The personal auto market remains competitive across the country, even as rates begin to creep upward. Experts in the field said they expect competition to continue throughout the year and into 2010.
As with most other industries, the economy continues to be a factor in the personal auto market. Most observers said this is primarily being seen in the spending habits of consumers, as they forego the purchase of a new car or seek to save on insurance coverage.
In general, though, those in the industry said they have not seen any dramatic change in the marketplace compared to a year ago, and they predict only minor tweaking going forward, rather than any wholesale market shifts.
Insurers are seeing some deterioration in performance in terms of combined ratio, according to Robert Hartwig, president of the Insurance Information Institute, but “not extraordinarily so.” The deterioration, he said, is due to rising claims costs, which in some states has more than offset declining accident frequency.
Accident frequency is down, according to Mr. Hartwig, because people are driving less. Initially, he said this was due to high gas prices. But in the last six-to-nine months, Mr. Hartwig said the economy is the reason.
The economy has also caused consumers to stop buying as many new vehicles. Mr. Hartwig said growth in the personal auto insurance market will slow because the number of new vehicles sold is falling and there are more cars being taken off the road than put on.
Derek Ross, a spokesperson for the Independent Insurance Agents and Brokers of the West and vice president of CM Meirs Co., an independent agency in Woodland Hills, Calif., said he, too, has seen a reduced number of vehicles on the road. At the same time, he said, consumers who are buying are not replacing their old vehicles with vehicles of the same quality. “So we’re seeing a lot of downsizing in the quality” of the types of vehicles on the road.
Speaking to the declining number of vehicles on the road, Mr. Hartwig said, “This has not happened in decades.” He noted there may be a “pent-up demand” for new cars when the economy turns, and he added that insurers will be able to meet that demand when the time comes.
But while experts agree there are fewer new car purchases, not all agree that this necessarily translates to fewer cars on the road. Richard Luedke, spokesperson for State Farm, said people are not buying as many new vehicles, but they are holding onto the cars they have longer, so there is essentially the same number of cars to insure.
Agents have reported some changes in purchasing decisions among consumers because of the economy. James Berliner, vice president of the Professional Insurance Agents of Connecticut and president of Berliner-Gelfand & Co. Inc., a Bridgeport, Conn.-based agency, said consumers are shopping more for insurance and are paying more attention to pricing today.
Paul Monacelli, past president of PIA New Jersey and CEO of Cedar Knolls, N.J.-based ADP/Statewide Insurance Agencies, which writes personal auto in New Jersey, Pennsylvania and New York, said customers are also looking to reduce coverages to save money. They are taking higher deductibles on physical damage, he said.
Mr. Monacelli said he has responded to the shift in consumer buying habits by having longer conversations with customers to ensure they still have enough insurance to protect their assets.
Mr. Ross said he reviews customers who ask questions about reducing costs as if they were new submissions. He said he speaks to these customers about saving money by bundling coverages together and taking advantage of credits for certain levels of education achieved, or certain professions or professional designations.
Insurers are applying these types of credits more liberally than they used to, according to D. Scott Liebert, president of PIA New York and chairman of CLG Insurance, an agency in Nanuet, N.Y. For example, he said he is seeing companies apply credits for renewing coverage early, taking higher limits and owning a home.
Even with consumers shopping more and companies adjusting to compete for business, Mr. Luedke said he has not seen a change in the number of people canceling policies or letting coverage lapse. The lapse and cancellation rate, he said, is about the same it has been for two-to-four years.
Fraud is also a concern for insurers. Mr. Hartwig said there is anecdotal evidence that, because people are struggling financially today, fraud “give up” schemes are on the rise.
Auto theft is also believed to be on the rise, Mr. Hartwig said, particularly in border cities in the United States. He said problems associated with the drug trade in Mexico may be a reason for this rather than the economy.
Despite the economy looming, professionals in this field agreed the personal auto market is still healthy and competitive, with prices remaining relatively stable for the foreseeable future.
Mr. Hartwig characterized the market as “extremely competitive,” and noted a healthy personal auto market is important to the industry’s overall health.
“The number of carriers in some previously difficult-to-operate states is increasing,” such as Massachusetts, Mr. Hartwig said, and residual markets are “virtually depopulated” in many states.
Private passenger auto, he said, currently accounts for 34 percent of all premiums written in United States.
Mr. Monacelli said the market in areas where he writes coverage is “stabilizing.” Up until this year, he said, companies were doing whatever they could to get market share. “They were appointing a lot of agents; sometimes the quality of those agents didn’t meet the profile the companies had in the past,” Mr. Monacelli said.
Companies lived by the mantra that there is a price for every risk, Mr. Monacelli continued, but some of those risks were not necessarily being written at the right prices, casing a deterioration in combined ratios.
The newness of multivariate rating also led to some inappropriate pricing, Mr. Monacelli said. But companies have more experience with this type of rating now, he added, so rates should stabilize some.
Mr. Berliner said insurance company field representatives have warned him that there will be slight rate adjustments upward, but he said this is only being seen in certain regions, not across the board. While other lines are seeing pressure to increase pricing, this has not impacted personal auto, he said.
Rates have been essentially flat according to what Mr. Ross has seen, although he said there has been “some rumblings” about rates beginning to increase. He said he expects some slight increases over the next six months but does not see any landscape-change in the personal auto market.
“Any major changes will happen in baby steps,” he said.
Speaking to State Farm’s experience, Mr. Luedke said rates increased, but only by just under 1 percent.
Mr. Hartwig said the slight adjustment upward in rates is a response to “some underlying increases in costs.” He cited higher medical care costs as an example.
On the regulatory and legislative fronts, Mr. Hartwig said the possibility of some form of federal regulation stands above all other issues. Questions such as whether federal regulation will only be seen as a “systemic risk regulator,” or whether the states or feds will regulate rates, or whether federal regulation will be optional have yet to be answered, he said.
It is also unknown how such changes will affect big insurers versus small insurers, he noted.
Aside from federal regulation, credit scoring remains a “perennial concern,” Mr. Hartwig said. Some states are again talking about bans or restrictions.
Mr. Berliner said a bill has been introduced in his state of Connecticut to ban credit scoring.
Ultimately, Mr. Hartwig said it is incumbent on insurers to make the case for credit scoring and to show that banning the practice will result in an inferior rating system.
The personal auto market remains competitive across the country, even as rates begin to creep upward. Experts in the field said they expect competition to continue throughout the year and into 2010.
As with most other industries, the economy continues to be a factor in the personal auto market. Most observers said this is primarily being seen in the spending habits of consumers, as they forego the purchase of a new car or seek to save on insurance coverage.
In general, though, those in the industry said they have not seen any dramatic change in the marketplace compared to a year ago, and they predict only minor tweaking going forward, rather than any wholesale market shifts.
Insurers are seeing some deterioration in performance in terms of combined ratio, according to Robert Hartwig, president of the Insurance Information Institute, but “not extraordinarily so.” The deterioration, he said, is due to rising claims costs, which in some states has more than offset declining accident frequency.
Accident frequency is down, according to Mr. Hartwig, because people are driving less. Initially, he said this was due to high gas prices. But in the last six-to-nine months, Mr. Hartwig said the economy is the reason.
The economy has also caused consumers to stop buying as many new vehicles. Mr. Hartwig said growth in the personal auto insurance market will slow because the number of new vehicles sold is falling and there are more cars being taken off the road than put on.
Derek Ross, a spokesperson for the Independent Insurance Agents and Brokers of the West and vice president of CM Meirs Co., an independent agency in Woodland Hills, Calif., said he, too, has seen a reduced number of vehicles on the road. At the same time, he said, consumers who are buying are not replacing their old vehicles with vehicles of the same quality. “So we’re seeing a lot of downsizing in the quality” of the types of vehicles on the road.
Speaking to the declining number of vehicles on the road, Mr. Hartwig said, “This has not happened in decades.” He noted there may be a “pent-up demand” for new cars when the economy turns, and he added that insurers will be able to meet that demand when the time comes.
But while experts agree there are fewer new car purchases, not all agree that this necessarily translates to fewer cars on the road. Richard Luedke, spokesperson for State Farm, said people are not buying as many new vehicles, but they are holding onto the cars they have longer, so there is essentially the same number of cars to insure.
Agents have reported some changes in purchasing decisions among consumers because of the economy. James Berliner, vice president of the Professional Insurance Agents of Connecticut and president of Berliner-Gelfand & Co. Inc., a Bridgeport, Conn.-based agency, said consumers are shopping more for insurance and are paying more attention to pricing today.
Paul Monacelli, past president of PIA New Jersey and CEO of Cedar Knolls, N.J.-based ADP/Statewide Insurance Agencies, which writes personal auto in New Jersey, Pennsylvania and New York, said customers are also looking to reduce coverages to save money. They are taking higher deductibles on physical damage, he said.
Mr. Monacelli said he has responded to the shift in consumer buying habits by having longer conversations with customers to ensure they still have enough insurance to protect their assets.
Mr. Ross said he reviews customers who ask questions about reducing costs as if they were new submissions. He said he speaks to these customers about saving money by bundling coverages together and taking advantage of credits for certain levels of education achieved, or certain professions or professional designations.
Insurers are applying these types of credits more liberally than they used to, according to D. Scott Liebert, president of PIA New York and chairman of CLG Insurance, an agency in Nanuet, N.Y. For example, he said he is seeing companies apply credits for renewing coverage early, taking higher limits and owning a home.
Even with consumers shopping more and companies adjusting to compete for business, Mr. Luedke said he has not seen a change in the number of people canceling policies or letting coverage lapse. The lapse and cancellation rate, he said, is about the same it has been for two-to-four years.
Fraud is also a concern for insurers. Mr. Hartwig said there is anecdotal evidence that, because people are struggling financially today, fraud “give up” schemes are on the rise.
Auto theft is also believed to be on the rise, Mr. Hartwig said, particularly in border cities in the United States. He said problems associated with the drug trade in Mexico may be a reason for this rather than the economy.
Despite the economy looming, professionals in this field agreed the personal auto market is still healthy and competitive, with prices remaining relatively stable for the foreseeable future.
Mr. Hartwig characterized the market as “extremely competitive,” and noted a healthy personal auto market is important to the industry’s overall health.
“The number of carriers in some previously difficult-to-operate states is increasing,” such as Massachusetts, Mr. Hartwig said, and residual markets are “virtually depopulated” in many states.
Private passenger auto, he said, currently accounts for 34 percent of all premiums written in United States.
Mr. Monacelli said the market in areas where he writes coverage is “stabilizing.” Up until this year, he said, companies were doing whatever they could to get market share. “They were appointing a lot of agents; sometimes the quality of those agents didn’t meet the profile the companies had in the past,” Mr. Monacelli said.
Companies lived by the mantra that there is a price for every risk, Mr. Monacelli continued, but some of those risks were not necessarily being written at the right prices, casing a deterioration in combined ratios.
The newness of multivariate rating also led to some inappropriate pricing, Mr. Monacelli said. But companies have more experience with this type of rating now, he added, so rates should stabilize some.
Mr. Berliner said insurance company field representatives have warned him that there will be slight rate adjustments upward, but he said this is only being seen in certain regions, not across the board. While other lines are seeing pressure to increase pricing, this has not impacted personal auto, he said.
Rates have been essentially flat according to what Mr. Ross has seen, although he said there has been “some rumblings” about rates beginning to increase. He said he expects some slight increases over the next six months but does not see any landscape-change in the personal auto market.
“Any major changes will happen in baby steps,” he said.
Speaking to State Farm’s experience, Mr. Luedke said rates increased, but only by just under 1 percent.
Mr. Hartwig said the slight adjustment upward in rates is a response to “some underlying increases in costs.” He cited higher medical care costs as an example.
On the regulatory and legislative fronts, Mr. Hartwig said the possibility of some form of federal regulation stands above all other issues. Questions such as whether federal regulation will only be seen as a “systemic risk regulator,” or whether the states or feds will regulate rates, or whether federal regulation will be optional have yet to be answered, he said.
It is also unknown how such changes will affect big insurers versus small insurers, he noted.
Aside from federal regulation, credit scoring remains a “perennial concern,” Mr. Hartwig said. Some states are again talking about bans or restrictions.
Mr. Berliner said a bill has been introduced in his state of Connecticut to ban credit scoring.
Ultimately, Mr. Hartwig said it is incumbent on insurers to make the case for credit scoring and to show that banning the practice will result in an inferior rating system.
Wednesday, April 29, 2009
Tuesday, April 21, 2009
Auto Insurance Fraud on the Rise, officials say
Investigators know the tricks of insurance fraud trade
Insurance officials say they have noticed an increase in fraud as people become desperate in the tough economy.
By Laura A. Bischoff
Staff Writer
Insurance fraud investigators weren’t born yesterday. They know the difference between when an amateur and a professional thief dumps a car.
The professional removes the global positioning system, airbag, high-end stereo and other valuable parts before setting a stolen car ablaze or rolling it into a pond or lake.
The amateur leaves those items inside the car. And sometimes the rookie makes other mistakes, such as torching the vehicle in view of a surveillance camera, or reporting the car stolen with eyebrows singed.
Joel Demory, fraud chief with the Ohio Department of Insurance, said investigators see plenty of “boneheaded” moves by people looking to dump their cars for insurance payouts.
State insurance officials say they have noticed that insurance fraud, through staged thefts, is on the rise as people become desperate in the troubled economy.
The state fire marshal reports that between 2004 and 2007, Ohio saw a 62.3 percent increase in vehicle arsons.
Other states have reported measurable increases in auto give-ups in recent years. New York reported a 25 percent increase between 2007 and 2008, New Jersey saw a 59 percent increase in suspected vehicle arsons between 2004 and 2007, and California reported a 40 percent increase in vehicle give-ups in fiscal year 2008 compared with fiscal year 2007.
“If it looks like a fake car theft, acts like a fake car theft and quacks like a fake car theft, then it’s probably a fake car theft,” said James Quiggle, spokesman for the Coalition Against Insurance Fraud, a consumer and insurance interest group.
Investigators consider whether the owner was behind on the payments, if they claimed high-end equipment was in the car, whether they recently checked on their insurance coverage, whether the owner has all the keys and if there are signs of forced entry on the car.
They also talk to neighbors and review surveillance camera footage from where a car was reported stolen and where it was found.
Sometimes it can take six months to investigate and prosecute an insurance fraud case, according to Demory.
But an insurance fraud conviction for dumping a car worth more than $5,000 carries a maximum penalty of 18 months in prison and a $5,000 fine in Ohio.
Quiggle said a recent survey found that during the last decade, American’s attitudes toward insurance fraud have become more tolerant. People see bilking big insurance companies out of a few thousand dollars as harmless, he said.
“Morally, these people find it easy to rationalize torching their car, because they don’t view insurance fraud as a real, live crime,” Quiggle said.
“They don’t consider the cost of these crimes are being passed on to all the policyholders in the form of higher premiums.”
Insurance officials say they have noticed an increase in fraud as people become desperate in the tough economy.
By Laura A. Bischoff
Staff Writer
Insurance fraud investigators weren’t born yesterday. They know the difference between when an amateur and a professional thief dumps a car.
The professional removes the global positioning system, airbag, high-end stereo and other valuable parts before setting a stolen car ablaze or rolling it into a pond or lake.
The amateur leaves those items inside the car. And sometimes the rookie makes other mistakes, such as torching the vehicle in view of a surveillance camera, or reporting the car stolen with eyebrows singed.
Joel Demory, fraud chief with the Ohio Department of Insurance, said investigators see plenty of “boneheaded” moves by people looking to dump their cars for insurance payouts.
State insurance officials say they have noticed that insurance fraud, through staged thefts, is on the rise as people become desperate in the troubled economy.
The state fire marshal reports that between 2004 and 2007, Ohio saw a 62.3 percent increase in vehicle arsons.
Other states have reported measurable increases in auto give-ups in recent years. New York reported a 25 percent increase between 2007 and 2008, New Jersey saw a 59 percent increase in suspected vehicle arsons between 2004 and 2007, and California reported a 40 percent increase in vehicle give-ups in fiscal year 2008 compared with fiscal year 2007.
“If it looks like a fake car theft, acts like a fake car theft and quacks like a fake car theft, then it’s probably a fake car theft,” said James Quiggle, spokesman for the Coalition Against Insurance Fraud, a consumer and insurance interest group.
Investigators consider whether the owner was behind on the payments, if they claimed high-end equipment was in the car, whether they recently checked on their insurance coverage, whether the owner has all the keys and if there are signs of forced entry on the car.
They also talk to neighbors and review surveillance camera footage from where a car was reported stolen and where it was found.
Sometimes it can take six months to investigate and prosecute an insurance fraud case, according to Demory.
But an insurance fraud conviction for dumping a car worth more than $5,000 carries a maximum penalty of 18 months in prison and a $5,000 fine in Ohio.
Quiggle said a recent survey found that during the last decade, American’s attitudes toward insurance fraud have become more tolerant. People see bilking big insurance companies out of a few thousand dollars as harmless, he said.
“Morally, these people find it easy to rationalize torching their car, because they don’t view insurance fraud as a real, live crime,” Quiggle said.
“They don’t consider the cost of these crimes are being passed on to all the policyholders in the form of higher premiums.”
Wednesday, April 8, 2009
Mass. Ranks Last Again in US For Use of Seat Belts
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."
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."
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.
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