Insurance Q&A

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Monday, December 12, 2005

Insurance is a must if driving in another land

By Susan Spano
Los Angeles Times

I had been driving all day, and now it was dark. I had rented a car in Phoenix and was heading across the border to Kino Bay on the Gulf of California in the Mexican state of Sonora.

Tired and impatient to get to a motel, I was going too fast on an unpaved, shoulderless highway detour just outside Hermosillo. A big four-wheeler roared past in the opposite direction just as a cow stepped onto my side of the road. I couldn't swerve into oncoming traffic, so I hit the animal. The cow walked away from the crash without a moo, but it put a huge dent in the front right fender of the SUV.

That was the worst but not the only accident I've had with rental cars in my travels. Another time in the Yucatan, a Mexican driver hit my rented Volkswagen, though when I finally collected the police report -- required for an insurance claim -- it said I hit him.

I had a fender-bender with a truck in Jamaica, and destroyed a side-view mirror on a narrow lane bordered by picturesque but obstructive hedgerows in rural England.

Incidents like these used to upset me, partly because I didn't own a car when most of them happened and didn't have personal auto insurance, which often -- but not always -- covers policyholders for rental car accidents in foreign countries. I relied on the auto insurance that came with my credit cards.

But to make a claim on them required onerous paperwork, I found, and the cards covered damage to a rental but not to another vehicle, which worried me.

Now I rest easier, having decided that you can't drive rental vehicles in unfamiliar places without hitting the occasional cow.

I started routinely taking out the full auto insurance package when renting, which can be expensive. On my recent trip to Mexico, I rented a big SUV for off-road explorations from Dollar Rent a Car in Phoenix, one of the few agencies that allows its vehicles across the border. The collision damage waiver and liability cost more than $50 a day, and I also had to buy Mexican insurance for about $25 a day, which is obligatory for U.S. drivers there.

Given the price, some renters say no to insurance from rental agencies. But the expense was worth it to me in Mexico, especially because I no longer have personal auto insurance (because I no longer have a car). When I returned the vehicle to Dollar, I filled out one form and walked away.

Mike Nelson, author of Live Better South of the Border in Mexico, thought I was joking when I told him I hit a cow while driving at night in Sonora, which is a classic, stupid, gringo mistake. Despite his vast experience on the roads of Mexico, Nelson totaled his old Ford Bronco there. And he almost hit a cow while testing the Mexican theory that you see better at night without headlights. "It is a falsehood," he said of the theory.

Charles Nelson, founder of Nelson Insurance Agency in McAllen, Texas, which specializes in covering American drivers south of the border, said I was lucky not to have hit another vehicle or a pedestrian and that it was a good thing the cow was unharmed, because otherwise I'd be the owner of a lot of steak.

Americans who have personal auto insurance should check before they leave home to make sure they are covered for vacation car rentals, Nelson said. Some personal auto policies don't handle rental car accidents or liability abroad. And credit card coverage has limitations. For instance, my American Express gold card pays for repairs only if the damaged vehicle has been rented on the card; my Signature Visa doesn't cover rentals in Israel, Jamaica and Ireland; and my corporate American Express card carries no auto rental coverage.

Driving in developing nations is especially dangerous; 70 percent of auto accident deaths occur in the Third World, according to the U.S. State Department.

Mexico is a special problem in that regard. Road conditions are inconsistent, and Americans who drive there often seem oblivious to the dangers of driving in a foreign country. For them, the chief causes of accidents are the lack of familiarity with their rental vehicles, speeding and driving under the influence.

Nevertheless, American drivers with comprehensive Mexican auto insurance from an established provider can expect payment on claims, Nelson told me.

Mariana Field Hoppin, a spokeswoman for Avis, said the best way to avoid accidents on the road is never to drive at night in unfamiliar territory and to take out collision damage waiver insurance, which means you won't be financially responsible if your rental is damaged.
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Checkup on Health Insurance Choices



Today, there are more types of health insurance, and more choices, than ever before. The information presented here will help you choose a plan that is right for you. You may be buying health insurance for the first time, or you may already have health insurance but want to consider changing plans. Married or single, children or no children, this information will help you to find out how to choose a health insurance plan that best meets your needs and your pocketbook.

Choosing and Using a Health Plan

Thinking About Health Insurance Choices
Which of these statements best describes your thoughts on health insurance?

"I get health insurance through my job. I have the coverage I need... I think"

Many employers offer a choice of plans. The information provided will help you figure out the plan that's best for you.

"I know I need health insurance, but I'm not sure how to get the best protection at the lowest cost."

You're not alone. Many people have questions about how to select a health insurance plan. The information provided will help you find some answers.

"I can't afford health insurance right now. I have too many bills to pay and other things I need to buy."

Health insurance is one of your most important needs. Without it, one serious illness or accident could wipe you out financially. The information provided will help you decide which is the best plan you can afford.
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Wednesday, December 07, 2005

Life Insurance Rates Continue to Drop


Press Release

Term life insurance rates are continuing their downward trend. These lower rates are shown at the unique anonymous and instant life insurance quoting engine.

(PRWEB) December 6, 2005 -- A recent study showed that rates for individual term life insurance and permanent life insurance (whole life and universal life) will likely drop by 3 percent in 2006.

This is because people are living longer (what the insurance business calls "mortality improvements) and also because of competition.

One will be able to see these improvements instantly on the insurance quotes engine as these changes come about.

Term life insurance rates have been in a downward trajectory for the last 20 years or so.

The biggest rate reductions that we have seen have been for the most healthy people who don't use tobacco which the life insurance companies call the "best risks".

The lowest rates available in 2005 are more than 50 percent lower than term life insurance rates from a decade ago.

There are two major types of life insurance; permanent life insurance and term life insurance. Permanent life insurance is called "permanent" because unlike term life insurance it is either guaranteed to last for life (whole life insurance) or projected to last for life based on interest rates and other factors (universal life insurance).

Over the last few years there have been other new factors introduced into the life insurance market besides the lowering of cost. For example, there are now universal life policies now that overcome a deficiency that used to exist in these kinds of policies - that, unlike whole life, they could lapse if interest rates fell or the cost of insurance increased. Now, universal life insurance can be guaranteed with a "rider" (extra) that guarantees that the universal life policy will last for a number of years or for life no matter what happens to interest rates.

Tuesday, December 06, 2005

Live Close to Restaurants? Pay More for Auto Insurance

Why People Who Live Close to Restaurants are More Likely to Have an Accident and Pay More for Auto Insurance

Press Release

Tuesday December 6, 8:00 am ET

Report From Quality Planning Corp. Highlights the Risks of Living Near Restaurants, Medical Buildings and Grocery Stores

SAN FRANCISCO, Dec. 6 /PRNewswire/ -- If you live within a mile of a church, you're far less likely to have a car accident than drivers who live more than a mile from a church. But if you live within one mile of a restaurant, you face a significantly greater risk of an accident than most other drivers. Those are among the key findings of a study released today by a leading predictive analytics company -- Quality Planning Corporation -- a firm that helps insurance companies price insurance more accurately and fairly.

Quality Planning Corporation (QPC) examined the relationship between where a vehicle owner lives and the likelihood that he will be involved in an auto accident, and concluded that the riskiest place to live is within one mile of a restaurant. In fact, if the owner of an automobile lives within one mile of an eating establishment, he is 30 percent more likely to crash his car than if he lived more than one mile from the restaurant.

The study examined more than 15 million policyholders and two million claims, mapping the proximity of vehicle-owners' addresses to various types of businesses, including amusement centers, bars, churches, dentists' and doctors' offices, parking lots, banks, car dealers, car washes, child day-care centers, gas stations, medical buildings, movie theaters, optometrists' offices, schools and shopping centers. The study found that the riskiest places to live near are restaurants, grocery stores, schools and banks. At the other end of the scale, individuals that live within one mile of an airport, park, forest or racetrack are much less likely to suffer vehicle damage.

When it comes to car crashes, churches are the least risky neighbor of all. People who live within one mile of a church are 10 percent less likely to have an accident resulting in a property damage claim than if they lived one more than one mile from the church.

Commenting on the statistics, Dr. Daniel Finnegan, founder and CEO of QPC, noted: "It's well known that auto insurers use a policyholder's ZIP code to calculate the risk he or she represents. New technology enables us to be even more accurate in determining the level of risk associated with a policy by identifying the specific risk factors associated with that policyholder's home address.

"In our research to develop a new predictive loss model for auto insurers, we have identified more than 500 variables that are highly correlated to auto accidents, many of which are specific to a policyholder's home address. Among the more interesting variables we found are hail storms, crime rate, topography, traffic patterns, occupation, street width and chiropractors per capita."

Auto Insurance companies have historically based policyholders' rates on their ZIP code or where their vehicle is kept. While ZIP codes may be convenient and necessary for speedy mail delivery, they are not a particularly good predictor of property/casualty insurance losses. The ability to assess risk at the street-address level is a major breakthrough in private passenger auto underwriting and will eventually lead to more accurate rating and could reduce premiums for some drivers.

TABLE: Increase in physical damage claims by living within one mile of:

Top Tier Bottom Tier
Restaurant 30% Racetrack or amusement park 11%
Grocery store 26% Hotel, motel, resort or spa 5%
Elementary or secondary school 26% National park or forest 4%
Bank 25% Local or community park 3%
Car dealer 23% Airport 2%
Gas station 22% Doctor's office or clinic 1%
Liquor store 18% Religious institution -10%

"It's important to remember that these observations are indicative of the area and we would naturally expect higher accident rates in higher traffic areas," added Bob U'Ren, vice president of marketing at QPC. "Traffic patterns and density are often key considerations when selecting sites for restaurants and grocery stores. There are also comparatively fewer homes and apartments, and generally lower vehicle use, close to parks and forests. But who would have thought it is more dangerous to live by an elementary school than a liquor store? Or a bank versus a hotel?"

QPC periodically releases snapshots and analyses of auto insurance data to raise awareness of the factors that determine what consumers pay for auto insurance. Previous reports have examined the fraudulent use of social security numbers when applying for insurance, the abuse of the 'farm discount,' older drivers and auto accidents versus violations, the relationship between occupations and auto accidents, teenage drunk driving, and the discrepancy between reported and actual mileage.

Rating integrity and competitive advantage

QPC assists auto insurers in their efforts to minimize rating error. QPC takes an auto insurance company's book of policyholders and processes it through a battery of more than 150 proprietary tests, cross-reference checking and pattern-matching algorithms to identify errors and discrepancies that might suggest fraud and misrepresentation on the part of consumers. QPC also provides insurers with additional services such as policyholder phone interviews to discover missing drivers, verify garaging addresses, determine annual mileage and other key rating information. Over time, insurance companies with accurate rating information are better able to compete and are more financially stable.
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Smokers' medical insurance bills may rise

Smokers be warned: Your habit might soon cost you a lot more.

Companies are increasingly tacking surcharges onto insurance premiums in an attempt to manage rising health-care costs, and some refuse to employ smokers.

Smoking-related health-care costs nationwide run $75.5 billion every year, according to the Centers for Disease Control and Prevention. The price tag for lost productivity is an additional $92 billion a year, for a total of more than $167 billion.

Increasingly, smokers are being asked to pay a greater share of the bill. Spokeswoman Mary Thompson of BlueCross BlueShield, Tennessee's largest health insurer, says her company doesn't keep statistics on plans with employee surcharges, but their popularity appears to be on the rise.

"I see employers trying to take advantage of every opportunity that they can to help improve the health status of their employees," she says.

BlueCross BlueShield employees who smoke pay an additional $7 per pay period, but that figure is relatively modest compared with the $40-a-month surcharge Georgia state employees pay. The surcharge is $15 for state employees in West Virginia, $20 in Alabama and $15 to $30 a month in Kentucky, depending on the policy.

Though the practice has yet to be part of the business plans of Guam employers and health insurance companies, smokers already have boosted health insurance costs on Guam.

Although nothing is inherently wrong with making people accept financial responsibility for their choices, surcharges raise troubling issues, says Lewis Maltby, president of the National Workrights Institute, a nonprofit advocacy group in Princeton, N.J.

"Surcharges are the first step down a road that America may not want to travel," Maltby says. "Surcharges sound nice when you talk about smokers because everyone hates smokers. But what about all the other bad habits that people have?"

Treatments for obesity-related and sexually transmitted diseases are costly. Too many beers after work? Not enough time at the gym? Surcharges conceivably could be levied for those behaviors, too.

Many smokers say they understand why they may have to pay more for health insurance. William Tatum, 54, of Huntington, W.Va., works in construction and smokes two packs of cigarettes a day.

"If I was an insurance company and was underwriting a policy, I would want my people clean," Tatum says. "It is just the risk involved."

A handful of companies are putting a more restrictive twist on smoke-free workplaces. This year Weyco, a Michigan health benefits management company, began testing employees for smoking and will fire those who fail a random test. Four of the company's 200 employees quit rather than submit to the policy.

The workers had a year's notice on the policy and could enroll in a company-sponsored smoking cessation class.

The policy is legal in Michigan, which doesn't have a law barring employers from firing employees for legal activities they engage in outside of work hours. Maltby says while surcharges are problematic but not inherently wrong, firing someone for smoking is clearly wrong.

"The only legitimate objection to an employee smoking is that it increases the company's medical costs," he says. "So the most that an employer is ethically entitled to do is have a surcharge."

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Sunday, December 04, 2005

Hurricane claims still await action


Staff Writer, The Miami Herald

Insurance companies in South Florida are overwhelmed with claims from Hurricane Wilma, leaving thousands of homeowners frustrated because they have yet to see an adjuster and begin repairs.

Wilma could leave major home, condo and auto insurers with more claims than in all the other seven storms that hit Florida in 2004 and 2005. Platoons of adjusters have descended on the region, many from other states, to handle the estimated $6.1 billion in claims.

Citizens Property Insurance, the state-run insurer of last resort and the second largest home insurer in the state, is handling more than 123,000 claims so far. That total, five weeks after Wilma hit, already has surpassed the 120,000 claims it saw after Charley, Frances, Ivan and Jeanne last year.

Of those 123,000 claims, Citizens at the start of this week had settled 11 percent. It has nearly 2,000 people working on adjusting claims, many of them for leaking roofs and blown-out windows, the company said.

State Farm, the state's No. 1 insurer of homes and autos, is fielding 88,333 home property claims, including flood claims that it is adjusting for the National Flood Insurance Program. It also is handling more than 65,000 auto claims. Figures on how many claims State Farm has settled were unavailable Thursday.

Insurers are urging patience, but that's dwindling among their customers. More than 2,000 homeowner complaints have been filed at the state Department of Financial Services' consumer services division.

In Broward, more than 1,200 complaints out of about 1,500 deal with issues regarding adjusters, according to state documents. In Miami-Dade, there are nearly 199 adjuster complaints out of more than 500 complaints filed with the state.


Terry Minda in West Palm Beach has paid about $2,000 to remove a 30-foot pine that fell on her garage and part of her home and to repair the flat roof over the enclosed porch. But now leaks have appeared in the living room, dining room and family room.

''I realize there are lots of people in the same situation, but something has to be done,'' said Minda, who is considering hiring a public adjuster to estimate the repair costs and help her negotiate with her insurer, State Farm.

Ray Breslin, condo association president for Mantell Condominiums in Miami Beach, said he reported the building's damage to his insurance agent right after the storm. But every time he calls the 800 number he was given to make contact with a Citizens adjuster, all he gets is a busy signal.

Breslin is eager to get repairs under way and already ordered the glass to replace the broken lobby windows.

''I just need to know what's covered and what's not,'' he said, noting that the condo association has a $96,000 deductible.

Jeanne Kos in Coral Springs said she was was outraged when an Allstate customer representative told her to climb on her roof and get the measurements for the area damaged when a tree fell on the house.

She, too, has paid to have some repairs done -- about $13,000 -- to prevent further damage while she waits to see the adjuster.

''I'm very frustrated. I've put out more money out of pocket than I should,'' said Kos, who is worried it could still take months before a roofer actually begins work on her house.

For their part, insurers say they're not ignoring policyholders. But as claims pour in, they're practicing a form of ''claims triage,'' tackling claims where they expect the most damage.


''We see first the people where the need is greatest,'' said Lynn McChristensen, a spokeswoman for USAA, which provides home and auto insurance for the military and their families. USAA has received 25,530 home claims so far, and another 7,500 auto claims.

Citizens follows the same rule, said Justin Glover, a company spokesman.

So far, Glover said the company is meeting a state rule that requires insurers to acknowledge claims within 14 days after they are reported to the company.


''That doesn't mean that everyone has seen an adjuster,'' he said.

Some insurers are coming up with novel ways to handle claims more quickly.

State Farm set up two drive-through centers in South Florida to handle auto claims. At both, an auto glass installer fixed broken windshields and windows on the spot if possible.

The company is resolving small claims by phone, such as for screen enclosures or minor roof damage, said Jose Soto, a State Farm spokesman in Miami. He said homeowners are also advised to get repair estimates if they're concerned that costs might not be enough to surpass their policy deductible.

The magnitude of damage brought about by Hurricane Katrina in the Gulf Coast is one reason insurers dealing with Wilma in South Florida are so stretched. They're handling the aftermath of two large storms.

Last year, state regulators fined several insurers who were slow to respond and resolve claims. They're monitoring claims-handling operations this year as well. Citizens, which was widely criticized for its inability to deal with last year's storm claims, said it has revamped its catastrophe operations.

Ron Major of Pembroke Pines decided to wait a few days before he contacted his insurer, Atlantic Preferred, thinking he might not be able to reach the company during the initial calling crush.

He reported his broken windows, downed fence and missing roof shingles Nov. 7. He has a claims number but has yet to see an adjuster.

Like other homeowners, Major has had no luck reaching a customer service rep on the 800 number he was given after his initial call.

''I'm working on getting estimates on fixing the windows and roof myself now,'' Major said.
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Friday, December 02, 2005

States Launch Plans to Expand Health Coverage - December 01, 2005 - As the healthcare debate in Washington, D.C. fizzles out, the states are taking on ambitious proposals to expand insurance coverage.
"The lack of action in Washington is not because of the lack of a problem,? Alan R. Weil, executive director of the National Academy for State Health Policy, told the Los Angeles Times. ?It's because of a lack of agreement and, frankly, a lack of consequences for failing to address the issue. At the state level, if you have a Medicaid budget problem or a growing number of uninsured, you have to tackle the issue."

Consider some of the proposals. In Maine, for example, lawmakers are considering recouping health costs from large employers, such as Wal-Mart, that don't provide adequate health insurance for their employees, Statehouse News Service reported. Employees often turn to the state's subsidized insurance program. Maine senators are looking at a model, which was vetoed in Maryland, that would require companies with more than 10,000 employees to spend 8 percent of their payroll on healthcare benefits or contribute to the state's health program for the poor.
?There's no easy solution to this, but I think people pick on Wal-Mart because they make this great claim they have all these benefits, but I'm not sure their employees can afford all these benefits,? Maine Senate President Beth Edmonds said. ?They're not paying their people very much, and with the benefit that's being provided, they still end up in the emergency room ? or bankrupting themselves? to pay their health bills.

In Massachusetts, lawmakers want to expand coverage to the state's 500,000 uninsured residents. As part of that effort, lawmakers have proposed charging a payroll tax of 5 to 7 percent on employers that do not provide health insurance for their workers. The plan has sparked opposition from business groups, the Boston Globe reported.

''You've got employers who are facing the highest energy costs, the highest wages, the highest unemployment insurance, the highest real estate costs ? and to now put this on? You're going to be in a position where the job growth isn't there, where people aren't making a decision to grow their business," said Bill Vernon, state director of the National Federation of Independent Business.

Initiatives like these back up information gathered by the Kaiser Commission on Medicaid and the Uninsured, which found that 20 states expanded access to healthcare from July 2004 to July 2005. The October study said that 14 states limited access in some way, mainly by raising premiums for programs covering low-income children.

The problem shows no signs of letting up, as employers continue limiting traditional coverage in the face of increasing costs.

"Washington needs to wake up and smell the coffee," said John E. McDonough, executive director of Health Care for All, a consumer group, the Los Angeles Times reported. "Employer-based coverage is melting away like the Arctic ice cap. It is stunning and alarming. The basic underpinnings of the healthcare system are badly eroding."

For now, it appears the states are taking the lead, with interested parties in Washington closely watching their progress.

"You can't fix the whole healthcare system by putting a Band-Aid on each individual hurt, or each individual state," said Sen. Ron Wyden (D-Ore.). "At the end of the day, you are going to have to integrate this very constructive, locally driven brainstorming into a framework that benefits the country as a whole."

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Four of Five U.S. Part-Timers Lack Employer Health Insurance

From Bloomberg

Four of every five part-time workers in the U.S. lack employer-sponsored health insurance, a study released today reports.

By comparison, about one of every four full-time employees is without such insurance, according to the study conducted by the Iowa Policy Project, a nonprofit public policy research group in Mt. Vernon, Iowa.

The study analyzed insurance coverage for ``nonstandard'' employees, such as part-time, temporary or contract workers. About 34.3 million Americans, or 25 percent of the nation's workforce, fall into that category, according to the study.

The research ``demonstrates the weakness in our health insurance system'' for a ``vulnerable group of workers,'' said Sara Collins, a senior program officer with the Commonwealth Fund, a New York nonprofit group that financed the research.

The study, based on 2001 census data and telephone surveys by the researchers in 2003 and 2004, found 21 percent of nonstandard employees had health insurance through their jobs, compared with 74 percent of full-time workers.

About 15 percent of the children and 16 percent of the wives of nonstandard employees received health insurance through the worker's employer, the study found.

Rising Costs

``It's a problem if you're a part-time employee who can't get full-time coverage because your paycheck won't cover it,'' said Kate Sullivan Hare, executive director of health care policy for the U.S. Chamber of Commerce in Washington.

``We need to have a private health-care insurance market that can cover these people,'' Sullivan Hare said in an interview.

Because of rising costs, it's becoming ``less and less likely'' that employers will subsidize all workers' health insurance, she said. A study released in October by benefits consulting firm Hewitt Associates predicted U.S. companies will pay an average 9.9 percent more for workers' health insurance next year.

Some companies employ part-time workers to avoid paying for health insurance, Kathleen Stoll, director of health policy for Families USA, a Washington-based group that lobbies for ``affordable'' health care, said in an interview.

The study also found nonstandard workers use government insurance, including Medicare and Medicaid, at five times the rate of regular workers. Nonstandard workers rely on the government because they have ``less options,'' the Commonwealth Fund's Collins said.

`Growing Trend'

Less employer-based coverage ``has been a growing trend'' since the 1970s, said Peter Fisher, research director for the Iowa Policy Project and one of the study's authors. Employment- based health insurance today covers 60 percent of the U.S. population, down from 70 percent in the mid-1970s, according to research cited by the study.

Fisher and the two other authors of the study, Elaine Ditsler and Colin Gordon, encourage labor law changes that would give nonstandard workers the same status as full-time employees. Still, policy makers must be ``wary of mandating coverage for very low-wage workers'' when employees can't bear the cost, the study says.

Fisher said he doesn't anticipate increased employer-based coverage in the near future. ``I don't see policies coming out of the national level to deal with health-care costs,'' he said in an interview.

The Iowa Policy Project's telephone survey of nonstandard workers consisted of 20-minute telephone interviews among a random sample of workers over 18 years old.

The survey has a margin of error of 1.5 percentage points, while the analysis based on Census Bureau data has a margin of error of less than one percent.

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