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INSURANCE RATES THAT LOOK TOO GOOD TO BE TRUE . . .

BY ALAN PLAFKER, PRESIDENT & CEO
MEMBER BROKERAGE SERVICE LLC
A MELROSE CREDIT UNION SERVICE ORGANIZATION

If it looks too good to be true…

You’ve heard this before: If it looks too good to be true, it’s likely not true. There are many applications for this maxim, but when it involves auto insurance the stakes can be high.

Sometimes, an insurer will quote an amazing premium price, significantly lower than either your current premium or quotes from other insurers. Unfortunately, the quoted premium may not be your final premium. This happens because insurers generally are allowed to complete their underwriting review and revise the billed premium according to the rating elements discovered after the policy was bound. What initially seemed like a great bargain could end up a big burden.

Take this scenario for example: Dave is ready to purchase a vehicle at a local dealership. He calls his insurer to quote the insurance on the new car. The premium will be $3,000 per year, but the current insurer knows Dave’s traffic violation record, drivers in his household and losses that have been incurred over the last five years. This kind of information is available to all insurers, but they must pay a fee for it.

Dave is reluctant to purchase the car because the car payment, combined with insurance costs, exceeds his budget. The car salesperson doesn’t want to lose the sale, so she recommends that Dave call an insurer she relies upon under these circumstances.

This insurer quotes an annual premium of $1,500. The insurer asks Dave all the right questions, but Dave does not remember the fender bender or the speeding ticket he got two years ago. However, this insurer does not want to pay for the records to verify statements on the application until it has bound the policy and received the first premium installment. With the $1,500 quote, Dave proceeds to purchase the car on the assumption that the car insurance is affordable.

Six weeks later, Dave gets bad news: Underwriting reports have been obtained by the new insurer, including the motor vehicle abstracts for all drivers, investigative report and C.L.U.E. report, and it turns out the annual premium will be $3,200. As frustrated as Dave is, he probably will stay with that insurer because to return to the prior insurer now will require another down payment, and it will take weeks to get an unearned premium refund from the new insurer.

Shopping for the right price, service and coverage is a wise thing to do. Your agency represents multiple insurers that compete for your business. What makes them different is they can ensure that each of these insurers knows the pertinent details about you ahead of binding time so that you don’t end up with an underwriting surprise. That not only sounds good, but it’s true.




A Policy with Teeth

Here are two sobering facts you should know about your four-legged friends. According to the Center for Disease Control and Prevention, dog bites injure more than 4.5 million people each year. On the insurance side of the tale, a single dog bite can create a major expense. In 2013, the Insurance Information Institute quotes the average cost for dog bite claims as $27,862.

Homeowners and renters insurance policies typically cover dog bite liability as part of the standard policy’s liability coverage which can range from a limit of $100,000 to $500,000. This means that the dog owner is responsible for any additional damages (e.g., legal costs). However, while most insurance companies cover dogs, some breeds are very difficult to insure. Moreover, if the animal has had a previous incident, coverage for that dog could be denied.

Additional coverages (e.g., a liability policy to provide no-fault medical coverage; personal liability coverage; personal excess liability policy; umbrella liability policy, etc.) are available to protect you and your furry friend. Give your agency a call so they can walk you through your options and provide you with the best insurance policy for your needs.


Duty to report

Sounds like military terminology, doesn’t it?

Actually, many auto insurance policies contain this specific provision in the insurance contract or policy to ensure that any changes made to the policy during the policy period are reported. Although your “duty to report” can extend to a variety of changes, you will most commonly report changes such as: additional drivers; a change in address; or a modification to your vehicle.

Because the perception is that any change will result in a significant increase in premium, some people are hesitant to provide this information to insurers. The changes you actually make to your policy, however, often result in no change or only a minor change to the policy premium. These minor charges pale in comparison to the catastrophic costs of failing to inform your agent or insurer of any changes. Did you know that failure to report changes could allow your insurer to deny certain coverages if you get into an accident?

Some insurers include language in their auto policy permitting the denial of coverage on the physical damage portion of a claim if the policyholder does not inform them of certain changes, usually within 60 days.

Imagine a situation in which you have a brand new car and your teenaged child—whom you failed to report as a driver to your agent—gets into an at-fault accident and totals the car. Under this duty-to-report provision, an insurer may be able to deny the collision coverage for the new car. If the car was financed, you would be solely responsible for that financed amount. If it wasn’t totaled, this means that you will have to pay the repair shop out-of-pocket to fix the damaged vehicle.

Your agency can help you determine which insurers have this language in their policies. So, if you think that ad on TV sounds appealing and that you could save a lot of money on your insurance, understand that these “savings” could wind up costing you thousands, if not tens of thousands of dollars.




Grill safely this summer—a fun barbecue is a safe barbecue

Americans enjoy more than three billion barbecues each year. But barbecuing can be dangerous, even when you are careful. If you have a grilling accident, will you be covered by your homeowners insurance?

Homeowners insurance typically covers fire, smoke, lightning, wind, hail, freezing of pipes, theft, explosion, falling objects, vandalism and a few other perils. Damaged belongings, such as a ruined grill, also are covered under your personal property coverage.

Hopefully, no one visiting your home will be harmed, but if someone is injured, they will receive payment for reasonable medical expenses. If they were to sue, you could rely on your liability coverage to protect you.

However, if the grilling accident injures a member of your household, this would not be covered by your homeowners policy. You would need to rely on your health insurance provider to cover medical expenses instead.

To avoid potentially disastrous situations, follow these simple tips:

  • When ready to barbecue, protect yourself by wearing a heavy apron and an oven mitt that fits high up over your forearm.

  • With gas grills, never store your gas cylinders in the house or garage. Make sure they are always stored outside and away from your house. Always ensure the valves are turned off when you are not using them, and check regularly for leaks in the connections using a soap and water mix that will show bubbles where gas escapes.

  • Barbecue grills should be kept on a level surface away from the house, the garage and most of all, children, because vinyl siding melts quickly.

  • For charcoal grills, only use starter fluids designed for those grills. Never use gasoline. If the fire is too slow, rekindle with dry kindling and add more charcoal if necessary. Never add more liquid fuel or you could end up with a flash fire.

  • Keep a fire extinguisher nearby at all times.


Don’t forget after grilling safety! Keep your grill clean by removing the fat or grease build up from the grills and the trays below. If using a charcoal grill, dispose of coals by soaking them in water and letting them cool completely before placing them in a metal container away from any structures.

Be aware that grills remain hot long after the cooking is done. Before you fire up your grill this barbeque season, give your agency a call. They’ll review your homeowners coverage with you to be sure your protected if the unexpected occurs.

 


Are you covered for quakes?

Everyone desires certain skills they hope to never use, e.g., to know CPR or self-defense maneuvers. Although we may be content to never call upon those abilities, there is comfort in knowing that you are prepared for a situation. The same can be said about insuring your home and property against an earthquake. While you hope to never need it, knowing that you will not need to rebuild alone can help relieve anxiety.

While it may seem less likely that a sizable earthquake will affect where you live, the more experts explore fault lines and tectonics, the more incredibly complex they appear. The fact is that in all likelihood, earthquakes will strike the East Coast. And, as with any worst case scenario, the best time to call our agency to discuss your insurance options is before an event occurs.

Unfortunately, most standard homeowners policies exclude damage caused by earth movement, e.g., earthquakes and any other earth movement, including earth sinking, rising or shifting.

But, you’re in luck. You can purchase an endorsement to your homeowners, renters or business policy to cover your losses from earthquakes and aftershocks. Since different building materials react differently to earth movement, e.g., brick versus wood, premiums vary by the type of building construction and they usually are determined by a percentage of the building’s value.

Something to keep in mind: Once an earthquake is detected, it’s too late. You can’t buy coverage within 72 hours after an earthquake, and damaging aftershocks always are a possibility within that period of time.

If you belong to a corporation or association of property owners that has inadequate earthquake coverage, or none at all, you could be assessed for repairs to common property. If you have earthquake coverage and loss assessment coverage on your homeowners policy, you may be able to extend it to cover you for this liability to the association.

Give your agency a call, they’ll be happy to review your insurance policy to make sure you have the coverage you need when you need it.


Go with a pro

When it comes to insurance coverage for you and your family—homeowners, auto, etc.—it’s important to understand that insurance is not a one-size-fits-all commodity. Each household has a unique set of priorities to address. That’s why you need to work with a professional, independent insurance agent. Unlike captive agents, who only represent a single carrier, an independent agent will evaluate your situation, find the best price/coverage ratio from a variety of insurance companies and develop a cost effective policy package to meet your specific needs.

Why choose a professional, independent insurance agent?

  • They offer choice of insurance products from different companies,

  • They give more objective advice because they are not employed by an insurance company,

  • They shop for coverage that’s right for you—at a price you can afford,

  • They can access companies that offer specialized coverages for unique needs,

  • They are highly trained to help you make complex, vital insurance decisions,

  • They offer personalized, face-to-face service,

  • They live in your community and support local efforts.


The best part of working with an independent agent is knowing that a real person is there to help. Feel free to call, email or visit your agency whenever you have a question.

For more information, talk to your Insurance Agent, or the author of this article.


Your Professional Insurance Agent …
We want you to know about the insurance you’re buying.

Alan Plafker, CPIA is President of Member Brokerage Service LLC, a Melrose Credit Union Service Organization. He is a Certified Professional Insurance Agent and licensed Insurance Broker.
He serves as Immediate Past President of the PIANY (Professional Insurance Agents Association of NY), an active member of CIBGNY (Council of Insurance Brokers of Greater NY), and serves as Treasurer for the New York Independent Livery Driver Benefit Fund Board of Directors.
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, or visit the website at: www.MemberBrokerage.com

 

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