Archive for May, 2010

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Got Sewage? Get Coverage

May 12th, 2010 by Iris | Comments Off | Filed in flood insurance, homeowners insurance

According to the Insurance Information Institute, most sewer backups are not covered by a standard homeowners insurance policies, and if your sump pump can’t handle the runoff after a major rainstorm, that isn’t usually covered, either. If you don’t have a home warranty, or didn’t purchase extra coverage just for your sewer system, that flood in your basement may just wash all your money down the drain.

Even though they’re not generally covered by insurance, sewer backups are a fairly common occurrence, and they can be caused by many things, including aging sewer systems and combined pipelines (those which handle storm runoff and sewage in the same system). Blockage of sanitary drains and water seeping into basements are also common, and not covered under standard policies.

What can you do? First look into either special sewage system coverage, or consider a home warranty, which will cover all of the internal systems in your home – including plumbing – that standard insurance doesn’t, then, take a look at these tips to reduce system failure.

  • Problems with tree roots in the lines? Replace your old pipe with new plastic. It’s more durable, and cheaper to repair.
  • Consult a plumber to fix any illegal plumbing connections that could cause problems down the line.
  • Install a backwater protection valve, to make sure that sewage flows out of your home, but can’t flow back in. have a qualified plumber do this.
  • Dispose of grease, paper products and other such household trash in the proper way. Grease should never be poured down the drain, and the only paper product that should ever be flushed, is toilet paper.

Remember that insurance companies may not tell you what is or is not covered; it’s up to you to read your policy very carefully, and ask questions about anything you don’t understand in your homeowners policy.

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Florida Leads Country in Suspicious Auto Insurance Claims

May 10th, 2010 by Iris | Comments Off | Filed in auto insurance

The South Florida Sun-Sentinel is reporting that the Sunshine State has led the country in the number of insurance fraud complaints related to staged accidents for the past three years, according to a report released this morning by the National Insurance Crime Bureau (NICB).

Insurance companies in that state reported 3,006 suspicious auto insurance claims between the beginning of 2007 and the end of 2009, while the next states on the list, New York and California, reported 1,680 and 1,619 such claims, respectively. Among metropolitan areas, South Florida ranked second in the country, behind the New York/New Jersey metro area, with 1,298 suspicious claims filed during the same three year period.

Industry experts believe that Florida and New York have the most suspicious automobile accident claims because both are among the country’s five largest states, and both have laws requiring that a motorist’s insurance covers some of his or her own medical payments, no matter who is actually at fault in an accident.

A representative of the NICB, a nonprofit organization with support from more than a thousand insurers and self-insured groups, and fights insurance fraud by tracking, researching, and investigating claims, wrote, “Staged accidents are dangerous criminal events that target innocent drivers with increasingly bold schemes aimed at defrauding insurance companies out of millions of dollars. Unless someone becomes suspicious, many of these staged accidents go undetected.”

Frank Scafidi, public affairs director for the NICB, said that the group isn’t certain how many of the suspicious claims led to convictions. Such claims, he said, are a mere fracti9on of all the claims policyholders submit. Less than 1% of the 48 million insurance claims processed each year are flagged as possible fraud, but the recession seems to be fueling an increase in suspicious activity. “That winds up costing us all more in the end,” he said, since insurers pass their expenses – including claims costs – to policyholders, in their rates.

Alex Sink, Florida Chief Financial Officer, announced last month that the state’s Division of Insurance Fraud partnered with the NICB and local law enforcement to find and arrest eight people for “alleged involvement in staged accidents,” which brings the total number of arrests this year, to twenty-seven. The insurance fraud division made more than 830 arrests in the last year, and the state’s Department of Financial Services pays informants up to $25,000 for information that directly leads to a conviction.

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Wyoming May Be At Greater Risk of Wildfires This Year

May 7th, 2010 by Iris | Comments Off | Filed in fire insurance, homeowners insurance, insurance news

Wyoming residents may want to look carefully at their homeowners insurance policies this month, especially where fire insurance coverage is concerned.

Why? Because according to national fire officials, a season of light snowfall is likely to mean greater risk of wildfires in the northwest part of the state this summer.

Officials of the National Interagency Fire Center explained that a light winter in the region means that the environment – especially fire fueling elements – are drier going into summer, which could increase the potential for wildfires. Last year, heavier-than-average moisture helped to minimize similar threats throughout the region.

Mack McFarland, a Teton Interagency Fire Fuels specialist, said that conditions can still change between now and the beginning of fire season. While fire prediction is useful, he said, there’s no such thing as a “crystal ball” for the wildfire season.

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BP May Not Be Liable for ALL Oil Spill-related Costs

May 5th, 2010 by Iris | Comments Off | Filed in insurance news, insurance specialists

The Insurance Journal is reporting that there may be a federal law limiting the amount of money BP has to pay in damages, including lost wages and economic suffering, as a result of the recent Gulf Coast oil spill, despite President Obama’s assurances that taxpayers will not be liable.

A 1989 law, passed in response to the Exxon Valdez spill in Alaska, makes BP responsible for cleanup costs, but it also sets a $75 million limit on other kinds of damages. Gulf Coast economic losses are likely to far exceed that, and in an attempt to intervene, several Democratic senators have introduced legislation to increase the liability limit for such incidents to $10 billion, though it may not apply retroactively.

On Monday, White House press secretary Robert Gibbs said that the administration was committed to making BP pay for all costs associated with the spill, echoing a statement made by the President on Sunday, during a tour of the affected area. “Let me be clear: BP is responsible for this leak; BP will be paying the bill,” the President said.

According to Kenneth Baer, spokesman for the Office of Management and Budget, if BP were found to have violated federal laws, or was negligent with regard to the spill, the cap for damages under the Oil Pollution Act would no longer apply. He also said that the company could be held liable under other federal or state laws. “You can be sure that BP will be held accountable to the full extent of the law,” Baer said.

Even so, the existence of the liability cap could complicate the President’s plans to make BP pay for numerous costs like shortened fishing seasons and decreased tourism – costs that have not yet begun to be estimated, and could rise incredibly high.

Senator Robered Menendez (D-NJ), one of the sponsors of the cap-raising legislation, which the administration has said it supports, told the press, “We’re glad that the costs for the oil clean up will be covered, but that’s little consolation to the small businesses, fisheries and local governments that will be left to clean up the economic mess that somebody else caused.”

Also on Monday, BP issued a fact sheet, promising to pay, “…all necessary and appropriate cleanup costs…” as well as “…legitimate and objectively verifiable claims for other loss and damage caused by the spill…” Whether or not claims above $75 million would be paid was not addressed.

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Meet the MIB – that’s Medical Insurance Board, not Men in Black

May 3rd, 2010 by Iris | Comments Off | Filed in health insurance, insurance facts, medical insurance

With all the talk of health insurance reform, including much reference to pre-existing conditions, and rules on when coverage may be canceled by an insurer, it’s natural to wonder exactly who is “in charge” of all that information. The answer? The MIB, that stands for Medical Insurance Board, and they’re a membership organization owned by life insurance companies in the United States and Canada.

Their purpose is to maintain a database which allows their member companies to exchange “confidential information of underwriting significance” whenever someone applies disability income, health insurance, life insurance, long term care, or critical illness insurance. This information is submitted to the MIB whenever an insurance application is completed, transmitted in a coded, encrypted format which ensures that confidential information remains so.

What does your MIB file include? If you’ve ever looked at the invoice for a doctor visit, before or after insurance, you’ve probably noticed that there’s a code number attached to every procedure and every complaint. That coded information, which identifies everything from medical conditions to tests to some non-medical items of data like hazardous hobbies or a dangerous job, is reported by MIB members (your doctor or hospital) to the MIB, itemized under fairly general categories. Don’t worry, the MIB doesn’t have the details; they only get a coded “resume” provided by the member.

When you apply for insurance coverage, underwriters at your insurer compare the information on your application to the coded information your file. No decisions – such as declining to offer coverage, or charging you a higher premium – can be made entirely on the basis of these coded reports, but they are used as an alert system.

If you wish to find out if you have an MIB file, and what information it contains, the federal Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act of 2003, allows you make an annual request for free disclosure of your report. Only you can make the request, and you’ll be required to answer some identifying information before it’s released.

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