Insurance Reports

What are insurance financial ratings?

2010-07-14T10:59:00.002-04:00

One of the most important things you can do when choosing an insurance company is to pick one that is financially secure. As a result of the recent financial environment, financial solvency has probably never been more critical for insurers. There are five major agencies that rate the financial stability of insurance companies.

Insurance ratings are based on financial data that insurers are required to report to the government, as well as information the insurance companies provide directly to the rating agencies. Most financial rating services also post ratings on the Web or publish ratings that are readily accessible to the general public.

It is very important to know what constitutes each agency's high ratings, and stick with insurers that rank highly on a consistant basis. Deciphering the ratings is somewhat confusing, and rating systems can vary quite a bit between each rating service. At first glance all ratings seem equal, like report cards with an "A" as the highest mark and a "C" for average. However, this is not the case. An insurance company touting an "A" rating could have some potential problems paying claims, while one with a "C" rating could be on the fast path to bankruptcy.

The Most Prominent Rating Agencies

• A.M. Best Unlike the other services, A.M. Best rates only insurance companies, and it rates the entire market. Top financial-strength ratings fall in the categories of superior (A++, A+) and excellent (A, A-).

• Standard & Poor's Highest financial-strength ratings are AAA (extremely strong) and AA (very strong). Standard & Poor's also designates certain companies as Security Circle insurers. These companies must rank in the top four categories for financial strength, submit to a comprehensive initial review, and undergo ongoing monitoring.

• Moody's Moody's ratings cover global life, property and casualty, mortgage and title insurers and reinsurers, plus financial guarantors. Look for companies with financial strength ratings of Aaa (exceptional) or Aa (excellent).

• Fitch Fitch Ratings is an international credit rating agency dual-headquartered in New York City and London. It was one of the three Nationally Recognized Statistical Rating Organizations (NRSRO) designated by the U.S. Securities and Exchange Commission in 1975, together with Moody's and Standard & Poor's

• Duff & Phelps This agency specializes in rating small- to medium-size insurers. Companies with a high claims-paying ability get marks of AAA, AA+, AA, and AA-. In addition to its ratings, Duff & Phelps' Solvency Seal identifies companies that have been in operation five years or longer, and show a strong long- and short-term capacity to pay claims.

What to Look For in an Insurer Beyond Just the Ratings

In addition to the ratings, you should also look at how a company ranks across its entire range of services to get a good idea of its overall financial stability. Ratings tell you only how financially sound a company may be on paper. Getting an insurance company to easily pay out a claim is another story. Usually, a personal referral or your insurance agent's advice can help you get a feel for how quickly claims are settled. Another great source for company testimonials is your state insurance department, because it collects complaints from consumers against their insurance carriers.

Still, many insurance companies do go unranked. This isn't necessarily a big cause for concern, but be sure you check with A.M. Best, because its ratings tend to be the most comprehensive. If you see a questionable rating with A.M. Best, and the company you're considering isn't rated with the other services, it's a good idea to obtain a quote from another insurance company as well

____________________________________
Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

Buying Insurance: What You Need To Know

2010-06-17T09:39:00.004-04:00

Owning and managing a business has many positives and negatives, requiring the performance of varied responsibilities and wearing of many different hats. Most of my clients typically view the insurance renewal process with a sense of dread. Navigating the minefield of carriers, coverages, exclusions, sub-limits, etc. Contracts can be time consuming and frustrating, filled with technical jargon and terminology that can leave you exhausted. After you manage to finalize your renewal, you may still lay awake at night wondering if there is an uncovered claim lurking out there waiting to strike.

What can you do to make the renewal process easier for you and your staff, while also reducing overall insurance costs and maximizing coverage?

Representation
Having a trusted, knowledgeable professional working to secure your interests can make this process much easier. Well trained, professional insurance brokers take their careers and their clients accounts very seriously. Focus on finding a broker that specializing in working with your type of business, and has appropriate designations, such as CPCU. You can learn more about insurance designations and find lists of qualified brokers at http://www.aicpcu.org. Asking colleagues and competitors for recommendations can also prove valuable. Most people are very willing to make an introduction if they are pleased with their broker. They will carefully review your schedules, limits, coverages and exclusions, making recommendations on the package of coverages that will most benefit your account. There are tools available that will confirm your coverages are adequate, such as buildings limits, http://www.marshallswift.com. A good broker will also closely monitor what is happening in the insurance market, tracking trends and carrier appetites.

Alternate Proposals
After you have found a good broker, allow him to select the markets he would like to approach on your behalf. Your broker will work hard for you every year, but the market is fluid and can change quickly. Allowing a second broker to review your account every 3 to 5 years will ensure that your account is placed with the best carrier for your needs.

Keep clear records*
Use Microsoft Excel or another spreadsheet program to keep clear and current details of your building(s), vehicles, drivers, and other account schedules of information. Retain clear and current records of contracts and certificates of insurance from all sub contractors and third parties you do business with in the event they cause any damage or claims. Ask your broker and attorney to review these documents for proper wording and limits. You should also keep details of past claims if you have any. This will make it easy for a potential carrier to assess your account quickly.
* This item is very important. Most underwriters are overworked. They will eliminate some of their workload by taking all of the accounts that are lacking information or are poorly prepared and instantly decline them. Your broker will play a big role in making your submission as attractive as possible.

Housekeeping
Some carriers prefer to pre-inspect risks prior to offering a quote. The easiest way to clean up your account is to take care of visible debris, make sure handrails are secure, and move items away from burners and boilers. Take a look at past carrier recommendations to see if there are any items suggested that you may not have completed. Typically these things are not expensive and can make a big difference in the way you present to a carrier.

Quote review
Once your broker produces all of the quotes you will be reviewing together, consider all the factors, not just the price. It is easy to produce quotes that are cheap, but you usually get what you pay for. Compare your coverage forms and exclusions; make sure the quotes are basically the same. If there are differences, confirm that they are reflected in the price.

Ask to see the AM Best rating for the quotes your broker provides. AM Best provides financial ratings of all insurance companies, and their indications can help offer some guidance on the strength and longevity of the carrier with whom you are doing business.

Check your deductibles. If you have some frequency in claims, you may want to take a lower deductible to reduce your annualized risk management costs. However, a risk-free insured may be willing to take a higher deductible to reduce insurance costs. This allows you to keep more cash on hand in the event the occasional claim comes along. Again, your broker can help you analyze your claim history and provide some claim scenarios to assist in determining which plan makes the most sense.

Throughout this article, you will note a recurring theme: the assistance provided by your broker. I cannot stress enough how important a knowledgeable broker is to your business, coverage and profitability. There are many insurance professionals who genuinely care about providing the best services to their client. If you don’t feel you have one of these professional working for you, I urge you to find a new broker. They are out there and not hard to find.
____________________________________
Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

Admitted versus Non-admitted insurance companies

2010-05-12T10:57:00.008-04:00

Admitted Insurance Companies vs Non-Admitted Insurance Companies

AdmittedAdmitted carriers are licensed and governed by the laws of the state they are in, and their rates and forms (coverages) are reviewed and approved by that state. This is very good because each states insurance department is charged with protecting the interests of the consumer. They review the rating to make sure there is no price gouging, and they review the coverages (forms) to make sure there are no egregious exclusions on the policy being sold.

Also, Admitted carriers are protected by their state guarantee fund (if one exists). Here in NY , the state agrees to back up an admitted carrier in the event that carrier becomes insolvent and is unable to pay claims.

Non admitted
Non-admitted carriers on the other hand are not protected by any state guaranty funds. They also are free of rate and form. They can, in effect charge any price they want, and can provide any coverage or exclusion they want, leaving it to the carrier and insured to negotiate terms of coverage, typically through a broker. This may seem initially very bad on the surface, however non-admitted carriers exist for a very specific purpose.

Example #1
If there is a sudden spike in arson related apartment building fires, insurance companies who write on admitted paper only have two choices: Keep writing policies at a loss, or stop writing the class altogether while they wait for a rate change approval from the State department of insurance, which can take many months. Non-Admitted carriers can step in, increase the pricing to a level that will allow them to continue writing the class profitably. While no one likes higehr insurance premiums, this is certainly better than leaving the building owner uninsured.

Example #2
Your particular set of buildings keeps experiencing water damage claims & all admitted carriers choose not to offer coverage. They can not exclude water damage, and they cannot charge enough rate to operate your policy profitably. A nonadmitted carrier offers you a competitive rate, with a standard deductible of $1,000, and then adds a Water Damage Deductible of $25,000. While you dont like such a high deductible, you can see the sense of the carriers offer, it keeps your premium down, and is this offer is again better than no coverage at all.

The ability to offer a custom made policy is very useful to risks that are hazardous or have experienced a bad claims history. Nonadmitted policies are not designed for the lay person. They exist to address specific needs of special classes of business that are having problems in one form or another.

Solvency Concerns
Some insureds are fearful of doing business with nonadmitted carriers due to insolvency concerns as described above. While this fear is reasonable, it should and can be managed and planned for. In addition to being admitted or non admitted, carriers are also given ratings of their financial strength. There are plenty of carriers that are admitted that have a B (or worse) financial rating. I would probably not reccomend my client buy such a policy. Alterntaively there are many non-admitted companies that can provide financials that position them as A-XV and better. These companies are very strong and the likelihood of their failure is very small.

Find a reputable, knowledgable broker who can help you navigate the many types of carrier policies available and you may be suprised at what you find.

____________________________________
Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

What is Risk Transfer?

2010-02-05T12:00:00.008-05:00

http://www.investorwords.com/ defines this as: "Shifting risk from one party to another; examples include purchasing insurance coverage or issuing debt."

The whole basis for insurance is risk transfer. You can move known, definable risks from you to a third party who is more capable of surviving the risk, if a negative event occurs.

Insurance companies were formed to pool the risks and the monies charged(premium) so that they can pay for the repairs in the event any of the insured parties suffers a covered claim.

Almost any type of risk can be transferred to another party. This is good and bad. It is good because no matter how exotic the coverage needs to be, it can be purchased. It is bad because the flexibility of the policy structure allows policies that seem similar to provide very different coverages, which may cause confusion for an insured over what is and is not covered.

The cost of risk transfer (insurance policies) is determined by a few things:
1) How common is your risk? Usually, the more of them there are, the more comfort a carrier will have with the risk, leading to reduced pricing.

Homeowners insurance is very common. It is fairly easy for insurance companies to predict the statistical averages for claims and payments so they can rate their policies pretty tightly. There is also a lot of competition between insurance companies, so this helps keep prices down.
On the other hand, if your in a business that is a completely new field, finding a carrier willing to provide a quote will become very difficult. This wil llimit competition, and also because there will be many knowns for the insurance company, the pricing they provide may be reflective of their uneasiness with your business.

2) How hazardous is the risk? Typically, the more hazardous your risk is, the more premium you can expect to pay.

Do you shine shoes for a living? How likely would you to be sued?
What if you operate a playground, where there are children running around all day long?
Do you manufacture dynamite? Even if your product is used as its designed, you may still generate claims with this class of business. I would imagine insurance for a dynamite factory will be a touch more expensive than for a shoe shining business.

3) How broad is the coverage? You get what you pay for. The more coverage you want, the more it will cost.

If you operate a business and are paying a very small amount versus your friends in the same business, I would be very curious to take a look at yur poicy wording and see if there are any substantial restrictions that you should be aware of.
It would be very bad if your dynamite factory had an exclusion for fire and explosion.

If you have additional questions, please feel free to contact me.

____________________________________
Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

What is E&O Insurance?

2009-02-04T10:34:00.019-05:00

Errors and omssions (E&O) is the insurance that covers you in the event that a client holds you responsible for a service you provided, or failed to provide, that did not have the expected or promised result.

For doctors, dentists, chiropractors, etc., it is often called malpractice insurance. For lawyers, accountants, architects or engineers, it may be called professional liability.

This coverage is typically in force where you are providing a professional opinion or some expertise. This type of coverage is typically excluded from your standard GL policy. If you provide any type of service where you are being paid for your opinion, then it would probably be a good idea to have E&O insurance.

If you have additional questions, please feel fre to contact me.

____________________________________
Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

Occurrence versus Claims Made

2009-02-04T10:34:00.018-05:00

OCCURRENCE vs. CLAIMS MADE

When a policy is written on a "claims-made" basis, it means that the policy in force at the time a claim against you is made will pay for losses, regardless of when the claim actually occurred in the past. (Assuming no retroactive inception date is applied, which will be explained below).

With an "occurrence" based policy, even though the policy may have expired, provided the policy was in force at the time that the claim occurred, a claim can still be made against that old, expired policy.

Both forms of coverage have advantages and drawbacks, depending on the circumstances. It is difficult to predict whether, in any particular instance, it will be advantageous to insure using one form or the other, but carriers typically offer claims made when the odds of a claim occurring over time is more likely, such as when you sell products, or have environmental exposure.

Advantages of "occurrence" policies

* - "Occurrence" policies are sometimes like "money in the bank," in that you can go back to old policies, years after they have lapsed and put a claim against them for incidents that happened while they were in force. Old policies should never be thrown away. They should be kept in a place of safekeeping.

* - You don't have to worry about canceling an "occurrence" policy and moving to a different insurer. Coverage remains locked in for incidents occurring while the policy was in force, so long as the insurer is in business. In contrast, once a "claims-made" policy is cancelled, it is possible that purchasing insurance for past events will become difficult, expensive or perhaps not possible.

* - Sometimes courts will find occurrences in successive policies if there is continuing harm. This can have the effect of accumulating limits over a period of years. With "claims-made," only one limit applies; the limit in force when the claim is actually made.

Disadvantages of "occurrence" policies

* - Insurance companies who wrote policies in previous years may no longer be around. With "claims-made" policies, the insurer is much more likely to be around when a claim becomes payable. The length of time between an occurrence and resolution in court can be 20 or more years. An insurer in business 20 years ago may not be in business today.

* - De to inflation and other economic factors, the limits on an "occurrence" policy are likely to be inadequate if a claim is made twenty years after a policy has expired. With "claims-made" it is easier to arrange a limit which is adequate for today's exposures.

Advantages of "claims-made" policies* - Limits can be predicated on today's exposures more accurately than with "occurrence" policies, so there is less likelihood of being under insured. Previous inadequate "occurrence" basis limits can be topped up retroactively.

* - Previous inadequate coverage or more restrictive terms exceptions and conditions can be broadened out retroactively.

* - The above two advantages can be made to apply whether the insured was previously on either "occurrence" or "claims-made" policies.

Disadvantages of "claims-made" policies* - Coverage is triggered by an actual claim for damages, not a notice of an "occurrence" or "incident." However, the date of the occurrence or incident must be more recent than the retroactive date of the policy. This retroactive date determines the cut-off date for claims: if the incident occurred before the retroactive date, the insurer has no obligation and the insured no coverage. While the claim has to be made during the policy period, the occurrence which gave rise to the claim has to fall after the retroactive date of the policy. A "claims-made" policy can have no retroactive date (the broadest coverage). On the plus side, a retroactive date can pre-date the policy inception date (this may range from days to years). Ideally, it should go back at least to the expiration date of your last "occurrence" policy. If it goes back further it can be designed to provide top-up cover in the case of different limits. Ideally, you want no retroactive date or one that includes the entire period that you have had "claims-made" coverage. Anything less makes you self-insured for any claims for injuries or damage that occurred during prior claims-made policy periods which you have not reported to your insurer at the time of the occurrence (unless such claims are covered by supplemental "tail" coverage).

* - The first claim for damages determines which policy applies. If a person first makes a claim for medical payments in 1986, then files for additional damages in 1988, both claims activate the 1986 claims-made policy.
With "claims-made" basis of coverage, should the policy ever be allowed to lapse or be cancelled, the insured is generally given the option of purchasing coverage, (extended reporting period or "Tail") With "occurrence" policies you don't have to worry about past incidents when lapsing coverage or changing insurers.

* - If coverage terms ever become more restrictive on subsequent renewal of a "claims-made" policy, the new terms apply retroactively to the original retroactive or inception date.
Limits of Liability and need to project into the future

* - Once an Insured is hooked on a "claims-made" policy it is difficult to get off. The Insured can purchase a "tail" coverage extension which can sometimes be extended for years, but even this is at the option of the Insurer, and is not under the control of the Insured.

There are many more complex differences to consider between these two policy types. For the sake of brevity, I have stopped short of continuing, but would be happy to continue this dialog with anyone who has more specific questions.
____________________________________

Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

What is EPLI?

2009-02-04T10:34:00.017-05:00

Employment Practices Liability Insurance (EPLI) covers businesses against claims made by workers who allege that their legal rights as employees of the company have been violated.

While most suits are filed against large corporations, no company is immune to such lawsuits.

EPLI provides protection against many kinds of employee lawsuits, including claims of:
* Sexual harassment
* Discrimination
* Wrongful termination
* Breach of employment contract
* Negligent evaluation
* Failure to employ or promote
* Wrongful discipline
* Deprivation of career opportunity
* Wrongful infliction of emotional distress
* Mismanagement of employee benefit plans

The policies will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements. The policy covers legal costs, whether your company wins or loses the suit, with liabilities covered by other insurance policies such as workers compensation excluded from EPLI policies. These policies typically do not pay for punitive damages or civil or criminal fines.

To prevent employee lawsuits, educate your managers and employees so that you minimize problems in the first place:
* Create effective hiring and screening programs to avoid discrimination in hiring.
* Post corporate policies throughout the workplace and place them in employee handbooks so policies are clear to everyone.
* Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure supervisors know where the company stands on what behaviors are not permissible.
* Document everything that occurs and the steps your company is taking to prevent and solve employee disputes.

____________________________________
Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

What is Gap insurance?

2009-01-19T10:52:00.010-05:00

When you buy or lease a new car, and have a claim, the insurance company will only pay what the car is worth. As you drive the car, its value reduces signifigantly, espescially in the first year or so. If the car were to be damaged or stolen, it would be very likely that you would owe more to the bank than the car is actually worth.

So as an example, if you bought a $25,000 car, and had an accident 6 months later, the insurance company might pay for the car, at about $16,000. But you had only made a few payments, so the bank is still owed lets say, another $7,000. The insurance company won't pay them that money. You are responsible for this "gap" in coverage.

A gap policy will pay this difference for you, so you wont lose anything on the back end.

____________________________________
Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

Whats is a Deductible? What is an SIR?

2009-01-14T10:58:00.005-05:00

Deductibles and Self-Insured Retentions (SIR) in liability insurance serve the same purpose: They can offer a cost savings to an insured who anticipates small and infrequent losses, and they can reduce an insurer’s reluctance to write an account with a loss frequency problem.
The fundamental difference between a deductible and a SIR is how the claims are adjusted. With a deductible approach, the insurer adjusts all claims, and then bills the insured for his deductible amount. Wtih an SIR approach, the insured is responsible himself for adjusting claims up to his SIR, which means that the insured will probably require the services of a third-party administrator (TPA). After the SIR is consumed, then the inurance carrier is brought in to handle the remaining amounts of the claim.
Not only do deductibles and SIRs differ in claims adjustment approach, there are usually other differences, so making an "apples-to-apples" comparison can require soem additonal research.
Here are some key factors to be aware of:
1. Loss Adjustment Expense (LAE). Some insurers using deductibles or SIRs apply the deductible or SIR amount only to the actual claim itself (BI/PD), while others also include LAE. This is often noted in the quote as "LAE inside" or "LAE outside." This is the same concept as "defense inside" or "defense outside."
2. Per Claim/Per Occurrence. Another variable is whether the deductible or SIR apply per claim, or per occurrence. Obviously, this could make a huge difference to the insured, depending on the circumstances of a particular loss. A per claim deductible or SIR would produce a lower premium quote, since the insured has assumed more of the potential loss, but the insured could face a considerable amount of up-front expenses.
3. Third Party Administrator (TPA). If an SIR is used, the insured will need a TPA to assist with the claims adjustment process. The insurer will usually provide an approved list of TPAs that the insured can use. The TPA will review the insured’s loss runs, as well as consider the nature of the insured’s business, and provide a cost per claim pricing. In some cases, the TPA will also require a deposit at policy inception.
4. Appeal of deductible vs. SIR. As you noted in your question, some insurers prefer a deductible approach, some prefer the SIR, some offer both, and some don’t offer either. One difference between the two that insurers often like is that with an SIR, the insured "has some skin in the game." That is, there is an incentive for good loss control, since the insured must pay up front for claims (and often LAE also) which are below the SIR. With a deductible, the insurer pays the money first, but has to bill the insured for their contribution, which can produce a delay in the insurer receiving reimbursement from the insured.
Feel free to hit me with any other questions as well.
____________________________________
Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

What is Third Party Over?

2008-10-22T13:57:00.006-04:00

Also known as "Labor Law" or "Action Over"

An injured employee, after collecting workers compensation benefits from the employer, sues a third party for contributing to the employee's injury, such as the General Contractor that hired his employer top perform a task.

Then, because of some type of contractual relationship between the third party and the employer, the liability is passed back to the employer by that prior agreement. This causes the employer to pay both the Workers Comp claim, and the General Liability Claim.
This type of claim is very common in NY, and many carriers specifically exclude this type of claim.

____________________________________
Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

Insurance Jokes Part 5

2008-09-17T17:17:00.003-04:00

Q: Do you know what a woman and insurance have in common?
Answer: They are both expensive, difficult to understand and what you get is not guaranteed.

Q: Do you know the difference between a man and a whole life policy?
Answer: A whole life policy eventually matures

Q: Did you hear about the insurance executive that nearly died in a horseback riding accident?
Answer: He was saved when the manager of the Wal Mart finally came out and unplugged it.

Q: How many producers does it take to change a light bulb?
Answer: None, they'll just have a CSR do it.

Q: How many CSRs does it take to change a light bulb?
Answer: Seven; one to change the bulb, and six to stand around and complain how producers do it.

Q: How many actuaries does it take to change a light bulb?
Answer: "How many did it take last year?"

Q: How many insurance agents does it take to change a light bulb?
Answer: That depends on whether the light bulb burned alone or with the whole house.

Q: Why is a CSRs like a mushroom?
Answer: Because they're kept in the dark, fed a lot of crap, and when they start to grow, they get canned.

Q: What do you get when you cross a monkey with a broker?
Answer: Nothing, there's some things even a monkey won't do.

Q: I asked a broker how many producers he had working for him?
Answer: He answered "about half of them".

____________________________________

Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

Basic, Broad, Special

2008-09-11T16:03:00.004-04:00

Property insurance provides three levels of coverage. Basic, Broad & Special. Basic is the cheapest to purchase, and Special is the most expensive, with Broad form in the middle.

Basic & Broad form only provide coverage for the perils that are listed. Special provides coverage for anything and everything, unless that peril is specifically excluded. See below for more information.

Basic
fire; lightning, explosion, windstorm or hail, smoke, aircraft or vehicles, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, or volcanic action.

BroadBasic + falling objects, weight of ice, sleet or snow, and accidental water damage.

Special
When a property policy is written on a special form, the insurance company has a duty to specifically exclude coverage. Simply put, if the insurance company does not exclude coverage in writing, the damage to your property will be paid for. There are tons of common exclusions, for example: government action, nuclear hazard, war and military action, water damage (ie. flood), fungus, and pollution. At the end of the day, however, the special form gives you much more comprehensive insurance protection than the basic or broad forms.

____________________________________
Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

Insurance Jokes Part 3

2008-09-09T16:51:00.005-04:00

Life insurance agent to would-be client: "Don't let me frighten you into a hasty decision. Sleep on it tonight. If you wake in the morning, give me a call then and let me know."

Three Insurance salesman were sitting in a restaurant boasting about each companies service.The first one said, "When one of our insureds died suddenly on Monday, we got the news that evening and were able to process the claim for the wife and had mailed a check on Wednesday evening. "The second one said, "When one of our insured died without warning on Monday, we learned of it in 2 hours and were able to hand-deliver a check the same evening." The last salesman said, "That's nothing. Our office is on the 20th floor of a tall building. One of our insureds who was washing a window on the 85th floor, slipped and fell. We handed him his check as he passed our floor."

Several cannibals were recently hired by a health insurance agency. "You are all part of our team now," said the HR rep during the welcoming briefing. "You get all the usual benefits and you can go to the cafeteria for something to eat, but please don't eat any of the other employees." The cannibals promised. Four weeks later their boss remarked, "You're all working very hard, and I'm satisfied with you. However, one of our CSR's has disappeared. Do any of you know what happened to her?" The cannibals all shook their heads no. After the boss had left, the leader of the cannibals said to the others, "Which one of you idiots ate the CSR?" A hand rose hesitantly, to which the leader of the cannibals continued, "You fool! For four weeks we've been eating Producers and no one noticed anything, but noooooo, you had to go and eat the Customer Service Representative!"

"You ought to feel highly honored," said the businessman to the life insurance agent, "so far today I have had my secretary turn away seven insurance agents.""Yes, I know," replied the agent, "I'm them."

An insurance agent was teaching his wife to drive when the brakes suddenly failed on a steep, downhill grade."I can't stop!" she shrilled. "What should I do?""Brace yourself," advised her husband, "and try to hit something cheap."

Sad but true: One day when I was a new agent, I received a phone call from a lady saying that unfortunately she had to cancel her husband´s life insurance policy. "We always paid it in time", she said, "but since my dear husband´s sudden death last year I have had some financial hardship; therefore, I cannot pay it anymore."

A traveling insurance salesman was held up by a bad storm in the Hawaiian Islands. He sent an e-mail to his corporate headquarters advising them that he was stranded for a few days and requested instructions.The reply came back shortly: "Begin vacation as of yesterday."

____________________________________
Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

Insurance Jokes Part 4

2008-09-08T17:55:00.006-04:00

An insurance agent won a trip to Mexico City. Now he is trying to win a trip back home.

A couple I know enjoys getting away from their high-stress jobs in the city by spending a few weekends out camping and relaxing in their motor home. However, they often found their peace and quiet disturbed by well-meaning, but unwelcome, visits from other campers. So, they devised a plan to assure themselves some privacy. Now whenever they set up camp they place this sign on the door of their RV..."Insurance agent. Ask about our term-life package."

The other day my house caught fire. The insurance agent said, "Shouldn't be a problem. What kind of coverage do you have?"I said, "Fire and theft."Insurance agent frowned. "Uh oh. Wrong kind. Should be fire OR theft." Apparently, the only way I can make a claim with this coverage is if the house is robbed WHILE it's burning down.

Two women are playing golf when one of them ask the other, "Do you and your husband have mutual climax?" The other woman replies, "No, I think we have State Farm."

There´s a new insurance policy written especially for Jewish mothers. It´s called the "My Fault" policy.

A traveler wandering on an island inhabited entirely by cannibals comes upon a butcher shop. The shop specialized in human brains differentiated according to source. The sign in the shop read:
Actuary' Brains ... $9/lb
Loss Control Brains ... $12/lb
Underwriters' Brains ... $15/lb
Claims Adjusters' Brains ... $33/lb
Insurance Executives' Brains ... $87/lb
Life Insurance Salesmens' Brains ... $146/lb
Upon reading the sign, the traveler noted, "My, those insurance salesmens' brains must be something."To which the butcher replied, "Are you kidding! Do you have any idea how many of them you have to kill to get a pound of brains?!"

A Charlotte, North Carolina man, having purchased a case of rare, very expensive cigars, insured them against .... get this .... fire. Within a month, having smoked his entire stockpile of fabulous cigars, and having yet to make a single premium payment on the policy, the man filed a claim against the insurance company. In his claim, the man stated that he had lost the cigars in "a series of small fires."The insurance company refused to pay, citing the obvious reason that the man had consumed the cigars in a normal fashion. The man sued ... and WON!! In delivering his ruling, the judge stated that since the man held a policy from the company in which it had warranted that the cigars were insurable, and also guaranteed that it would insure the cigars against fire, without defining what it considered to be "unacceptable fire," it was obligated to compensate the insured for his loss. Rather than endure a lengthy and costly appeal process, the insurance company accepted the judge's ruling and paid the man $15,000 for the rare cigars he lost in "the fires." After the man cashed his check, however, the insurance company had him arrested... on 24 counts of arson! With his own insurance claim and testimony from the previous case being used as evidence against him, the man was convicted of intentionally burning the rare cigars and sentenced to 24 months in jail and a $24,000 fine.

After many years at sea, a pirate decided to retire. Since he had suffered injuries on the job, he thought that he should collect on his worker's compensation insurance. He had a wooden leg, a hook where his right hand should be and a patch over his right eye. The agent assured him that he would be compensated if the injuries were work related. "How did you get the wooden leg?" asked the agent.In a booming voice the pirate replied, "Me and me mates were on the high seas when the boom swang 'round and knocked me into the sea where a shark bit off me leg. "The agent replied, "That is certainly work related. How did you lose your hand?""Well matey, me and me mates were on the high seas when the boom swang 'round and knocked me into the sea where a shark bit off me hand," said the pirate. "That's also work related. Now how did you lose your eye?" asked the agent. The pirate replied, "Well matey, I was laying on the deck one balmy day catching some rays when this seagull flew by and dropped his duty right in me eye!" "What does that have to do with the loss of your eye?" said the agent."It were the first day with me hook!"

____________________________________

Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

Replacement Cost (RC) versus Actual Cash Value (ACV)

2008-09-08T13:33:00.011-04:00

When purchasing a property policy, one decision you will need to make, is whether or not to buy your coverage with "Replacement Cost" (RC) or "Actual Cash Value" (ACV)

Replacement Cost means, "the cost to replace an item or structure to its pre-loss condition"

Actual Cash Value means, "replacement Cost less depreciation.

In simple terms, assume you had a TV that was 5 years old, and it was damaged in a fire. Under Replacement Cost, the insurance company would give you enough money to buy a NEW television. Under Actual Cash Value, they would give you the money your old, used TV was worth, and it probably wouldn't be enough to but a new one.

Sometimes insurance companies will only offer ACV if they feel there is a greater risk of a loss, such as on a building that has not been updated in some time.

This is definitely a coverage that you should pay attention to on your policies, as a policy with ACV will usually be far cheaper than a policy with RC, and for good reason.

____________________________________

Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

What is coinsurance?

2008-09-08T13:32:00.004-04:00

Coinsurance is a penalty imposed on the insured by the insurance carrier for under reporting/declaring/insuring the value of tangible property or business income. The penalty is based on a percentage stated within the policy and the amount under reported.

As an example:
A building actually valued at $1,000,000 has an 80% coinsurance clause but is insured for only $750,000. Since its insured value is less than 80% of its actual value, when it suffers a loss, the insurance payout will be subject to the underreporting penalty. For example: It suffers a $200,000 loss. The insured would recover $750,000 ÷ (.80 × 1,000,000) × 200,000 = $187,500 (less any deductible).
In this example the underreporting penalty would be $12,500.

The most commonly issued coinsurance percentage would be 80% but can be as high as 100%. The latter [100%] would impose the greatest penalty for under reporting. For this reason, it is vital that values of property are accurately reported and updated annually to reflect inflation and other increases in cost.

CArriers may also choose to offer "Agreed Amount". This effectively eliminates the coinsurance clause of an insurance policy. Most carriers wil require a minimum amount per sq ft in order to offer Agreed Amount.

____________________________________

Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

What is Insurance?

2008-09-08T13:23:00.008-04:00

Taken from Wiki, http://en.wikipedia.org/wiki/Insurance
"Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. An insurer is a company selling the insurance. The insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice."

What does this mean in plain English? Insurance companies are providing you with a promise. They promise to pay damages you may suffer up to an agreed upon amount, for an agreed amount of time, for a smaller payment in advance. Most insurance policies will have a list of exclusions you should be aware of, so you should have a trusted professional review your coverages with you.

____________________________________

Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

Insurance Jokes Part 1

2008-09-05T17:33:00.008-04:00

Insurance agents never retire, they just expire.

Insurance agents are premium lovers.

Insurance agents do it with third parties.

A woman was in the hospital after feeling very ill. The doctor says to her, "I have some bad news for you. You only have three months to live." "Oh that's terrible," the woman sighs, "what am I going do?"The doctor replies, "Marry an insurance agent.""Will I live longer?" asks the woman. "No," replies the doctor, "but it will SEEM longer."

Mr. John Johnson III, was a rich old man was dying from a rare disease. On his deathbed, he called for his insurance agent, doctor and preacher:"I trusted each of you my entire life. Now I want to give each of you $30,000 cash in an envelope to put in my grave. I want to take it with me." Mr. Johnson died and at the funeral, each one placed the envelope on top of the man, then he was laid to rest.On the way from the funeral, in the limo, the doctor confessed "I must tell you gentlemen, I only put $20,000 on top of Mr. Johnson, I wanted buy this new machine that would enable me to diagnose his rare disease and save others. It's what he would have wanted. "Then the preacher said: "I have to confess, I only put $10,000 on top of Mr. Johnson. We needed that money to help more homeless, and it's what Mr. Johnson would've wanted "The insurance agent was angry at both the man, and said: "I can't believe both of you, stealing from a dead man. I wrote Mr. Johnson a check for the full $30,000!"

A super genius goes in to see a doctor. "Doc," the genius says, "I think I'm too smart. I'm having trouble even communicating with people because we have no common frame of reference, and it's ruining my social life. Can anything be done? "The doctor runs a series of tests on the genius, and indeed finds that he is too smart. He says, "Currently, your IQ is 250, which is vastly superior to an average man. This is why your having trouble communicating. I do have a cure, however. I have a machine that will drain away some of your intellegence, leaving you with an IQ of 160. You'll still be a genius, but you should be able to lead a normal life as well. "The genius immediately agrees to the treatment, so the doctor straps him into the machine.Just as the doctor turns on the device, he gets a phone call from his ex-wife. They have a heated phone conversation for several minutes before the doctor remembers his patient. He rushes back, and is shocked when he sees the IQ readout at 75. The doctor says, "Are you all right?"The former genius just stares blankly.The doctor shakes him, saying "Say Something."The former genius replies, "Can I interest you in a health insurance policy?"

Needing insurance is like needing a parachute. If it isn't there the first time, chances are you won't be needing it again.

A state adopts strict new insurance self study CE requirements for its agents. The tests they now require are very difficult, can take no more than an hour to complete, and must be taken at a certified testing center.On the first day of the new requirements, an agent wanders into a testing center a half hour late."You'll never finish this test on time," the test administrator coldly states."Just give me the test," replies the agent, "I'll finish it." Skeptically, the administrator gives the agent the test. The time limit comes and passes and yet the agent still has not completed the test. Finally, a half hour after the test time limit, the agent brings his test up to the administrator, who is correcting a large stack of tests."You can't turn that in," states the test administrator, "you knew there was a time limit.""Do you know who I am?" replies the agent. "No", says the administrator."DO YOU KNOW WHO I AM???" the agent says more forcefully. "No, and I really don't care" replies the administrator, slightly annoyed."Good," says the agent, who quickly shoves his test into the middle of the stack the administrator is correcting and walks out the door.

____________________________________

Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681

Insurance Jokes Part 2

2008-09-05T16:11:00.011-04:00

Last night as I lay sleeping, I died or so it seemed, Then I went to heaven, but only in my dream. Up there St. Peter met me, standing at the pearly gates, He said "I must check your record, please stand here and wait." He turned and said "Your record Is covered with terrible flaws, On earth I see you rallied for every losing cause. I see that you drank alcohol and smoked and used drugs too, Fact is, you've done everything a good person should never do. We can't have people like you up here, your life was full of sin," Then he read the last of my record, took my hand and said "Come in." He lead me up to the big boss and said "Take him in and treat him well, He used to work in Insurance, he's done his time in hell."

A lawyer and an engineer were fishing in the Caribbean. The lawyer said, "I'm here because my house burned down, and the insurance company paid for everything." "That's quite a coincidence," said the engineer. "I'm here because my house was destroyed by a flood, and my insurance company also paid for everything." The puzzled lawyer asked, "How do you start a flood?"

An insurance agent said to a customer,"Thank you, Mr.Smith, for your patronage. I wish I had twenty customers like you.""Gosh, it's nice to hear that, but I'm kind of surprised," admitted Smith. "you know that I file many claims and always pay premium late." The insurance agent said, " I'd still like twenty customers like you. The problem is, I have two hundred like you."

An underwriter, an insurance agent, an old lady and a beautiful blonde find themselves together on a train. The train passes through a tunnel and in the darkness a loud slap is heard. When out of the tunnel and in the light, they see that the insurance agent has a red five finger mark on his cheek. The blonde is thinking: the insurance agent must have tried to grope me in the dark and mistakenly groped the old lady, so she slapped him. The old lady is thinking: that guy must have groped the blonde in the dark and she slapped him. The insurance agent is thinking: the underwriter must have groped the blonde in the dark and she mistakenly slapped me instead of him. The underwriter is thinking: I can't wait for the next tunnel so I can slap that damn insurance agent again!!!

Airman Jones was assigned to the induction center, where he advised new recruits about their government benefits, especially their GI insurance.It wasn't long before Captain Smith noticed that Airman Jones had almost a 100% record for insurance sales, which had never happened before. Rather than ask about this, the Captain stood in the back of the room and listened to Jones's sales pitch. Jones explained the basics of the GI Insurance to the new recruits, and then said: "If you have GI Insurance and go into battle and are killed, the government has to pay $200,000 to your beneficiaries. If you don't have GI insurance, and you go into battle and get killed, the government only has to pay a maximum of $6000. Now," he concluded, "which bunch do you think they are going to send into battle first?"

James walks into an insurance office and asks for a job."We don't need anyone," he was told."You can't afford not to hire me," James said. "I can sell anyone, anytime, anything!" "Well, we have two prospects that NO ONE has been able to sell. If you can sell just one, you have a job." He was gone about two hours. He returned and handed them two checks, one for $25,000 and another for $50,000. "How in the world did you do that?" they asked."I told you I'm the world's best salesman," James said. "I can sell anyone, anywhere, anytime!""Did you get a urine sample?" they asked."What's that?" he asked."Well, if you sell a policy over $20,000, the company requires a urine sample. Take these two bottles and go back and get urine samples." James was gone about six hours, and they were fixing to close when in he walks in with two five-gallon buckets, one in each hand. He sets the buckets down, reaches in his shirt pocket and produces two bottles of urine. He sets them on the desk and says, "Here's Mr. Brown's and this one is Mr. Barricks's." "That's good," they said, "but what's in those two buckets?" "Well, I passed by the Holiday Inn and they were having a state teachers' convention, so I stopped and sold them a group policy!"

____________________________________

Jonathan S. Carroll, ASLI, CRIS
Bradley & Parker
320 S. Service Rd, Melville, NY 11747
O - (631) 981-7600
D - (631) 650-4034
C - (917) 376-0075
F - (631) 981-7681