Consumer Insurance Blog

If you bought trip insurance before the recent volcanic eruptions, your travel may be covered by the policy, depending on exclusions. But if you are hoping to get travel insurance to protect you from any volcano-related disruptions in the future, you are probably out of luck - Scott McCartney of the Wall Street Journal reports that as of April 13, there is no ash coverage anymore. It's similar in principle as to why you can't call your agent to buy a flood insurance policy in the middle of a hurricane. Insurance covers unexpected events, not events that are in progress.

Now if you already had trip insurance, are you covered? That's a complicated issue because there are no standard travel insurance policies - they vary widely. Whether or not you are covered will depend on the type of coverage you bought, how much coverage you bought, what the exclusions are, and the specific practices of the company you bought it from. McCartney says:

Even if purchased before April 13, travel insurance can be of limited utility to travelers. If airlines refund tickets for canceled trips, for example, there’s no claim with insurers. If you haven’t left home, you won’t get money for hotels and accommodations under most policies. And many policies have limits on daily expenses if you are stranded away from home.

It's too soon to get an estimate of how many travelers have been displaced, but the final tally will no doubt be enormous. Insurance companies report that they are being deluged with queries and calls for help. An article in the New York Times tells us that trip insurers are looking at an event that will cost millions.

"While there can be some exclusions, companies have typically covered nonrefundable prepaid travel that can pay stranded passengers $150 to $250 a day for a maximum of $1,500."

More resources
The Insurance Information Institute offers an overview of the various types of trip insurance. A prior blog post featured a Travel Insurance Quiz. Also see CNN's article:6 Tips to avoid travel insurance fraud

Because it's the Friday of Oscar weekend, we thought that films and movies would be an appropriate theme for today's post. You might have opinions about which films had the best acting or the best special effects but can you guess what the riskiest movies of the year were? We're talking natural disasters, filming in multiple foreign locations, impressive stunt work, explosions, car chase scenes - anything that would add to potential risk and liability that the movie studios must bear.

Well, now you will be able to regale your friends and family with film-related risk trivia because Fireman’s Fund Insurance Company, a company that has a long history insuring major Hollywood films, has just issued its annual list of The Riskiest Movies of 2009. The awards go to "2012," "Crazy Heart," "Inglorious Basterds," and "Nine," but you'll have to read the article to learn more about why. You can compare this year's crop of risky films to the 2008 list.

A 2008 USA Today article Lights! Camera! Risk! Insuring movies is risky business offers a more in-depth look at some of the risk issues involved in film making. These can include such disparate hazards as wild and trained animals, technology glitches, actors who have to leave the set mid-production to go to rehab, and weather related events that may delay production schedules or pose danger to the cast, the crew and the props.

Insurance professionals in the movies
Over the years,there have been a few excellent films that feature insurance professionals - but they aren't usually very flattering. Marcus Covas reminds us of a few of the more prominent roles, and he offers an interesting list of the Top Movies No Risk Manager/Insurance Professional Should Miss. His list includes ten films, and he discusses the insurance issues that are at play in each of the films.

In addition to the roles Covas cites in his article, there was a 1959 film called Alias Jesse James, which starred Bob Hope as an insurance agent. The premise of the film, according to IMDB, is that the outlaw T.J. 'Jesse' James (Wendell Corey) tries to kill insurance agent Milford Farnsworth (Bob Hope) who has been mistaken for him in order to collect on a big policy. If you have the time and the inclination, you can watch the entire film online.

All too often, people only think about insurance when they have a loss or when it's time for an annual insurance policy such as auto or homeowners to renew. That's just human nature. Yet insurance is an important part of financial planning and deserves more consideration than a quick search for the cheapest quote come renewal. As with any other purchase, cheapest is not always the best purchasing criteria - you get what you pay for. While there is certainly no sense in spending more than you need to, you should be sure that the insurance package you buy will provide sufficient coverage for your particular situation. The question lies in what's sufficient coverage - and that may very well vary over the course of your life. Insurance is essentially a form of financial risk management that is designed to protect an individual or a business from loss resulting from adverse life events. A single person in their 20s will have very different coverage needs than a middle-aged parent who owns a home and has several dependents.

When certain major life events occur, they should trigger a review of insurance coverage. You may need to add a new type of coverage, you may want to raise or lower deductibles on an existing policy, or there may be opportunities for savings or discounts. Your independent insurance agent will be able to inform you about various coverage options - but can only advise you based upon what he or she knows. It's good to keep insurance coverage in the back of your mind, and get in the habit of making a call or dropping a note to your local agent when you experience a major life event, such as any of the following:

• Marriage
• Divorce
• Birth or adoption of a child
• Death of an immediate family member
• Military deployment
• Purchasing a new home, condo, or a second home
• Home renovation
• Adding buildings to your property
• Renting out your home
• Moving to a new geographic area
• Renting an apartment
• A teen child getting an auto license
• Changing jobs and job benefits
• Starting a small business
• Acquiring expensive electronics, antiques, jewelry, furs, or specialty collections
• Acquiring a recreational vehicle - boat, motorcycle, snowmobile
• Joining a carpool
• Retiring

You have to admit - jolly old St. Nicholas runs one heck of a business operation. He employees a huge number of elves and maintains a herd of reindeer. He runs a factory that operates 24/7, along with a busy warehouse and shipping operation. He has at least one specialty vehicle, although we suspect he also needs some back-ups. Like any good business person, he needs solid insurance coverage to protect the business should anything go amiss.

Gregory Boop of About.com's business insurance page has previously discussed the various types of insurance coverage that Santa Claus needs.

First, as an employer, he is mandated to have workers compensation overage for his elves. And to be a good employer, he should also provide health insurance, too. The elves are pretty loyal workers - to show appreciation for this, Santa should consider disability insurance and some type of retirement planning, such as 401k options.

We agree that he needs commercial general liability coverage, as well as product liability coverage. Gregory suggests that Santa needs commercial auto insurance and a specialized equipment rider ... but we are not so sure we would classify Santa's sleigh as an auto - we think it might be better for Santa to have aircraft coverage. He might also benefit by travel insurance and pet insurance for the reindeer. Gregory also suggests that Santa should have key man coverage on himself since he is so essential to the operation. Good idea.

Now apart from the needs of his business, Santa himself has some specialized insurance needs. He needs a heck of a life insurance policy and it poses some significant challenges for his insurance agent. He's getting on in years, he's overweight, he's been known to smoke a pipe and drink brandy, and he's got a lead foot when driving his sleigh. He also faces a lot of on-the-job hazards. Even before that big day of the year, he travels to thousands of shopping malls and meets millions of kids. This year, that means he is at heightened risk for the H1N1 virus. Not to mention all the other hazards that Santa faces - he can be exposed to everything from back strain while lifting kids to a wet lap caused by terrified children. It's hard to believe, but not everyone loves Santa.

Now we know that Santa has already given some thought to his insurance coverage because we read a few years ago that he has insured his trademark beard with Lloyds of London. That's a good start, but today, he'd do well to have insurance against identity theft, too.

Santa, we're worried about you. Call your agent, we can help!

Homeowners & Santa Claus
And what about you as the host? Are you properly covered to entertain a V.I.P. like Santa in your home? What if your dog bites Santa or he gets stuck in your chimney - are you covered against these or any other mishaps while he's on your property? If you have homeowners insurance or rental insurance, the personal liability and medical payments portions should cover you, but you may want to check your coverage limits and deductibles. If you are hiring a Santa stand-in for a party, there are some other things you should consider to limit your liability: Covering the Santa Clause.

If you plan to leave any sweets out for the big guy, Mrs Claus issues this plaintive plea: Please skip the cookies - Santa has a weight problem. Consider leaving a healthier snack. If you decide to leave cookies out anyway, you may want to get Santa to sign Christmas Cookie Liability and Indemnification Agreement (PDF). And something that should go without saying - don't leave any wine or brandy out - you don't want to be liable if a tipsy Santa leaves your house and has a DUI accident!

Happy holidays to all - we'll see you in the new Year!

This is a jokey video to promote a brand of sneakers, but the idea of insuring specific body parts is not totally farfetched ... celebrities have been known to insure body parts ... Jimmy Durante had a $50,000 policy on his distinctive nose and Betty Grable had a million dollar policy on her famous legs. Larry Getlen has an amusing article on the topic at Bankrate: Celebrity body parts: Million-dollar thighs and smiles

On this Veteran's Day 2009, we recognize and salute all U.S. veterans. We appreciate your service to our great country - thank you! For those who would like to show appreciation in a concrete way - why not hire a vet? And we also call your attention to a worthwhile cause that helps to address some of the seriously wounded veterans of recent conflicts: The Wounded Warrior Project provides services and programs to ease the burdens of the most seriously wounded and their families, to aid in the recovery process, and to smooth their transition back to civilian life.

Insurance issues related to the military
The National Association of Insurance Commissioners (NAIC) has put together a great resource on insurance issues as they specifically relate to U.S. military service members and their families, noting that insurance coverage can often be affected when someone moves out of state or spends an extended period of time away from home. NAIC suggests that military members talk to their agents before deploying to make arrangements for insurance renewal and payment to ensure that they do not lose important coverage. The site covers life insurance issues specifically as they relate to military service members, including buying tips and red flags for deceptive practices. The site also addresses other types of insurance coverages, including homeowners, rental, auto and health insurance. There are many considerations and issues to discuss with your agent: if your home will be vacant, check to see if your insurer has a vacancy clause that would limit your coverage; find out how your homeowners insurance will cover any possessions you have with you while deployed; and check to see if your auto policy will allow you to suspend some or all of your coverage.

NAIC also suggests that deploying service members may want to consider assigning power of attorney to a spouse, family member, or trusted friend who could act on your behalf in insurance, financial, personal, or legal matters. The site offers a list of links to helpful resources for other sources of benefits and assistance.

Avoiding insurance & investment scams and ID theft targeting military families
Service members and their families are good targets for fraud: they are away from home for extended periods while mobilized in service; families are often transient; paychecks are regular and predictable; and returning service members often have extra cash from combat pay. In TRAPPED! Financial Scams Are Targeting Military Families, Kimberly Lankford of Military Money discusses common scams and offers tips and resources to help you avoid becoming a victim.

To minimize the risk of identity theft while deployed, military members may want to place an "active duty alert" in credit reports. According to the Federal Trade Commission (FTC), the alert would require creditors to verify your identity before granting credit in your name. Active duty alerts on your report are effective for one year, unless you request that the alert be removed sooner.

The FTC also encourages service members to file complaints through the Consumer Sentinel Military Network, a secure online database of complaints from the military community. While the FTC doesn't resolve individual disputes, complaints help the effort to target cases for prosecution, shut down scammers, spot patterns of fraud before they become widespread, and alert the military community to scams.

Workplace issues
Employers need to be aware of their legal obligations to employees on military leave as well as legal obligations to veterans under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). In addition to legal obligations, it's important for employers to take steps to help service members make the transition back to the workplace. Also, the Insurance Information Institute offers advice on What employers and their insurers need to know about returning veterans. There are many issues that may relate to overall benefits, workers compensation, and the Americans with Disabilities Act (ADA).

To buy or not to buy? That is the typical consumer conundrum when renting a car and faced with the issue of insurance. This short podcast from the Insurance Information Institute (III) helps you to understand the choices. Also, see the III article to help you determine if you need separate rental car insurance. III suggests that, before you do anything, check to see what your current auto insurance policy covers - your agent can help you with that, or you can call the insurer directly. Also, check with your credit card company because there may be some insurance benefits associated with your card.

One byproduct of the difficult economy is an increase in the number of reluctant landlords. Many homeowners have been forced to relocate for jobs or other reasons but they can't sell their first house so they rent it out. Others are holding on to their house, reluctant to sell at a low and take a loss - so they are trying to wait out the market by renting their first home. It's difficult to know how widespread this practice is, but one gauge is that some insurers are reporting a recent spike of 25% or more in demand for landlord insurance.

While individual circumstances vary and there are times when it makes sense to rent a home, experts advise caution. Waiting out the market can be a chancy proposition because it may take years for the market to sufficiently appreciate. Meanwhile, there are a variety of additional expenses and responsibilities that a property owner must assume: taxes, maintenance, repairs, insurance, and property management, to name but a few. It can be difficult to charge enough in rent to recoup the expenses. Plus, renting for a number of years can eliminate or diminish the value of capital-gains tax exclusions.

If you are trying to make a decision about selling at a loss or renting your property, be sure to read the article's comments where several readers share their experiences of being landlords. The author also offers useful tips and resources about renting your house in a sidebar to the article.

Don't forget landlord insurance
If you suddenly find yourself an accidental landlord, make sure that you are properly insured. The Insurance Information Institute notes that landlord Insurance generally costs about 25% more than a standard homeowners policy, but the price may fluctuate based on a number of variables: what state your property is in, the condition and location of your property, what type of property it is (condo, single home or multi-dweller unit, for example) and the level of coverage that you require. Insurance Journal talks about what landlord insurance does and doesn't cover:

"These policies typically cover the building in case it's damaged or destroyed by fire, lightning, wind, hail, cars or collapse from ice, snow or sleet. they also cover the landlord's personal property used by the tenant or used to maintain the house. This could include appliances and landscaping machinery like snow blowers and lawnmowers."

"... the coverage helps protect landlords from liability if someone gets hurt on their property. Some policies also pay for some or all of legal expenses. It also will pay for some or all the medical expenses for people injured on the property if the landlord is found responsible.

Unlike a homeowner's policy, the landlord policy also will compensate for lost rent if the building is uninhabitable because of damage that is covered by the insurance. This is a big deal for a landlord who relies solely on that income, especially if a building is under repairs for a long time. "

If you're like many insurance consumers, when you get your annual homeowners, condo or renter's insurance policy, you simply file it away in a drawer and don't give it another thought. Many people barely glance at the fine print and are later surprised when a loss occurs that isn't covered. The flip side of the coin is that there may be benefits that are being paid for but that the policyholder is unaware of. Insurance policies sometimes offer coverage perks and benefits that go unused simply because the insured was unaware of the benefit. For example, some homeowners' policies will cover spoiled food from a power outage, personal possessions stolen from your car, a camera stolen while on vacation, or even a damaged tombstone. It can pay to know your policies - Meg Green of A.M. Best talks about various unusual benefits that might be included in your insurance coverage.

Coverage options can vary from insurance company to insurance company, so when you are discussing renewals with your agent, ask about any special benefits or perks that might be relevant to you and your family and ask questions to be sure you understand the extent of your coverage. And when you experience a loss, if you are unsure of whether or not you're covered, pick up the phone and talk it over with your agent. You would need to document your loss so keep receipts. And as Green notes, if you make too many claims, the cost of your premium could increase or you may even be canceled when you next try to renew.

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

Have you just had a new baby or are you expecting one soon? If so, you are part of a demographic trend. More babies are born in August than in any other month, according to the National Center for Health Statistics. September is the second-highest month, and while Tuesday has traditionally been the highest day of the week for births, Wednesday has been edging it out in recent years. See more interesting facts on birth and motherhood at the US Census Mother's Day press release. The government keeps track of a lot of interesting data related to births. You can find out the most popular baby names by year on the Social Security website - or view the cute video version of top baby names. You can even find the most popular names by region.

Now check your insurance!
The National Association of Insurance Commissioners (NAIC) suggests steps that new parents should take to protect their growing family by checking insurance coverage. Anytime you experience a major life event - such as a marriage, a birth, a death, a new home - it's important to remember to review your insurance policies. With a new baby, health insurance and life insurance are both coverages that should be reviewed to ensure that you are adequately protected. NAIC suggests there may also be auto and homeowners insurance considerations.

The Social Security office also reminds parents to register your child for a Social Security number, which you need to claim your child as a dependent on your income tax return, and may be necessary for medical coverage, setting up financial accounts, or eligibility for government-sponsored services.

The U.S. National Flood Insurance Program (NFIP), which was due to expire in two months, has been extended for six months under a bill approved by the House of Representatives. This will extend the program until March 31, 2010. Congress created the National Flood Insurance Program (NFIP) in 1968 to help millions of American homeowners, renters, and business owners to secure coverage if their community participates in the NFIP. Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.

Standard homeowners insurance policies don't cover flooding so it's important to know your relative risk of floods - it may be higher than you realize. You can check your relative flood risk, view your local flood map, and access other flood-related information at FloodSmart, the official web site of the NFIP.

In the wake of Michael Jackson's untimely death at a relatively young age, much is riding on the results of his autopsy and a ruling on the cause of his death. Anschutz Entertainment Group (AEG) is estimated to have about $40 million at stake, depending on the cause of his death. According to Billboard, about three-quarters of a million concert tickets had been sold and AEG plans ticket refunds of about $85 million.

As part of the event planning, AEG sought and secured event cancellation insurance from Lloyd's of London. This type of insurance is particularly important to protect all parties against unforeseen losses due to any number of problems - sudden unavailability of a venue, catastrophic weather that might force a cancellation, or ill health on the performer's part, to name a few examples. In the past, Jackson has canceled shows in the latter parts of his tour for ill health or exhaustion. Earlier this year, when AEG was arranging for insurance coverage, Jackson had to pass a four-hour medical exam attesting to his health.

But like any insurance policies, there are exclusions. If Jackson's death was due to a reason that was excluded in the policy - such as a pre-existing medical condition or a substance abuse problem - the promoters could be left holding the bag. While autopsy results so far have been inconclusive, ongoing investigations into Jackson's death are occurring. And with the amount of money at stake, it wouldn't be unusual for an insurer to conduct their own investigation.

Business insurance for large events
Rock concert promoters aren't the only parties that might need event cancellation insurance. This is a common type of insurance sought by corporations and businesses that sponsor major events, conferences, and trade shows and depend on revenue for those events. Determining whether of not cancellation insurance is needed and how much is generally a matter of scale, based on the number of people involved and the amount of financial and other risk involved in the event.

"Whether planners should invest in cancellation insurance depends upon how important an event is to an association or corporation financially and what kind of risk it is assuming. “If you're holding a board of directors meeting for 65 people that wouldn't generate income and was inexpensive to hold, there's no point,” explains James M. Goldberg, an attorney with Washington-based Goldberg & Associates. “But if it's a big annual event for 3,000 people that's a major source of revenue, definitely think about insuring."

Event insurance can cover unforeseen problems, and "... perils that are beyond the control of a planner, such as inclement weather, a principal speaker dropping out, strikes, outbreaks of disease and so on." But experts caution that it will not cover poor planning or poor attendance.

Personal events such as weddings may benefit from insurance, too
Beyond businesses, private events can also sometimes benefit by similar types of coverage. As the average cost of a wedding climbs - in the U.S., it is between $20,000 and $30,000 - wedding insurance is increasingly common. Wedding insurance can cover costs for cancellation due to weather, illness, or venue unavailability. It can also cover losses if gifts are stolen, damage or loss of photos, rings, gowns, and the like, and other unforeseen problems. If you are planning a costly reception, you may want to discuss wedding insurance options with your agent. In addition to insurance for cancellation or other problems, your reception venue may require liability insurance. You should also be sure to verify that your wedding venue and your vendors are properly insured, and learn exactly what and how their insurance might extend to cover any problems you might experience.

From New Hampshire to Wisconsin to Maryland, state insurance commissioners throughout the country are urging residents to buy flood insurance. Flood insurance is particularly important as we count down to this year's hurricane season. Your homeowners insurance may cover you for water damage from a burst pipe, but if your water problem was started by Mother Nature, you are likely out of luck since most policies do not cover flood damage.

While you may think your flood risk is negligible, floods and flash floods happen in all 50 states. Here are a few interesting flood facts you may not know:

• Your home has a 26% chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 9% chance of fire.
• Last year, one-third of all claims paid by the National Flood Insurance Program. were for policies in low-risk communities.
• A car can easily be carried away by just two feet of floodwater.
• Last year, one-third of all claims paid by the National Fllod Insurance Program were for policies in low-risk communities.
• Most homeowners insurance does not cover flood damage.

To find out the risk for your home or your business, enter your address to create your flood risk profile and assess your risk of financial loss. Or check your local FEMA flood map. You can also use this interactive tool to see the inch-by-inch cost of a flood in your home - as little as an inch or two of water in your home can add up to thousands of dollars in repair.

Talk to your agent about flood insurance - if you are in a low to moderate risk zone, insurance can be very affordable. Your agent will know the options and will know if your community participates in the National Flood Insurance Program (NFIP), which helps homeowners, renters, and business owners to secure coverage.