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The biggest threat to recovery after a natural disaster is the mass of people who are unprepared for it. After every single tornado, hurricane or flood, the media easily find people who have been impacted by the event, and they invariable say nearly the same thing: “I never saw it get this bad before.” Sure, seeing is believing. But even then it’s not enough. Those who’ve been through a devastating event think it can never happen to them twice. Until it does.
The Florida Legislature is again looking at ending no-fault auto insurance in Florida. Sound familiar? Tweaking no-fault (also known as personal injury protection – PIP) is a frequent topic for legislative debate.
You may recall a fix to fight no-fault fraud came in 2012. Regulators issued a report in 2015 that said the fix appeared to be working. Regardless, it seems the desire to do something about rising auto insurance rates may be driving the desire to abolish no-fault. Florida is one of 12 states with a no-fault law. Proponents say it allows those injured in a car crash to recover costs for medical treatment under their own insurance policy, without needing to determine who is at fault for the accident. Among the proponents are hospitals, which say about one-third of the people they treat for auto injuries only have no-fault coverage. Critics discount that view, saying no-fault duplicates coverage that most people already have with medical insurance.
The Wall Street Journal frequently appears fascinated by some of the goings on in Florida. The publication has often written about anomalies that seem unique (or some other not-so-favorable adjective) to the Sunshine State. We have “issues” here that just don’t seem to occur in many other places. Living here, in the midst of it all, can cause a loss of perspective. So, without any editorializing in this space, you might find this editorial on the demise of a bill to stop insurance claim abuse interesting reading. Click the link and read it through.
The challenges with assignment of benefits and water damage claims has been documented on this blog several times. Insurers have been calling attention to this problem for at least three years. The reality of allowing the abuse to continue became ever more apparent last week when Citizens Property Insurance announced its first net loss since 2005 — of $27.1 million. Assignment of benefits is the clear cause. The clear solution now that there won’t be a legislative fix? Higher insurance premiums for Citizens’ customers, particularly in South Florida. That’s where assignment of benefits became a “unique” practice, allowing lawyers and contractors to take over a homeowner’s insurance claim and inflate the costs.
Ah, the high costs of being unique.
During hurricane season, emergency preparedness professionals suggest that people have enough food and water around to last three days. Business owners need to plan for three days on their own, too. But it’s not about food and water; it’s about cash reserves.
One important coverage for a business owner to consider is business interruption insurance. It is triggered due to a slowdown or suspension of a business’s operations due to a covered peril, such as a fire or hurricane. And, it has limitations that must be recognized, with the most important being the typical waiting period of 72 hours before coverage kicks in.
Why is there a waiting period? It exists to lower the cost of insurance coverage and to encourage the business to take necessary, immediate steps to minimize business losses. There are ways to reduce or remove that waiting period, at an additional cost. However, knowing the coverage does not go into effect the moment the lights go out is the first step to planning for it. Many small businesses do not do that. After every natural disaster, they learn about it too late.
Business owners should find insurance coverage that matches their business size, that suits their particular needs, and they must remain confident in their understanding of how a commercial insurance policy works. Now is the time for small-business owners to take a hard look at their risks and make a plan for 2017.
According to the Small Business Administration, 99.7% of all businesses are small. If that sounds surprising, understand the SBA defines “small” as a business with fewer than 500 employees. About 80% of businesses are VERY small, as in under 10 employees. Thinking big is a success strategy as necessary for the sole proprietor as it is for the CEO of a giant corporation. It includes thinking about how to make it through the first 3 days after disaster strikes. With a well-conceived plan, the disaster itself may certainly ruin your day (or month), but it won’t ruin your business.
Car thieves love Honda Accords. They are also rather fond of the Honda Civic. Both models are ranked as the top two most-stolen cars in America. The fact they are also among the most popular cars has a lot to do with it, of course. The National Insurance Crime Bureau (NICB) keeps track of this data, and there’s quite a lot to keep up with since a car is stolen about every 46 seconds.