Talking about “average” costs of insurance makes things simple, not necessarily helpful

The National Association of Insurance Commissioners (NAIC) issued its latest national report on property insurance costs this week, and you’ll likely be seeing news stories about how Florida homeowners pay more than double the national average for homeowners insurance.

This is not news. We Floridians already know the cost of homeowners insurance is higher here than in states like Idaho. And, we’re also well aware that we are the #1 state for natural disasters. Still — and maybe always. If you’re terrified of natural disasters, three of the cities with the lowest risk are in Ohio. (And, many of those Ohioans are wintering in Florida right now!)

A little perspective on this NAIC report:

  • First, this newly-released analysis is of data from 2012. There is a considerable lag time between when the data gets collected from all 50 states and how long it takes to wade through it, obviously. It’s questionable how valuable two-year-old data is to planning for the future.
  • Property insurance rates have started to decline, as we have been hurricane-free for nine years. Additionally, there are now more choices for those shopping for coverage as insurance companies are taking on new business.
  • Talking about “average cost” has its limitations. Here’s what the NAIC has to say about it:Average premium is an imperfect measure of the relative “price” of insurance due to wide variations in hazards, economic conditions and real estate values from state to state. Even when comparing identical policy forms and amounts of insurance, premiums for homeowners coverage can differ dramatically across the country.

If you are interested in understanding how communicating the averages is less than helpful, check out pages 21 and 22 in the NAIC report.  Knowing the variables affecting the cost (including the volume of property insurance losses) has value because the average only tells a partial story. Variables include the type of building structure, population density, regulation and economic factors, such as inflation and interest rates.

It’s easy to make this all about costs; the real point is about the level of risk. Florida owns the top slot, no averaging necessary.

Posted in General, Homeowners+Renters, Insuring Florida, Property insurance | Leave a comment

Auto insurance reforms may be working, say regulators

In 2012, Florida lawmakers passed legislation to target the fraud and abuse that was driving up the cost of auto insurance. Today, the Florida Office of Insurance Regulation released a report indicating the reforms may be starting to work.

The overall number of insurance claims related to Personal Injury Protection (PIP, also known as no-fault) are declining and so is the overall cost of each claim. Because insurance rates are based on the cost of claims, this is positive news.

Legitimate auto insurance claims from injuries are not the problem; it’s the fabricated claims and inflated medical bills associated with what was considered a PIP “benefit” tapped to enrich some at the expense of the multitudes of honest, insurance-paying drivers.

It has long been known that South Florida and the Tampa Bay metro were popular breeding grounds for the organized crime associated with staged auto accidents and phantom medical clinics that bill for procedures never actually administered. Well, you can certainly guess where the biggest drops in the frequency of PIP claims occurred.

Here is a chart to prove your guess correct:

OIR chart





Posted in Auto Insurance Fraud, No-fault Auto Insurance | Leave a comment

Foiling identity theft during the holidays — and all year through

Guess which state had the highest number of identity theft complaints last year. Yeah, it’s Florida. Our state ranks highest, based on complaints per population. And, Florida is behind only California for cyber crime.

identity theftSince the holidays seem to stimulate use of credit cards, galvanize your fraud awareness radar right alongside. Be aware of tricks of the identity theft trade, particularly:

  • Shoulder Surfing: This is when someone is watching over your shoulder in a public place as you punch in a credit card number or listening in while you call in a credit card order over the phone. Seek privacy!
  • Dumpster Diving: Thieves aren’t above digging through your trash to get check information, credit card numbers or bank statements. They also look for pre-approved credit card offers you may have received, so tear those up before tossing them.

    Maybe Santa can bring you a shredder for Christmas. Or, look for companies in your area that will shred for you. Some charge as little as $5 to $10 a box to shred sensitive documents for you.

  • Spam Mail: Criminals love the Internet. While we all want to believe this is the season where wishes come true, there is no one in Nigeria with tons of money to give you for merely sending them a few thousand dollars first.

The FBI lists common fraud schemes, and the U.S. Dept. of Justice has an identity theft quiz. Good tip: Don’t carry all your credit cards with you; take only what you need, so if your wallet is stolen, thieves have fewer options and you have fewer calls to make.

Most home and renters policies provide coverage for theft of money or credit cards. However, the amount is limited to usually about $200 in cash and $50 on each card. Some companies offer more comprehensive coverage, so find out what you have and ask about the costs and benefits of additional identity theft protection.


Posted in Fraud, Identity Theft | Leave a comment

Older drivers and safety: Tips to save lives and money

Last week was Older Driver Safety Awareness Week, and while it was an event that just sped past me, it offered an idea worthy of putting in park for contemplation. When you’re considering hiding the car keys from an aging relative, suggest a driving fitness evaluation from a third party.

Safety awareness week for older drivers is sponsored by the American Occupational Therapy Association, and it (naturally) suggests a therapist conduct a comprehensive assessment. That makes sense because driving is complex. Driving requires visual, cognitive and physical aptitude, and involving a professional prevents a family member from playing the bad guy.

Another option is to partake of self-evaluations of driving performance. Check on the websites of your auto insurer, too, since most have such evaluation tools and offer tips for maintaining and improving driving skills as one ages. In fact, taking a Mature Driver Course earns you a discount on auto insurance. The discount varies from insurer to insurer, and if you are already getting good rates for good driving behavior, the discount may not be much. But most everyone believes every dollar saved is a dollar earned, so go for it.

Healthier seniors and safer cars means fewer car crash injuries and fatalities, a welcome trend. Yet, older drivers still have high fatality rates, usually because frailty makes it harder to recover from injuries sustained. Keep in mind that teen drivers and those in their early 20s have a higher fatality rate than senior citizens. That, too, is an age thing.

Posted in Auto, Driving Safety, Older Drivers, Saving money on auto insurance | Leave a comment

9 years without a hurricane, yet Florida still #1 for catastrophe losses

In many ranking situations, being #1 is a good thing. Except this: After nine years without a hurricane hitting Florida, our state still ranks tops for catastrophe losses. Time has not changed that. It has, however, shrunk the margin between first and second place. Granted, this is not much consolation.

About a decade ago, Florida’s share of historical catastrophe losses was somewhere around 20 percent of all U.S. natural disasters. With this extended period of storm-free years, the state’s share has dropped to around 14 percent, but that is still the top ranking.  Picture1

When people ask why property insurance rates have not dropped in the absence of a major storm, think about this chart above. Insurance rates reflect history, and there is no escaping a history that includes nearly $67 billion dollars in losses over the past 30 years.

It is extremely positive to enjoy all these years virtually unscathed by damage from high winds and storm surge  — obviously.  The familiar saying is that history repeats itself. When it comes to powerful storms, there’s always hope that it does not. Yet, history cannot be ignored. Ideally, it should be a catalyst for taking action to build fortified structures to keep us safer, reduce the costs of disaster and help the state relinquish the No. 1 spot.

Posted in General, Homeowners+Renters, Hurricanes, Insurance Institute for Business & Home Safety, Property insurance | Leave a comment

Hurricane Center’s new storm surge map shows what can happen

Hurricane Season 2014 chalks up another storm-free year for the history books. Nine in a row. How lucky can we get! The unspoken question: How lucky can we stay?

With that in mind, there is a new map you should look at to learn about the risk Floridians face from storm surge. Flooding is the nation’s #1 natural disaster, and it’s not just a coastal problem. The water has to go somewhere, and it often chooses inland areas.

The National Hurricane Center has just released a storm surge inundation map. At a glance, you can tell if your location is at risk. So….glance. Take a moment to hit the tabs at the top of the page to see how different hurricane categories can impact flooding. Toggling between worst case storm surge scenarios for a Category 2 hurricane and a Category 5 will get you seeing a deep shade of red. Hopefully, seeing red will propel you to action — to find out more about your evacuation zone and to mitigate against flooding.

The data used to create the map has an interesting moniker: SLOSH. It stands for Sea, Lake and Overland Surges from Hurricanes. It’s all about the physics of flooding, and you don’t have to understand the science. But you should know your flood risk. Do it now, please. Because we should never let our preparedness skills rust during the off season.

Posted in Flood, Hurricane preparedness | Leave a comment

Insurance: Don’t fogetaboutit

I think about insurance all the time; you probably don’t (unless you too work in the biz). Truth be told, there are probably 10,0000 other things you’d rather think about. But another truth is that thinking about insurance at least a few times a year is really worthwhile. And, there’s an easy, free way to keep coverage top of mind.

Sign up for our Check20 newsletters. There is no simpler way to be sure your insurance keeps up with you. We’ve got three distinct newsletters to deliver to your email inbox:

  • Home Insurance — published twice monthly with tips on saving money, home safety and disaster preparedness,
  • Auto Insurance — offering strategies for getting the most from your coverage and advice on safe driving habits, also sent twice a month, and
  • Financial Planning — a monthly update providing insight to help you plan for life stages and long-term financial well being.

CHECK20_270X100_LOGOEach provides straight-to-the-point tips to help you feel confident about insurance coverage decisions. Nothing to buy; no hidden agenda — except for this: The newsletter content is intended to encourage you to spend 20 minutes reviewing your insurance coverage. You’ll likely breeze through them in just a few minutes, and that’s perfect. If you want to dig deeper, the newsletters point you to more free information.

Our mission at the Insurance Information Institute is to improve public understanding of what insurance is and how it works. Part of that mission is to continually remind people that insurance is not a product you buy and put on the shelf. Your life is in motion, and insurance has to keep up.

Never say “fogetaboutit” on insurance. Forgetfulness can cost you.



Posted in Check20, General, Saving money on auto insurance, Saving money on home insurance | Leave a comment

Steeling seniors against scams & shams

There always seems to be someone trying to get rich quick at the expense of the unsuspecting. Insurance fraud is a $32 billion business for property/casualty insurers, and the U.S. Dept. of Health and Human Services estimates healthcare fraud to be more than twice that amount. While there are many fraud victim stories to tell, it’s kind of scary when one hits close to home.

I was reminded of the vulnerability of senior citizens yesterday as I cleared a pile of papers from my desk to see a letter an 81-year-old relative received months ago telling her she won a “Shoppers Sweepstakes.” Along with the letter declaring her “winning” $230,000 was a very legitimate-looking check for $3,750. The letter explained the money was an advance to pay the tax on her “winnings” and directed her to send two separate Money Grams for nearly $1,000 each to pay the “tax” on the “winnings.” Thankfully, this relative has a longtime habit of turning over all her mail for review, so nothing happened — other than astonishment over the scam.

Seniors get mounds of unsolicited mail for all types of investment “deals” and requests for iffy charitable donations. It would be great if they had a friend or family member review all such requests before any checks were written or before responding to farcical finance schemes. The state has a program called On Guard for Seniors to help Floridians develop a fraud radar to deflect scams. It’s worth checking out.


Posted in Fraud, Identity Theft | Leave a comment

Teen Driver Safety Week: Don’t touch that phone

Every day, on average, there are more than 700 traffic crashes on Florida roadways, according to the crash facts report by the Dept. of Highway Safety & Motor Vehicles. About 8 percent of those crashes involve teen drivers.

Drivers between the ages of 15-19 naturally have less experience. But teen drivers also tend to think they are experts at multitasking, which is an incredibly dumb thing to believe while driving. 5toDrive_CMYK

The National Highway Safety Administration has a “5 to Drive” campaign that provides parents with reminders of rules of the road ripe for frequent reinforcement:

  • No cell phones.
  • No extra passengers.
  • Don’t speed.
  • No alcohol.
  • Wear seat belts.

Pretty simple stuff, right? Betcha can hear a teenager whining somewhere in the sunshine as his/her parent ticks off these 5 reminders each time they hit the road. Whining is easy on the ears if it means safety is being stressed. The first years of driving are risky, and safety tips are lifesavers.

A look at injury data from 2012 (the latest available) shows that while injuries among male teen drivers were only slightly higher than female teens, the fatality rate among teen males was more than twice as high. Boys will be boys, as the saying goes, and are more inclined to want to show off fast cars and fancy driving. Just stop it, fellas. The real way to impress the girls is to show up when you say you will — safely.


Posted in Auto, Driving Safety, General, Teen Drivers | Leave a comment

Got a fire alarm? Put it to the test

When was the last time you tested your home’s fire alarm? If you can’t remember, then it’s time to do it. Put your fire alarms to the test today. Please?

This is Fire Prevention Week.  And, it’s one of those times when you really need to take action. It’s great if you have fire alarms in your home, and it’s not great if they are inoperable. As the National Fire Protection Association (NFPA) says, “Working fire alarms save lives.”

The NFPA has a fire prevention quiz that is enlightening. Okay, I’m giving you the answers to the quiz, but this is a test worthy of a cheat sheet. Did you know that if a smoke alarm fails, it’s likely because of dead batteries or because batteries were not properly installed? Other important lessons:

  • Three out of every five fire deaths result from fires in homes with no smoke alarms or no working smoke alarms.
  • Many of today’s fabrics and products are MORE flammable.
  • firetext-smoke-alarmOld fire alarms need to retire.

If you have fire alarms manufactured more than 10 years ago, you need new ones. And yes, you need multiples. There should be a fire alarm outside every sleeping area. Having an functioning smoke detector is essential.

Forget the flowers and chocolates. Be practical. Buy every loved one a smoke alarm! While it would be ideal if they never have an opportunity to be reminded about who sent such a gift, it’s better knowing a smoke alarm is standing guard.


Posted in Fire, General, Homeowners+Renters, Safety | Leave a comment