Consumer Insurance Blog

In the recent "200 year event" flooding in Rhode Island, hundreds if not thousands of cars were submerged in flood waters. Can those cars be salvaged? Probably not, according to experts. The National Insurance Crime Bureau (NICB) defines a flooded vehicle as one that has been completely or partially submerged in water to the extent that its body, engine, transmission or other mechanical component parts have been damaged.

According to Ronny Pucino, a body shop owner in Rhode Island, there are three main elements in a car that are affected by flooding: the upholstery, the engine and the electronics. The extent of any damage depends largely on the level of water that the car experienced. Cars that have had wheel-top level damage may be able to be salvaged if the owner acted quickly to address the damage. But when water reaches as high as the dashboard, it is more likely that the engine and the electronics have been compromised and the car will be unsalvageable.

Being alert for flood-damaged cars should be of concern to all used car buyers, regardless of geography. Often, damaged cars are professionally refurbished and shipped to other parts of the country to be sold. Experts say that flood-damaged cars end up going to places where consumers won't be likely to be on alert. Even when cars "clean up nice," they may well have electrical or engine damage.

Edmunds.com offers some good tips on how to avoid buying a flood damaged car. They present 6 tell-tale tips, which we've summarized, but click on the article for more detail.

1. Get a vehicle history report.
2. Be alert to unusual odors.
3. Look for discolored carpeting.
4. Examine the exterior for water buildup.
5. Inspect the undercarriage.
6. Be suspicious of dirt buildup in unusual areas.

CARFAX offers more excellent tips for detecting and avoiding flood-damaged cars. They also offer vehicle history reports for a fee, which could be a worthwhile investment if you find a car you're thinking of purchasing.

One other consumer service is the NICB's VINcheck, a free service provided to the public to assist in determining if a vehicle has been reported as stolen, but not recovered, or has been reported as a salvage vehicle by cooperating NICB members. You must have the Vehicle Identification Number (VIN) to perform a search, and a maximum of five VINCheck searches can be conducted within a 24 hour period.

Shopping for health insurance coverage now that health reform has passed? Buyer beware of health insurance scams. That's the message from the National Association of Insurance Commissioners (NAIC), which is alerting consumers that scammers and shady operators have been surfacing since the passage of the Patient Protection and Affordable Care Act of 2009 (PPACA). Some insurance regulators on the state level are reporting that they are receiving complaints about scam artists going door-to-door or setting up toll-free phone lines to sell bogus “ObamaCare” insurance policies.

Here are some NAIC red flags to alert you to potential fraud:

• Time-limited offers or policies with limited enrollment periods. Reputable health insurance concerns will not ask you to make a quick decision!
• A claim that the coverage is required by law. There are no coverage requirements until 2014.
• The salesperson doesn’t explain the coverages included in the policy or does not provide a full list of the coverages.
• The salesperson claims the coverage will be "grandfathered" or exempted from changes required by the health care reform law. The only policies that would be "grandfathered" are those which were in already in force before the law was signed.

Your state insurance authority is your most important resource to check insurance company and insurance agency licensing information. If you have any suspicious sales calls - either by phone or in person - trust your instincts and take the time to check things out.

If you suspect fraud or have a complaint, NAIC offers a resource to file a report.

As social networking becomes more and more ingrained in people's lives, many incautious, naive, or new users may be inadvertently heightening their risk of becoming a crime victim.

A site called PleaseRobMe.com graphically illustrates this point by highlighting recent tweets in which Twitter users are telling followers where they can be found. The site is simply aggregating public information that is available to anyone - you, me ... and crooks. As the site founder notes,

"The danger is publicly telling people where you are. This is because it leaves one place you're definitely not... home. So here we are; on one end we're leaving lights on when we're going on a holiday, and on the other we're telling everybody on the internet we're not home."

Last June, we posted Careful what you Tweet - crooks could be using social networks, too, about the highly publicized case of an active social networker who Twittered about his trip only to return home to find that his home had been burglarized while he was away. While the dangers of the Internet can sometimes be overly dramatized in the media, raising awareness of how social media tools are used is a worthy goal. It's a new era of heightened transparency and we all need to learn to step with care.

Technology security expert Brian Krebs asks if you'd have spotted this skimming fraud device when you went to use your ATM? ATM skimmers are card-reading devices that cover the real card slot, and are usually installed in conjunction with a camera to record the PIN number. Skimmers can be affixed at bank ATMs, freestanding ATMs, ATM-enabled gas station pumps, and anyplace else that an ATM might be found.

ATM skimming devices are getting more sophisticated - they've even been found in high-traffic bank lobbies. But experts say that by being alert and cautious, you can minimize your risk of being a scam victims. To help raise your awareness of what to look for, we've gathered some examples with pictures and visuals:

• Credit Card Skimming: How thieves can steal your card info without you knowing it
• Example from the University of Texas Police Department
• How to avoid ATM skimming
• Attack of the card skimmers
• This 6-minute video from the BBC's The Real Hustle demonstrates gives a fascinating overview of how ATM skimmers work:

Tips to avoid ATM skimmers
We've gleaned these "best practice" tips from some of the articles, linked above:

• Use well lit, well-trafficked ATMS with security cameras; go inside banks; be particularly careful at freestanding ATMs
• When using an ATM, check for anything unusual and be alert for any devices that may be affixed. Look for anything that protrudes from or seems affixed to the machine, any color differences, any unusual stickers. Look for nearby mirrors, pamphlet holders, speakers, or devices that could house a camera.
• Always cover the keypad with your hand to shield from any cameras that may be trying to record your PIN
• Don't let anyone "help you" at an ATM
• Check your bank account regularly to ensure funds have not been taken
• If you spot anything suspicious at an ATM, alert the bank or the police right away.

There's a group of thieves who are scheming about how to get your personal financial data this tax season and make no mistake about it - they're good at what they do. Consumer Report's Money Blog offers this advice: as you plan for tax season: Don't become a tax-time phishing victim. No matter how authentic an e-mail from the Internal Revenue Service may look, the IRS doesn't initiate taxpayer communications through email.

Know what you're up against - educate yourself about phishing
According to Wikipedia, phishing is:

"...the criminally fraudulent process of attempting to acquire sensitive information such as usernames, passwords and credit card details by masquerading as a trustworthy entity in an electronic communication. Communications purporting to be from popular social web sites, auction sites, online payment processors or IT administrators are commonly used to lure the unsuspecting public. Phishing is typically carried out by e-mail or instant messaging,[1] and it often directs users to enter details at a fake website whose look and feel are almost identical to the legitimate one. Even when using server authentication, it may require tremendous skill to detect that the website is fake."

• Be suspicious of any email with urgent requests for personal financial information
• Don't use the links in an email, instant message, or chat to get to any web page if you suspect the message might not be authentic - call the company on the telephone, or log onto the website directly by typing in the Web adress in your browser
• Avoid filling out forms in email messages that ask for personal financial information - you should only communicate information such as credit card numbers or account information via a secure website or the telephone
• Always ensure that you're using a secure website when submitting credit card or other sensitive information via your Web browser
• Consider installing a Web browser tool bar to help protect you from known fraudulent websites
• Regularly log into your online accounts to ensure that all transactions are legitimate
• Ensure that your browser is up to date and security patches applied
• Always report "phishing" or “spoofed” e-mails to the following groups: forward the email to reportphishing@antiphishing.org; forward the email to the Federal Trade Commission at spam@uce.gov; when forwarding spoofed messages, always include the entire original email with its original header information intact

Millions of popular Toyotas are being recalled to fix a sudden acceleration problem. While the scope of this recall is huge, the problem is not necessarily limited to Toyotas. According to Consumer Reports, in an analysis of National Highways Safety Institute complaints for sudden acceleration by auto make through August 2009, Toyotas represented only about 41% of the overall complaints. Obviously, these numbers will change, but the point is that it's a safety issue and it could happen for any driver. Would you know what to do? Consumer Reports also offers a useful video about how to safely stop your car if it accelerates suddenly:

For additional information, the Los Angeles Times offers a good article with more information on the Toyota Recall Q&A and what to do if you car suddenly accelerates.

The Insurance Institute for Highway Safety (IIHS) has issued new ratings for children's auto booster seats. They've examined 60 models covering almost all models sold in the U.S. right now, and they've issue 9 "best bet" recommendations and 4 "good bet" recommendations. In addition, they've indicated 11 products which aren't aren't recommended due to poor fit.

IIHS states that more than 1,000 children 12 and younger in passenger vehicles die in crashes every year, and more than 100,000 are injured. Parents can reduce the risk to their kids by properly securing them in the back seat of their vehicle.

"Parents can't tell a good booster from a bad one just by comparing design features and price," says Anne McCartt, Institute senior vice president for research. "What really matters is if the booster you're considering correctly positions the safety belt on your 4-8 year-old in your vehicle. Our ratings make it easier to pick a safer booster for kids who have outgrown child restraints."

• See the full ratings list with model numbers and photos of seats
• Map of child restraint and booster seat laws by state
• Also see Keeping Children Safe in Crashes - a comprehensive guide for parents, which includes videos and photo examples.

In the post holiday season, we're all looking for ways to tighten our belts to save money in the new year - particularly since the economy continues to be sluggish, with no end in sight. But when making resolutions for the year ahead, the Insurance Information Institute (III) reminds us not to be penny wise and pound foolish by cutting insurance costs in a way that could cause problems later. III advises consumers to avoid the 5 Biggest Insurance Mistakes:

• Insuring a home for its real estate value rather than for the cost of rebuilding
• Selecting an insurance company by price alone
• Dropping flood insurance
• Only purchasing the legally required amount of liability for your car
• Neglecting to buy renters insurance

Other common mistakes that we see, which can cost you money:

• Forgetting to keep beneficiaries updated
• Not understanding what a policy does and doesn't cover
• Buying too much or too little coverage
• Forgetting to update coverage to reflect major life changes, such as birth, marriage, new homes
• Not verifying agent or insurer licenses
• Not taking advantage of potential discounts

Planning to get or give a flat screen TV, a new laptop, or a smart phone this holiday season? If so, you aren't alone. For the first time in more than 25 years, electronics are virtually tied with toys as the top Christmas gift item, according to holiday shopping polls conducted by America's Research Group. CEO Britt Beemer says, "Electronics sales, especially flat-panel TV sets, are flying out the door this Christmas season."

The Insurance Information Institute offers good advice for protecting your expensive electronics. Among some of their suggestions and ours:

• Contact your insurance agent to find out if your current policy will cover the new equipment or if you need additional coverage
• Learn what your homeowners or renters policy does and doesn't cover and what your dedutciblesare
• Learn what your credit cards and product warranties will and won't cover. Be sure to fill out any warranties
• Keep a copy of your purchase receipt
• Add the new item to your home inventory
• Read the product manuals to learn how to properly set up, maintain, and clean your new electronic goodies
• Invest in good surge protectors but even those won't protect your equipment from lightning. The best protection is to unplug expensive equipment during electrical storms

See more in our post from last year: Make sure your expensive gifts are protected - insure those valuables!

If you have been putting off winterizing your home, you may have woken to a little seasonal reminder this morning. Looking out the window this mid-October day, it is unusual to see snow falling here in central Massachusetts - as it is in other parts of the Eastern seaboard. If you want a sneak peak of what the season is likely to hold in store, check out AccuWeather.comcom's Chief Meteorologist and Long Range Forecaster Joe Bastardi's winter weather forecast for 2009-2010.

In this post, we've gathered up a variety of links and resources to help you in planning for winterizing your home.

Now’s The Time To Winterize Your Home
Before Winter Storms and Extreme Cold - tips from FEMA for preparing your home and your car for severe weather
How to Winterize Your Car
Homewizard - free service to help you to save energy costs, improve safety, and extend the useful lives of your home and appliances. You can sign up for monthly email reminders of various household maintenance tasks that you should be scheduling, or see the maintenance library.

Energy Money Saving Tips
20 Free Ways to Save Energy
Cheap Ways to Stay Warm this Winter
How to weatherstrip your windows - (video)

Winter Emergency Kits
Emergency Car Kit
Basic Disaster Supplies
72-Hour Family Emergency Kit

Here in Massachusetts, today's local news headlines tell us that swine flu has infected 20,000 in the state since the virus first surfaced five months ago, with 11 associated deaths. Public health officials in Massachusetts say they are expecting the first doses of swine flu vaccine to arrive within about two weeks, and will be distributed to people at highest risk from the virus.

According to the Centers for Disease Control & Prevention (CDC), in any given year, about 5% to 20% of U.S. residents will get seasonal influenza (or "flu") each year. This year, in addition to the seasonal flu, the H1N1 flu virus (also called the Swine flu) is expected to have a second wave over the next few months. The CDC discusses those who are at risk:

In seasonal flu, certain people are at "high risk" of serious complications. This includes people 65 years and older, children younger than five years old, pregnant women, and people of any age with certain chronic medical conditions. About 70% of people who have been hospitalized with this 2009 H1N1 virus have had one or more medical conditions previously recognized as placing people at "high risk" of serious seasonal flu-related complications. This includes pregnancy, diabetes, heart disease, asthma and kidney disease.

One thing that appears to be different from seasonal influenza is that adults older than 64 years do not yet appear to be at increased risk of 2009 H1N1-related complications thus far.

For prevention, the CDC suggests:

• Stay informed
• Cough or sneeze into tissues, and then discard tissues
• Wash your hands frequently
• Avoid touching your eyes, nose or mouth
• Stay home if you are sick

Flu.gov is a good source of information where you can get updated information. It includes information for individuals & families as well as for businesses, community planners & professionals.

H1N1 Flu information from the CDC. The CDC also posts flu updates of U.S. influenza activity based on key indicators, such as the number of doctor visits and hospitalization rates.

The National Association of Insurance Commissioners (NAIC) encourages consumers to include a flu response plan in their disaster preparations this year and offers tips for getting your insurance matters in hand.

Pop quiz: what car do you think was the most stolen car in 2008? The National Insurance Crime Bureau (NICB) just released its list of the top 10 stolen vehicles for 2008. You can also find out the top 10 most stolen vehicles by state. If you think having an older car is any protection, think again - older models are popular for their parts. Plus, newer models are getting harder to steal since they are more likely to be equipped with anti-theft devices.

The good news is that auto theft continues on its 5-year downward trend, with 2008 being the lowest annual total in over 20 years.

To avoid theft, NICB recommends four layers of protection:

Common Sense: Lock your car and take your keys.

Warning Device: Having and using a visible or audible warning device.

Immobilizing Device: "Kill" switches, fuel cut-offs and smart keys are among the devices which are extremely effective.

Tracking Device: A tracking device that emits a signal to the police or to a monitoring station when the vehicle is stolen is very effective in helping authorities recover stolen vehicles.

View or download a brochure with more tips on how to reduce your chances of auto theft.

Each August since 1998, as millions of freshmen prepare to embark on their college years, Beloit College has released the Beloit College Mindset List, which provides a look at the cultural environment that has shaped the lives of those students. For those of us with a few more years under out belts, the list can be startling. For the Class of 2013, "... Carter and Reagan are as distant to them as Truman and Eisenhower were to their parents. Tattoos, once thought "lower class," are, to them, quite chic. Everybody knows the news before the evening news comes on."

For this year's freshmen, Martha Graham, Pan American Airways, Michael Landon, Dr. Seuss, Miles Davis, and Freddie Mercury have always been dead. Smoking has never been glorified, books have always been available on an electronic screen, and wars have always unfolded on TV in real time. We've given you a sampling of the data points, but the entire list makes for some fun reading. You can also check back to 1998 for archived lists.

Some things never change
While the cultural zeitgeist might change, one thing never changes: Parents want to ensure that students are safe and secure while away at school. As your students head off to school, it's important take steps to ensure that they are adequately covered by insurance and make sure they understand the coverage and benefits that are available to them. If your student will be living away from home, you should ensure that they have emergency contact numbers and that they know how to report a claim if a loss or accident occurs. Some of the insurance coverage issues you need to consider include:

Health insurance - Will your student be covered under your policy or will you need to arrange coverage? Many family policies will cover full-time students but you need to check how the insurance company defines full time. Also, check your plan's benefits, coverage area, and coverage requirements. If your student is an athlete, check coverage limits - you may need to arrange for additional coverage.

Auto insurance - Will your student have a car full-time at their college? If so, they may need their own policy. If not, you may be able to save money on your policy if they are only using your car intermittently. Ask if any "good student" or "safe driver" credits are available to your student - availability may depend on the state and the insurance company.

Personal possessions - Theft is the most common crime on college campuses. If your student will live in a dorm, personal possessions may be covered under your existing homeowner's policy, but if they are living in an apartment, they may need rental insurance. Don't assume that the college or the landlord will have coverage that will encompass your child's possession in the event of fire, theft, or loss - check your homeowner's policy to learn the extent of your coverage - you may need additional insurance if your student has expensive electronic equipment.

Of course, these are just the basics. There are other issues like ID theft, credit cards, life insurance, and more. Remember, many insurance matters are state-specific and governed by state laws. Often, state insurance bureaus offer consumer alerts so check with your state's website.

Here are more resources to help you plan for the insurance needs of your college students:
College Insurance Needs - issued in 2008 from the Massachusetts Division of Insurance

Parents: Know your insurance policies before your student goes off to school - a 2009 Consumer Alert from the Kansas Insurance Department

College-Bound? Keep an Eye on Your GPA and Your Personal Possessions - insurance advice and safety tips from the Insurance Information Institute

What Your College Student Needs to Know about Identity Theft - a Consumer Alert from the National Association of Insurance Commisioners

Heading Off to College With an Empty Wallet? - tips for managing money while away at school from the Insurance Information Institute

College Athletes Often underinsured

College Health and Safety Tips

Campus Safety Tips

When times are tough, rest assured there are always scam artists around to try to make things worse. The Federal Trade Commission recently announced that it is launching a major sweep to target fraudsters and scammers who proliferate in economic downturns. Scammers thrive on people's very human vulnerabilities: fear, stress, anxiety, greed, vanity, honesty, and compassion. Where once scammers would use mail, phone, or even local solicitation, today easy to e-mail and websites allows scammers another avenue, one that can deploy pitches widely and quickly. Common schemes in this economy include get-rich-quick schemes, debt-reduction scams, job recruitment scams and work-at-home scams. Authorities warn people to beware of any jobs that require fees: "Pitches for bogus work-at-home opportunities involving medical billing, rebate processing, "mystery shopper" positions that promise to pay you for buying products anonymously for companies, and money-order processing jobs also are on the rise, say Better Business Bureau and consumer-protection officials."

Then National Consumers League has recently released its semi-annual ranking of the top telemarketing and Internet scams:

Top Scams, Jan. - June 2009
1. Fake Check Scams
2. Internet: Gen Merchandise
3. Prizes/Sweepstakes/Free Gifts
4. Phishing/Spoofing
5. Nigerian Money Offers (not prizes)
6. Business Opportunities/Franchises/Distributorship
7. Advance Fee Loans, Credit Arrangers
8. Friendship & Sweetheart Swindles
9. Internet: Auctions
10. Lotteries/Lottery Ticket Buying Clubs

Remember:

• If it sounds too good to be true, it most likely is
• Be super cautious in giving out personal information to anyone, particularly online
• Learn how to protect against phishing and other online scams designed to get your personal information or your money
• Don't send money to anyone you don't know
• Avail yourself of consumer protection tools and resources - we've compiled some below

When's the last time you got money back for insurance overpayment? If you live in the "show me" state, you might have recently had such a a windfall. Missouri's Department of Insurance has been successful in returning nearly a million dollars a month to insurance consumers as a result of mediation efforts on behalf of those who had filed complaints. Common consumer complaints included insurance companies' claims handling, as well as marketing and sales practices. Health insurance had more complaints than any other type of insurance, followed by homeowners and life.

This good news story isn't an anomaly: Insurance officials in Maryland and Connecticutt have recently announced consumer restitution for auto insurance policies after investigations revealed incorrect charges, improper claim settlements, and other problems. And in Florida, millions in restitution will be paid out to workers compensation claimants who had been victims of a fraud scheme.

What do you do if you have a complaint against an insurer or think that you have been overcharged? If you have a trusted independent agent, that's a good place to start. Independent agents are knowledgeable, licensed professionals who advocate on your behalf. They understand the terms in your policy, insurance industry standards and norms, and state insurance laws.

But if you don't have an agent, or if your complaint is with your agent, you should familiarize yourself with the consumer services that are available from your state's insurance bureau. Insurance is regulated on a state basis and each state has their own insurance bureau or division to oversee insurance laws and operations. Consumer protection is a primary mission, and one of the most important functions of any state bureau is to ensure the solvency of any insurers conducting business in the state. State oversight bodies also supervise insurers to ensure that consumers are treated fairly.

Because there are 50 different oversight bodies, consumer services can vary quite a bit from one state to the next. Some common services might include license verification for agents and insurance companies; the ability to find out if your employer is paying workers comp; hotlines for filing complaints, reporting fraud or requesting an investigation; access to mediation services or an insurance ombudsman; and online consumer information about state laws and your rights as a consumer. The National Association of Insurance Commissioners (NAIC) offers a clickable map with links to state insurance departments. NAIC also offers a service where you can search for insurance company complaint and financial information, as well as extensive consumer resources to learn more about insurance.

Especially in this tough economy, The National Association of Insurance Commissioners (NAIC) is warning consumers to keep their guard up to avoid becoming victims of insurance fraud. When it comes to insurance pricing, it's best to adhere to the old adage of "if it seems to good to be true, it probably is." According to NAIC:

"Fake insurance companies and dishonest insurance agents can defraud consumers by collecting premiums for bogus policies with no intention or ability to pay claims. Phony home, health, life and auto policies typically are offered at rates that are significantly lower than the traditional market price in order to woo consumers who are trying to save money."

They suggest that if you are unsure of the company or agent that you are dealing with, take these three steps:

• STOP before signing any paperwork or writing a check
• CALL your state insurance department, which is easily reached by phone
• CONFIRM that the company or agent offering insurance is legitimate and licensed in the state.

It can also be helpful to keep informed about common fraud schemes. The Coalition for Insurance Fraud posts consumer insurance scam alerts and they feature a good list of insurance fraud links for consumers. The FBI also posts updates for common fraud schemes. Be sure to keep an eye out for your senior relatives and friends too - senior citizens are prime targets for various types of fraud, including insurance fraud.

This post was written by Pat Long of Eldredge & Lumpkin Insurance Agency

There’s been more than one occasion when a customer called or visited to report a claim, and I have had to tell them they are not covered. Talk about a very uncomfortable conversation!

Insurance is an intangible; you don’t need it until you need it. You pay premiums, sometimes high premiums. And often you never use the coverage. So, when you have a claim under homeowner’s insurance, auto, liability, or worker’s compensation, you want it covered, right? Then why are some claims not covered by insurance?

Policies as Contracts
An insurance policy is a legal contract between you, the insured, and the insurance company. You sign the application and pay the premium, and the insurance company sends you a policy. All policies define who the insured is, and they tell what the company is willing to cover. But sometimes coverage and claim do not match.

Exclusions
These are specifically noted perils that the company will not cover. For example, some homeowner’s policies exclude coverage of flood damage. Many people in Louisiana did not understand this when Hurricane Katrina hit. You can purchase a separate flood policy, but flood damage is not covered by the basic homeowner’s policy.

Conditions
These are general rules or procedures that the insurer and insured agree to follow, under the contract. When you sign the application and pay the premium, you agree to these conditions. For example, did you know you have duties after a loss? In order to claim a loss, you need to promptly notify the insurance company or agent; some policies have specific notification deadlines. If you have theft coverage, you’re required to notify the police. If a tree falls on your home and opens a hole in the roof, you must protect the property from further damage and make reasonable and necessary repairs to protect the property. Most policies require you to cooperate with investigations and settlements. If you don’t meet these conditions, the insurance company can deny the claim.

So what’s the best way to make sure you are properly covered? Simply think about what is important to you:

• Do you worry about cost of health care when you get older?
• Are you concerned about your 16-year-old son or daughter driving?
• Have you inherited an heirloom and wish to pass it on to your family?
• Do you have an older home with systems that no longer meet state requirements?
• As a business person, have you just signed a contract to build three more homes?
• Do you have an office in your home?

Ask your insurance agent how best to cover what is important to you. Taking a proactive approach to insurance may avoid the discomfort of the "you’re not covered" discussion.

Millions of people are sharing real time activities with friends, family and colleagues through online social networks like Twitter and Facebook. If you are one among those millions, be aware that there may be some other parties that find your tweets fascinating, too ... such as your local burglar. Recently, an active social networker Twittered about his trip only to find his home had been burglarized while he was away. While this could be coincidence, the victim thinks that it might be related to his public postings - and the news media seems to think so too - see a newsclip about the robbery.

There are likely to be many more reports of this incident since it is being heavily tweeted and it seems to have piqued the "mainstream" media's interest, too. Although the media likes to hype stories about crimes related to online activity, these types of opportunistic crimes have been going on long before social networks existed. Wiley burglars are often known to target funeral goers based on obituaries printed in newspapers or after seeing families pack the car for a trip. With basic precautions, social networking may be no more unsafe than other "real world" activities. In fact, increasingly, social networks are being harnessed by citizens and police departments to help solve crimes.

So while this incident shouldn't be blow out of proportion, it should serve as a cautionary tale of the potential downside of real-time transparency in social networks - particularly if you've attracted a following of people that you don't know very well - or at all. Take sensible precautions and think twice about what and when you share - and with whom.

It's also a wise to take home security precautions when you plan to be away on vacation - there are definite steps you can take to reduce the likelihood of your being victimized. And while nothing can take away the feeling of violation that happens after a burglary, being insured properly can help you to financially recover from a loss. If you have work equipment, antiques, or valuable collections, talk to your insurance agent about whether you need an endorsement or a rider to expand the coverage limits of your existing policy.

Most people know the basic safety precautions to take when using an ATM, such as looking for safe, well lit locations and being careful to cover the keyboard when entering a PIN - but far fewer people are aware of the increasing threat posed by ATM and credit card skimming. With card skimming, thieves attach a camouflaged card reader over a legitimate card reader, such as the one at your ATM, gas pump, or store checkout. One might think it would be easy to recognize a phony card reader - but like thousands of victims worldwide, one might be wrong. The ruses are getting more and more sophisticated and harder to detect. Some devices are placed over a keypad to record your transactions and gather your data for later use. Others are micro-hand held devices that thieves can use to quickly scan a card.

NetworkWorld offers an excellent article on ATM and credit card skimming that describes how the con works and offers an illustrated guide with examples of what to look for when using a credit or debit card. This is definitely an article worth reading and passing on.

To protect yourself from being a victim, make sure that you check out credit card readers before using them to look for any unusual signs - if you spot anything strange or get any error messages, report the problem to the bank or the responsible outlet immediately. Don't let anyone help you at an ATM outlet - this "helpfulness" is a common ploy for skimmers. Also, sign up for the online services associated with your account and check your account activity and statements every few days.

by Alan Long of Eldredge & Lumpkin

The difficult economy is not just visible in the headlines but a reality that most of us face daily. Over the last several months we have seen many customers lose their jobs, retirees watch their income from stocks and pensions disappear and contractors lose jobs. These have had a very decided trickle down effect and, as a result, many of our clients are having difficulty keeping current on their premium payments.

Insurance assumes an unwanted connotation in times like these. It is an intangible that can prompt the reaction, why put my dwindling assets towards something that may not ever be used? Unfortunately, driving a car requires insurance, carrying a mortgage requires insurance and success in bidding for jobs requires insurance. So there is a need to find a palatable way to manage these payments. This is where your insurance agent will help.

A policy review with your agency's customer service representative (CSR) will help determine if you have the most cost-appropriate coverage to fit your individual needs. The key is finding ways to make it work for you.

When you speak with your CSR before a cancellation occurs, you can actually save money and grief. Here’s why:

• Each time you receive an insurance cancellation notice (even if you get your payment in before it is actually canceled) the company charges a late fee. These range from $20-$35.
• If your policy is canceled because of non-payment – even for the first time - most companies will require a replacement policy to be paid in full up front.
• If your policy is canceled and has to be rewritten, you will lose all grandfathered benefits; these may include preferred credits, loyalty credits and pre-insurance exemption status.
• Losing a policy can be costly to the Cape Cod homeowner. We have seen companies decline to renew homeowner policies that have received too many cancellation notices.
• Even though Massachusetts does not allow credit ratings to be used as a factor in setting insurance rates, the number of issued cancellations can affect the rate you receive.
• Cancellations will affect your credit rating and have a ripple effect on your general credit standing.

Find easier ways to pay your bills. Getting organized can take away some of the stress and avoid late fees. Here are some suggestions:

• Keep a list of your policies and their effective dates. Renewed policies require at least a down payment by the effective date.
• Get a list of your installment dates. Most companies charge a fee from $4-$8 per installment. If you pay in 10 installments, you could be paying an extra $80 per year in installment payments for your insurance.
• Pay the bill at a time of year when payment is easier to manage.
• Pay bills online. Using the mail could result in late payments.Companies will consider your premium paid on the date they receive it at their place of business; afterward it is considered “late”.

Be sure to communicate with your agent and company. That’s the best way to save money and time on your insurance premium payments.

The bad news is that the number of identity fraud victims in 2008 increased 22%, encompassing 9.9 million U.S. adults. The good news is that because consumers and businesses are detecting and resolving fraud more quickly, consumer costs dropped from $718 to $496 per incident in 2008, a 31% decrease. The 2009 Identity Fraud Survey Report, which was conducted by Javelin Strategy & Research, also found that most compromised data is due to low-tech methods, such as lost or stolen wallets, checkbooks, and credit and debit cards. One other notable trend was that women were 26% more likely to be victims than men in 2008, and this is attributed to women making more in-person purchases. Also noteworthy is that 14% of the female victims experienced a lag time of one year or more before their data was compromised.

Experts suggest the following six steps to prevent identity fraud:

1.Be Vigilant - Monitor your accounts regularly online at bank and credit card websites, ATMs or by phone and set up alerts that can be sent both online and to a mobile device.

2.Keep Personal Data Private — Do not provide Social Security Numbers, passwords, PINs or account numbers by phone or online unless you initiated the interaction to a verified and trusted location.

3.Online is Safer Than Offline - Paperless transactions that are conducted in a secure online environment (keep browsers, anti-virus and anti-spyware software updated) reduce the potential for fraud. Instead of paper invoices, statements and checks, replace them with electronic versions.

4.Be Aware of Those Around You — Be alert to those around you when giving out financial information over the phone or by text. Note that more than 10 percent of victims knew their fraud perpetrator.

5.Ensure Credit and Debit Cards are Protected — Obtain credit and debit cards from financial institutions that provide zero liability if a card is ever lost, stolen or used without authorization.

6.Learn About Identity Protection Services — At a minimum, consumers should review their credit report no less than once per year, either for free at AnnualCreditReport.com or through many financial institutions’ websites.

Identity Theft Insurance
The National Association of Insurance Commissioners has a Consumer Alert about Identity Theft Insurance, noting that while policies are available, they do not protect you from becoming a victim of identity theft and do not cover direct monetary losses incurred as result of identity theft. Rather, they insure you for any costs that might be incurred in reclaiming your identity, such as hiring an attorney, taking time from work, and any administrative costs such as the cost of phone calls or postage. Before purchasing, NAIC recommends checking with your current Homeowners policy to see if it already includes such coverage. If not, NAIC offers suggestions for things to consider before you purchase.

For more resources on identity fraud, see the Federal Trade Commission's Identity Theft Site.

Every year, the National Association of Insurance Commissioners (NAIC) collects and analyzes consumer complaints about insurance companies through a centralized electronic Complaint Database System. This week, they released a report on top consumer complaints with insurers for 2008. Almost 20,000 complaints were logged, with the top three reasons for those complaints being delays, denials of claims and unsatisfactory settlement offers. More than 73% of the complaints dealt with Accident & Health or Auto coverage.

Consumers can view 3-year trend reports of most common complaints by reason for complaint, by type of insurance or by dispositions.

NAIC also offers resources that allow you to file a complaint with your state insurance authority or to search for complaint information about specific insurers in your state.

Of course, those of us who are independent agents would suggest that one of the best strategies to ensure satisfaction with your insurance company's quality and service is to work with an independent agent to find the best coverage options for your unique needs. All too often, consumers use price as the primary litmus test in picking an insurance company, but insurer selection should be more about finding the right combination of product, service, and price. There can be a great difference in service from one insurer to another and that can make all the difference in the world when you experience a loss and need help.

Planning any spring or summer travel? One silver lining to the bad economy is that travel prices are dropping and there are some good deals to be found...but you might want to protect your investment with travel insurance. The Insurance Information Institute's Travel Insurance Quiz offers a good overview of what travel insurance does and doesn't cover:

A new Not-in-Traffic Surveillance study sheds light on the numbers and types of injuries that occur as a result of non-crash related accidents, statistics that hadn't previously been tracked. Annually, auto-related non-traffic accidents are estimated to cause 1,747 deaths and and 841,000 injuries, according to the National Highway Traffic Safety Administration, which conducted the study.

Here are some of the study findings, as reported by the Consumer Reports Car Blog:

• More than half of the non-crash fatalities in the study occurred when a vehicle fell on a person who was under it or from unintentional carbon monoxide poisoning
• About 20 percent of the non-crash injuries involved slamming fingers or other extremities in a car door or trunk, or resulted from overexertion when loading or unloading a vehicle or pushing a disabled vehicle
• Across all types of tragedies, about one-third of those injured and about half of those killed were not inside the vehicle at the time
• Other common hazards included vehicle fires, anti-freeze and battery-acid burns, and falling from a vehicle
• A significant 221 deaths, and 14,000 injuries resulted from pedestrians being backed over by a vehicle

Backovers killed nearly 100 children and injured 2000 in 2007
About twice a week, kids are killed by being run over by a vehicle that is being backed up. Tragically enough, this often occurs in the home driveway with a parent or a relative at the wheel of the car. In 2007, nearly 100 children were killed and 2,000 injured when they were backed over by cars. In fact, one of the primary reasons for the new mandate to track non-traffic related injuries and deaths stems from a 2008 law requiring the tracking of data for incidents in which children are backed over, strangled by power windows or killed from being left in hot vehicles

A child safety advocacy organization called Kids and Cars says such accidents are predictable and preventable. The following video highlights the issue and shows Consumer Report studies on blind zones, which vary by vehicle, ranging from about 12 feet for a sedan to as much as 30 feet for a pickup-truck.

For additional information on back-up blind zones, see The danger of blind zones by Consumer Reports.

Doctors and dentists do it. Judges do it. Even little old ladies do it. Welcome to the 2008 Insurance Fraud Hall of Shame, a dirty dozen of "America’s most brazen, vicious or plain klutzy insurance crooks."

Insurance fraud is a crime that is estimated at as much as $80 billion a year - some would put the figure higher. Unfortunately, honest people pick up the slack for cheaters and criminals in the form of higher insurance costs. While few would argue that organized criminal scams to bilk insurers - often also harming other individuals in the process - constitute fraud, the public has mixed opinions about so-called "soft fraud." Soft fraud might be intentionally padding the value of losses in a homeowner's claim or underestimating the number of employees on payroll for workers comp. Various surveys on the public attitude to insurance fraud taken over the years have shown that many people - possibly as many as one in three - think that type of soft fraud is OK. In a recent survey in Great Britain, 4.7 million people indicated that insurance fraud is more acceptable now because of the challenging economy. But this type of fraud adds very real dollars to the amount we all pay in premiums for our insurance coverage.

Don't be an insurance fraud victim
Besides paying higher premiums, fraud can hurt individuals in many ways. Staged car crashes injure and kill innocent victims. Employers who fail to carry workers comp mean jeopardizes benefits for employees who are injured at work. Identity fraud hurts innocent people's credit and their reputations.

Here are some steps you can take to avoid being an insurance fraud victim:

• Know who you are dealing with. Use only licensed agents and licensed insurers. Contact your state insurance bureau if in doubt.
• Shop around. Ask your agent to get more than one quote.
• Don't pay premiums in cash. Get a receipt for payments.
• Get a written copy of your insurance policy and review it. Yes, even the fine print.
• Don't sign a blank form.
• Don't accept "on the spot" cash for an accident.
• Be leery of any "helpful" strangers who surface at the scene of an auto crash who offer advice on body shops, doctors, or lawyers.
• Get detailed bills for any repairs or medical services.
• Keep that old adage in mind: "If it sounds too good to be true, it probably is."
• Be guarded about giving out your Social Security number - don't give it out to anyone you don't know.
• Check with your state insurance bureau to be sure your employer has workers compensation insurance that would protect you in the event of an on-the-job injury.
• If you don't understand something or question the validity of something, don't be afraid to check with your state's insurance bureau.
• Report fraud when you see it.

Helpful resources:
State insurance department links
State fraud bureau links

Here's some good news about a type of insurance that you don't have to buy: the FDIC has increased its protection for your bank and credit union accounts. The basic insurance limit was raised from $100,000 to $250,000 for a single account; joint accounts may be eligible for up to $500,000 coverage.** The increased coverage is a temporary measure that will extend through the end of 2009.

With news of two banks having failed last week, the first casualties of the new year, many people are understandably concerned about whether money in their bank account would be safe if their bank should fail. If your money is in a bank that is insured by FDIC, it will be insured up to $250,000.

The FDIC - or the Federal Deposit Insurance Corporation - is an independent agency of the federal government that was created in 1933 to protect consumers after thousands of banks failed during the depression. Since the start of FDIC insurance, no depositor has lost insured funds as a result of a bank failure. The key point here is that your bank must be insured by the FDIC.

You can learn more at the FDIC Frequently asked questions page, where there is information on how to find out if your bank is insured by FDIC, what types of accounts are covered, and what the coverage limits are.

**Clarification per FDIC site:
"Joint Accounts (two or more persons): $250,000 per co-owner"

As you gather your year-end documents for tax preparation, there is one important financial item that should be included: checking your insurance policies and other important financial records and plans to ensure that your designated beneficiaries are up to date. It's a good idea to review beneficiaries annually because life events may have changed your situation. Parents die, marriages dissolve, children are born, and any of these events may warrant a change in beneficiaries. Failing to periodically update your beneficiaries could have unintended consequences – you might not want a former spouse rather than your current spouse to be the beneficiary of your assets but that could happen!

Here are some best practices when naming beneficiaries:
Always name a beneficiary. People who have wills often think they have their beneficiaries covered, but this assumption can be wrong. Generally, beneficiaries named in insurance policies and retirement plans will take precedence over any instructions you leave in your will. Make sure you have specified individuals as beneficiaries in your policies and plans. People often name their "estate" as the beneficiary but this can lead to benefits being tied up in probate court. Failure to name a beneficiary may also mean that you miss out on certain plan or policy advantages. For example, if you name an estate as beneficiary, an IRA will be liquidated on your death and taxes will be due. If your spouse is named as beneficiary, he or she could potentially continue to enjoy tax-free growth.

Be specific. Avoid ambiguous language. Simply stating “my husband” or “my niece” may not be sufficient, particularly in instances of multiple marriages. It's a good idea to use full names of intended beneficiaries to avoid potential confusion or disputes.

Name a secondary beneficiary. Make sure that it will be you and not your state law that determines who will be the recipient of your policy benefits. If your primary beneficiary should pass away and you have not named a secondary or contingent beneficiary, your insurance policy or retirement plan will be distributed according to your will. If you have no will, the decision will default to state law.

Keep important records in a secure place and tell a trusted family member what and where they are. Many people die suddenly without leaving instructions as to where a will, insurance papers and other important records are kept. All too often, benefits go unclaimed because family members don't know about potential benefits or can't find important account information. Bank accounts and insurance policies are overlooked. Make sure someone in your family is familiar with your most important records and where they are kept.

Further reading:
Are your beneficiaries up to date?
Update your beneficiaries
Life Insurance: Reviewing Your Policy Important to Securing Your Family's Future
Insurance Beneficiaries

With a major ice storm under our belt, many area residents are just getting power and heat back and we are facing more potential adverse weather over the weekend.

The American Insurance Association offers handy tips to homeowners following the northeast storm, which include pointers on how to start the insurance process. And if your home has been damaged or destroyed, you may want to invest two and a half minutes to watch the Insurance Information Institute's advice on how to file a homeowner's claim:

Preparing for the next storm
With some advance notice, there are things you can do to prepare for winter storm emergencies. Here are a few good resources:

The American Red Cross suggests a list of supplies to include in a home emergency kit, covering such items as water, food, first aid supplies, clothing and bedding, tools and emergency supplies, and special items.

Winter Power Outage Tips - an excellent resource on what to do before, during, and after an outage compiled by the Massachusetts Emergency Management Agency.

Don't Freeze Up (PDF) - good tips for preventing frozen pipes.

Preventing Carbon Monoxide Poisoning After an Emergency - The Centers for Disease Control inform us that every year, more than 500 people die in the U. S. from accidental CO poisoning and, sadly, here in New England, we have had carbon monoxide-related deaths after the recent storms. In Massachusetts, the law states that you must have a carbon monoxide detector on every level of your home, excluding unfinished basements, attics and crawl spaces. You may need more than one per floor because detectors must be placed within 10 feet of a bedroom door. This is good advice for homeowners whether or not your state has a law. Be sure to refresh your batteries periodically.

In these trying economic times, we've had a few people ask us what would happen if their insurer should go belly up. Because insurance laws vary state by state, there are no specific answers but we'll give you a generalized overview.

First of all, state insurance bureaus regulate insurance matters for their state. As part of that function, they require various reports to monitor the financial health and well being of insurance companies licensed in their state. But because many large insurers don't operate in just one state, or as in the recent case of AIG, in one line of business, insolvencies can and still do occur.

So what happens if you have a policy or an open claim and your insurance company gets in financial trouble? First, the state will work with the insurer to help solve the problem. And if that fails, the good news is that states operate Guaranty Funds to protect policyholders in the event of insurer insolvencies. These funds will pay claims, often giving priority to hardship cases. Some state bureaus also have a mechanism for short-term insurance coverage to allow insured parties to find alternate coverage. On the downside, however, claim payments may be delayed, settled, or capped.

There are also many excluded lines of insurance. Guaranty Funds usually cover auto and home and similiar types of insurance, but generally have exclusions. Common exclusions include life, accident and health, annuities, disability, and mortgage. Many states also draw the line at protections for high net worth insureds ($25+ million). For specifics, you would need to check with your state law.

Should worse come to worst, your local agent should be your first and best source of information. You can also learn more about the topic at the Insurance Information Institute's excellent overview of insurer insolvencies and Guaranty Funds. And you can find links to state insurance department websites on this map. Residents of New England, DC, and Virginia can find links to Guaranty Funds, which offer copies of the laws in those states.

More than 9 million Americans are victims of some type of identity fraud each year. With the implementation of new "Red Flag Rules" issued by the federal Trade Commission, consumers are slated to get more protection from identity theft. Under these regulations, banks, credit cards, and other merchants would be required to strengthen measures to detect and prevent identity theft. By enacting these regulations, much of the burden of crime prevention is shifted from the consumer to the merchant.

"In simple terms, this means each business must establish a policy for spotting danger signs -- say, if the address on a credit application doesn't match the one on the credit report for that person -- and outline steps to handle them. Steps could range from requiring further documentation to denying the application."

Implementation delayed until May 1, 2009
These regulations were slated to kick in on November 1, but the start date has recently been deferred until May 1, 2009 to allow financial institutions more time to plan for implementation of the rules and written identify theft prevention programs. While these protections will be welcome, consumers should continue to be vigilant and informed about their risk of identity theft.

Identity Theft Insurance
Check with your local insurance agent - many insurers are offering insurance policies for identity theft but it is important to understand the coverage that such policies encompass. The National Council on Insurance Commissioners (NAIC) says:

"Identity theft insurance cannot protect you from becoming a victim of identity theft and does not cover direct monetary losses incurred as result of identity theft. Instead, identity theft insurance provides coverage for the cost of reclaiming your financial identity, such as the costs of making phone calls, making copies, mailing documents, taking time off from work without pay (lost wages) and hiring an attorney."

NAIC suggests you check your current homeowners' insurance policy includes identity theft. If not, your agent may be able to add identity theft insurance to your current policy for a small fee, or help you to purchase a stand-alone policy from another insurer.

More resources:
FTC - Minimize Your Risk of Identity Theft
FTC - Tools for Victims of Identity Theft
Identity Theft Red Flag Rules