The purpose of any insurance policy is to cover the cost of unexpected events in our lives. Most policies anticipate problems in broad areas — health, home, auto, and life. Specialty or “genre” policies wander into a different realm of “what if,” and often play to unrealistic fears, with little promise of actually delivering benefits. Thus, these “genre” coverage options really are just a “cover” to increase insurer profits. For instance, a company called HomeServe, offers water line coverage up to $6,000 for about $5 a month.
The policies address the potential for water meter breakage on personal property, with repairs running from $200 to $2,000. The problem is quite real, because the meter is the responsibility of the property owner. The proposed coverage, however, is not. The policy language stipulates that acts of God, wear and tear over the life of the meter, and emergency repair work without prior authorization are all excluded.
The stipulation for advance approval of an emergency repair is a glaring example of how such policies often contradict themselves. By its very nature, an “emergency” belies having prior authorization. The policies also do not include benefits for broken faucets or freezing.
Highly specialized stand-alone policies that cover what are likely “once in a lifetime” risks are rarely worth the money no matter how economical they may seem on the face of things. Such coverage caters to and increases homeowner anxieties and are best left alone in favor of more comprehensive and affordable policies with well-conceived riders.
Over the past decade, New York City has seen a 70 percent increase in personal injury protection claims including lost wages, medical bills, and other auto insurance-related claims.
This upsurge exists concurrently with a 49 percent jump in the cost of medical care in the city.
The Insurance Research Council (IRC), which conducted the study, says the average PIP claim in the city exceeds $15,000 while the amount for the rest of the state is just $7,000
The senior vice president for the IRC, Elizabeth Sprinkel said the statistics validate the issue of claims abuse in New York, which is made worse by medical providers who are over charging insurers and over treating their patients to get that claim money. These so called “medical mills,” as well as organized crime rings that turn auto fraud into what amounts to an industry are at the heart of the escalating problem.
Together, these fraudulent practices are elevating the price of auto insurance not just for drivers in the city, but for those across the state of New York. The monetary consequence of the fraud totals about $200 million annually in premium increases for New York state drivers. In the city specifically, drivers pay premiums 272 percent above the state average.
According to the IRC, approximately 23 percent of the claims examined to compile data for the study involved some sort of fraud. Of that group, claims that originated in New York were four times more likely to include some suspicious activity.
In February 2011, the national average rate for auto insurance premiums peaked for the six-month period of December 2010 to May 2011, standing at $1,236.38. By March, however, it dipped to an encouraging $1,162.18 driven by market pressure to bring rates in line with the needs of cash-strapped Americans.
How messy can an auto insurance claim get? Well, lets see. Take the case of the couple from Fort Worth, Texas who were rammed from behind by a motorist who then sped off. Chased down by a third party who was trying to be a good guy and get the license plate number, the hit-and-run driver doubled back to the scene of the crime.
Hurricane Irene, which hit the east coast in August 2011, subjected the New England and mid-Atlantic regions to highly abnormal levels of wind and flood damage. Most residents found themselves deficient or completely unprepared in terms of homeowners insurances and supplementary flood coverage. Now the National Insurance Crime Bureau is warning people living form Maine to North Carolina that the used car market in the area could face a different kind of flood — a glut of water-damaged vehicles being sold to unsuspecting buyers.
In the popular trend of naming the generational groups, Generation Y or the “millenials” are those people who are now in their mid- to early 30s. Unlike the Baby Boomers who came before them, this generation is made up of pampered, high performers. Even though their parents and grandparents fueled the social unrest of the 1960s, they also embraced the post-World War II work ethic. Look for the old hippies today, and you’ll find them in board rooms and executive suites across the nation.
After the prestigious trade journal Risk Management Magazine praised the programs offered by the Katie School of Insurance, Cheap Insurance 123 spoke with Professor Kevin Ahlgrim and Associate Director Debbie Babcock.
The Katie School offers a strong double major in insurance and finance which gives students a valuable edge when they seek employment directly in the industry or in related fields.
Additionally, Katie has a strong track record for graduate job success with many of its graduates receiving the Chartered Property Casualty Underwriter (CPCU) professional designation.
(Thanks to financial support from the Katie School, students begin taking exams as undergraduates and then earn the full designation early in their careers.)
In a new wrinkle that may further hamper federal efforts to achieve cheap health insurance for all U.S. citizens, the National Governors Association, in a letter to U.S. Health Secretary Kathleen Sebelius, claims that the insurance exchanges mandated by the health care reform law actually threaten the autonomous nature of the individual states.
While everyone wants a price quote to make sure they’re getting the cheapest auto insurance premiums possible, sometimes a few dollars more is worth it for better claims handling. J.D. Power and Associates just released their annual “U.S. Auto Claims Satisfaction Study,” which shows that plenty of people are unhappy with their auto coverage even in the face of cheap rates.
Some Surprising Study Results for Big Companies
The rankings, which are tallied on a 1,000 point scale, saw Auto-Owners Insurance take the top position for the fourth year in a row. Not only did Auto-Owners pull a score of 890, they were the only insurer examined to get a five-star rating. The industry average score was 846 with a three-star rating. The other members of the top-five, in descending order were: Continue reading
While most of us don’t spend our time reading about insurance industry news — since we’re mainly concerned with the question “where the heck do we get the cheapest rates” — you may have missed what Cigna Corp. has been up to. The company acquired the Medicare carrier HealthSpring Inc. for $3.8 billion. And why do we care about this?
The acquisition is a sign of how health insurance companies are changing the way they’re doing business as federal health care reform moves forward. A progression of changes will take place through 2014 that are geared toward achieving universal, cheap health care as well as a more fair relationship between insurance companies and their customers. With its acquisition, Cigna is responding to major demographic shifts in the American population — in what is likely a positive way for the insurance / consumer relationship as a whole. Continue reading