Keeping an Inventory

When insuring property, commercial or personal, it can be highly beneficial to create an inventory of all your items. There are many advantages to keeping a schedule of your items, and taking inventory can be aided by technology.

Homeowners, Condo-owners, Renters, and businesses all have something in common—they have a lot of stuff! Now, the items may be a bit different for each, but the need to schedule these items is vital for all of them.

Why should I make a list of my possessions?

• Making a list of your items will help determine the amount of personal property coverage to initially obtain
• In a claim, an inventory can speed up the claims process, getting you paid sooner
• In a claim, an inventory will ensure you get completely and accurately reimbursed for your loss
• After a catastrophe, you will need to quantify your losses to qualify for tax breaks or disaster assistance.

So how do I do it?

Though it may seem overwhelming to keep track of all the items you have, know that even a partial list is better than no list as all, and the list can be organized however you see fit. You could organize it by highest cost item to lowest, by room, by most recent purchase, by item type, or any way you find intuitive.

Taking inventory can also be aided by technology. Apps such as the Insurance Information Institute’s ‘Know Your Stuff’ app allows you to write down the item location, category of item, item name, item’s make, and the item’s model. It also allows you to take a picture of each item. The information is then synced to their website where you can easily access it from anywhere with an internet connection, keeping it safely stored online.

If you decide to make a list by hand or in a spreadsheet, make sure to save a copy of it outside of the home, perhaps at work, a family member’s house, or a copy saved to a Cloud database. Also, you may find it beneficial to store other important information with your inventory list. Some useful information to save would be a copy of you and your family’s legal documents, financial records, passwords, and PINs for bank accounts.

Creating a list of your items can seem to be a very daunting task. Maintaining it will be an ongoing process as well, but remember that a partial list is better than no list at all, and that keeping a list will make sure you get the full use out of the insurance coverage you bought!

Note from the Author (Nov. 14, 2014): After two years of work, we've entirely redesigned our website! Using SquareSpace, we were able to import this blog and we are continuing our blog there. To find the current version of this article and our new articles, click HERE.

Underwriters--Gatekeepers of Insurance

Why do insurance agents ask so many questions? What is an underwriter? Who do they work for? What is their function? How do I convince them to give me the best coverage for a good price?

Underwriters are the men and women that check over your agent’s quote submissions. Each Underwriter only work for one insurance carrier/company (E.g. Progressive), and they ultimately receive the information that your insurance agent asked you for. With that information, they have to determine if you are eligible for insurance, and if you are, what types of coverage you qualify for, how much coverage can be provided, what exclusions should be applied, and what the premium should be. 

So the first step is to determine if you fit into the company’s desired risk appetite. To do this, they have to follow the carrier’s rules and guidelines in accepting prospects. A few examples of ‘risk appetite’ and ‘rules and guidelines’ are the following:

• Some carriers will only accept clients who place both their home and auto insurance with them.
• Some carriers won’t accept buildings that still use fuse boxes instead of breaker boxes.
• Some carriers won’t insure people/entities with certain types of claims
• Some carriers won’t insure people/entities who have a predetermined amount of claims or total amount of claim dollars
• And many more, all unique to each insurance company 

If the prospect meets all of the criteria, the Underwriter will then determine what kind of quote they will give. They will determine if there are any special conditions, if they need to add any exclusions, and will ultimately decide what the overall price will be. And until the underwriter gives their approval of a quote, the agent cannot bind coverage.

So How Can I Convince the Underwriter to Give Me Discounts?

One of the main functions of an underwriter is to create a risk profile for each person/entity. The more complete the profile is, the more the underwriter will know about the client. And the more the underwriter knows about the client, the more comfortable they will be with giving discounts and credits to them. The types of things that give a good description of a client, personal lines or commercial lines, includes, but is not limited to, the following:

• Update information
• Credit reports
• Bio/resume of the client/entity
• Claims history with detailed claim descriptions
• Risk management procedures
• Experience information

The more information an agent can give the underwriter, the better the quote they will give. Maybe that means fewer exclusions, lower deductibles, a better price, or a combination of some or all of those! Note that all information given to an agent is confidential, and will only be used to provide the Underwriter with necessary information for quotation.

Note from the Author (Nov. 14, 2014): After two years of work, we've entirely redesigned our website! Using SquareSpace, we were able to import this blog and we are continuing our blog there. To find the current version of this article and our new articles, click HERE.

IRMI Tip of the Month: Helping Teenage Drivers

There are several things parents can do to help keep their teenagers safe behind the wheel. Here are a few tips.

• Coach Your Son or Daughter. You should "coach" your teenage driver. Talk openly and frankly with him or her in order to determine his or her attitude about being behind the wheel. Work with your teen to set ground rules, such as the number of people allowed in the car, where the car may be taken, and curfew.
• Utilize Emergency Road Service. If you do not belong to a motor club, you should consider joining one that provides 24-hour emergency road service. That way, your teenager may call for help at any time if they need gas, need a jump-start, are locked out, or need a tire changed. You can also arrange with the motor club to provide service for your teen if they are in a friend's car.
• Have an Open Discussion About Driving Under the Influence. While no one wants to think about the possibility of their teenager drinking and driving--or being in a car with an impaired friend at the wheel--we need to be realistic. History has shown that teenagers will experiment with alcohol. You should make it clear to you teen that driving after drinking is not acceptable, and is very dangerous for everyone. However, if they ever do drink, or are in a car with someone else who is impaired, make it clear to your teen that he or she can call you at any time of the day or night and that you will come to get them--no questions asked.

Two other effective, though more costly, things that can be done are:

• Install a "Governor." Many vehicles, such as school buses and certain types of delivery vehicles, have a "governor" installed in them that restricts the amount of fuel that can be injected, thus preventing the vehicle from being driven over a certain speed. A governor in your teen's car may help keep him or her within the speed limits.
• Install a Global Positioning System (GPS) in the Teen's Car. You can program it to let you know where your teenager is driving at any time. With the GPS, you can set a radius of operation and the GPS will notify you if your teen has taken the car outside of that radius. It can even alert you when the speed limit is being exceeded. Finally, A GPS can notify you if the car is being kept out past an agreed upon curfew. Note: We realize that this may seem like a rather extreme measure. Use of a GPS may best serve those parents who have a reason to mistrust their teenager.

When your son or daughter gets a drivers license, work with your insurance agent to review various options for both of you. It is important for you—and your son or daughter—to remember that, yes, your auto insurance rates will go up, but they will come down after a couple years of driving experience. However, the rates will really go up if your teenager has tickets or gets into accidents.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2008, International Risk Management Institute, Inc.

Note from the Author (Nov. 14, 2014): After two years of work, we've entirely redesigned our website! Using SquareSpace, we were able to import this blog and we are continuing our blog there. To find the current version of this article and our new articles, click HERE.

Nebraska Workers' Compensation

What is Workers’ Compensation? Is everyone in a business supposed to be covered by it? What happens if I don’t have Workers’ Compensation for my employees? What’s the difference between an independent contractor and an employee? Why was Workers’ Compensation implemented?

Workers’ Compensation (WC) is also referred to as Workers’ Comp, Workman's Comp or just Work Comp. It is an insurance policy bought by an employer to cover the injuries of their employees while at work. In Nebraska, employers are legally responsible to cover every employee with Workers’ Compensation insurance. However, the business owners/employers themselves are not required to be covered, and independent contractors are not required to be covered either (however, business owners/employers can elect to be covered).

The basis for creating a WC program is because it is mutually beneficial for both the employer and the employee. The employer benefits because the employee cannot sue the employer for injuries sustained if there is a WC policy. The employee benefits because they know that any injury that occurs while they are working will be fully paid, whereas suing the employer could be a long process and the employer may not even have the funds to fully compensate them. 

Workers' Compensation can get complicated when dealing with independent contractors because the line separating employees from independent contractors is blurry. Though there is no set rule to differentiate between the two, in Nebraska, determining independent contractor from employee status consists of ten factors related to the work performed. Things such as the amount of control the person has, the amount of skill required, who provides the tools, if the person can work without supervision, and a few more factors go into determining the person’s status. Each of the ten factors carries a different weight, depending on the situation. So if there is any question on whether someone is an employee or an independent contractor, it’s always better to just cover them in the WC policy.

Failing to cover an employee with WC is taken very seriously in Nebraska. The following is an excerpt from the Nebraska Department of Insurance’s Workers’ Compensation website:

“What are the penalties for an employer's failure to provide workers' compensation insurance coverage?

Any one or more of the following penalties may be applied:

1. a civil fine not to exceed $1,000.00 for each violation. Each day of continued failure to secure coverage constitutes a separate violation.

2. imprisonment for not more than one year, a $1,000.00 fine, or both.

3. enjoinder from doing business in Nebraska until compliance is secured.

Also, an injured employee may sue the employer for damages in district court, and the employer will lose its common law defenses."

As you can see, the penalties for not covering an employee, or an employee you thought was an independent contractor, could be substantial. Even only having a single, part-time employee requires Workers' Compensation insurance. Also, determining the true status of your independent contractor(s) is vital. 

Note: This article is an introduction to Workers' Compensation for Nebraska only. Each state's WC program varies, and one cannot rely on this information for any other state's WC program. Any WC question should be discussed with your agent or the department of insurance. Copple Insurance Agency is here to answer you questions as well.

Note from the Author (Nov. 14, 2014): After two years of work, we've entirely redesigned our website! Using SquareSpace, we were able to import this blog and we are continuing our blog there. To find the current version of this article and our new articles, click HERE.

What Are Captive Agents?

What makes a Captive Agent different from an Independent Agent? Is there nothing in-between a Captive and Independent Agent? Are there any advantages or disadvantages to being a Captive Agent?

Captive Agents occur when an agent can only sell insurance from a single carrier. Their ‘captivity’ is contractually bound in order for them to be able to represent that carrier. In exchange for only being able to sell for the one carrier, the carrier will often help pay for some of the operating expenses of the agent and more, such as mentoring the agent, training their new sub-agents, advertisement expenses, creation and implementation of marketing items, signs, and more. The Captive Agent can typically advertise however he or she wants, as long as everything mentions the carrier or has the logo and/or name of the carrier on them.

So a Captive Agent has only one carrier it can sell products from. The next step up from a Captive Agent is a semi-Captive Agent, who is contractually bound to quote every new person/entity with the semi-captive-carrier, but can then seek other markets if necessary. The top tier is the Independent Agent, who can quote anyone they want with any carrier they have.

What are the benefits of being a Captive Agent?

All of the extra perks captive-carriers offer often lures in agents that are just starting out. Starting from scratch is made a lot easier with carrier-provided sales managers/mentors, advertising materials, and other expenses that they’ll pay for. Another benefit of being a Captive Agent is that they only have to know the ‘ins and outs’ of one carrier’s insurance policies.

What are the draw-backs of being a Captive Agent?

Each carrier has specific markets that it targeting with its products, so trying to sell to someone outside of the carrier’s niches is often hard to do. Along with that, having only one company to quote with can create a conflict of interest: if a prospect needs a coverage that the captive-carrier cannot provide, the Captive Agent will either have to tell them to look elsewhere for insurance, or downplay the necessity of that coverage to keep the prospect. This can often sacrifice quality and breadth of the insurance coverage. Furthermore, having only one carrier to sell from limits the options they can provide a client.

What about semi-Captive Agents?

Being a semi-Captive Agent is the middle ground between Captive and Independent. Semi-Captives get some of the perks that fully Captive Agents get, but it also creates extra headaches when they try to quote outside of the semi-captive-carrier: if the carrier finds out that the agent didn’t quote with them first, the carrier might sue or drop the agent for a breach of contract. Also, having to quote with the semi-captive-carrier on every piece of business takes up valuable time, especially when the agent know that the semi-captive-carrier won't be competitive.

Note from the Author (Nov. 14, 2014): After two years of work, we've entirely redesigned our website! Using SquareSpace, we were able to import this blog and we are continuing our blog there. To find the current version of this article and our new articles, click HERE.

Not All Auto Insurance Was Made Equal

Every day we get bombarded with advertisements telling us that we can save hundreds of dollars with some company’s cheap insurance. How do they offer less expensive coverage? 

They have catchy jingles, humorous commercials, spotless websites, and they’re all offering bargain auto insurance. How can you really be paying less for the same thing? Well, that’s just it—you aren’t buying the same thing. It’s cheap insurance for a reason. Here’s how they do it:

Coverage Guidance: When quoting insurance online, there is little to no guidance given. When applying for coverage, you’ll typically be asked what your current coverage is, and that’s what they’ll quote. There won’t be a review for coverage gaps or increased liability exposure.  They won’t discuss strategies to best cover you while maintaining an affordable premium. It’s simply an apples-to-apples comparison of what you’re paying now versus what you could pay with them. Their focus is solely on price, while an Independent Agency has various insurance carriers and the experience to find the overall best value for your situation.

Customer Service: Most companies’ biggest expense is its employees. If you want to talk to a person about your coverage, you’ll most likely be dealing with call centers. Establishing a relationship with your insurer is hard when you talk to a new person every time you call in. And all of the things you could count on an agency for (new proofs of insurance, endorsements, billing) is now done by yourself online or through a call center.

Policy Coverage: Coverage from an insurer that is only focused about getting you the ‘best price’ has to cut corners somehow. Removing the agent and using call centers is one way. In addition to this, there are often large policy differences by your ‘cut-rate’ insurers. Many have policy language that drops your liability coverage to your state’s bare minimum if someone else is driving your car, which could be very dangerous! (Nebraska’s DMV website shows the minimum amount, which is 25/50/25, but also makes a note that says that the state minimum may not adequately cover your exposure) Similarly, others will only pay a certain percentage of the claim if someone else is driving. Some cut-rate insurers offer Comprehensive and Collision insurance, but they cover far fewer perils than a standard policy. An example is that even though you may have your car insured for Collision, if someone else is driving, your Collision coverage won’t pay. Others may have separate deductibles for glass claims and body/engine claims. Some may not pay for cosmetic damages, and the list goes on…

Claims: Come claim time, you can run into some sneaky provisions on the settlement. Your cut-rate insurer may have understaffed adjusters, and the adjusters may be trained to only pay the absolute bare-minimum (You can usually find claim ratings online). Then when an amount is agreed upon, you might not see that money for a few months. Another scenario you might face is a limited coverage for repairs—your cut-rate insurer might only pay to replace the most necessary parts to make your car operable again, and they will probably only reimburse you for the Actual Cash Value/depreciated amount. That leaves you with an out-of-pocket expense that a standard insurer would have covered. Lastly, some of these shifty insurers sneak a provision limiting the number of miles you are insured for. The limit varies, but as soon as you go an inch over that last mile, you instantly become completely uninsured.

Extra Coverages: With some companies, you may not even have the option to buy Uninsured/Underinsured Motorist coverage. Some companies don’t offer coverage for towing expenses. Others don’t cover Punitive Damages, and others don’t provide Medical Payments. It all varies, but a standard insurer would cover all of those.

What Does it Matter to You?

Insurance is not a commodity, but a service. To us at Copple Insurance Agency, insurance is a promise. Don’t be fooled by cut-rate insurers. Just think about it—they have be making money to stay in business, so if they’re offering cheaper rates, there must be a catch! That catch could be any combination of things, such as more exclusions, fewer coverages, terrible service, denied claims, and more. 

Note from the Author (Nov. 14, 2014): After two years of work, we've entirely redesigned our website! Using SquareSpace, we were able to import this blog and we are continuing our blog there. To find the current version of this article and our new articles, click HERE.

IRMI Tip of the Month: Do You Really Need Flood Insurance?

According to the Federal Emergency Management Agency (FEMA), flooding can cause several billion dollars of property damage in the United States each year. If you are like many homeowners, however, you may be unaware that the standard homeowners insurance policy you buy does not cover flood losses. You may believe that you have a low risk to this peril but FEMA reports that approximately 25 percent of all flood claims occur in communities in which flooding is deemed to be a low to moderate risk. So do you really need a separate flood policy? The following tips and ideas may prove helpful in answering this question.

• Contact your insurance agent to see if you live in a community that participates in the National Flood Insurance Program (NFIP), a prerequisite in order to qualify for flood insurance. Participating communities must agree to adopt and enforce certain floodplain management regulations, including building construction and zoning laws that minimize the risks of flood damage.
• Ask your insurance agent to see if you are in a floodplain. Or, if you prefer, go to www.floodsmart.gov and select “What’s Your Flood Risk?” which will ask you to enter your home address. This Web site will then specify whether you are in a low, moderate, or high risk area.
• Consider purchasing flood insurance even if you are in a low-to moderate-risk community. In these areas, you may be eligible for the Preferred Risk Policy, with premiums as low as $112 per year including coverage for your personal property.
• Note that a flood policy does not take effect until 30 days after you purchase the coverage. Thus, if the local meteorologist announces a flood alert for your community and you try to purchase coverage, it is already too late.
• The maximum limit of insurance in the NFIP for your home itself is $250,000. If your residence’s value exceeds this amount, ask your insurance agent about excess insurance for losses above the federal policy’s maximum limits.
• Don’t assume that the government will bail you out if you suffer a flood loss and don’t have a flood insurance policy. That decision is a gamble you may not win. Remember that federal disaster assistance, if available, is usually a loan that must be paid back with interest.
• Discuss all the pros and cons of flood insurance with your agent before making your final decision.

Get more personal lines insurance and risk management tips and ideas from IRMI

Copyright 2008, International Risk Management Institute, Inc.

Note from the Author (Nov. 14, 2014): After two years of work, we've entirely redesigned our website! Using SquareSpace, we were able to import this blog and we are continuing our blog there. To find the current version of this article and our new articles, click HERE.