By Michael Levenson, Globe Staff | April 7, 2009
Massachusetts ranked last among the states in its rate of seat belt use last year, extending a dismal trend that has prompted renewed calls for a tougher seat belt law.
The rate, 66.8 percent, was down 1.9 percent from 2007 and well below the national average of 83 percent, according to the National Highway Traffic Safety Administration. Massachusetts' rate, which has been last or near last for years, has improved from a rate of 56 percent in 2001.
Massachusetts is one of 22 states that do not allow police officers to stop motorists for not a wearing seat belt. State law allows police to ticket drivers for the offense, but only if the drivers are stopped for another reason first.
Efforts to pass a "primary enforcement" law have repeatedly failed in the Legislature, defeated by critics who argue the law would give police too much power to stop drivers. Some have also raised concerns that minorities would be unfairly targeted.
A "primary enforcement" bill has been filed in the Legislature again this year, but has not gained traction, legislators said. Proponents say the bill will not only save lives, but bring Massachusetts $13.6 million in federal transportation funds if it passes before June 30.
"It's really the only thing that's proven to bring up the usage rate," said Arthur Kinsman of the American Automobile Association of Southern New England. But opponents, like Senator Robert L. Hedlund, say the bill is "an intrusive, big government move."
Hedlund, a Weymouth Republican, said: "Common sense dictates you should wear your seat belt, whether or not there's primary enforcement."
Wednesday, April 8, 2009
Friday, April 3, 2009
Mass. House Approves Bill That Would Make Auto Insurance Appeals Board Permanent
By DAN RING dring@repub.com
BOSTON - The state House of Representatives on Thursday approved a bill that would make permanent a state board that rules on drivers' appeals of motor vehicle insurance surcharges.
The 155-0 vote in the House moved to enshrine the state Division of Insurance's Board of Appeal in state law and strip away the power of an insurance commissioner to unilaterally abolish the board.
The vote comes two weeks after Insurance Commissioner Nonnie S. Burnes dropped her disputed plan to scrap the board and agreed to keep it operating. Burnes had wanted to eliminate the board as part of a new system that allows auto insurers to set their own rates and allows drivers to shop around for the best rates.
Rep. Angelo J. Puppolo, D-Springfield, a cosponsor of the House bill, said it didn't make any sense to eradicate the board.
"The board allows consumers a fair appeal process," Puppolo said. "I'm glad we were able to make it permanent. It's a great win for the consumer."
The House approved the bill after a 90-minute debate.
The Senate last week voted 39-0 to approve the bill.
A spokeswoman for Gov. Deval L. Patrick said the governor supports the preservation of the appeal board, but needs to review the details of the bill before deciding whether he will sign it.
Sen. Stephen J. Buoniconti, sponsor of the bill in the Senate, said he expects lawmakers to send a final bill to the governor's desk in about a week. The West Springfield Democrat said the bill is universally supported and is a high priority.
Buoniconti said he received 50 phone calls from insurance agents and consumers when Burnes planned to abolish the board.
Supporters said the appeal board gives consumers a fair hearing if they are assessed a surcharge. A driver can receive a surcharge if the insurer rules the driver is more than 50 percent at fault in a collision.
Surcharges can costs hundreds of dollars and can remain on an insurance bill for up to six years.
People can pay $50 to lodge an appeal with the board and an appeal often pays off. Last year, the board heard 43,264 appeals around the state and approved 52 percent of the appeals, according to the state Division of Insurance.
About 10 percent of the hearings, or 4,500, were held for Western Massachusetts residents at the Registry of Motor Vehicles on Liberty Street in Springfield.
Burnes had planned to have motorists appeal surcharges directly to their insurer. But critics said insurers were unlikely to grant many appeals of their own decisions considering the money at stake.
In a statement on Thursday, Burnes said, "We heard the concerns voiced by the public and responding to those concerns, we decided to maintain the board of appeal and its accident resolution review process."
Burnes had moved to dismantle the board because she said it didn't fit with managed competition for auto insurance. Under the year-old competitive system, the state no longer fixes rates and insurers have more freedom to offer different policies and compete for customers.
Burnes also met with resistance because elimination of the board would have actually cost the state money. According to Burnes, the state receives about $2 million a year in fee revenues and it costs about $1.7 million a year to operate the board.
"These hearings not only pay for themselves but generate revenue for the commonwealth," said Rep. Walter F. Timilty, D-Milton. "That's a plus in this climate."
BOSTON - The state House of Representatives on Thursday approved a bill that would make permanent a state board that rules on drivers' appeals of motor vehicle insurance surcharges.
The 155-0 vote in the House moved to enshrine the state Division of Insurance's Board of Appeal in state law and strip away the power of an insurance commissioner to unilaterally abolish the board.
The vote comes two weeks after Insurance Commissioner Nonnie S. Burnes dropped her disputed plan to scrap the board and agreed to keep it operating. Burnes had wanted to eliminate the board as part of a new system that allows auto insurers to set their own rates and allows drivers to shop around for the best rates.
Rep. Angelo J. Puppolo, D-Springfield, a cosponsor of the House bill, said it didn't make any sense to eradicate the board.
"The board allows consumers a fair appeal process," Puppolo said. "I'm glad we were able to make it permanent. It's a great win for the consumer."
The House approved the bill after a 90-minute debate.
The Senate last week voted 39-0 to approve the bill.
A spokeswoman for Gov. Deval L. Patrick said the governor supports the preservation of the appeal board, but needs to review the details of the bill before deciding whether he will sign it.
Sen. Stephen J. Buoniconti, sponsor of the bill in the Senate, said he expects lawmakers to send a final bill to the governor's desk in about a week. The West Springfield Democrat said the bill is universally supported and is a high priority.
Buoniconti said he received 50 phone calls from insurance agents and consumers when Burnes planned to abolish the board.
Supporters said the appeal board gives consumers a fair hearing if they are assessed a surcharge. A driver can receive a surcharge if the insurer rules the driver is more than 50 percent at fault in a collision.
Surcharges can costs hundreds of dollars and can remain on an insurance bill for up to six years.
People can pay $50 to lodge an appeal with the board and an appeal often pays off. Last year, the board heard 43,264 appeals around the state and approved 52 percent of the appeals, according to the state Division of Insurance.
About 10 percent of the hearings, or 4,500, were held for Western Massachusetts residents at the Registry of Motor Vehicles on Liberty Street in Springfield.
Burnes had planned to have motorists appeal surcharges directly to their insurer. But critics said insurers were unlikely to grant many appeals of their own decisions considering the money at stake.
In a statement on Thursday, Burnes said, "We heard the concerns voiced by the public and responding to those concerns, we decided to maintain the board of appeal and its accident resolution review process."
Burnes had moved to dismantle the board because she said it didn't fit with managed competition for auto insurance. Under the year-old competitive system, the state no longer fixes rates and insurers have more freedom to offer different policies and compete for customers.
Burnes also met with resistance because elimination of the board would have actually cost the state money. According to Burnes, the state receives about $2 million a year in fee revenues and it costs about $1.7 million a year to operate the board.
"These hearings not only pay for themselves but generate revenue for the commonwealth," said Rep. Walter F. Timilty, D-Milton. "That's a plus in this climate."
Thursday, April 2, 2009
New Registry of Motor Vehicle Fees 2009
This list reflects the transactions that will change in price Friday, April 3, 2009 at 5:00 pm:
Registration Fees
*Amendment $25.00
*Duplicate $25.00
License & ID Fees (5 year)
*Class A $75.00
*Class B $75.00
*Class C $75.00
*Mass ID / Liquor ID $25.00
Out of State License Conversions (5 year)
*Class A $125.00
*Class B $125.00
*Class C $125.00
Title Fees
*Certificate of Title (Clear, Owner Retained, Reconstructed, + Recovered Theft) $75.00
*Salvage Title (Repairable + Parts Only) $50.00
Other Fees
*Instant Issue License/ID $50.00
*Driver History (Paper) $20.00
*Driving Records (Certified + Non-certified) $20.00
*Accident Report $20.00
*Reducible Load Permit Amend $20.00
*Reducible Load Permit (Overweight Permits) $50.00 Minimum
*Returned Check/CC Fees $15.00
Registration Fees
*Amendment $25.00
*Duplicate $25.00
License & ID Fees (5 year)
*Class A $75.00
*Class B $75.00
*Class C $75.00
*Mass ID / Liquor ID $25.00
Out of State License Conversions (5 year)
*Class A $125.00
*Class B $125.00
*Class C $125.00
Title Fees
*Certificate of Title (Clear, Owner Retained, Reconstructed, + Recovered Theft) $75.00
*Salvage Title (Repairable + Parts Only) $50.00
Other Fees
*Instant Issue License/ID $50.00
*Driver History (Paper) $20.00
*Driving Records (Certified + Non-certified) $20.00
*Accident Report $20.00
*Reducible Load Permit Amend $20.00
*Reducible Load Permit (Overweight Permits) $50.00 Minimum
*Returned Check/CC Fees $15.00
Thursday, March 19, 2009
A Milder Hurricane Outlook From AccuWeather
A Milder Hurricane Outlook From AccuWeather
NU Online News Service, March 18, 11:55 a.m. EDT
The 2009 hurricane season will see three hurricanes impacting the U.S. coast, compared with four that arrived last year, and a lower total number of named storms, according to an AccuWeather.com early forecast.
Joe Bastardi, AccuWeather chief long-range and hurricane forecaster, also predicted storms may be more likely to form in the Atlantic basin closer to the coast. The possibility of a major hurricane making a U.S. landfall cannot be ruled out, he warned.
“This year’s forecast shows only half as many impacts on the United States as there were last year,” Mr. Bastardi said. “But keep in mind, it only takes one major hurricane hitting a highly populated area to have devastating impact.”
“Early indications show a reduction in the overall number of named storms and of major hurricanes in the Atlantic basin compared to last year, but the number of storms should still be near or a little above normal.”
The meteorologist pointed to several factors influencing the forecast, including:
• Dissipation of the weak La Niña in the Pacific Ocean. A reverse to a weak El Niño, which is associated with decreased hurricane activity in the Atlantic, is most likely in the middle to latter part of the hurricane season.
• The expected orientation of high pressure in the eastern Atlantic will produce stronger easterly trade winds across northern Africa than last year. This will result in increased dust and dry air being pushed westward into the Atlantic where many tropical storms originate.
• Cooler water temperatures in the deep tropical Atlantic, a typical breeding ground for hurricanes, which can reduce hurricane activity and intensity. This may create a season in which storms are reaching a greater intensity further north and east than last year, leading to less impact in the Caribbean areas hit hard last year.
• A continuing multidecadal pattern of higher-than-average water temperatures in the Atlantic, raising the chance of major storms near the East Coast until about 2020.
Mr. Bastardi forecasted that while there will be 13 storms this year, compared with 16 in 2008, the number of hurricanes will remain the same at eight. He predicted two major hurricanes compared with five last year and one major hurricane hitting the coast compared with none last year.
NU Online News Service, March 18, 11:55 a.m. EDT
The 2009 hurricane season will see three hurricanes impacting the U.S. coast, compared with four that arrived last year, and a lower total number of named storms, according to an AccuWeather.com early forecast.
Joe Bastardi, AccuWeather chief long-range and hurricane forecaster, also predicted storms may be more likely to form in the Atlantic basin closer to the coast. The possibility of a major hurricane making a U.S. landfall cannot be ruled out, he warned.
“This year’s forecast shows only half as many impacts on the United States as there were last year,” Mr. Bastardi said. “But keep in mind, it only takes one major hurricane hitting a highly populated area to have devastating impact.”
“Early indications show a reduction in the overall number of named storms and of major hurricanes in the Atlantic basin compared to last year, but the number of storms should still be near or a little above normal.”
The meteorologist pointed to several factors influencing the forecast, including:
• Dissipation of the weak La Niña in the Pacific Ocean. A reverse to a weak El Niño, which is associated with decreased hurricane activity in the Atlantic, is most likely in the middle to latter part of the hurricane season.
• The expected orientation of high pressure in the eastern Atlantic will produce stronger easterly trade winds across northern Africa than last year. This will result in increased dust and dry air being pushed westward into the Atlantic where many tropical storms originate.
• Cooler water temperatures in the deep tropical Atlantic, a typical breeding ground for hurricanes, which can reduce hurricane activity and intensity. This may create a season in which storms are reaching a greater intensity further north and east than last year, leading to less impact in the Caribbean areas hit hard last year.
• A continuing multidecadal pattern of higher-than-average water temperatures in the Atlantic, raising the chance of major storms near the East Coast until about 2020.
Mr. Bastardi forecasted that while there will be 13 storms this year, compared with 16 in 2008, the number of hurricanes will remain the same at eight. He predicted two major hurricanes compared with five last year and one major hurricane hitting the coast compared with none last year.
Monday, February 23, 2009
Are You Covered?
Will your home insurance really protect you in case disaster strikes? Find out if your policy fits your needs -- plus how to reduce its cost.
By Elizabeth Gehrman February 22, 2009
Like many people, Nancy Dalrymple and Michael Flannery never thought much about their homeowner's insurance. Every so often they put a check in the mail for their agent and figured coverage would be there if, God forbid, they ever needed it.
Until their Winthrop single family went up in flames in November 2005, that is. "I thought everything was fine," Dalrymple says. "But they said we were way underinsured. We only had something like $193,000 on the structure, and we had damage of about $360,000. Then of course you have other coverage for contents, but it was a total loss. We lost far more contents than we had coverage for."
In addition, Dalrymple says she felt rushed, during a time of trauma and devastation, into getting the extensive repair work done quickly, which led to hiring a contractor who went way over budget and disappeared in the middle of the job, and a second whose shoddy work landed the couple in informal mediation talks. The couple, who had paid off their mortgage two months before the fire, had to take out a new mortgage to finish the work. They still have not moved back into the house. "Once you have a claim, it becomes an adversarial relationship between you and the insurance company," Dalrymple says, "whereas you thought they were part of your team. They're not."
Dalrymple might feel differently, insurers insist, if she had been more informed about her homeowner's policy and what it entailed. "Most people never read their policy," says Mike Barry, vice president of media relations at the Insurance Information Institute, an insurance trade organization based in New York. "I understand it's not the most scintillating reading, but it's well worth their while to do it. The greatest mistake people make is not understanding their policies."
Many in the insurance industry maintain that it is the job of agents to keep their clients informed, but there is no question that being a proactive consumer -- knowing what to ask your agent about in terms of both coverage and cost-saving measures -- will put you in a better position in the event disaster does strike. "Every year, get a checkup on your insurance," says Kathy Silvia, a licensed broker and cofounder of the Fair Insurance Agency in Centerville. "Just like you would get an annual physical exam. Schedule it for when your policy renews, which is usually the month you bought your home. The worst time to find out what you're covered for is after a loss." Getting an insurance checkup is especially important if you've done renovations that have increased the value of your home.
The state's switch to a competitive auto insurance system last year means there are now more opportunities to shop around for all your insurance needs -- and if you bundle the policy for your car with one for your home, using the same carrier, you could save up to 20 percent. Here's how to get the coverage you need and maybe save some cash, too.
Choose the Best Coverage: The first thing consumers need to understand, insurance insiders say, is the replacement cost for both the dwelling and contents. The replacement value of the dwelling will be lower than what your house would be worth on the open market and lower than the tax assessor's evaluation, because both of those values are affected by location, lot size, and other factors, whereas replacement value only takes into account how much it would cost to rebuild the house in what insurers call "like kind and quality." That is, if you had gingerbread and intricate moldings in the original structure, the new house should have those, too, at no extra cost to you.
When you apply for a policy, your agent should ask lots of questions about the construction of your home. If you feel you don't know enough to judge your home's replacement cost, it might be a good idea to hire a contractor to help you get an accurate appraisal.
Standard policies require you carry at least 80 percent of your home's replacement cost, says Silvia. So if you purchased a policy with $100,000 in replacement cost a few years ago, but building materials have gone up since then, as long as that $100,000 still represents at least 80 percent of the current cost of rebuilding your home, the insurer will pay the full amount.
You can add endorsements that modify your insurance coverage; two are particularly recommended: Guaranteed replacement cost coverage pays the full cost of replacing or repairing a home, even if it is above the policy limit. This endorsement can protect you from inflated building costs in the event of a disaster that affects a whole neighborhood, such as a hurricane, a wildfire, or something unexpected like the 2006 chemical-plant explosion in Danvers. Another is a building ordinance endorsement, which protects you if building codes change in a way that might increase your replacement cost. On the Cape, for instance, the code was recently amended so that windows are now required to withstand 110-mile-per-hour winds rather than 90-mile-per-hour winds. "Twenty miles an hour means absolutely nothing to me," Silvia says, "but in the pocketbook, it means a lot when you have to replace those windows."
Putting your personal property on a replacement-cost basis may also be worthwhile, since standard policies - which generally assume contents to be worth 50 percent of the replacement cost of the dwelling -- figure in the depreciation of electronics and other goods. "If you get 50 percent for content value and add a replacement cost endorsement onto the policy," says Silvia, "most companies will increase the content value to 70 percent of the building's value." For example, say your television is stolen. A standard policy will take into account the age of the TV; if the average life of a TV is 10 years and yours was five years old, you'll get only half of its replacement value toward buying a comparable new one -- unless you have this extra coverage.
In certain circumstances -- such as if your home has a swimming pool or trampoline or you own a breed of dog deemed dangerous -- standard insurance companies will often refuse to cover you. In that case, you'll have to go with the Fair Access to Insurance Requirements (FAIR) plan, a state-sponsored program paid for with money pooled by all the carriers that operate in the Commonwealth. The FAIR plan covers all owners as long as their houses meet certain minimal safety requirements (such as there are no live wires dangling from the ceiling), and it does not necessarily cost more for comparable coverage.
As Dalrymple and Flannery found, even a single large claim can also force you into the FAIR plan. "Sometimes it makes me embarrassed to be in insurance," says Irene Morrill, vice president of technical affairs for the Massachusetts Association of Insurance Agents. "You've been a client for multiple years, paid your bills, never had a loss, have a loss, and we nonrenew you. It makes no sense to me." On the upside, you can challenge nonrenewal, and after three years claim-free, most companies will again consider you an acceptable risk for the voluntary market.
Consider These Extras
In addition to basic replacement costs and liability, many other types of coverage can be tacked onto a standard home insurance policy. Whether you want them depends on how you live and your tolerance for risk. Among the extras you might want to consider:
Many people don't realize that if they have a home-based business, a standard homeowner's policy covers the contents of their office for only $2,500; an endorsement can raise that substantially. It's also wise to cover your business for additional liability. Morrill tells of the time a FedEx delivery person fell down and sued the homeowner. "It was a business delivery," she says, "so they didn't have coverage."
According to Silvia, fewer than 10 percent of Massachusetts residents have flood insurance, which most agents think is a big mistake. Even if you don't live in a flood-prone area, an unusually heavy rain can bring water into your basement and storm drains can back up, and these are not covered on a standard homeowner's policy. Depending on where you live, you may need to purchase this coverage through the National Flood Insurance Program, which is managed by the Federal Emergency Management Agency (fema.gov/business/nfip). You can challenge your flood zone -- say, if you live near the water but on top of a high hill -- and possibly lower your rate. To learn your flood risk, go to floodsmart.gov and type in your address.
Earthquake damage is also not covered on a standard policy and, depending on your location and the type of house you have, it can run as little as $35 per $100,000 of coverage. Julie Bisconti, marketing director at Claremont Insurance in East Boston, says her mother has affordable earthquake coverage on her frame house in Revere, but her mother's next-door neighbor can't afford it on his more crack-prone stucco house.
Whether you think it's worth the extra cash depends on your own personal comfort level. "There is a fault in Eastern Massachusetts," says Frank Mancini, president and CEO of the trade organization Massachusetts Association of Insurance Agents. "I think the last time there was a quake was probably 250 years ago. Are we due for one? I'm not a seismologist."
If you have valuable art, antiques, jewelry, or the like, you may want to add a rider for them. "You need separate appraisals for each thing," says Bisconti, "and if you start listing each of these individual things, you'll really start paying for them." Therefore, that $500 Hummel figurine your grandmother gave you probably isn't worth an amendment; your $15,000 Renoir sketch, however, is a different story. "You can't insure sentimentality," adds Morrill.
Most policies won't cover all similar valuables -- that is, all the books in your collection or all of your jewelry - but require separate appraisals for each piece; there are, however, some companies that offer blanket endorsements, so be sure to ask your agent.
A few of the more obscure but possibly worthwhile types of extra coverage include identity-fraud expenses, additional personal liability for things like slander and defamation of character, and even a refrigerated products rider -- which has a low deductible and might have come in handy during the recent ice storm in the north-central part of the state. Often, such types of coverage can be packaged together for an additional cost of as little as $50 a year.
Lower Your Costs: The cost of your insurance policy is based on many things, including the neighborhood you live in and the age, condition, and style of your house -- a flat roof, for example, is considered a greater risk than a pitched roof, since snow buildup can cause a collapse. While you can't change certain aspects of your house, there are many factors under your control:
Your credit score: Those who maintain decent credit, goes the reasoning, probably work harder to keep their houses in good shape, too. A score in the high 700s will put you in the highest-tier -- and lowest-cost -- insurance schedule.
Your C.L.U.E. score: Your Comprehensive Loss Underwriting Exchange number is similar to a credit score, but rather than tracking whether you pay your Macy's bill on time, it keeps tabs on how many insurance claims or even inquiries you make. A low C.L.U.E. score will increase your policy's cost, so it's a good idea to check yours periodically to make sure no mistakes have crept in. You are entitled to a free C.L.U.E. report annually and can order it at choicetrust.com. If there are errors in your report, learn how to appeal them at consumerdisclosure.com.
Your lifestyle: Many companies offer discounts for nonsmokers and, perhaps surprisingly, even for those who work at home. "Some companies will give a credit if nobody works outside the home for more than a certain number of hours a week," says Silvia. "Because it's more likely they'll be there if something happens." If you're the type who always has a little something in the bank, that can help, too: Insurers frequently offer "paid in full" discounts to those who save them monthly paperwork by clearing up their entire bill yearly instead.
Your home's extras: Additional security in the form of deadbolts or burglar and fire alarms can decrease your premium, as can storm shutters if you live in an area with high-wind risk.
A higher deductible" "Insurance is for 'Oh, my gosh, my house is leveled to the ground,' " says Silvia. "It's not for 'They just stole my $200 bicycle.' " She recommends increasing your deductible from a typical $500 to $1,000 or even $2,5000. "Whatever you can afford. It can save you 20 to 25 percent of your premium." You may also be able to save money by increasing only a portion of your deductible; for instance, agree that you'll pay more if hit by a wind- or hailstorm.
Shopping around: Some insurers offer a discount for longtime customers; others lower your premium when you switch carriers. Every couple of years, it's a good idea to get some competing quotes to make sure you're getting the best rate; a good place to start is at insweb.com, which allows you to include the specifics of your house and lifestyle before providing you with the name of an insurer in your area that meets your needs.
Taking a class: Some insurers offer a discount of up to 15 percent to clients who take three workshops with the Massachusetts Affordable Housing Alliance's HomeSafe program. Learn more at mahahome.org/class/hs_about.html.
File a Big Claim Wisely
If you find yourself in a situation similar to Dalrymple and Flannery's -- where you've experienced a significant loss -- often your best first step is to hire a public adjuster. Though no statistics are available, public adjusters maintain that for a 10 percent cut, they can increase the payout you will receive from your insurer. "An insurance claim is a business transaction between two parties with opposing interests," says Timothy Ball of Ball and Boyd Public Adjusters Inc. in Marstons Mills. "One side knows what they're doing, and the other side doesn't. We're helping the side that doesn't." You'll get better results, Ball says, if you call a public adjuster immediately after the problem strikes, rather than getting one involved after your insurance company has already made a decision. "It's much easier to negotiate when they haven't taken a position yet."
Even if the amount you're reimbursed doesn't end up being substantially higher, many say it's worth hiring your own adjuster simply because of the energy required to settle a claim. "A major benefit of our service," Ball says, "is that you don't have to deal with the insurance company. It saves you time, aggravation, and, ultimately, money."
Nancy Dalrymple, who hired her adjuster right away, agrees. "You have to pay," she says, "but you're so traumatized by the event that it's hard to get your foot going. Our adjuster took care of a lot for us so we didn't have to deal with it."
What Every Homeowner Must Do:
Buying a good insurance policy is just the start. The following measures will ensure that if you ever have to file a claim, you can prove what you've lost. "The more documentation you have," says John Cantalupa, supervising underwriter for the Massachusetts Fair Access to Insurance Requirements plan, "the easier the process will be."
Take photos of your house that clearly show the materials used in construction; keep a copy both on and off the premises, either in a safe-deposit box or with a friend or relative. Document any special features, such as marble tile or a custom kitchen.
Keep a list of valuable contents, with photos and any appraisals, both on and off the premises. Knowyourstuff.org, a site administered by the Insurance Information Institute, allows you to download free software to create an inventory of your home.
Elizabeth Gehrman lives in East Boston and writes the On the Block column for the Globe Magazine. Send comments to magazine@globe.com.
By Elizabeth Gehrman February 22, 2009
Like many people, Nancy Dalrymple and Michael Flannery never thought much about their homeowner's insurance. Every so often they put a check in the mail for their agent and figured coverage would be there if, God forbid, they ever needed it.
Until their Winthrop single family went up in flames in November 2005, that is. "I thought everything was fine," Dalrymple says. "But they said we were way underinsured. We only had something like $193,000 on the structure, and we had damage of about $360,000. Then of course you have other coverage for contents, but it was a total loss. We lost far more contents than we had coverage for."
In addition, Dalrymple says she felt rushed, during a time of trauma and devastation, into getting the extensive repair work done quickly, which led to hiring a contractor who went way over budget and disappeared in the middle of the job, and a second whose shoddy work landed the couple in informal mediation talks. The couple, who had paid off their mortgage two months before the fire, had to take out a new mortgage to finish the work. They still have not moved back into the house. "Once you have a claim, it becomes an adversarial relationship between you and the insurance company," Dalrymple says, "whereas you thought they were part of your team. They're not."
Dalrymple might feel differently, insurers insist, if she had been more informed about her homeowner's policy and what it entailed. "Most people never read their policy," says Mike Barry, vice president of media relations at the Insurance Information Institute, an insurance trade organization based in New York. "I understand it's not the most scintillating reading, but it's well worth their while to do it. The greatest mistake people make is not understanding their policies."
Many in the insurance industry maintain that it is the job of agents to keep their clients informed, but there is no question that being a proactive consumer -- knowing what to ask your agent about in terms of both coverage and cost-saving measures -- will put you in a better position in the event disaster does strike. "Every year, get a checkup on your insurance," says Kathy Silvia, a licensed broker and cofounder of the Fair Insurance Agency in Centerville. "Just like you would get an annual physical exam. Schedule it for when your policy renews, which is usually the month you bought your home. The worst time to find out what you're covered for is after a loss." Getting an insurance checkup is especially important if you've done renovations that have increased the value of your home.
The state's switch to a competitive auto insurance system last year means there are now more opportunities to shop around for all your insurance needs -- and if you bundle the policy for your car with one for your home, using the same carrier, you could save up to 20 percent. Here's how to get the coverage you need and maybe save some cash, too.
Choose the Best Coverage: The first thing consumers need to understand, insurance insiders say, is the replacement cost for both the dwelling and contents. The replacement value of the dwelling will be lower than what your house would be worth on the open market and lower than the tax assessor's evaluation, because both of those values are affected by location, lot size, and other factors, whereas replacement value only takes into account how much it would cost to rebuild the house in what insurers call "like kind and quality." That is, if you had gingerbread and intricate moldings in the original structure, the new house should have those, too, at no extra cost to you.
When you apply for a policy, your agent should ask lots of questions about the construction of your home. If you feel you don't know enough to judge your home's replacement cost, it might be a good idea to hire a contractor to help you get an accurate appraisal.
Standard policies require you carry at least 80 percent of your home's replacement cost, says Silvia. So if you purchased a policy with $100,000 in replacement cost a few years ago, but building materials have gone up since then, as long as that $100,000 still represents at least 80 percent of the current cost of rebuilding your home, the insurer will pay the full amount.
You can add endorsements that modify your insurance coverage; two are particularly recommended: Guaranteed replacement cost coverage pays the full cost of replacing or repairing a home, even if it is above the policy limit. This endorsement can protect you from inflated building costs in the event of a disaster that affects a whole neighborhood, such as a hurricane, a wildfire, or something unexpected like the 2006 chemical-plant explosion in Danvers. Another is a building ordinance endorsement, which protects you if building codes change in a way that might increase your replacement cost. On the Cape, for instance, the code was recently amended so that windows are now required to withstand 110-mile-per-hour winds rather than 90-mile-per-hour winds. "Twenty miles an hour means absolutely nothing to me," Silvia says, "but in the pocketbook, it means a lot when you have to replace those windows."
Putting your personal property on a replacement-cost basis may also be worthwhile, since standard policies - which generally assume contents to be worth 50 percent of the replacement cost of the dwelling -- figure in the depreciation of electronics and other goods. "If you get 50 percent for content value and add a replacement cost endorsement onto the policy," says Silvia, "most companies will increase the content value to 70 percent of the building's value." For example, say your television is stolen. A standard policy will take into account the age of the TV; if the average life of a TV is 10 years and yours was five years old, you'll get only half of its replacement value toward buying a comparable new one -- unless you have this extra coverage.
In certain circumstances -- such as if your home has a swimming pool or trampoline or you own a breed of dog deemed dangerous -- standard insurance companies will often refuse to cover you. In that case, you'll have to go with the Fair Access to Insurance Requirements (FAIR) plan, a state-sponsored program paid for with money pooled by all the carriers that operate in the Commonwealth. The FAIR plan covers all owners as long as their houses meet certain minimal safety requirements (such as there are no live wires dangling from the ceiling), and it does not necessarily cost more for comparable coverage.
As Dalrymple and Flannery found, even a single large claim can also force you into the FAIR plan. "Sometimes it makes me embarrassed to be in insurance," says Irene Morrill, vice president of technical affairs for the Massachusetts Association of Insurance Agents. "You've been a client for multiple years, paid your bills, never had a loss, have a loss, and we nonrenew you. It makes no sense to me." On the upside, you can challenge nonrenewal, and after three years claim-free, most companies will again consider you an acceptable risk for the voluntary market.
Consider These Extras
In addition to basic replacement costs and liability, many other types of coverage can be tacked onto a standard home insurance policy. Whether you want them depends on how you live and your tolerance for risk. Among the extras you might want to consider:
Many people don't realize that if they have a home-based business, a standard homeowner's policy covers the contents of their office for only $2,500; an endorsement can raise that substantially. It's also wise to cover your business for additional liability. Morrill tells of the time a FedEx delivery person fell down and sued the homeowner. "It was a business delivery," she says, "so they didn't have coverage."
According to Silvia, fewer than 10 percent of Massachusetts residents have flood insurance, which most agents think is a big mistake. Even if you don't live in a flood-prone area, an unusually heavy rain can bring water into your basement and storm drains can back up, and these are not covered on a standard homeowner's policy. Depending on where you live, you may need to purchase this coverage through the National Flood Insurance Program, which is managed by the Federal Emergency Management Agency (fema.gov/business/nfip). You can challenge your flood zone -- say, if you live near the water but on top of a high hill -- and possibly lower your rate. To learn your flood risk, go to floodsmart.gov and type in your address.
Earthquake damage is also not covered on a standard policy and, depending on your location and the type of house you have, it can run as little as $35 per $100,000 of coverage. Julie Bisconti, marketing director at Claremont Insurance in East Boston, says her mother has affordable earthquake coverage on her frame house in Revere, but her mother's next-door neighbor can't afford it on his more crack-prone stucco house.
Whether you think it's worth the extra cash depends on your own personal comfort level. "There is a fault in Eastern Massachusetts," says Frank Mancini, president and CEO of the trade organization Massachusetts Association of Insurance Agents. "I think the last time there was a quake was probably 250 years ago. Are we due for one? I'm not a seismologist."
If you have valuable art, antiques, jewelry, or the like, you may want to add a rider for them. "You need separate appraisals for each thing," says Bisconti, "and if you start listing each of these individual things, you'll really start paying for them." Therefore, that $500 Hummel figurine your grandmother gave you probably isn't worth an amendment; your $15,000 Renoir sketch, however, is a different story. "You can't insure sentimentality," adds Morrill.
Most policies won't cover all similar valuables -- that is, all the books in your collection or all of your jewelry - but require separate appraisals for each piece; there are, however, some companies that offer blanket endorsements, so be sure to ask your agent.
A few of the more obscure but possibly worthwhile types of extra coverage include identity-fraud expenses, additional personal liability for things like slander and defamation of character, and even a refrigerated products rider -- which has a low deductible and might have come in handy during the recent ice storm in the north-central part of the state. Often, such types of coverage can be packaged together for an additional cost of as little as $50 a year.
Lower Your Costs: The cost of your insurance policy is based on many things, including the neighborhood you live in and the age, condition, and style of your house -- a flat roof, for example, is considered a greater risk than a pitched roof, since snow buildup can cause a collapse. While you can't change certain aspects of your house, there are many factors under your control:
Your credit score: Those who maintain decent credit, goes the reasoning, probably work harder to keep their houses in good shape, too. A score in the high 700s will put you in the highest-tier -- and lowest-cost -- insurance schedule.
Your C.L.U.E. score: Your Comprehensive Loss Underwriting Exchange number is similar to a credit score, but rather than tracking whether you pay your Macy's bill on time, it keeps tabs on how many insurance claims or even inquiries you make. A low C.L.U.E. score will increase your policy's cost, so it's a good idea to check yours periodically to make sure no mistakes have crept in. You are entitled to a free C.L.U.E. report annually and can order it at choicetrust.com. If there are errors in your report, learn how to appeal them at consumerdisclosure.com.
Your lifestyle: Many companies offer discounts for nonsmokers and, perhaps surprisingly, even for those who work at home. "Some companies will give a credit if nobody works outside the home for more than a certain number of hours a week," says Silvia. "Because it's more likely they'll be there if something happens." If you're the type who always has a little something in the bank, that can help, too: Insurers frequently offer "paid in full" discounts to those who save them monthly paperwork by clearing up their entire bill yearly instead.
Your home's extras: Additional security in the form of deadbolts or burglar and fire alarms can decrease your premium, as can storm shutters if you live in an area with high-wind risk.
A higher deductible" "Insurance is for 'Oh, my gosh, my house is leveled to the ground,' " says Silvia. "It's not for 'They just stole my $200 bicycle.' " She recommends increasing your deductible from a typical $500 to $1,000 or even $2,5000. "Whatever you can afford. It can save you 20 to 25 percent of your premium." You may also be able to save money by increasing only a portion of your deductible; for instance, agree that you'll pay more if hit by a wind- or hailstorm.
Shopping around: Some insurers offer a discount for longtime customers; others lower your premium when you switch carriers. Every couple of years, it's a good idea to get some competing quotes to make sure you're getting the best rate; a good place to start is at insweb.com, which allows you to include the specifics of your house and lifestyle before providing you with the name of an insurer in your area that meets your needs.
Taking a class: Some insurers offer a discount of up to 15 percent to clients who take three workshops with the Massachusetts Affordable Housing Alliance's HomeSafe program. Learn more at mahahome.org/class/hs_about.html.
File a Big Claim Wisely
If you find yourself in a situation similar to Dalrymple and Flannery's -- where you've experienced a significant loss -- often your best first step is to hire a public adjuster. Though no statistics are available, public adjusters maintain that for a 10 percent cut, they can increase the payout you will receive from your insurer. "An insurance claim is a business transaction between two parties with opposing interests," says Timothy Ball of Ball and Boyd Public Adjusters Inc. in Marstons Mills. "One side knows what they're doing, and the other side doesn't. We're helping the side that doesn't." You'll get better results, Ball says, if you call a public adjuster immediately after the problem strikes, rather than getting one involved after your insurance company has already made a decision. "It's much easier to negotiate when they haven't taken a position yet."
Even if the amount you're reimbursed doesn't end up being substantially higher, many say it's worth hiring your own adjuster simply because of the energy required to settle a claim. "A major benefit of our service," Ball says, "is that you don't have to deal with the insurance company. It saves you time, aggravation, and, ultimately, money."
Nancy Dalrymple, who hired her adjuster right away, agrees. "You have to pay," she says, "but you're so traumatized by the event that it's hard to get your foot going. Our adjuster took care of a lot for us so we didn't have to deal with it."
What Every Homeowner Must Do:
Buying a good insurance policy is just the start. The following measures will ensure that if you ever have to file a claim, you can prove what you've lost. "The more documentation you have," says John Cantalupa, supervising underwriter for the Massachusetts Fair Access to Insurance Requirements plan, "the easier the process will be."
Take photos of your house that clearly show the materials used in construction; keep a copy both on and off the premises, either in a safe-deposit box or with a friend or relative. Document any special features, such as marble tile or a custom kitchen.
Keep a list of valuable contents, with photos and any appraisals, both on and off the premises. Knowyourstuff.org, a site administered by the Insurance Information Institute, allows you to download free software to create an inventory of your home.
Elizabeth Gehrman lives in East Boston and writes the On the Block column for the Globe Magazine. Send comments to magazine@globe.com.
Wednesday, December 31, 2008
Massachusetts Agents Want Regulator to Rein in Progressive
December 23, 2008
A trade group for Massachusetts insurance agents has asked the state's top regulator to force Progressive Insurance to take down its Web site, which agents say routinely gives inaccurate quotes -- particularly when comparing Progressive's prices to its competitors.
The complaint comes in a letter to Insurance Commissioner Nonnie Burnes from the Massachusetts Association of Insurance Commissioners. The letter follows an admission by Progressive that its Web site was mistakenly doubling the rates of several competitors -- Commerce Insurance and Liberty Mutual.
It's the second time in the seven months Progressive has been selling personal auto insurance online that the company has become a target of agents' ire. In August, the company admitted that its Web site was mistake-prone in some circumstances, and vowed to correct any problems.
"It is safe to say that an independent insurance agent found to be providing inaccurate quotes, particularly for competing companies, would face a regulatory hearing and fine by the Division of Insurance," wrote Frank Mancini, president of the Massachusetts Associaton of Insurance Agents. "We are not aware of any action taken by the DOI for the inaccurate quotes provided to Massachusetts consumers earlier this year by Progressive."
Mancini is requesting that Progressive be forced to take down its Web site until the accuracy of its quoting system can be verified. Mancini has also said the company should be fined for every inaccurate quote
It's not the only problem the agents' group has with Progressive. Agents say Progressive is selling six-months-only policies, which are supposedly against regulations in the Bay State, as well as altering deductibles and PIP coverage without informing purchasers of the ramifications of the changes.
In a statement, Progressive spokeswoman Cristy Cote said the mistakes were caused by human error in the design of the site. Cote also said that Progressive has sent apologies to the 21,000 consumers who saw incorrect quotes.
"To help remedy this situation, we notified both companies as well as the Massachusetts Division of Insurance and the Attorney General's office, and we removed the comparison rating service from our Web site," she said. "We will not re-install this service until we're completely confident that it is delivering fair and accurate pricing information to Massachusetts consumers."
A trade group for Massachusetts insurance agents has asked the state's top regulator to force Progressive Insurance to take down its Web site, which agents say routinely gives inaccurate quotes -- particularly when comparing Progressive's prices to its competitors.
The complaint comes in a letter to Insurance Commissioner Nonnie Burnes from the Massachusetts Association of Insurance Commissioners. The letter follows an admission by Progressive that its Web site was mistakenly doubling the rates of several competitors -- Commerce Insurance and Liberty Mutual.
It's the second time in the seven months Progressive has been selling personal auto insurance online that the company has become a target of agents' ire. In August, the company admitted that its Web site was mistake-prone in some circumstances, and vowed to correct any problems.
"It is safe to say that an independent insurance agent found to be providing inaccurate quotes, particularly for competing companies, would face a regulatory hearing and fine by the Division of Insurance," wrote Frank Mancini, president of the Massachusetts Associaton of Insurance Agents. "We are not aware of any action taken by the DOI for the inaccurate quotes provided to Massachusetts consumers earlier this year by Progressive."
Mancini is requesting that Progressive be forced to take down its Web site until the accuracy of its quoting system can be verified. Mancini has also said the company should be fined for every inaccurate quote
It's not the only problem the agents' group has with Progressive. Agents say Progressive is selling six-months-only policies, which are supposedly against regulations in the Bay State, as well as altering deductibles and PIP coverage without informing purchasers of the ramifications of the changes.
In a statement, Progressive spokeswoman Cristy Cote said the mistakes were caused by human error in the design of the site. Cote also said that Progressive has sent apologies to the 21,000 consumers who saw incorrect quotes.
"To help remedy this situation, we notified both companies as well as the Massachusetts Division of Insurance and the Attorney General's office, and we removed the comparison rating service from our Web site," she said. "We will not re-install this service until we're completely confident that it is delivering fair and accurate pricing information to Massachusetts consumers."
Friday, December 5, 2008
Most Holiday Travelers Unaware Of Insurance Coverages
A majority of travelers don’t fully understand what insurance covers during their trips according to a national survey by an agents group.
The telephone poll was sponsored by Trusted Choice and the Independent Insurance Agents & Brokers of America based in Alexandria, Va.
Conducted by International Communications Research, an independent research firm based in Media, Pa., the survey contacted 1021 households during the month of November.
People were asked if they thought their personal auto insurance would cover a car rental for damages or other related expenses; if their insurance would cover them for loss of luggage containing gifts; or if health insurance covered them if they became ill or were injured while traveling.
Thirty to 75 percent of the respondents either did not think they were covered or did not know if they were.
“With so many people traveling for the holidays, it is imperative that they understand their insurance needs and rights before leaving home,” said IIABA President and Chief Executive Officer Robert A. Rusbuldt.
He said IIABA advises that travelers “consult with their Trusted Choice independent insurance agent to discuss their current policies and what do to in the event that they need to file a claim while on vacation.”
Madelyn Flannagan, IIABA vice president for education and research, said, “Many consumers do not know when they may already be covered or where they might have gaps while on vacation.”
The survey found that about 75 percent of homeowners did not think or did not know if they would be covered in the event the airline lost their luggage containing holiday gifts.
Actually, most homeowners or renters insurance policies do provide worldwide coverage for most belongings, IIABA said. Airlines have reimbursement policies for lost luggage. Lost gifts purchased with a credit card may also have some level of protection from the issuer. Before purchasing baggage insurance, consumers should check their current policies. It may be a waste of money, according to IIABA.
Nearly one third of consumers do not think or do not know if their current policies cover them in a rental vehicle. In fact, driving a rental car is considered to be the same as driving your own vehicle for liability purposes, IIABA advised.
The purchase of liability damage waiver and collision damage waivers are often not necessary, but IIABA said that consumers should consult their independent insurance agent to find out what’s best for their travel needs, especially when traveling outside of the United States.
The survey found that more than 35 percent of respondents did not think or did not know if they were covered in the event they became ill or injured no matter where they were located.
Most individual and employer-provided health and medical insurance policies cover you when you are injured or become sick no matter where your injury or illness occurs for short recreational trips, said the IIABA
The group said that in general, major medical health insurance plans sold in the U.S. will provide coverage for emergency medical services you require while traveling. Still, insurance companies cannot guarantee the quality of care that is available wherever you travel and some policies have territorial restrictions.
The telephone poll was sponsored by Trusted Choice and the Independent Insurance Agents & Brokers of America based in Alexandria, Va.
Conducted by International Communications Research, an independent research firm based in Media, Pa., the survey contacted 1021 households during the month of November.
People were asked if they thought their personal auto insurance would cover a car rental for damages or other related expenses; if their insurance would cover them for loss of luggage containing gifts; or if health insurance covered them if they became ill or were injured while traveling.
Thirty to 75 percent of the respondents either did not think they were covered or did not know if they were.
“With so many people traveling for the holidays, it is imperative that they understand their insurance needs and rights before leaving home,” said IIABA President and Chief Executive Officer Robert A. Rusbuldt.
He said IIABA advises that travelers “consult with their Trusted Choice independent insurance agent to discuss their current policies and what do to in the event that they need to file a claim while on vacation.”
Madelyn Flannagan, IIABA vice president for education and research, said, “Many consumers do not know when they may already be covered or where they might have gaps while on vacation.”
The survey found that about 75 percent of homeowners did not think or did not know if they would be covered in the event the airline lost their luggage containing holiday gifts.
Actually, most homeowners or renters insurance policies do provide worldwide coverage for most belongings, IIABA said. Airlines have reimbursement policies for lost luggage. Lost gifts purchased with a credit card may also have some level of protection from the issuer. Before purchasing baggage insurance, consumers should check their current policies. It may be a waste of money, according to IIABA.
Nearly one third of consumers do not think or do not know if their current policies cover them in a rental vehicle. In fact, driving a rental car is considered to be the same as driving your own vehicle for liability purposes, IIABA advised.
The purchase of liability damage waiver and collision damage waivers are often not necessary, but IIABA said that consumers should consult their independent insurance agent to find out what’s best for their travel needs, especially when traveling outside of the United States.
The survey found that more than 35 percent of respondents did not think or did not know if they were covered in the event they became ill or injured no matter where they were located.
Most individual and employer-provided health and medical insurance policies cover you when you are injured or become sick no matter where your injury or illness occurs for short recreational trips, said the IIABA
The group said that in general, major medical health insurance plans sold in the U.S. will provide coverage for emergency medical services you require while traveling. Still, insurance companies cannot guarantee the quality of care that is available wherever you travel and some policies have territorial restrictions.
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