos as well.   The burden of this change fell hardest on the elderly who still owned their homes but had stopped driving.

Not long after that, insurance companies decided to extend this no home without auto rule to apply to their existing book of business.  Now they wouldn’t renew a homeowners policy if they didn’t also write the auto insurance.  Suddenly many homeowners who insured their home and auto policies with different companies were facing a non-renewal of their home insurance unless they brought their auto insurance to that company as well.  This change dragged quite a few more homeowners into the vortex of marketplace disorder. 

As insurance companies were turned down for one rate request after another, many chose to use an archaic rule, called consent to rate as the tool to get their home insurance clients to pay them rates that are above the state mandated maximum rates that the insurance commissioner has allowed.  This was a way, albeit one policy at a time, to make an end run around the insurance commissioner’s power to control rates.  But as you can imagine, asking clients give you written permission to increase their rates, one policyholder at a time is a very inefficient and costly way to get a rate increase.  Now an additional number of homeowners insurance customers were drug through a new paperwork mess that even left some with no coverage at all.  I have no doubt in my mind some homeowners out there who think they have coverage, do not because they failed to sign a consent to rate letter in time.  With no signature, their policy would not have renewed and if they didn’t notice that they didn’t pay a bill recently, they may not realize that they have no coverage.

One of the more dislocating gyrations of this dysfunctional market occurred when several insurance carries simply stopped doing business in NC.  They non-renewed all of their policies and moved on.  This kind of action reduces competition between insurance companies, and puts additional upward pressure on pricing.  In addition, when they leave, they leave all insurance markets, so we see reduced competition and higher pricing in other areas like auto insurance, business insurance and workers compensation insurance.

More recently we see insurance companies reducing the coverage provided under their homeowners insurance policies.  If they can’t raise rates then they need to reduce losses and that means reducing coverage under the policies themselves.  The most dramatic of these are special, higher deductibles for wind and hail claims and reduced coverage for roof damage.    If you don’t read the fine print, you may not realize that your policy has changed and perhaps  now you have a $5000 wind and hail deductible, or a deductible equal to some percentage of a wind and hail loss.   Worse yet, we are also seeing a number of insurance companies reducing the coverage for damage to roofs from a full replacement cost protection to a depreciated value protection.  This could cause serious cash flow issues for homeowners with a damaged or destroyed roof.  Imagine that your roof is damaged in a hailstorm and you must replace it.  Assume that you have a 30 year roof on your house and it is 20 years old.  If the cost to replace the roof is $15,000, then with depreciated value protection, you will only receive 1/3, or $5000 for this insurance claim.  You will have to come up with the other $10,000 to replace your roof out of your own pocket. 

All of these results are generally negative for the consumer and they hit consumers unevenly.   If insurance is to do anything at all, it is to pool assets among a large group of people so that everyone suffers just a little and no one suffers a lot.   And while many consumers will tell you that insurance companies are out to screw them over, they should understand that these insurance companies are operating in competition with each other and none of them are getting rates high enough to make a profit so they are stripping down the policy or putting consumers through the consent to rate process in order to attempt to make a profit and stay in business.  Only a diehard conspiracy theorist would believe that this many insurance companies would take this much drastic action in a competitive environment if they didn’t feel they had to in order to survive.  If our insurance commissioner would allow the free market to operate then insurance rates will go up right away, but over time competition will allow rates to stabilize and settle at a level that allows for a more stable insurance market.   I know no one wants to pay more for their insurance but blindly supporting a politician’s goal of keeping rates below profitable levels will generate more pain and agony for all consumers over the long haul.

At Clinard Insurance Group, we insure thousands of families all across North Carolina.   We want all insurance buyers to be informed consumers.  If you would like help with your home or auto insurance, life insurance or business insurance, please call us, toll free at 877-687-7557.

Are You Managing Your Certificate of Insurance Process Carefully?

It is no secret that the larger companies with big budgets and teams of lawyers often lead the way over smaller companies when it comes to risk management and safety issues.  Still, smaller companies can learn by watching the behaviors of the large companies in their trade group. This blog is designed to share with you some of what the big boys already know when it comes to insurance certificates.

Most small contractor companies understand the need to obtain certificates of insurance to prove that their subcontractors are insured.  But what often gets lost is a clear understanding of just why you need that certificate and how your certificate processes might impact your company’s risk profile.

If I were to randomly survey the small contractors that call our office to request an insurance certificate on one of our clients, and ask them why they need this certificate, the lion’s share of them would say that they need it for their insurance company when their policies are audited.   And while I understand that this is the most pressing issue; you don’t want to have to pay for insurance on your subcontractors if you don’t have to; this mindset completely overlooks the risk management component of this process.  In fact, the real reason that you want a certificate of insurance is to make sure that you are not taking on the risks of an uninsured subcontractor on your job site.  Look at it this way; you’ve put a lot of thought, time and care into your insurance protection. Do you want to let an uninsured subcontractor put all of that in jeopardy? 

Focus now on the risk management side of this equation.  You are relying on this certificate of insurance to protect your company from dangerous or uninsured subcontractors.  With that in mind, take a look at this short list of issues to keep in mind regarding the insurance certificates that you request from your subs. 

Make your certificate request to the insurance agent, not the subcontractor.  Several years ago it was reported that people were offering blank and/or fraudulently completed certificates of insurance for sale on ebay.  If your uninsured subcontractor wants to find a way to fake a certificate of insurance, it is not going to be that difficult to do.   So, to help insulate your process from this risk, ask your subcontractor for the contact information for his or her insurance agent and then contact the insurance agent directly to request the certificate.

Carefully review the certificate information.  So many contractors simply file away certificates of insurance without even glancing at them.  This is a dangerous practice.  You should take a minute to check the names of the insurance companies listed as providing coverage.  Do they look legitimate?  Are they names that you recognize?  Now take a close look at the policy effective and expiration dates.  If a policy will be expiring soon, especially if the expiration date is before you expect that the subcontractor will be finished at your job site, then you will need to get another certificate, one that shows that the policies were renewed.  Last of all, check the limits of coverage shown for each policy.  You want to be sure that your sub has limits high enough to keep your insurance from having to respond to a large loss.

Remember, with an insurance certificate you are looking at a snapshot in time.  Keep in mind that any information shown on the insurance certificate is just a record of the coverage in place on the day that the certificate was created.  If your sub fails pay his next insurance bill then he could be working on your job site with cancelled coverage, exposing your company to a huge unknown risk of loss.  And don’t be fooled by the idea that you will receive a notice of cancellation if your sub gets behind on his insurance payments.  The ugly truth is that most insurance companies do not even want to see copies of certificates issued by their agents and they have no intention of letting you know if a policy is cancelled.  The truth is, they couldn’t notify you of a cancellation, even if they wanted to as they have no record of the certificate in their files.

The Additional Insured option provides better security for you.  The larger contractors have taken this route and small contractors who care about their risk management should consider it as well.   In addition to asking for a certificate of insurance from your subcontractors, you might also consider asking that your company be added as an additional insured on the subcontractor’s policies.  Some companies charge for this but generally the charge will be pretty low.  As an additional insured, you will now receive an endorsement to the policy from the insurance company, so you know that they know about you.  This also solves the snapshot problem as you hold a position on the sub’s policy that entitles you to receive cancellation notices or notices of nonrenewal should any of those be triggered.

Don’t fall into the trap of focusing only on the audit requirement of an insurance certificate while forgetting that you need protection from your subcontractors and their behavior on your job site.  Don’t let your certificate of insurance procedures become a simple rule following process, instead take action to be certain that your company is getting the protection that it needs from the risks of uninsured subcontractors. 

At Clinard Insurance Group, located in lovely Winston Salem, NC, we want all insurance buyers to be informed consumers.  We have different types of contractor insurance programs, from landscapers insurance, plumbers insurance, electricians insurance to painters insurance programs and many others.  We insure contractors in North Carolina, South Carolina, Georgia, Tennessee and Virginia.  Should you need any help with your commercial insurance policies, I hope that you will feel free to call us, toll free, at 877-687-7557.

Electric Shock Drowning – Are You At Risk From This Silent Killer?

Electric shock drowning, referred to as ESD, is a relatively new danger to swimmers and boat owners.  With so many more docks now connected to shore power for lights and other electrical conveniences, more people each year are falling victim to ESD.  And since most people are completely unaware of this risk, we will continue to read about additional innocent victims each year.

Electric Shock Drowning comes about when small amounts of 120 volt alternating current leak into fresh water in places where swimming occurs.  Swimmers can be electrocuted or incapacitated by this AC leaked current.   This is a fresh water phenomenon as fresh water is highly resistant to electrical flow, meaning that a swimmer caught in the flow of escaped electrical current now becomes the path of least resistance for this current trying to return to its source.   It takes very few amps to incapacitate a person and lead to drowning.  Salt water by contrast has a low resistance to electricity so that the current would flow around a swimmer in salt water.

Electric shock Drowning incidents are most common around docks and marinas, but there have also been cases reported at water fountains, irrigation ditches, golf course ponds and other bodies of water.  Many cases may simply be written up as drowning if no one was there to hear the victim cry out before he or she drowned.  Despite these other places for ESD, the most common cause comes from a boat plugged in to shore power that is leaking this current into the water around it.  Before AC current can escape into the water around the boat, two things must happen.  The first is that the boat itself must have some electrical fault on board.   This would be a short circuit of some type or another, a wiring error or a malfunctioning appliance which is sending AC electricity away from its intended path.  Remember that AC electricity travels in a loop, from its source to the load and back again, forming what is called a circuit.  When the circuit is broken, AC electricity will try to find a way back to its source.  Proper AC setup requires that there be a green grounding wire serving as a backup return path for the electricity to complete its circuit if there is a fault in the circuit.   So the second thing that must go wrong is that the grounding system is broken or fails so that the AC current cannot return to its source.

So what can you do to protect yourself and your loved ones from ESD?  The best plan would be to never swim around docks or marinas where shore sourced electricity is present unless that electricity is turned off.  This is also why rough play on docks is so dangerous as it could lead to someone falling into the water around the dock.  Now if you must swim or dive around your boat in order to work on fittings or equipment, you should be sure that all electricity is turned off before you enter the water.  Should you ever feel tingling or shocks while swimming, then you should not return to the dock.  Touching a metal ladder in this case could be immediately fatal.  Instead, swim away from the dock or marina and head to shore 100 yards or more away.  To rescue an ESD victim, do not go in the water as that could make you a victim as well.  Instead, turn off the shore power connection at the meter or unplug the shore power cords, then throw a line to the swimmer or row out to help the victim.  And now that you know more about ESD, please spread the word about these risks to all of your friends and family who have docks or spend time at marinas and might be at risk.

For those of you who own docks with shore power, there are a few additional precautions you should take.  Post no swimming signs at your dock.  Only hire trained marine electricians to install or service the wiring at your dock.  Those trained as land electricians do not have the training or understanding to safely install or service wiring in a marine environment.  You can also purchase testers that can test your dock and the waters around it for electricity leaks.  Please also consider the following protective devices for your dock.

Isolation Transformer – This device transfers electricity from the shore to the boat without the shore wires physically touching the boat’s wires.  If you have a fault, then the current no longer seeks a path through the water back to shore.

Galvanic Isolators – These are designed to help prevent your boat from suffering from or contributing to galvanic corrosion while plugged in to shore power.  Choose a failsafe model that requires that if it fails, it will fail in the off position.

Reverse Polarity Indicator – Can tell you if a neutral wire becomes hot thus removing your protections from circuit breakers that are installed on hot wires.

Growing up around water, I know I have many wonderful memories of swimming and playing around docks.  But we need to rethink this tradition as our docks are changing and becoming more dangerous places.  Please share this information with anyone you know who may be at risk.

At Clinard Insurance Group, located in Winston Salem, NC, we want all insurance buyers to be informed consumers.  If you need any help at all with your personal auto insurance, your home insurance or boat insurance or even your life insurance, please feel free to call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com. 

The Parent’s Role In Teaching A Teenager To Drive

This year, National Teen Driver Safety Week runs from October 20 – 26.  That got me thinking that now might be a good time to review the parent’s role in teaching a teen aged child how to drive safely.  This year, the theme of National Teen Driver Safety Week is:  It Takes Two – shared Expectations for Teens And Parents.

Gaining the freedom that comes with learning to drive and obtaining a drivers license is a life changing process for most teens and their parents.   The public schools in North Carolina take on some of this instruction, but most teens generally only receive about 6 hours behind the wheel in drivers’ education programs.  We know for sure that this is not enough time to learn to drive safely.  We advise our parent clients that they should spend at least 100 hours in the passenger seat with their teen behind the wheel learning from them.  If they can increase those hours to 150, then their child will have an even better chance of becoming a safe driver.   These hours of supervised driving are critical to the success of the driving training that a parent provides for his or her child.  This is a safety issue and the best way to insure that your child will be a safe driver is to practice good driving skills when your child rides with you in the car and to pass on your knowledge as the trainer in the passenger seat while your permitted child drives.   

It will also help if you have a good understanding of the statistical realities for inexperienced drivers.  As an example, a recent study found that 75% of serious teen automobile accidents were the result of driver error and that more than half of these wrecks were caused by one of three mistakes made by the teen aged driver.  These three common errors in judgment were:

1.       Driving too fast for road conditions – Teach your child about speed management, not only following the posted speed limits but also learning to make adjustments in speed for weather, traffic or road conditions that demand slower speeds.

2.       Driving while distracted – First of all, emulate non-distracted driving when you drive and your child rides with you.  Help them understand just how quickly a distraction can kill them.  Make it scary and make it personal if you have to but help them understand this concept.

3.       Failure to detect a hazard – Teach your child to constantly scan the road and the area around them for possible hazards.  They must learn to get the big picture by taking in data all around them for purposes of spotting hazards.

To help you with this important teaching process, Clinard Insurance Group has created a driver training book that breaks down what your child needs to know and how you can teach it to them into an organized, step by step approach.  If you and your child keep a log of the hours driven under training, this can help give him or her the incentive needed to learn these skills so that your teen will understand where the two of you are in the training process and will know what is required to finish this training.  Learn more about this training booklet here.

Once your child has completed the training while driving with you under a license permit, then the next step is to have your child test for and obtain a restricted driving license.  At this point your job is not finished.  Do not let up in your supervision of your child at this point.  At this point, it is important that you take the time to learn the rules of the graduated license system in your state and make sure that you consistently apply them to your newly licensed teen driver.  If your teen is anything like mine, then he will tell you that no other parents are making their children follow these rules to the letter of the law.  He will be wrong when he says this and it is your job to make sure that he moves through the graduated licensing process step by step, following all restrictions.   Graduated licensing programs have had a major impact in reducing deaths and injuries for teen drivers in states that have implemented them so please follow that process all the way to the end.

At Clinard Insurance Group, located in Winston Salem, NC, we insure thousands of families all across NC, SC, GA, and TN.  We want to help you with the process of turning your child into a safe driver and have many tools on our website for this purpose.  We can also help you reduce the cost of auto insurance for your teen driver while still helping you get the coverage that you need to feel comfortable with this change.  Please call us, toll free, at 877-687-7557 for help.

Did Your Car Dealer Forget To Add Your New Car To Your Auto Insurance Policy?

What a huge thrill.  Taking your new or even gently used car home from the dealership is a big day for anyone.  But before you drive off that lot you need to make sure that your insurance is in place on this new car.

Car dealers always want to help make the car buying process as painless as possible.  That’s why they often offer to handle the call to your insurance company for you to add coverage for your new car to your auto insurance policy.   And this seems more than convenient, but for some unlucky people this convenience has come at a huge cost.  I’m an insurance agent and have been for 30 plus years.  My word of advice is that you don’t leave this job to someone else.  Mistakes and oversights happen and we are discovering more and more cases where we don’t know about a new car purchase until months after it actually happened.    If this discovery comes after your car has been totaled in a wreck then you might lose quite a lot of money.   Please don’t delegate this important part of the car buying process to anyone else.

With that in mind, it might help to review exactly what the NC auto insurance policy says about changing  the cars on the policy.   I must preface this discussion by saying that this blog is oriented around the North Carolina Personal Auto Insurance Policy form so if you are located  in another state, or if your vehicles are insured on a commercial auto insurance policy then what you read below may not be accurate for your particular situation.  Also,  I want to keep the attorneys happy here by saying that whatever you read in this blog may or may not be accurate for your particular situation and that there is no substitute for reading your policy as what is written there will supersede anything that you read here.

Ok, so we have the disclaimers out of the way, now let’s see what the NC Personal Auto policy says about vehicle changes.  The policy form addresses this issue as two different categories which I will call replacement vehicles and newly acquired vehicles.  Replacement vehicles language refers to the case where you are replacing one vehicle with another one.  The newly acquired vehicles language will refer to the instances when you have acquired a vehicle and are also keeping all of your existing vehicles.  We will study each of these situations separately.

Here’s what the policy language says regarding replacement vehicles:  “If a newly acquired auto replaces a vehicle shown in the Declarations, it will have the same coverage as the vehicle it replaced except that coverage, if any, under Part D – Coverage For Damage To Your Auto applies only if you ask us to insure it within 30 days after you become the owner. “  For me, that means that if you replace one vehicle with another then the liability insurance will apply to the new vehicle no matter if you forget to tell the insurance company or not.  But the physical damages protections under coverage D, called collision and comprehensive coverage, will not be available for the new vehicle unless you ask the insurance company to make this vehicle change on the policy within 30 days of the purchase of the new vehicle.  So if your car dealer forgets to call in the car change, and you don’t catch the oversight, then after 30 days the new car will have no comprehensive or collision insurance in force if it replaced a car that had comprehensive and collision coverage in place.  Of course if the replaced vehicle was insured for just liability insurance, then that is all that you will ever have on the replacing vehicle unless you ask the insurance company to make the car change on your policy.

Regarding the situation where you purchase an additional vehicle that is not replacing a vehicle on the policy, the insurance policy language reads this way: “If the newly acquired auto is in addition to any shown on the Declarations, it will have the broadest coverage we now provide for any vehicle shown in the declarations if you ask us to insure it within 30 days after you become the owner.”   In this case your comprehensive and collision protection will be automatically apply to the new car as long as at least one other car on your policy has this coverage.  But all insurance on that new car will end if you don’t ask the insurance company to add the car to your policy within 30 days.

The take away for you as an insurance consumer in North Carolina is that it is your responsibility as the car owner to notify your insurance agent or insurance company as soon as you take ownership of an additional or replacement vehicle.  Leaving this detail to your car dealer could put your insurance protection and thus your assets in jeopardy.

At Clinard Insurance Group, located in Winston Salem, NC,  we insure thousands of families all across the state of North Carolina.  If you need help with your auto or home insurance,  or even your business insurance or your life insurance, please feel free to call us, toll free, 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.

If You Buy Flood Insurance, Your Next Bill Might Be A Shocker!

In the United States, flood insurance is very much a subsidized product.  You see, flood insurance, by its very nature, runs against the basic rules of the insurance industry.  With flood insurance, only people in flood zones will buy it.  Homeowners insurance and auto insurance are different.  Any house could burn, so every home owner will buy insurance and spread the risk around.  But flood insurance is very different as the risk of loss only applies to those in known flood zones thus removing the ability of insurance to spread the risk.  So, in order to make a market for flood insurance, the federal government created the National Flood Insurance Program (NFIP) and either over time or perhaps even from the beginning and by design, they allowed the rates to be set far below what is needed to pay the losses generated in the program.

These subsidies made the NFIP a real target in these days of federal budget cutting.  And since the NFIP has to be reauthorized from time to time, it’s reauthorization now became contingent on these subsidies going away.  Enter the Biggert-Waters Flood Insurance Reformation Act of 2012, which reauthorizing the NFIP through September 30, 2017, but also included a mandate to eliminate the subsidized premiums.  The result of this legislation is that  many who buy flood insurance can now expect to pay quite a bit more for flood insurance.

This unwinding of subsidies means that rate increases will happen for consumers in one of two ways.  They will either see 25% rate increases each year for an undetermined number of years into the future, or they will see immediately higher rates as their policy is forced into a post-firm conversion to post-firm rates.  Either way, if you buy flood insurance then, you will likely be facing much higher rates for all renewals and changes that take place after October 1, 2013.

Earlier I mentioned pre-FIRM and post-FIRM rating programs and this needs a brief explanation.  These terms simply describe the rating table from which the rates for flood insurance are taken.  Pre-FIRM buildings are those built before January 1, 1975 or built before their community adopted its first Flood Insurance Rate Map (FIRM).  And while there are some exceptions to the rule, if your home is a pre-FIRM home, located in flood zones A, V, or D, then you should expect 25% rate increases on your flood insurance policy each year for the foreseeable future.  I assume that these rate increases will stop once your rates have gradually increased to match post-FIRM rates.  If your building or home is a pre-FIRM building and located in flood zones A, V, or D and the building was not insured on a NFIP policy prior to July 6, 2012, or was purchased by a new owner after July, 6, 2012 or have experienced a lapse in flood coverage on or after October 4, 2012, then that building will be immediately reclassified into the higher cost post-FIRM rating.  If this happens then your policy will take on all of the rate increase needed to remove all subsidies immediately.

If you have a home or building that will need to be moved from pre-FIRM to post-FIRM categorization,  then you will do a few things to make sure that you maintain your eligibility for flood insurance.  This means that you must submit a new elevation certificate on your property along with current photos of the front and back of your building. 

As the federal government eliminates flood insurance subsidies, some homeowners will find themselves facing higher premiums and perhaps even additional paperwork and eligibility issues.   If you buy flood insurance now, then you can expect to receive some notifications of the rate changes, along with instructions on what you must do to remain eligible to continue to purchase flood insurance.  Please read all of this information carefully, and pay attention to deadlines to make sure that you can continue to buy this insurance for your flood risk building.  If you need any help with your flood insurance or have questions about this program, please feel free to call us, toll free, at 877-687-7557.

Clinard Insurance Group is an independent insurance agency located in Winston Salem, NC.  We insure thousands of families and businesses all across NC, GA, TN, and SC.  We can help you with your auto insurance, home insurance, life insurance and business insurance with specialized niche programs for artisan contractors, landscapers insurance, restaurant insurance, used car dealers insurance, painters insurance and auto repair shop insurance.  If we can help you in any way, please call us, toll free at 877-687-7557.

Obesity Classified As A Disease – This Presents New Problems For All Employers

The American Medical Association (AMA) has recently chosen to classify obesity as a disease instead of a medical condition.  This new classification may have implications for all employers.  Now carrying the label of disease, obesity suddenly becomes a major risk liability for employers on many different fronts.  Employers now must better understand what this means vis-à-vis the ADA Amendment,  federal disability law and the Equal Opportunity Employment Commission (EEOC)law suits.  And keep in mind that since one third of all Americans are considered obese, with another one third considered overweight, this dramatically increases the number of people that can now be recognized as disabled with rights under the 2008 amendments to the Americans with Disabilities Act. 

In defense of this new classification, the AMA says that recognizing obesity as a disease will likely help change the way the medical community tackles this very complex medical issue.  And this could offer hope to those that suffer from this disease.  And while the AMA’s new definition does not carry the force of law, it might make it easier for an obese employee to argue that he or she is disabled.  Disability law says that an impairment is something that affects a major life function.  This could include walking or sitting.   Next up is the EEOC.  Will they change their definition of disability to include limitations caused by obesity?   Currently their definition of disability due to obesity is limited to the category of morbidly obese. 

One more area of concern for employers is the federal disability law.  Under this law, employers’ actions in dealing with an obese employee could come back to haunt them.  An employee who isn’t morbidly obese and who isn’t limited in any major life functions might still qualify as disabled if the employer treats him or her as impaired.  A worker who is passed over for promotions or hiring because of obesity, may be able to show that he was denied work because the employer acted in a way that indicated that the employer considered him impaired.

So what should a business owner do to protect the company from the risk of lawsuits and disability claims due to obesity?  Start by getting a clear understanding of whether or not your company falls under the rules of the ADA amendment.  If so, then keep in mind that by their definitions, you may have a disabled person working for you and you may need to modify the work environment to accommodate them.  Next, remember that if you don’t treat the person as disabled in terms of the work that you give them or the promotions that they receive, then you will have made a step in the right direction in terms of making it harder for them to prove that they are disabled because of the way that they are treated in your company.  And if you don’t carry workers compensation insurance, then get that taken care of immediately.   Last of all, make sure that you have purchased and have in force, an Employment Practices Liability Insurance(EPLI)  policy and be sure that your protection provided by this insurance policy will extend to discrimination against obesity.  Treat all of your employees fairly in all hiring, firing and promotions, without regard to physical attributes and you will have gone a long way toward protecting your business.  But bear in mind that you must stay on top of changes to rules and definitions like this or you may suffer damages for ignoring them.

At Clinard Insurance Group, located in Winston Salem, NC, we insure thousands of businesses all across North Carolina, South Carolina, Georgia, Tennessee and Virginia.  We want all insurance buyers to be educated and informed consumers.  If you would like to discuss an Employment Practices Liability Insurance (EPLI) policy, or any other insurance need for your business, please give us a call.  We will take as much time as you need to help you understand your risks and your options for insurance protection.  You can reach us, toll free, at 877-687-7557.

Cyber Liability Insurance – Can You Afford To Ignore This Protection Any Longer?

These days most every business, no matter how small or what kind, is in the business of collecting data and information about its customers.  We do this for many reasons, from collecting payments from clients to establishing ways to stay in touch with them and help generate repeat business with them.  And these days there are so many client data driven business applications for smart phones and tablets and computers that data collection processes are now showing up in even the smallest organizations.  So what can you do to keep this data safe, and by implication, protect the privacy of your clients?  What will be your responsibilities to them if your database is hacked or stolen?  Have you tried to understand and measure the costs to you and your business if you have to pay for the losses and damages from a cyber-intrusion into your network?

Cyber attacks can happen fast and leave behind long lasting negative effects for your company.  A data breach can be caused by something as simple as misplacing or losing a laptop computer, smartphone or a tablet computer.  And while this sounds a bit scary and overwhelming, the good news is that the insurance industry has recognized this risk and has begun to offer insurance protections for this type of loss.     I have listed below a short list of reasons why you need cyber liability insurance coverage in place for your business. 

Here are 5 top reasons why you should purchase a cyber liability insurance policy for your company:

1.        Breach of Network Security/Privacy  -   While we tend to think of a data breach affecting our clients, it can also involve the loss of the personal information of your employees of information about your vendors.  You could also lose company data for your own company such as proprietary information; let’s call it the secret sauce to what makes your business unique and successful. 

2.       Data Recovery Costs – Among the many costs of recovering from a cyber theft will be the costs to recover data that is stolen.  You may have to spend quite a bit to pay for your clients’ or your employees’ costs to rehabilitate their individual financial identities.  This could be a very long and expensive process, depending on what damage has been done by the thieves. 

3.       Breach Notification – You will be required to notify anyone who might be affected by the data breach.  The costs of communicating with so many people at one time could be quite expensive for your company.

4.       Regulatory Fines/Penalties – Different governmental entities may have fines that you will have to pay as a result of the cyber theft of your data.

5.       Your Loss of Income – Don’t discount the damage to your business of this type of theft.  Your reputation will need to be repaired and this will take time.  In addition, the time and effort that you spend in recovering from a data breach loss could completely cripple your ongoing operations and generate a huge loss of income for you.

Cyber liability losses to businesses are increasing in both frequency and scope.  Because this liability exposure is so new, many businesses have overlooked the negative financial impact that this kind of loss might have on their organization.  My advice is that you sit down with your insurance agent and take as much time as is needed to make sure that you have the cyber liability coverage in place that you feel is required to adequately protect the health of your organization. 

Here at Clinard Insurance Group, located in Winston Salem, NC, we want all insurance buyers to be informed consumers.  We insure thousands of small businesses all across North Carolina, South Carolina, Georgia, Tennessee and Virginia.  If you need help with your small business insurance, or if you want to explore cyber liability coverage in more detail, please feel free to call us, toll free, at 877-687-7557.

Homeowners Insurance And Dog Bites

There are a lot of dog lovers in this world.  I know I am one.    And that makes it easy to be blinded to the risks that they pose to me as a dog owner and a home owner.  If your dog bites or attacks someone, either in your home or off of your premises, do you have any insurance protection?    What steps should you, as a dog owner and dog lover, take now to reduce the possibility that your dog will hurt someone else?

In NC, if your dog injures someone and if you are held responsible for that injury, then your North Carolina Homeowners Insurance Policy will pay that loss.  This falls under the liability section of your homeowners insurance policy.  But bear in mind that once the claim is settled, your insurance company may refuse to renew your homeowners insurance policy unless you remove the dog from your home.   And depending on where you live, your local government may require that the dog be destroyed.   So it makes a lot of sense for you to be clear about some of the facts of dog bite claims and injuries.  In addition you should be thinking about things that you can do to keep your loved family pet from hurting someone.

Here’s a quick review of some recent dog bite statistics.  In 2012, insurance companies paid out an estimated $489 million on dog bite claims.  The US Postal Service reports that in 2012, a total of 5879 postal workers were bitten or attacked by dogs.  The 2012 number reflects an increase of 274 attacks over the 2011 totals.  And the American Humane Society estimates that unsupervised newborns are 370 times more likely than an adult to be killed by a dog.  And consider that the average cost of a dog bite claim in 2012 was $29,752.

So what can you, as a dog lover and dog owner, do to reduce the chance of your dog biting someone?  Well, keep in mind that any particular dog’s tendency to bite will depend on a number of factors such as heredity, training and socialization, as well as the victim’s behavior.  Many people don’t realize this but under the right circumstances, any dog might bite.  Here are a few tips that might help:

·         Remember that a sick or injured dog is much more likely to bite. Stay on top of your dog’s health needs to reduce the chance of a bite due to poor health.

·         While your dog is still young, make an effort to socialize him or her to as many different situations with other animals and people as you can.  If your dog feels at ease in a situation, he or she is much less likely to bite.

·         When you play with your dog, do so with nonaggressive games.  A good example of this would be fetch.  Playing tug of war type games can encourage inappropriate behavior that could lead to a bite later.

Taking a bit of care to work with your dog early might save the dog’s life later.  And it could prevent someone from being hurt by your dog.  And all of that prevention just might preserve your ability to continue to buy insurance for your home by preventing a claim later.

At Clinard Insurance Group, we insured thousands of families, all across North Carolina.  If you would like help or questions answered about any of your insurance policies, either home insurance, auto insurance, business insurance or even life insurance, please call us, toll free, at 877-687-7557.