Tomasz Kaznowski

Archive for the ‘Guest Post’ Category

Since 1990, there’s been a steady trend for the nonprofit insurers to convert into for-profit. The industry argues this makes their members more efficient. In fact, it only makes them more efficient in extracting money from the insured. As if this is not bad enough, many of America’s top insurers also sell insurance in foreign countries. This is one of the byproducts of globalization. It seems the efficiency of insurers can be felt all round the world as they pursue profit wherever it can be found. Well, this makes 2011 a year for us all to remember. We had earthquakes in New Zealand and Japan where the damage was made rather worse by the arrival of a tsunami. Back home, we had a terrible winter with major storms. Then came the tornado season and hurricanes brought flooding to Virginia and other unexpected places. This combination of extraordinary seismic activity and record-breaking bad weather has produced a disaster in company profits. Insurance companies are in shock as the volume of claims becomes apparent. In America alone, the insurers will be paying out more than in any other year since records began The losses are almost $18 billion in the first six months of 2011 as against $13.5 billion for all of 2010. It’s going to be a challenge for them to recover from the estimated loss of $32 billion for the full year.

Looking at the geography of America, some companies are less exposed because either they are based in states experiencing fewer disasters or they have fewer insured in states where the losses have been highest. All insurers have therefore been taking determined steps to reduce their exposure to risk. They have begun by reviewing the terms of their policies to impose more limitations and exclusions. They are also refusing cover for flooding and water damage where the volume of claims has risen faster. Deductibles are rising, and then come the premium rates. According to the Insurance Information Institute, the average rate annual premium for homeowners is about $850. This will almost certainly rise in 2012. This may not sound fair but, with insurers operating in many different states (and selling insurance to foreign countries), the risk of losses is spread out with premiums rising for everyone.

Once the majority of insurers changed their status, they focussed on the need for profit. This means reducing the amount paid out and maximizing the amount paid as salaries and benefits to the employees. Stockholders take the rest. Since the majority of insurers act in this way, how can you protect yourself? First, you must look very carefully at the small print. Remember cheap home insurance is cheap for a reason, i.e. it offers only limited cover. Second, once you have found a good value policy, don’t make small claims. Even if you have lost more than the deductible, be warned. Insurers are canceling policyholders who make more than two claims in a relatively short period of time. Keep the policy for a major loss. Remember your claims history is shared among all insurers so, if you do claim, hope to avoid a nonrenewal notice in the mail. You might find it difficult to find a replacement home insurance policy.

Keeping your car in good shape can affect your auto insurance quotes, and one of the most important times your car needs special attention is when getting ready for winter. The time to start this project isn’t after winter has already hit, but well in advance, so you and your vehicle are both ready before that first big storm.

Regular maintenance
Oftentimes, those little problems that just seemed nagging in warmer months become big issues by the time winter rolls around. It’s best to take care of maintenance issues prior to getting stranded in a snow drift. This includes maintaining regular oil changes, making sure all lights (including hazard lights) are working, and keeping fluids topped.

Visit your mechanic
A trained professional should be involved to check a few things more thoroughly before winter sets in. This includes your car battery performance, making sure your heater and thermostat both work properly, and that your defroster is effective. Belts and hoses should also be checked, as cracked or worn rubber isn’t likely to withstand the colder temperatures of winter.

Check your tires
The air pressure in your tires changes when the air outside changes temperatures, so be sure to top off your gauges. Also, the making sure the tread on your tires is important, as good traction is a key factor in avoiding the kinds of accidents that result in higher auto insurance quotes. You may even consider in investing in a set of snow tires designed especially for handling winter roads.

Emergency Kits
It’s a good idea to keep an emergency kit in the trunk of your car throughout the year, just in case something should happen. Include a flashlight with extra batteries (or one that doesn’t require any), water (be sure to leave enough room in the bottle to allow for freezing expansion), trail mix or protein bars, and a first aid kid. Other necessities include a can of Fix-A-Flat, jumper cables, and emergency flares. In the winter, this basic emergency kit should be supplemented with a couple blankets, a bag of sand or kitty litter, and some strips of old carpet, for getting traction on slick ice when stuck.

Dedicated winter upgrades
Finally, you may purchase special gear made just for winter use. The snow tires listed above are a good example; another example includes replacing the normal fluid used for your windshield with a formula designed especially for use in freezing weather. Special wiper blades can cut better through an ice-coated windshield than standard blades. Some of these upgrades may count as added safety features that end up lowering your auto insurance quotes .

It’s a curious fact that the federal government does very little to monitor the amount of crime. You would imagine the Department of Justice would be interested to follow the statistics of wrongdoing so that resources could be targeted where most needed. Instead, we have judicial statistics that record the number of cases coming before the courts – the tip of the iceberg with so little crime actually detected. The police admit to solving less than 10% of the burglaries reported to them. Yet the statistics show the number of burglaries has been falling. This surprising fact is explained in two ways. First, most people have the basic contents of a home so burglars struggle to find buyers for the goods they steal. Second, more than a quarter of our homes are now fitted with an alarm system, iron bars on the windows, and stronger doors. This makes it more difficult for the burglar to break in. Obviously, a determined thief will always get in but, if it looks too much hassle, most move on in search of a home where the owner has helpfully left a door or window open.

So let’s start with the good news. Most insurers offer a discount for people who fit security measures to reduce the risk of a burglary. Check with your current insurer to see what gives the biggest savings. Now come back to your home with a little more confidence. You may still find the worst has happened, but you have done your best to prevent it. Now the practicalities: did you have enough cover? Whether you are a renter or an owner, it’s worth paying the full rate to cover the replacement value of all your possessions. Walk through the rooms and make a list. It’s too easy just to think of the more expensive items like the television, your computer(s), cameras and music equipment. You will be surprised how quickly the value of the contents rises when you actually list all you have.

In fact, there should be two lists. One should be the everyday possessions, the other the expensive items. This can be jewelry, artwork and other collectibles. Take photographs of all the expensive items. For all the larger electronic and domestic goods, make a note of the serial numbers. Insurance companies are always more comfortable if you have proof of purchase – yes, it’s a good idea to keep receipts and instruction manuals should a claims adjuster ask for them. Receipts are also useful to show the original value. If you have no receipts, look for evidence of payments on credit card and bank statements. Even PayPal may show payment when you bought online.

Although this all looks a lot of hassle, you are smoothing the way should you come back to a burglarized home. Now you have a master list, it’s easy to find what’s been stolen. The claims check is also likely to arrive more quickly, which should make you feel a little better. Now spend some dollars to make your home a fortress and the next home insurance quotes will not rise too much. When you claim, remember this will be recorded in CLUE and A-PLUS so, when you next come to renew your homeowners insurance, all insurers will know about your claims history.

Cheap car insurance is definitely something that all drivers strive to get these days. With insurance costs rising every year and the incomes of many households getting smaller the question if cheap car insurance becomes crucial for a lot of families in the US. There are many ways you can actually get an affordable policy and you don’t have to break the law or become an insurance expert to do that. However, for a certain group of drivers cheap car insurance is the standard option no matter which company they choose to buy from. These lucky customers are called good drivers and they always get the best rates possible.

The definition of a good driver is rather vague depending on the point of view you study it from. Most people would think that being a good driver means handling your car like a pro and being able to drive at incredible speeds like a Formula 1 racer. However, the insurance providers have quite a different understanding on this term. From their perspective “good” means “low risk”, a driver who is very unlikely to file a claim and make the company pay out for damage or injuries he or she has caused. Insurance providers use different factors to determine the risk grade of a particular customer and knowing them will definitely help you get cheap car insurance if you will take the necessary measures to improve your statistics.

First of all, insurance companies check your driving record and look for any negative entries it may contain. The more traffic violations and accidents you have, especially if your record isn’t that long in time, the more it is unlikely for you to get cheap car insurance in general. Try to keep your record as clean as possible for a longer period of time and you will be considered as a low risk driver. If there are already certain entries you can take measures by eliminating them. Ask your local road police station whether you can take additional course in order to eliminate your penalty points and negative entries in the record – in most states it is possible.

Additional driving courses can be a very good idea in general since they often allow you to get better quotes after you show the certificate. There are many courses available in all states and you will just have ask around in your city or town. Make sure that you will get a valid certificate after finishing such courses because it will be a proof to the insurance company that you are actually a better driver. Besides the obvious benefits of getting cheap car insurance you will also gain additional knowledge and driving skills which is definitely a good perspective.

And don’t forget to keep your credit record in a good condition. Most insurance companies use customers’ credit reports in order to determine how risky they are because it was statistically proven that drivers with a good rating file claims less often than those with scores below the average. If your credit record isn’t very favorable hire a financial consultant in order to improve your rating and eliminate any unused and outstanding credits and debts. This will raise your chance of getting cheap car insurance right from the start.

In the good old days before there were organized police forces, it was left to a few individuals to enforce the law. When they proved inadequate, there were feuds and vigilante action by the victims. Obviously, this fighting disturbed everyone, so states slowly got into the law enforcement business, recruiting and training people to keep the peace and identify criminals. Today, we rely on state and federal policing agencies, supported by CSI and other forensic agencies. But there’s been a fundamental and unchanging truth from the early days. More people avoid detection and profit from their crimes than are caught. That’s why the courts are forced to use deterrent sentencing. What judges are saying to potential criminals is there will be long periods of imprisonment if they are caught. The irony is that, if people were sure they would be caught, lighter punishments would be sufficient. It would cost us less to keep all these people in jail. Our society would be safer.

So why is it so difficult to detect fraud? Surely dishonesty should be obvious to an experienced insurance company? Well, sadly, detecting which claims are fraudulent is not easy. Let’s take a simple question. Both drivers involved admit there was an accident. One driver submits a medical report showing neck injuries. On what basis should the insurer challenge the medical report? Well, detailed investigation might show this particular clinic advertises for people to report accidents to them. Or this clinic may consistently be receiving business through referral networks. Either way, the clinic is found to specialize in the treatment of traffic accident injuries. This could make them highly skillful and deserving professional respect, or it could suggest the clinic exaggerates the injuries for its own profit when it bills for treatment, paying commission to referral agents and passing only some of the benefit on to “patients” who get settlements for their injuries. Is an insurer supposed to get a second opinion from an independent doctor on every patient from suspect clinics? Or suppose someone wants to get out of an auto loan so stages a small accident and pays a repair shop to set off the air bags and certify more serious damage so the vehicle will be totaled. If this is a one-off event and there’s no pattern to suggest this repair shop is dishonest, why should this particular claim set off alarm bells?

There’s no doubt the level of fraud has been at epidemic levels for a decade and more. Several billion dollars a year are being sucked out of insurance companies by criminals. In turn, all these losses are passed on to us in higher car insurance rates. This makes insurance fraud a political issue, albeit mainly in the no-fault states where the levels of dishonesty seem to be higher. Although there’s a National Insurance Crime Bureau established with the task of coordinating the fight against fraud, there’s little sign of success. It will take a major cultural change to deter people from this type of crime when the chances of being caught are so low. Even when staffing levels are improved by the insurers and the law enforcement agencies, there’s little observed change in behavior. The fraudulent claims keep coming in and the auto insurance quotes keep rising.