Motorcyclists are well aware of driving defensively, and the most cautious never let their guard down. They wear bright clothing not to show off but to show up! Check out the poster titled Ride Proud. Dress Loud. It is part of a conspicuity campaign started in 2008, based on data showing that while motorcyclists comprised just over 5 percent of the population, they represented over 16 percent of all traffic fatalities. So, smart bikers dress to be seen. And yet…….

There are many accidents in which automobile drivers pull out in front of motorcyclists because they did not see them. Motorcyclists are unseen because car drivers look for another car and fail to fully engage the brain to see the full scene before them. I personally witnessed such a thing, when a car driver attempted a left turn and pulled into the street just as a motorcyclist approached, causing the biker to do a flip over the car’s hood. He was wearing a helmet, thankfully.

Helmet laws for motorcyclists differ among the states. Nineteen states and the District of Columbia require helmets for all motorcyclists. In Florida, only those 20 and younger are required to have a helmet. Those over age 21 can ride a motorcycle without protective headgear as long as they have at least $10,000 in appropriate health insurance. The Insurance Institute for Highway Safety has information on helmet use and notes a federal government estimate that per mile traveled, the number of deaths on motorcycles in 2007 was about 37 times the number in cars.

There may be no better place to ride than the Sunshine State, providing motorcyclists plan ahead to dodge the nearly every day summer rainstorms. More than one million Florida drivers have the motorcycle endorsement on their driver’s license. A motorcycle law passed in 2008 requires training before getting a motorcycle endorsement for a driver’s license, so first timers and new Floridians sit through 15 hours of instruction and training. But long-time riders may have never received such training. Keep that in mind, and stay alert – no matter what you drive.

When I’m in my 80s, I fully expect to be puttering along as well as they do. There will be a lot of us. According to the U.S. Census data, in 2010 there were 22 people over the age of 65 for every 100 people. By 2030, that number will rise steeply – with 35 of every 100 Americans being over 65 years old. That’s 19 percent of the population. No surprise that Florida ranks #1 with the most households with senior citizens. Obviously, the need for long-term care insurance will increase.

Most people buy long-term care insurance around age 60, says the U.S. Dept. of Health and Human Services. The younger you are when you buy it, the more likely you are to be accepted for coverage. If you apply in your 50s, there’s a one in 10 chance you’ll be rejected. If you apply in your 60s, the chance of rejection is two in 10, and the odds against you double if you wait to apply for coverage until you hit your 70s. Of course, the younger you are, the lower the premium will be for a given set of benefits and features. Once the premium is set, it stays at that amount for the life of the policy, unless the claims for the group of people who have bought that type of policy require rates for the group be raised to cover claim payments.

You’ve got lots of options in planning for the silver and golden (and platinum) years. Some people think they should invest what they would have paid in long-term care, rather than buying an insurance policy. But that may leave you vulnerable if you need the benefits earlier than planned. Like most things in life, do your homework on long-term care. And, celebrate your years – since this is Older Americans Month, and the theme is “Never Too Old to Play.” I like the sound of that!

The first-ever Florida Public Sector-Private Sector Disaster Preparedness Summit was held in Daytona Beach. About 300 people attended, and I was among them. Overall theme: Government needs to partner with and integrate the private sector into all phases of emergency management. They cannot – and should not – be expected to go it alone, and they benefit from and welcome the insight and expertise of private businesses.

The goal of the two-and-a-half day summit was to solicit direction to support the efforts of state and county emergency management, volunteer organizations and business. It was the start of building dialogue, to engage stakeholders in disaster recovery so all the pieces of preparedness work together to ensure the state bounces back from disaster as rapidly as possible. The insurance industry is an economic first-responder after disaster; we write the checks, so joining in the conversation made sense. Plus, there is no substitute for showing up!

Bryan Koon is the director of the DEM. He was previously operations manager for Walmart’s emergency management department. He pointed out that his Walmart role was to handle preparedness, planning, recovery and mitigation in every state and 30 international locations. He noted that Walmart employees and their families represent one percent of the U.S. population, so getting those people engaged in recognizing hazards in the community makes an impact. You can make an impact, too.

Think about what the private sector brings to the conversation. As a speaker with the Federal Emergency Management Agency made clear, private sector businesses do things right because big mistakes put them out of business, and a similar threat does not hang over government entities.

Want to step up and be involved in building a more resilient Florida? Some ideas:

• Be part of your community’s Post-Disaster Redevelopment Plan.
• Connect with John Cherry, who is the private sector coordinator for the Division of Emergency Management.
• Join the Florida Emergency Management Association.
• Contact your county emergency management office to inquire about how you may add value.

Floridians, disaster preparedness is not a spectator sport. Get in the game.

Complexities surrounding the purchase of a businessowners policy demand a greater degree of partnership between the insurance agent and the customer. It’s also important to understand business interruption insurance. Simply, business interruption coverage is survival insurance. Yet, a survey by the National Association of Insurance Commissioners found that only one-third of small businesses, defined as firms with fewer than 20 employees, have business interruption coverage. Almost 60 percent of firms with 20 to 99 employees have it. Without it, businesses may be doomed.

The U.S. Department of Labor estimates that over 40 percent of businesses never reopen after a disaster. Further, at least 25 percent close within 2 years. Those startling statistics should be enough to prompt a business to review its insurance coverage and give serious consideration to business interruption protection.

Business people are skeptical of the value of business interruption insurance because they make these mistakes:

• Fail to understand that coverage was triggered by direct physical loss to the property. Business interruption insurance is tied to property insurance and is not a stand-alone product. It doesn’t kick in unless the building sustains physical damage.

• Lack of knowledge of the waiting period or of timeframe limits for coverage. Policies usually have a 48- to 72-hour waiting period before business interruption insurance kicks in. After coverage is activated, a basic policy may provide for just 30 days of coverage. The recommendation is to purchase enough coverage for a 12-month period.

• Not knowing there are additional types of business interruption coverage to consider. “Contingent business” interruption insurance extends coverage to income losses that may result from a key supplier or customer suffering a property loss. While some policies combine “extra expense” coverage with business income coverage, it is also available as an add-on to help with additional costs, such as rent for a temporary location.

• Underestimating the amount of documentation required to support a claim. Of course, the amount of information needed depends on the complexity of the claim; however, a well-documented claim for business interruption insurance requires financial information, and if a business has not maintained offsite backup files, this step in the process can prove to be a major stumbling block. Additionally, the terminology to define loss calculations in a business interruption policy are often difficult to interpret, so business owners would be wise to involve an accountant who is familiar with these policies in the claims process.

Ultimately, the responsibility to make good decisions about disaster recovery is the business owner’s. If you own a business, get your insurer involved in helping you assess your risk. Remember that the largest losses to a business may not come from direct damage from the disaster itself, but from the struggle to survive in the months and years following it

Tom Grady, the interim president and CEO of Citizens, sent out a statement to the media after Gov. Rick Scott signed HB 1127, a bill intended to reduce the hurricane taxes all policyholders pay for Citizens’ debts. Grady said the bill will reduce the tax burden on non-Citizens policyholders (all of you with a homeowners, auto, business and/or boaters policy from a private insurance company) by more than $300 per policy, in the event of a catastrophic storm.  Many people probably don’t even know they have been paying these taxes. Check your insurance policy; it’s on your Declarations Page where the breakdown of costs is listed.

Simply, Citizens has three different lines of business: a Personal Lines Account (for homes), a Commercial Lines Account (condos and apartments), and a Coastal Account (high-risk, beach areas). If any of these accounts has a shortfall and can’t pay claims, Citizens policyholders can get slapped with a surcharge of up to 15 percent of their premium for EACH account. That’s up to 15 percent times 3 accounts = 45 percent maximum. Yes, 45 percent more than the premium now paid. This assessment threat is not an idle one, so Citizens customers take note please. The year after a big storm could cost you much more.  The new legislation did nothing to change this. It changed the assessment threat for everyone who does not have a Citizens policy.

Non-Citizens policyholders currently are on the hook for up to 6 percent in surcharges for each of the three accounts. And on July 1, this “regular” assessment threat drops to 2 percent and for only the Coastal Account. So, rather than worrying about an assessment of up to 18 percent (6 percent for each of the three accounts), policyholders who are not Citizens customers only have to worry about the 2 percent tax. However, emergency surcharges still remain.

There’s more to the story: Cutting back on the regular assessment helps insurers protect their surplus, which is the money necessary if a second or third storm hits. Previously, when assessments were necessary, insurers had to pay them upfront within 30 days, which could cause a serious dent in the financial cushion needed for multiple storms. Now, assessments to insurers can be paid over time as policies are issued and renewed.

Obviously, the change makes Citizens policies look less attractive – and that’s the point.

So, what should that 39 percent of Americans know about the way government aid works after a disaster? They should know there are federal loans and federal grants; the loans are paid back with interest and can provide for a full recovery, while the disaster assistance grants from the Federal Emergency Management Agency are limited and designed to make a household safe and not intended to restore damaged property.

At a recent National Hurricane Conference insurance workshop, a speaker from the Small Business Administration (SBA) busted a misconception I had on that organization. It’s more than its name implies, and many people do not know that the SBA offers disaster loans to homeowners and renters, in addition to businesses. SBA home and personal property loans cover uninsured and underinsured losses, which could include personal contents, landscaping, building code upgrades, and insurance deductibles. Interestingly, if a disaster loan is approved, a homeowner could also be eligible for additional funds to cover the cost of improvements that will protect the property against future damage. That means if you had to rebuild your home after a disaster, you could rebuild it better. The SBA has a Disaster Loan Fact Sheet to explain further. There are credit requirements that apply, and loan terms to negotiate.

There were a record-breaking 99 federally-declared disasters in 2011, and 11 so far this year. The SBA is offering loans to many of those people who were impacted, and it is a hand up, not a handout.

On Monday, Tom Iovino of the Pinellas County Dept. of Communication hosted a day-long workshop on public education called “Reach Out with Outreach,” which highlighted creative and effective programs to deliver disaster preparedness information. I delivered a presentation on how insurers use social media and also gave an overview on the liability risks of social media. (Yes, as the opportunities to tweet, message, share and “like” grow, so do the risks, and we have a white paper on social media liability and insurance that explains further.) Jeanne Salvatore, among my esteemed colleagues at the Insurance Information Institute (I.I.I.), spoke at the conference on the social media capabilities of insurers during a disaster. The percentage of people using social networking keeps on growing, and it has frequently proven to effectively keep people connected after a natural disaster.

Dr. Steven Weisbart of the I.I.I. spoke at the general session about the shifting nature of catastrophic losses in the U.S., noting that damage from thunderstorms and tornadoes has outpaced hurricane losses in recent years.

There’s always something to be learned, and one gem for me was learning about how the disaster loans and grants work. That’s my topic for next week’s post.

The first thing people want to know is if the changes will help to lower auto insurance rates. And, the truthful answer is…..it depends. It depends on each insurance company’s financial results based on the changes to the no-fault law and on whether or not the reforms go far enough to address the issues that caused rates to rise. It’s a cliché, yet “time will tell.” And, this is the timeline: The bill passed in March, will likely be signed by the governor in April, some changes start in July, and most start in January.

By October 1, the bill requires insurers to submit a rate filing to insurance regulators showing at least a 10 percent reduction in rates – or explain why they cannot. Keep in mind that the changes start July 1, so it’s hard to say if there will be much change realized by the reforms in four months. Regardless, if a downward trend in claims cost occurs, rates will reflect it. By October 2014, auto insurers are required by the reforms to submit another rate reduction of at least 25 percent from 2011 premium levels, so that’s an additional 15 percent from rate filings due this October.

Here’s what doesn’t change: No-fault insurance, also known as personal injury protection (PIP), is still required coverage. It still provides up to $10,000 in medical benefits and continues to pay for 80 percent of medically necessary costs, 60 percent of lost wages and 100 percent of the services that you cannot perform as a result of injuries received in an automobile accident, such as household chores and child care. Claims will continue to be paid within 30 days. However, if the insurance company suspects fraud is involved in the claim, it can take up to 90 days to investigate it, and if the investigation proves it is a valid claim, then it will be paid plus interest.

Here’s what changes in January: Injured drivers and their passengers have 14 days to seek treatment and depending on the severity of the injury, they can receive medical care in two ways:

For medical emergencies, the full $10,000 PIP benefit is available for injured people who seek treatment by ambulance or at a hospital, or from a physician, osteopathic or chiropractic physician, or dentist. Emergency medical treatment can also be provided by a physician assistant or advanced registered nurse practitioner, so that means you can visit your personal doctor if he or she is among these professionals.

For non-emergency treatment, the medical benefit is limited to $2,500, and injured people can visit any medical provider, except a massage therapist or for acupuncture. If follow-up care is needed, a referral is required from a physician, osteopath, chiropractor or dentist.

Here is an overview of the PIP coverage changes with HB 119 with more details.

She scrolled down the phone’s screen display to bring up the optional additional coverage for personal property which would cost her $184 a year. Here’s what she did not understand: Why do I get $92,000 worth of coverage included in my annual premium at no additional charge, but if I pay $184 a year, I still have $92,000 worth of coverage? I explained that what she’s paying extra for has to do with how she gets PAID BACK if her personal belongings are damaged or stolen. If she wants to get paid for the depreciated cost of her stuff, then that’s what she gets for no additional charge. For $184, she’ll receive much more back if she ever has to file a claim.  Ah, she said, that’s worth it! And, she’s right.

Choosing replacement cost coverage for your stuff typically adds about 10 percent of your annual premium. I explained to this new homeowner that if the total cost to replace all her belongings was $92,000, then she’ll get $92,000 with full replacement cost coverage, minus the deductible amount. But, if she decided to go with actual cash value coverage and forgo paying for the extra protection, she might get somewhere around $55,000 – $65,000 back because actual cash value pays the depreciated amount; in other words, it pays the used value, not the new value.

In most states, insurers have a “hold back” for replacement cost coverage. They pay the depreciated amount upfront for a damaged or stolen item, then pay the rest when it is replaced and the insured turns in a receipt. It doesn’t work that way here.  Florida statute on replacement cost coverage on personal property obligates insurers to pay full replacement cost without reserving any money, so you get paid whether you replace the item or not. While that may seem reasonable on the surface, in reality it has a way of driving up the costs of insurance because it is contrary to the basic premise of a property insurance policy – which is about indemnity to make a person “whole” again. You can also read more about it here.

Sometimes, tornadoes pop up with little warning and strike as you sleep. Your TV, radio or cell phone would also be snoozing. That’s when a weather radio can be a lifesaver. It will definitely scare you awake and get you moving. You just have to know where you’ll go in advance because when a weather alert sounds, there is no time to spare.

Some Florida cities have outdoor tornado sirens to blast a high-decibel warning when a tornado is a direct threat to the community, but most do not have them. County emergency management offices and news media outlets also offer free email and text message alerts for weather-related warnings. But for a 24/7 alert system, a weather receiver provides day or night warnings, making it as essential to safety as a home smoke detector. The National Weather Service has a network of radio stations for weather hazards, and weather radios can be purchased as little as $25.

Florida has an annual average number of tornadoes equal to “Tornado Alley” states. Most of Florida’s tornadoes are less powerful than those in the central states, and we have a tendency to associate them with those almost daily summer thunderstorms. However, Florida has experienced spring tornados, with the deadliest tornado outbreak recorded in late February 1998, striking Central Florida around Altamonte Springs and Winter Garden. Another deadly February tornado hit on Ground Hog Day is 2007 in Sumter and Lake counties. Both of these tornadoes occurred in the late evening and early morning hours as people slept, and that timing resulted in numerous fatalities.

The safest place from a tornado is usually an interior room without windows, such as a bathroom or closet. The more walls between you and the exterior of the building, the safer you will be. Take safety a step farther by creating a safe room or consider tips to minimize tornado risk for existing and new construction from the Insurance Institute for Business & Home Safety.