WASHINGTON
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Monday, April 22, 2013
Insurance News - Commercial P/C Pricing Continued Upward Trend In 1Q
Insurance News - Commercial P/C Pricing Continued Upward Trend In 1Q
WASHINGTON
,April 18 -- The Council of Insurance Agents & Brokers issued the following news release: Commercial lines pricing took another bounce upwards in the first quarter of 2013, according to The Council of Insurance Agents & Brokers' quarterly Commercial P/C Market Index Survey . On average, pricing rose at a rate of 5.2 percent compared with 5 percent in the fourth quarter of 2012. "The first quarter was a tough market for underwriting and for commercial clients who were hit with higher prices," said The Council's President/CEO Ken A. Crerar . "Carriers backed off risky business, tightened underwriting and pressed for higher pricing and deductibles on renewals. The upshot is more business is moving into the alternative markets." One broker called it a "Jekyll and Hyde" market with carriers seeking rate increases on renewals while good, new business is still aggressive. Average First Quarter 2013 Commercial Rate Increases Continue The survey revealed a number of trouble spots. Workers' Compensation continued to be a hard line to place. Brokers across the country reported large price increases and in some areas capacity shrunk. A Midwest broker said some carriers had no appetite for the workers' compensation business at all. Another broker said workers' compensation was driving a lot of the underwriting decisions forcing business into mono-line or alternative markets. The survey also reflected an on-going "Superstorm Sandy" effect with tighter underwriting on property risks with CAT exposure on the eastern coast. A broker in the region reported that "Insurers pushed for higher deductibles for named windstorm and flood in the Northeast, especially for insureds with claims from Superstorm Sandy." Another noted that flood deductibles increased and carriers were lowering limits or excluding flood coverage. Meanwhile, the Midwest struggled with wind/hail deductibles, which were up one percent to two percent, according to a broker there. The Southeast also experienced higher deductibles, exclusions for wind/hail and tighter underwriting on commercial property in general. A few brokers reported a capacity problem with employment practices liability coverage. Reflecting what brokers experienced from coast to coast, a broker in the Southwest said "EPLI rates [were] up dramatically over the last six months, coverage is being restricted and retentions are increasing." There was good news. Fifty-two percent of those responding said demand for insurance was up. As for what kept them awake at night - the majority answered finding new talent and the federal deficit.
WASHINGTON
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Thursday, April 18, 2013
Top 10 Questions to Ask when Shopping for Home Insurance
Top 10 Questions to Ask when Shopping for Home Insurance
Top Ten Questions To Ask When Shopping For Home Insurance
What are the most important home insurance concepts you should understand before purchasing a new home insurance policy? This article looks in-depth at the top ten questions you should get answered before buying or switching a home insurance policy. With answers to the top ten home insurance questions, you will be able to pick a home insurance provider that will provide you with the best coverage, strong financial stability, excellent customer service, and a very reasonable price.
What I Should Know Before Buying Home Insurance
If you are like millions of Americans out there, then to you insurance is a big black box. When it comes to home insurance, what are you covered for and what should you really be concerned about? To help you make the right decisions about home insurance, I've compiled a list of the top ten most important questions to get answered before you buy a home insurance policy. If you can get the answer to each of these 10 questions (and understand that answer), then you have armed yourself with all the knowledge you need to pick a home policy, or upgrade the one you currently have. So what are you waiting for? Read on!
- Is my home insured at actual cash value or replacement cost? A word to the wise; get a replacement cost policy. The main difference between actual cash value and replacement cost is that a replacement cost policy will make you whole after a claim with nothing more than your deductible out of pocket. Actual cash value factors depreciation into the amount you receive for a claim. What does this mean to you? Well, in addition to your deductible, you could be forking out hundreds to thousands of dollars to repair your home to the state it was in before the damage. A replacement cost policy doesn't factor depreciation into the equation, and thus will repair your home in its entirety regardless of age with only your deductible as your payout.
- Is my personal property insured at actual cash value or replacement cost? I have a close friend who got robbed in college. He had an actual cash value renter's policy. After his home insurance company factored in deprecation for his 52 inch TV, all his clothes, his laptop computer, and his leather couch, he received a check for ,000. Moral of the story? Pay the extra few bucks a year to make sure you will get full value on your stuff if something happens.
- What type of home policy is this? As you may already be aware, not all home insurance policies are created equal. In fact, there are five different tiers of home insurance policy you can buy. From the most basic coverage to the most extensive, the policy types are HO1, HO8, HO2, HO3, and HO5. My recommendation would be to stay away from the HO1 and HO8 policies, because you might be sorry later. A good solid policy is the HO3. It will protect your home from everything with a few minor exclusions, and will protect your personal property from the most common causes of loss.
- What endorsements, if any, are on the policy? Endorsements are add-ons that make your policy more bullet-proof. Examples of endorsements that can be added are residential glass coverage, water backup coverage, or additional coverage for electronics such as computers and LCD TVs. If you have any special add-ons, or want coverage that you're not sure is included, ask your agent or forever hold your peace.
- What is the company's AM Best rating? In an ever changing economy, I'm assuming you'd like to know that your current home insurance company is not going to be the next AIG. AM Best is an organization that rates insurance companies' financial stability. Although financial strength doesn't always tell the whole story, it's a good indicator of what claims and customer service might also be like.
- How can I be sure the home insurance company will provide great claims and customer service? This is probably the toughest question to answer, because there is no sure fire way of knowing exactly how a company will respond when you file a claim. The Better Business Bureau publishes complaint information on most reputable insurance companies, and this is what I would check first. Also, most state websites publish a customer complaint index on all insurance companies registered in the state. Search for your home insurance company to find out how they stack up against the competition.
- Have all discounts been applied that pertain to me? Lets face it. You are not a professional insurance agent, nor do you want to be. You don't have time to research whether or not every possible discount that could possibly be added has been put on your home policy. By asking your agent this simple question, it might cause her to rack her brain and find another discount you might qualify for. It's worth a try anyway.
- What is my deductible? The higher the deductible, the lower your premium, yet the more you have to pay if you file a claim. Are you more comfortable with a high deductible and low insurance payments, or the other way around? Decide what your comfort zone is, then get quotes based on what you prefer.
- Is there anything that could cause my home policy to cancel when they come to inspect the property? You want to make sure to ask this question in the beginning to avoid headache down the road. There are many things that could cause a policy to cancel shortly after it's written. Depending on the company and its underwriting guidelines, "cancelable offenses" could be vicious dogs, farm animals, unrepaired damage, missing roof shingles, trampolines, diving boards on pools, and much more.
- As my agent/insurance company, what hours are you available in case I need to contact you? Why do you have home insurance? Ok ok, because the mortgage company requires it. But home insurance is also there to protect you and make you whole if something happens. You need to make sure that your agent and/or insurance company is reliable and will be reachable by phone or in person when disaster strikes
DP1 Landlord Insurance Policy
DP1 Landlord Insurance Policy
In the United States, most landlords have three standard policy types available to insure their rental properties. The DP1 is the first, followed by the DP2 and the DP3. The DP1 policy offers the most basic coverage of all the rental property policies. It contains no bells and no whistles. The most common reason for a landlord to purchase this type of insurance would be to reduce the costs of insurance.
The DP1 insurance policy is a named perils insurance policy. This means that all the perils that are insured are specifically listed (or named) in the policy itself. The insurance coverage is restricted to the perils that show up in the policy. The DP2 insurance policy is also named risk, although its list of perils is much more extensive than the DP1's list. The HO1 and HO2 insurance policies are the home insurance counterparts to the DP1 and DP2, and are also named peril policies.
Policies that are more extensive in coverage are actually referred to as open perils policies. The DP3 insurance policy is open perils, as are its home insurance counterparts the HO3 and HO5. Open perils policies insure against all perils, with the exception of a few exclusions specifically listed in the policy.
As referenced above, the DP1 policy only covers the perils listed in the policy. The following perils are the most common perils that are insured against with DP1 insurance:
Most DP1 insurance policies are Actual Cash Value (ACV) insurance policies. This is an important distinction that needs to be understood. An Actual Cash Value dwelling insurance policy is much like a car insurance policy; the older the dwelling gets, the less it is worth. If you are a landlord and your rental property is insured with Actual Cash Value, depreciation will be deducted from any damages you are awarded after a claim.
Let's say for example that a hailstorm rips the roof off of your rental property, and you need it replaced. If the roof is 15 years old, the materials originally used on the roof are very old, and aren't worth very much. If it cost you $10,000 to replace the roof 15 years ago, the insurance company may only give you $5,000 to replace the roof now, because the materials have depreciated by 50% (in this example).
The alternative to ACV insurance is Replacement Cost insurance, which will not deduct depreciation from the amount you can receive for a claim. Unfortunately, most DP1 policies will not allow you to insure your rental with replacement cost insurance.
The DP1 is typically the lowest cost landlord insurance policy on the market. If a landlord is looking for the cheapest policy she can find, it will typically be the DP1 policy. Every landlord should, however, do a cost-benefit analysis of each type of dwelling insurance policy to decide which policy is the best policy for their rental. Price, perils covered, and type of insurance (ACV vs. Replacement) should all factor into the insurance purchase decision.
DP1 Landlord Insurance Policy
The DP1 insurance policy is the most basic insurance policy available for rental properties in the United States. This policy is often referred to as Dwelling Fire Form 1, or DP-1 insurance. It provides very basic insurance coverage for rental properties.
DP1 Policy is Very Basic
In the United States, most landlords have three standard policy types available to insure their rental properties. The DP1 is the first, followed by the DP2 and the DP3. The DP1 policy offers the most basic coverage of all the rental property policies. It contains no bells and no whistles. The most common reason for a landlord to purchase this type of insurance would be to reduce the costs of insurance.
DP1 Insurance is Named Risk Insurance
The DP1 insurance policy is a named perils insurance policy. This means that all the perils that are insured are specifically listed (or named) in the policy itself. The insurance coverage is restricted to the perils that show up in the policy. The DP2 insurance policy is also named risk, although its list of perils is much more extensive than the DP1's list. The HO1 and HO2 insurance policies are the home insurance counterparts to the DP1 and DP2, and are also named peril policies.
Policies that are more extensive in coverage are actually referred to as open perils policies. The DP3 insurance policy is open perils, as are its home insurance counterparts the HO3 and HO5. Open perils policies insure against all perils, with the exception of a few exclusions specifically listed in the policy.
Common DP1 Named Perils
As referenced above, the DP1 policy only covers the perils listed in the policy. The following perils are the most common perils that are insured against with DP1 insurance:
- Fire & Lightning
- Internal Explosion & External Explosion
- Windstorm & Hail
- Riot & Civil Commotion
- Smoke
- Aircraft
- Vehicles
- Volcanic Explosion
- Vandalism & Malicious Mischief
DP1 Insurance is Actual Cash Value Insurance
Most DP1 insurance policies are Actual Cash Value (ACV) insurance policies. This is an important distinction that needs to be understood. An Actual Cash Value dwelling insurance policy is much like a car insurance policy; the older the dwelling gets, the less it is worth. If you are a landlord and your rental property is insured with Actual Cash Value, depreciation will be deducted from any damages you are awarded after a claim.
Let's say for example that a hailstorm rips the roof off of your rental property, and you need it replaced. If the roof is 15 years old, the materials originally used on the roof are very old, and aren't worth very much. If it cost you $10,000 to replace the roof 15 years ago, the insurance company may only give you $5,000 to replace the roof now, because the materials have depreciated by 50% (in this example).
The alternative to ACV insurance is Replacement Cost insurance, which will not deduct depreciation from the amount you can receive for a claim. Unfortunately, most DP1 policies will not allow you to insure your rental with replacement cost insurance.
DP1 Insurance & Price
The DP1 is typically the lowest cost landlord insurance policy on the market. If a landlord is looking for the cheapest policy she can find, it will typically be the DP1 policy. Every landlord should, however, do a cost-benefit analysis of each type of dwelling insurance policy to decide which policy is the best policy for their rental. Price, perils covered, and type of insurance (ACV vs. Replacement) should all factor into the insurance purchase decision.
Tuesday, April 9, 2013
Insurance News from Laura Liss- 2013 Commercial Rates Up 5%
Insurance News - March 2013 Commercial Rates Up 5%
Large Accounts Hit With Rate Increases
Based upon the composite results of commercial business placed across the United States in March 2013, placing accounts that command large premiums no longer assures the buyer of a more aggressive pricing strategy.
Richard Kerr, CEO of MarketScout confirmed the results noting, “Historically, underwriters have been very aggressive in pricing name brand or large accounts. Other than the cache or bragging rights, there are few sound underwriting reasons for aggressively pricing large accounts. Risk is risk and exposure is exposure. In March, underwriters more frequently assessed an appropriate premium for large accounts.”
Workers’ compensation, professional and small commercial all received more aggressive month-over-month price increases.
Manufacturing continues to post the largest rate increases as compared to prior year results followed by contracting, service, habitational, and transportation.
A summary of the March 2013 rates by coverage, industry class and account size is set forth below.
By Industry Class | |
Manufacturing | Up 7% |
Contracting | Up 5% |
Service | Up 5% |
Habitational | Up 5% |
Public Entity | Up 4% |
Transportation | Up 5% |
Energy | Up 4% |
By Account Size | |
Small Accounts | Up 5% |
Up to $25,000 | |
Up 6% | |
$25,001 – $250,000 | |
Large Accounts | Up 5% |
$250,001 – $1 million | |
Jumbo Accounts | Up 5% |
Over $1 million | |
Friday, April 5, 2013
Replacing Mommy Would Cost 'A Small Fortune'
Insurance News - Replacing Mommy Would Cost 'A Small Fortune'
As many as 43 percent of adult women have no life insurance, according to the Insurance Information Institute, citing a nationwide poll by wholesaleinsurance.net, an industry news and information resource. Among those women covered by life insurance many are severely underinsured, carrying only one-fourth of the amount that would likely be needed by their policies’ beneficiaries, the industry group said in a release. “Ironically, 100 years ago women weren’t even able to buy life insurance,” said Loretta Worters, vice president with the Insurance Information Institute, in a statement. “Today, women can protect their finances, but they aren’t buying the coverage or, if they are, it isn’t enough.” In the United States, women have made big economic strides over the past 30 years. Many now are more educated and often better paid than their spouses. Yet their life insurance coverage hasn’t kept up, the latest poll numbers indicate. Women who serve as the family’s primary breadwinner carry 31 percent less life insurance than their male counterparts, the survey also found. This despite the fact that in 2007, more than a quarter of wives were earning more than their husbands in dual-income households, and despite the fact that women as a group live longer than men. Replacing mommy would cost “a small fortune,” Worters said, particularly if she were underinsured by an inadequate life policy or lacked coverage altogether. “What would happen to the family if the mom weren’t around?” Worters asked. “Who would manage the day-to-day housekeeping, the laundry, driving kids to and from their sports activities?” Life policies have a variety of uses. They serve to replace income for children and other adults who are dependent on a breadwinner. The policies can also pay for the cost of funerals, burial, probate and estate administration. They can be used as an inheritance and increase charitable contribution limits due to their tax advantages. Life policies can also be used as tax-advantaged savings vehicles that build up cash value.
As many as 43 percent of adult women have no life insurance, according to the Insurance Information Institute, citing a nationwide poll by wholesaleinsurance.net, an industry news and information resource. Among those women covered by life insurance many are severely underinsured, carrying only one-fourth of the amount that would likely be needed by their policies’ beneficiaries, the industry group said in a release. “Ironically, 100 years ago women weren’t even able to buy life insurance,” said Loretta Worters, vice president with the Insurance Information Institute, in a statement. “Today, women can protect their finances, but they aren’t buying the coverage or, if they are, it isn’t enough.” In the United States, women have made big economic strides over the past 30 years. Many now are more educated and often better paid than their spouses. Yet their life insurance coverage hasn’t kept up, the latest poll numbers indicate. Women who serve as the family’s primary breadwinner carry 31 percent less life insurance than their male counterparts, the survey also found. This despite the fact that in 2007, more than a quarter of wives were earning more than their husbands in dual-income households, and despite the fact that women as a group live longer than men. Replacing mommy would cost “a small fortune,” Worters said, particularly if she were underinsured by an inadequate life policy or lacked coverage altogether. “What would happen to the family if the mom weren’t around?” Worters asked. “Who would manage the day-to-day housekeeping, the laundry, driving kids to and from their sports activities?” Life policies have a variety of uses. They serve to replace income for children and other adults who are dependent on a breadwinner. The policies can also pay for the cost of funerals, burial, probate and estate administration. They can be used as an inheritance and increase charitable contribution limits due to their tax advantages. Life policies can also be used as tax-advantaged savings vehicles that build up cash value.
Insurance News - Mom's Finances Are Stretched Thin
Insurance News - Mom's Finances Are Stretched Thin
SPRINGFIELD, Mass.
,April 1, 2013 /PRNewswire/ --Moms feel they are doing it all: raising children, performing household chores and managing finances – and nearly eight in ten of these moms are juggling a job as well according to the 2010 U.S. Census. The reality is, doing it all perfectly may not be possible. Only 24 percent of moms surveyed are satisfied with their current financial situation and one quarter of moms admit they are struggling to make ends meet or are worried about their financial future. However, only one third of moms (32 percent) currently use the services of a financial professional to help them with their investments and/or insurance needs. Those are among the key findings from the nationwide State of the American Mom Study released today by Massachusetts Mutual Life Insurance Company (MassMutual ). "It's no secret in today's world that moms are stretched thin, but their finances shouldn't have to suffer as a result," says Tara Reynolds , Corporate Vice President of Consumer and Product Marketing in MassMutual 's Life Company Marketing division. "Luckily, finding an experienced financial professional for your finances can be easier than finding help for childcare or other things that cause stress for today's moms – and can make all the difference when it comes to achieving financial security for themselves and their families." When it comes to insurance, the data shows that moms may be putting their families in an especially vulnerable position. Forty-six percent of moms surveyed do not own disability income insurance and an even larger number (68 percent) do not own long-term care insurance – both key to help ensure financial stability for the long term.
SPRINGFIELD, Mass.
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