INSURANCE UPDATE

By Alan Plafker, PRESIDENT & CEO
Member Brokerage Service LLC
A Melrose Credit Union Service Organization

LONG TERM CARE INSURANCE (LTC) = PEACE OF MIND

The best time to buy long term care insurance is when you are too young and healthy to imagine needing it. Buying early can lock in affordable premiums that rarely, if ever, will change. People who wait until they actually need care will rarely qualify for a LTC policy.

LTC insurance can help people maintain their independence longer by paying for home care when that’s all they need. Whether help at home or care in a nursing home is ever needed, this coverage can provide peace of mind for parents and their adult children alike.

Don’t put off discussing this important issue. New York state is one of the best states for LTC insurance. Thanks to New York state’s Partnership Program some LTC products can protect families’ assets in the event that Medicaid is needed to pay for nursing home care. Recent changes have expanded people’s options under the Partnership Program offering more affordable choices. Some families also may find tax savings available to help offset the cost of premiums.

You can learn more about LTC insurance at the New York State Insurance Department’s Web site. Or just call our office to discuss whether LTC protection is right for you.

EVEN OUT OF THE WATER, YOUR BOAT IS AT RISK

The vast majority of seasoned boaters know the peril their vessel faces during boating season: collision, fire, theft and storms all pose considerable risks. However, when the sun fades in the autumn sky and your boat sits in your driveway or at a storage facility, your prized possession still is at substantial risk.

Sure, some of the risks disappear, but your need for insurance for your boat doesn’t. In fact, a study by a major insurance company reported that between 2003 and 2006 two out of 10 claims in the northern United States were filed between Labor Day and Memorial Day.

So, while you can be fairly certain your boat will not be involved in a collision with another boat in your driveway what about:

• the accident in the boat yard?
  
  
• the security of the boat yard?

Careless employees at a marina or storage facility could lead to a complete loss of your vessel. As boats are moved around and maintained it doesn’t take much more than backing up a trailer too far to send a boat tumbling. And, even while your boat sits in your driveway, theft and fire remain concerns that could lead to a total loss.

Comprehensive coverage which will protect your boat against damage caused by circumstances other than collision is a must even while it sits under shrink wrap. And, of course, the liability of owning a boat is a year-round concern.

What boat owner hasn’t had a friend or relative over to work on his or her boat during the off season? During these times, the chances of someone being injured on your boat, or because of your boat, is just as great as if you were taking friends out for a Sunday afternoon trip.

The majority of boat claims are for fire, theft, vandalism and flooding. Your boat doesn’t have to be in the water for these things to occur. Remember, when then boating season has ended it is the best time to contact our agency and make sure your comprehensive and liability policies on your boat are ready to protect you and your vessel during the long winter months.

WHAT YOU SHOULD KNOW ABOUT CREDIT BASED
INSURANCE SCORING

What is a credit score? A credit score is a snapshot of your credit at one point in time. The credit information from your credit report is put through a mathematical formula (credit scoring model) that assigns weights to the various factors and summarizes your credit information into a three digit number ranging from zero to 999. Generally, the higher the number the more financially responsible the consumer.

How are credit scores used by insurance companies?

Credit information has been used for a number of years to help insurance companies decide whether or not to accept insurance applications. Developments in information technology have led to the creation of insurance scores, number rankings based on a person’s credit history which give insurers a far more accurate way to assess the risk of future claims.

Statistically, people with a poor credit history are more likely to file claims. Insurance scores are used to help underwriters differentiate between lower and higher insurance risks, which allows them to charge a premium appropriate for the level of risk assumed.

What affects a credit score?

Several factors determine credit scores. Each factor is assigned a weighted number that, when applied to your specific credit information and added together, equals your final three digit score.

Following is a list of common factors:

• Major negative items — bankruptcy, collections, foreclosures, liens, charge-offs, etc.
  
  
• Past payment history — number and frequency of late payments.
  
  
• Length of credit history — Amount of time you’ve been in the credit system.
  
  
• Homeownership — whether you own or rent.
  
  
• Inquiries for credit — number of times you’ve recently applied for new accounts, including mortgage loans, utility accounts, credit card accounts, etc.
  
  
• Number of open credit lines — number of major credit cards, department store credit cards, etc., that you’ve actually opened.
  
  
• Type of credit in use — major credit cards, store credit cards, finance company loans, etc.
  
  
• Outstanding debt — how much you owe compared to how much credit is available to you.

Are credit based insurance scores really a good predictor of risk?

A recent report issued by the Federal Trade Commission says credit based insurance scores provide an objective and reliable tool for determining which drivers present a greater risk and therefore should pay higher rates.

INSURANCE FRAUD: THE CRIME INNOCENT PEOPLE PAY FOR

Watch out: Insurance crooks are picking your pocket.

These thieves are committing insurance fraud, one of America’s largest criminal industries. Insurance fraud is a crime, and honest consumers and businesses pay the price.

Insurance fraud happens every day in every state. It doesn’t discriminate. People of all ages and races are victims. The Coalition Against Insurance Fraud estimates that insurance fraud costs Americans at least $80 billion annually. This breaks down to approximately $950 per family.

Insurance fraud happens when people lie to an insurance company to collect money to which they are not entitled. Some may fake an accident, injury, fire or theft to collect money illegally from their insurance company. Some may exaggerate their actual loss to their insurance company. This may seem like just a little white lie but it is still a crime, and it raises everyone’s premiums.

Protect yourself

While you can’t protect yourself completely from being a victim of insurance fraud, you can take some steps to be less of a target:

• Be wary if a car pulls in front of you suddenly forcing you to follow closely. They may be setting you up for a staged accident when they stop with no warning and blame it on something on the road, or another driver who pulled away.
  
  
• If a stranger contacts you after any accident and offers you quick cash or recommends a particular medical clinic, attorney or doctor, be cautious. They could be part of a fraud ring.
  
  
• Never sign blank insurance claim forms. • Ask for detailed bills for all services and check them all for accuracy.
  
  
• Check and see that you received all the treatments and services listed on your invoice.
  
  
• Watch for double billed or excessive charges.

If you suspect that you or someone you know is being taken advantage of by a fraudulent insurance scam, or if you know someone who is committing insurance fraud, contact our agency. We will help you report this crime.

IMPORTANT NEW YEAR’S RESOLUTIONS

When you’re making that annual list of New Year’s resolutions, you may want to consider making some that have an impact on your pocketbook, and offer you financial piece of mind.

Along with the promises to exercise and skip dessert, resolve to welcome 2008 with a better understanding of what your insurance covers,how to save money, and when it’s wise to file a claim.

Insurance is something most people don’t want to think about until they need it the most. But, understanding what is and what isn’t covered in your homeowners policy can mean the difference between being able to rebuild your home and replace your personal belongings or not.

Homeowners should do an annual insurance policy check up to make sure they keep up with local building costs and have adjusted their coverage to include home remodeling and additions.

If you don’t have replacement cost coverage consider spending a few extra dollars for coverage that pays for the cost of replacing the damaged personal property.

Did you know your standard policy does not cover flooding? You may want to look into flood insurance coverage if you’re concerned that you’re at risk for rising surface waters from any source.

What about a home inventory? Before a catastrophe strikes make a home inventory that includes lists, pictures or videotape of the contents of your home. Having an up to date home inventory will help you get your insurance claim settled faster.

Call your agency today. We’ll go over your existing policies with you and we will help you purchase insurance according to your determined needs.

Alan Plafker is President of Member Brokerage Service LLC, a Melrose Credit Union Service Organization. He is a licensed Insurance Broker and serves on the Board of Directors the PIANY (Professional Insurance Agents Association of NY) and on the Board of CIBGNY (Council of Insurance Brokers of Greater NY). His Agency insures thousands of polices for TLC Insurance as well as many policies for all types of insurance. You can reach him in his Briarwood, Queens office at (718) 523-1300 ext. 1082.

© 2015 TLC Magazine Online, Inc.