Group Excess Insurance or Group Umbrella Insurance policies will extend the insured’s coverage worldwide to include boats, youthful drivers, spouses and dependents living within the household, directors and officers insurance (in the event your company executives are serving on non-profit boards), employer liability for domestic employee, and more. The advantage to having a Group Umbrella policy is that the individually insured are able to achieve greater coverage, at a lower cost, and the policies are easier to underwrite as each individual’s level of risk is not as closely evaluated. Group Personal Excess Liability Insurance or Group Umbrella Insurance is a true “group” policy; the insurance company will not individually underwrite or decline any individual in the designated group. Think of it like this: you buy group health insurance to take advantage of the savings over purchasing health insurance on your own, so why wouldn’t you want to do the same for an umbrella insurance policy? Group Umbrella Insurance policies extend the limits of personal risk for those high-income earners on a more affordable basis than when purchasing those umbrella insurance policies individually.

The limits for these policies are quite high. A company could effectively secure up to a $50 million umbrella policy for their high-net worth executives. The mechanics of it are familiar: The company buys the policy similarly to an employee benefit plan and charges it back to the employees proportionately.

While Group Excess Insurance policies are more popular among the highly-compensated, the same group policies are available at lower limits which are more suitable for other levels of employees. (Employees can also “purchase up” to suit their individual needs.) Enrollment is voluntary and new employees do not have to endure a waiting period, they can be automatically covered from the date they were hired or promoted.  The group personal excess policies have been purchased by most a large numbers of banks, law firms and insurance companies in the country aand regionally.  For more information, call for details. 

Author Note: Chris Peterie is a principle of Swingle Collins & Associates.

Personal Lines Insurance Information:

• Personal Information for all Covered Individuals (Driver’s License, Date of Birth, Social Security Number)
• List of Entities to Protect (Trust, Family Limited Partnerships, LLCs, & Corporations)
• Homeowners Policies
• Primary Home (House, Condo or Renter’s Policy)
• Secondary Homes (Lake House, Ranch, & Hunting or Ski Lodge)
• Investment /Rental Property & Vacant Land
• Flood, Quake & Wind Policies
• Workers Compensation Policy – Domestic & Ranch Hand Employee Exposures
• Personal Property Floater- (Jewelry, Fine Arts, Firearms, Sporting Goods Equipment,  Antiques, Cameras, Video Equipment, Rugs, Wine Collections, Collectibles, Silverware, Sports Memorabilia, Musical Instruments, & Minerals)
• Builder’s Risk Policy
• Auto Policy (Vehicle Identification Number, Make & Model)
• Antique Auto, & Collector Cars
• Motorized Vehicles
• Motorcycles, RV’s, Golf Carts, Scooters, ATV’s, Segway, & Ranch or Hunting Vehicles, Barbie Jeep
• Boats, Yachts, & Personal Water Crafts (Year, Make, Model, Length, Value & Horsepower)
• Kidnap and Ransom Policy
• Aviation Policy (Commercially or Personally Owned)
• Directors & Officers Policies (For-profit & Nonprofit)
• Employee Dishonesty & Employment Practices Policies
• Excess Liability- (Umbrella)
• Farm & Ranch Policy (Energy, Hunting & Vacant Land Policies)

Commercial Insurance Policies:

• Package Policy (Property, & General Liability)
• Worker’s Compensations Policy or Occupational Accident Policies
• Inland Marine Policies
• International Policy
• Commercial Auto Policy
• Commercial Umbrella or Excess Policies
• Executive Liability Policy ( D&O, EPLI, Fiduciary, Crime, K&R, Professional Liability Policy)
• Pollution Policy
• Group Excess Policy

Senate Bill 425 went into effect on January 1, 2012 and requires certificates to only include language which is stated in the insurance policy. The purpose of the Bill is to ensure that certificates state what risks are being transferred to an insurance carrier through leases and contracts. Unlike previously, certificates can no longer quote wording from a contract, attach to an endorsement, or quote anything which amends a policy unless the policy itself has been amended.

This new law will require enhanced communication between property managers, tenants, lenders, attorneys, contractors, and their respective insurance professionals on the insurance language in their contracts, leases, and the forms of the insurance policy.

How do you recognize a compliant certificate?

• After January 1^st 2012, a new liability certificate issued is not valid unless it is the Accord 25 (2010/05) edition.  You can easily recognize this new certificate form because of the two new columns in-between the “type of insurance” column and the “policy number” column. (EXAMPLE AT END OF ARTICLE)

• The new “additional insured” column and “waiver of subrogation” column can only be marked “Y” if the certificate holder is specifically endorsed on the policy.  There cannot be a “Y” in the column if the policy has a blanket additional insured or waiver of subrogation endorsement.

What if my certificates are not compliant with Senate Bill 425?

This new law applies to certificates of insurance issued after January 1, 2012, on operations located in Texas, regardless of where the certificate holder, policyholder, insurer, or agent is located. 

Insurance agencies are required to follow these new changes and the Texas Department of Insurance has the power to enforce violators by:

• issuing a cease and desist order
• seeking an injunction
• imposing fines up to $1,000 for each violation
• and other penalties including license revocation

Changes To Look For:

The most common areas of conflict with old insurance certificates and the new law will be with the wording for additional insured, waiver of subrogation, notice of cancellation, and primary non contributory wording.

Additional Insured and Waiver of Subrogation

In the past, attorneys have required specific wording to be placed in the general information box to deem a certificate acceptable.  The Texas Department of Insurance has now given agents recommended wording to place in “The Box” depending on the endorsements on their client’s policy.  Companies will now need to re-determine what is acceptable language based on the coverages required by their lease or contract.

Notice of Cancellation

The new certificate has changed the notice of cancellation wording to:

“Notice of Cancellation – SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THEPOLICY PROVISIONS”.

This wording cannot be legally changed on the certificate to match a contract or lease.  The certificate issuer will now need to add the appropriate endorsement to the policy to guarantee notice of cancellation will be provided to the certificate holder.  This is typically the Commercial General Liability: CG 02 05 (Amendment of Cancellation Provisions or Coverage Change).

Primary Non Contributory

Many contracts and leases request that subcontractor’s insurance be held “Primary and Non Contributory.”  This means you want the subcontractor’s policy to be the primary source of recovery so that your policy does not contribute to defense or indemnification in the event that your company is sued due to an accident caused by the subcontractor or tenant. You don’t want to tap into your own CGL policy unless and until the subcontractor’s policy limit is exhausted.

If a company’s CGL is a policy from 1998 or later edition of the ISO CGL, it will include the following wording.

This insurance is excess over any other primary insurance available to you covering liability for damages arising out of the premises or operations for which you have been added as an additional insured by attachment of an endorsement.

If this language is included in a company’s CGL policy, then it is redundant to ask for the language on your subcontractor’s the insurance certificate.  Some subcontractor’s policies though include a specific “Primary and Non-Contributory” endorsement.  The TDI recommends that agents not write “Coverage for the additional insured will be primary and non-contributory.” on the certificate but include the endorsement number or copy of the endorsement instead.

Author: Kyle Cardwell – For questions or additional information, contact Kyle at 972-387-6739 or email at Kcardwell@swinglecollins.com.

This is a great question, and one that our customers ask frequently. Whether you rent a vehicle for personal use while on vacation, or as a substitute while your vehicle is out of commission for repair or service, or for business use while out of town, there comes that time when you’re standing at the rental car counter and the agent asks the inevitable question: “Do you want to buy our loss damage waiver (or our insurance coverage)?”

Most loss damage waiver (LDW) fees are outrageous.Sometimes they cost more than the daily rental fee itself. But are they worth the additional cost? The answer may depend on your tolerance for risk and inconvenience. You must decide if the extra cost is reasonable, considering the potential for an uninsured loss should something happen to the vehicle during the term of the rental contract, and the resulting inconvenience of dealing with the rental company and your insurance company to satisfy the rental company’s demands.

First, you should know that the LDW is not actually an insurance policy. It is a waiver of the rental company’s requirement in the rental contract that you bring the vehicle back in the same condition as when it left their lot. Most rental contracts make you responsible for any damage to the vehicle, including theft and weather-related damage. When you purchase the LDW, the rental company is removing that provision from the contract on a conditional basis.

If you don’t purchase the LDW and the vehicle is damaged, here are some of the costs for which you could be held responsible under the rental contract:

• Cost to repair damage to the vehicle, or the full value of the vehicle if it is a total loss
• “Diminished value” of the vehicle – the difference between what the vehicle was worth before the accident and what it is worth after repairs have been made
• “Loss of use” – the amount of money the rental company loses on rental fees while the vehicle is out of service for repair or replacement
• Administrative or loss-related expenses incurred by the rental company, such as fees for towing, appraisal, and claims adjustment, plus general office expenses for handling the paperwork

Whether all or any of these costs are covered by your personal auto policy depends on several factors. One big factor is the type of personal auto policy you have purchased. Insurance companies sell different policies in Texas and the coverage and exclusions are not the same from one company to the next. Some companies sell a policy that covers damage to the rented vehicle in the liability section of the policy, while others sell a policy that covers damage to the rented vehicle in the physical damage section. Each type of policy is discussed separately below.

We encourage you to ask your agent which type of policy you have, because as you will see, the differences are significant.

> Reasons to purchase the Loss Damage Waiver when you have a policy that covers damage to the rental vehicle in the liability section:

1. Your limit of liability may not be sufficient to satisfy the rental company’s demands.

Coverage for damage to the rental car and related costs are provided by the property damage liability section of your personal auto policy. If the property damage limit of liability is not sufficient to cover the value of the vehicle you rent, plus pay for any other costs the rental company demands, you will be personally responsible for the costs that exceed what your insurance company has to pay.

2. Your policy may exclude rented pickups and vans used for business purposes.

If you rent a pickup or van for business purposes, your personal auto policy may not provide coverage at all. Some insurance companies consider an SUV to be a pickup or van, and may therefore not cover any damages arising out of the use of an SUV rented for business purposes.

3. Your premium may go up or your policy may not be renewed if you have an at-fault accident.

You are driving an unfamiliar vehicle in unfamiliar territory. If you have an at-fault accident while driving the rented vehicle, your insurance company may hold it against you – with a premium surcharge or perhaps even non-renewal.

4. Your line of credit may be adversely affected.

If you don’t buy the LDW, the rental company will probably ring up an estimated damage amount on your credit card, pending notification to and settlement by your insurance company.

5. You may suffer a huge inconvenience.

When you have purchased the LDW, you can bring a damaged vehicle back to the rental company, throw the keys on the counter, and walk away. When you haven’t purchased the LDW, you may have to spend a significant amount of time dealing with the rental company and your insurance company.

> Reasons to purchase the Loss Damage Waiver when you have policy that covers damage to the rental vehicle in the physical damage section:

1. Your policy may not cover damage to the rental vehicle at all.

Coverage for damage to the rental vehicle and related costs are provided by the physical damage section of your personal auto policy – IF your policy provides physical damage coverage on at least one of your covered vehicles.

2. Your insurance company may not pay the entire amount demanded by the rental company.

When your policy provides physical damage coverage on one of your covered vehicles, the policy covers damage to a rented vehicle. The amount payable by the insurance company is the lesser of the “actual cash value” of the vehicle or the amount “necessary” to repair or replace the vehicle, minus your deductible. In addition, the policy covers “loss of use” with a daily limit (usually as low as $20 per day) and a maximum limit (usually $600), and there is usually a 1- or 2-day waiting period before the policy will begin to pay these expenses. Because of all these limitations, you may become personally responsible for:

• The amount demanded by the rental company to repair or replace the vehicle in excess of “actual cash value” or the amount “necessary” to repair or replace;
• The amount of your deductible;
• The amount demanded by the rental company for “loss of use” in excess of the daily and maximum limits payable by your insurance company;
• The amount demanded by the rental company for “diminished value” of the vehicle, even after the repairs are complete;
• The amount demanded by the rental company for administrative or other loss-related expenses.

3. Your policy may exclude some electronic equipment.

Your policy may exclude loss to some electronic equipment that receives or transmits audio, visual or data signals. If you rent a vehicle equipped with a GPS receiver, for example, your policy may not cover it.

4. Your premium may go up or your policy may not be renewed if you have an at-fault accident.

You are driving an unfamiliar vehicle in unfamiliar territory. If you have an at-fault accident while driving the rented vehicle, your insurance company may hold it against you – with a premium surcharge or perhaps even non-renewal.

5. Your line of credit may be adversely affected.

If you don’t buy the LDW, the rental company will probably ring up an estimated damage amount on your credit card, pending notification to and settlement by your insurance company.

6. You may suffer a huge inconvenience.

When you have purchased the LDW, you can bring a damaged vehicle back to the rental company, throw the keys on the counter, and walk away. When you haven’t purchased the LDW, you may have to spend a significant amount of time dealing with the rental company and your insurance company.

Bottom Line

We recommend that you buy the Loss Damage Waiver from the rental company.

For more information, here is a helpful article from the Insurance Information Institute, Do I Need Separate Rental Car Insurance?

Download the pdf version of this article here: What should our employees do when they rent a car for a company trip.pdf

I certainly appreciate the reduction in my annual premiums with additional coverage.  I am looking forward to the personable service you have offered concerningclaim, service, or just a questions regarding my coverage or future coverage.

I have had a 24 year relationship with my past Insurance Carrier who have served me very well and I am looking for the same long relationship with Swingle Collins & Associates.

Gus K.

Only 224 independent agencies throughout the U.S. qualified for inclusion in the Best Practices Study. An IIABA affiliated state association or an insurance company must first nominate the agency which then must qualify based on outstanding customer services, growth, stability and financial management. More than 1,200 were nominated this year.

The Best Practices Study was initiated by IIABA in 1993 as the foundation for efforts to improve agency performance. The annual study of leading independent insurance agencies, which is conducted for IIABA by Reagan Consulting of Atlanta, Ga., documents the business practices of these “best” agencies and urges others to adopt similar practices.

To assist agencies in adopting Best Practices, IIABA has developed a family of products, service and workshops known as the Best Practices Implementation Series. The series includes materials such as theAgency Self-Diagnostic Tool, Agency/Company Joint Planning Tool Quick Step, Customer Service Made Simple, Best Practices in Business Perpetuation & Management Succession handbookandTop Producers: Discover, Train, Reward. Additional studies and tools are added periodically. The publications include guidelines, worksheets, and case studies to help agents apply the information contained in each report.

In addition to the written materials, hundreds of workshops and seminars have been conducted at various producer association functions, company sponsored agency meetings and national automation users group conventions.

The IIABA and Reagan Consulting jointly maintain the Best Practices that provides executive summaries of the annual Best Practices Studies, the Best Practices Quick Check interactive comparison took and samples from the various Best Practices tools. The Gateway, as well as the annual study, is made possible in part through the financial sponsorship of various insurance companies and industry organizations.

The 2010 Best Practices Study sponsors include:  Applied Systems, Addis Intellectual Capital, Central Insurance Companies, Chubb, EMC Insurance Companies, ENCOMPASS Insurance, Erie Insurance, Great American Insurance Group, The Hanover Insurance Group, Harleysville Insurance, Imperial Credit Corporation, InsurBanc, Kemper – A Unitrin Business, Liberty Mutual, MetLife Auto & Home, and Zurich North America.

For more information on the Best Practices Study, contact Jennifer Becker at IIABA, 1-800-221-7917.

Founded in 1896, IIABA is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally.  Its members are businesses that offer customers a choice of policies from a variety of insurance companies.  Independent agents and brokers offer all lines of insurance – property, casualty, life and health—as well as employee benefit plans and retirement precuts.  Web address:  www.independentagent.com.

I have been a client of Swingle Collins for years for all of my business and personal coverage needs.  I have worked with the Swingle Collins team for business along with for my home and auto; as well as several people on their support team.)  Their complete expertise and professionalism, have always been unmatched.

In 20 years of buying coverage, I have never had a claim before but I have heard many stories of difficulties and red tape that friends and associates have been through.  After having significant damage to my home in a hail storm last month, I have filed my first claim.  Swingle Collins handled everything from the scheduling of the claims agents, to the recommendation of a professional and reputable contractor.  Our claim was settled, and checks were cut for both the structural damage and personal property within three days.  It was fast, more than fair, and actually a pleasurable experience.  While most people in my neighborhood are still wrestling with their providers and spending days researching contractors, my family and I have moved on and life is good.

My highest recommendations for the Swingle Collins team; They are the absolutely outstanding!

This is a great question, and one that our customers ask frequently.  Whether you rent a vehicle for personal use while on vacation, or as a substitute while your vehicle is out of commission for repair or service, or for business use while out of town, there comes that time when you’re standing at the rental car counter and the agent asks the inevitable question:  “Do you want to buy our loss damage waiver (or our insurance coverage)?”

Most loss damage waiver (LDW) fees are outrageous.  Sometimes they cost more than the daily rental fee itself.  But are they worth the additional cost?  The answer may depend on your tolerance for risk and inconvenience.  You must decide if the extra cost is reasonable, considering the potential for an uninsured loss should something happen to the vehicle during the term of the rental contract, and the resulting inconvenience of dealing with the rental company and your insurance company to satisfy the rental company’s demands.

First, you should know that the LDW is not actually an insurance policy.  It is a waiver of the rental company’s requirement in the rental contract that you bring the vehicle back in the same condition as when it left their lot.  Most rental contracts make you responsible for any damage to the vehicle, including theft and weather-related damage.  When you purchase the LDW, the rental company is removing that provision from the contract on a conditional basis.

If you don’t purchase the LDW and the vehicle is damaged, here are some of the costs for which you could be held responsible under the rental contract:

1.  Cost to repair damage to the vehicle, or the full value of the vehicle if it is a total loss

2.   “Diminished value” of the vehicle – the difference between what the vehicle was worth before the accident and what it is worth after repairs have been made

3.   “Loss of use” – the amount of money the rental company loses on rental fees while the vehicle is out of service for repair or replacement

4.   Administrative or loss-related expenses incurred by the rental company, such as fees for towing, appraisal, and claims adjustment, plus general office expenses for handling the paperwork

Whether all or any of these costs are covered by your personal auto policy depends on several factors.

Reasons to purchase the Loss Damage Waiver:

1.  Your limit of liability may not be sufficient to satisfy the rental company’s demands.

Coverage for damage to the rental car and related costs are provided by the property damage liability section of your personal auto policy.  If the property damage limit of liability is not sufficient to cover the value of the vehicle you rent, plus pay for any other costs the rental company demands, you will be personally responsible for the costs that exceed what your insurance company has to pay.

2.  Your policy may exclude rented pickups and vans used for business purposes.

If you rent a pickup or van for business purposes, your personal auto policy may not provide coverage at all.  Some insurance companies consider an SUV to be a pickup or van, and may therefore not cover any damages arising out of the use of an SUV rented for business purposes.

3.  Your premium may go up or your policy may not be renewed if you have an at-fault accident.

You are driving an unfamiliar vehicle in unfamiliar territory.  If you have an at-fault accident while driving the rented vehicle, your insurance company may hold it against you – with a premium surcharge or perhaps even non-renewal.

4.  Your line of credit may be adversely affected.

If you don’t buy the LDW, the rental company will probably ring up an estimated damage amount on your credit card, pending notification to and settlement by your insurance company.

5.  You may suffer a huge inconvenience.

When you have purchased the LDW, you can bring a damaged vehicle back to the rental company, throw the keys on the counter, and walk away.  When you haven’t purchased the LDW, you may have to spend a significant amount of time dealing with the rental company and your insurance company.

Bottom Line

We recommend that you buy the Loss Damage Waiver from the rental company.

Download the pdf version of this article here: Rental Car Coverage – TX Personal Auto Policy.pdf

This is a great question, and one that our customers ask frequently.

Americans have developed a love affair with their electronic toys.  TVs, DVD players, GPS devices, satellite radio receivers, VCRs, CD players, computers, tape decks, and stereos (and more) have all multiplied and spread from the home to the automobile, where there is a much greater chance for these items to be stolen or damaged in an accident.  For that reason, some insurance companies have developed special ways to either cover or not cover electronic devices on the standard auto insurance policy, or charge an extra premium for covering them.

Your personal auto policy covers equipment designed for use with an automobile and attached to it or normally carried in it, but some exclusions and limitations apply, including:

• No coverage for stereos, radios or other sound reproducing equipment(such as tape decks, CD players, DVD players, video cassette recorders and players, and audio cassette recorders and players), unless these items are permanently installed in your vehicle.  An item is permanently installed when it is at least bolted or attached to the vehicle in some way to prevent easy removal. When these items are covered because they are permanently installed, the most the insurance company will pay for loss of or damage to the items is $1,500 less your deductible.  A higher amount of coverage may be available for an additional premium.
• No coverage for CB radios, 2-way radios, telephones, or scanning monitor receivers, or any accessories related to these devices (such as antennas), unless these items are permanently installed in the opening of the dash or console normally used by the auto manufacturer for the installation of a radio.  Coverage on these items may be available for an additional premium.
• No coverage for radar detectors or other speed measuring equipment.
• No coverage for televisions in a pickup or van.  Coverage is available for an additional premium.
• No coverage for tapes, CDs, DVDsor other devices used with equipment designed for the reproduction of sound.  Coverage may be available for an additional premium.

If you use or carry electronic equipment in your vehicle, call your agent and ask him or her to help you complete an Electronic Equipment Checklist.  The checklist will help your agent determine if additional coverage is needed and available.

Download the pdf version of this article here: Texas Electronic.pdf