|
 |
 |
|
|
Personal
Insurance: April, 2000
Why Does Auto Insurance Cost So
Much? How Can We Control the Cost?
8 Reasons why your personal
auto insurance costs so much:
| 1. |
|
Fraud |
Insurance industry loses about
$29 Billion every year to fraud. This means we each
pay about $200 a year more in premiums to cover the cost
of fraud. Fraud comes in all kinds of packages - criminals staging
accidents - filing false or exaggerated claims - fraudulent
or inflated medical bills. |
| |
|
|
|
| 2. |
|
Theft |
Car theft costs about $8 Billion
a year. Thieves are very sophisticated and are targeting specific
vehicles but if they strip the car for its parts it is almost
impossible to track. |
| |
|
|
|
| 3. |
|
Litigation |
Today more money is spent
on legal costs than on medical costs from auto accidents.
Our vehicles are generally safer but bodily injury claims are
also up 75% from 5 years ago. |
| |
|
|
|
| 4. |
|
Speed |
Higher speeds have meant
more accidents. As the rate of accidents increase on
our roads, our insurance rates increase also. |
| |
|
|
|
| 5. |
|
Cost of
Parts |
If you bought all of the
parts to make a car, the cost would be almost
twice as much as you paid for the car originally. Cars are
more complex and the cost to repair them is much higher. |
| |
|
|
|
| 6. |
|
Driving Under
the Influence |
The statistics say that every
32 minutes someone dies in a drug / alcohol related crash.
DUI is a serious issue - and it costs Billions of dollars in
both fatal accidents and medical claims because of injuries
each year. |
| |
|
|
|
| 7. |
|
Medical Costs |
Higher medical costs make
auto insurance premiums higher also. We have a better
chance of surviving a car crash today, but the cost of restoring
our health is up dramatically. |
| |
|
|
|
| 8. |
|
More Cars |
There are more vehicles on the
roads today. More cars have meant more collisions
and higher costs. |
Here are "8 Ways to Save" on
your personal auto insurance!
| 1. |
|
Choose
the Right Car |
For lower rates, the
right car is a safer car. Avoid high performance cars. |
| |
|
|
|
| 2. |
|
Safety
Equipment |
Airbags, alarm systems,
anti-lock brakes, etc. |
| |
|
|
|
| 3. |
|
Clean
Driving Record |
Keep your record clean.
There are often additional discounts for no tickets and
no claims in 36 months. |
| |
|
|
|
| 4. |
|
Car
Pool / Bus |
If you don't use your
car to commute every day there may be a discount. |
| |
|
|
|
| 5. |
|
Higher
Deductibles |
Don't waste money
on coverage you don't need. You can reduce your premium
by raising your deductibles. |
| |
|
|
|
| 6. |
|
Good
Student Discounts |
Maintaining a 3.0
grade point average for discounts that can be at least
15%. |
| |
|
|
|
| 7. |
|
Pick
One Company |
Insure all your cars,
boats, RV's, etc. with one company, get a multi-car discount
and maximize your account discounts if you insure
your home in the same market also. |
| |
|
|
|
| 8. |
|
Choose
the Right Company and a Strong Agent |
A company that does
all the right things - coverage options, claims service,
repairs, follow-through, a guarantee on repairs and
a competitive price.
An agent that you can communicate with, who understands
your needs, and someone you can rely on for counsel.
|
Business Insurance: April,
2000
In the construction industry - and
many other industries:
When a handshake is no longer
good enough .... Risk Transfer
In the construction industry, work agreements
between contractors and sub-contractors are often oral or informal
and sealed with a handshake. Unfortunately, a handshake cannot protect
builders who find themselves involved in litigation arising out of
work performed by their sub-contractors.
Builders today are faced with greater exposure to a "safe place to
work" and long term exposures associated with construction defects
in every home they build. The fast pace of the building industry,
an inconsistent enforcement of building codes in some areas, and the
growing shortage of skilled labor in some trade fields has significantly
increased most builders potential for loss. To help control these
exposures, risk transfer is crucial.
| What
is Risk Transfer? |
Risk transfer is a
means to allocate the responsibility to pay for losses to another
party. |
| |
|
| Importance
of Written Contracts |
Written contracts
are essential to enforce each party's agreement to the contract.
Having a written contract should not be considered insulting
to someone trying to live up to their oral agreements - it sets
the rules for both parties. |
| |
|
| Hold Harmless or Indemnification Clause |
Most contracts say
each party is responsible for its own negligent acts. It may
also allocate responsibility for payment of losses arising out
of those acts for each party. |
There is no substitute for your seeking
competent legal advice, familiar with the laws that may be specific
for the state you are operating in, but the following organizations
have been a source for standard contracts for your use with owners
and sub-contractors:
| |
National Assoc. of Homebuilders |
|
(800) 368-2665 |
| |
The Associated General Contractors |
|
(800) 223-2665 |
| |
The American Institute of Architects |
|
(800) 365-2724 |
| |
Master Builders of King County,
WA |
|
(425) 451-7920 |
But there is another form of risk transfer
- your business insurance program - so let's review the following
to make sure you are adequately protected:
| Additional
Insured Coverage |
Aside from indemnification
provisions another way to transfer risk is by obtaining insurance
coverage under another party's general liability policy. As
an "additional insured", the general contractor is insured under
another general or sub-contractors policy for liability arising
out of the contracted work. |
| |
|
| Adequate
Limits and Umbrella Coverage |
Evaluate your own
policy's limits of liability. Meeting the state requirements
for licensing may not be smart limits - unless they fully protect
your company's assets and your own personal assets especially
if you are a sole proprietor. Think about the completed value
of a project in its last days - and the risk if it was a total
loss. Think about your site safety - and the risk of a child
getting hurt or killed playing on an "attractive" mound of dirt
or piece of equipment. Think about some of the lawsuit awards
you read about in the newspaper in the last month.
Umbrella coverages are designed to increase your limits beyond
the $1 Million dollar amount. |
| |
|
| Understanding Your Coverage |
Liability insurance
provides protection which pays sums that an insured (you) are
legally obligated to pay as damages to others as a result of
the insured's negligence. Remember liability can result from
your own acts, acts of employees, or acts of sub-contractors.
Your Commercial General Liability policy provides this protection.
Property insurance pays for direct damage to physical property
from causes like fire, wind, hail, rain, etc. Property insurance
covers the property used to conduct your business like telephones,
computers, copiers, etc.
Talk to your us, as your policy renews, and familiarize yourself
with the limits and types of coverage that you are carrying.
Make sure you understand things like co-insurance requirements,
how value is determined in event of a loss, is coverage limited
to within 1,000 yards of premises - and not in an offsite storage
unit, new equipment purchased, type of projects for the current
year, and current estimates on payroll for employees and sub-contractors
listed separately. |
|
|
 |
