Insurance on the High Seas

As you doubtless know from the media coverage, the Titanic sank 100 years ago last week. That disaster was long considered to be the most costly maritime insurance loss although the sinking of the Concordia Costa last year in Italy seems to have surpassed it. It’s interesting, therefore, that a Titanic insurance document has just surfaced for the first time in a century. The document, which records the total pay out of £4,000 (an estimated £263,000 or $419,432 in today’s money) by Royal Insurance, now part of the RSA Insurance Group has never before been seen by anyone outside RSA. This was only a small portion of the total insurance payments. As the ship’s hull and machinery was valued at £1 million, owners White Star Line would have had hundreds of different insurers.
The Encyclopedia Titanica has over 100 articles about insurance claims on the Titanic. Initial estimates two weeks after the disaster were that life insurance payouts totaled around $2.1 million, and accident insurance payouts came to a little more than $1.5 million. The industry estimated that life insurance losses would end up at $4 million, accident insurance losses at $2 million. Many passengers carried specific life insurance and travel policies while the survivors of other lost passengers filed claims against White Star Lines. One Mrs. Irene Harris claimed $1,000, 000 for the loss of her husband, a theatrical manager. The first claim settled was for a Mr. Ervin G. Lewy of Chicago and in a morbid note, the article comments that without a death certificate, the company had to “strain certain points” to allow the payment. Eventually, White Star paid $664,000 to settle all the claims.
In a fascinating look back at the insurance industry of a century ago, this New York Times article from April 1912 is highly complimentary to the insurers who settled the Titanic claims so quickly. It also notes that while in the age of sail, a ship was never declared lost until a year and a day after it was expected in port, modern technology – i.e., radios – had changed that age old rule and now ships were considered lost almost immediately upon the disaster.
While the golden age of ocean liners is undoubtedly past, cruise ships are at sea in record numbers. While the chances of anything happening on a modern cruise are so slight as to be almost nil, you, like John Jacob Astor, may want to consider buying travel insurance if you’re planning a voyage on the ocean deep. And you should periodically evaluate your life insurance coverage – a good idea whether you’ll be taking any ocean cruises or not. Your independent Renaissance Alliance insurance agent can help!
*Image source: PD-US – The Titanic

Showing the love, insurance style

The Insurance Information Institute (III) is showing the love this Valentine’s Day, insurance style. They’ve created a themed Pinterest board to celebrate the day. For those of you not up on your social media trends, Pinterest is the popular “virtual pinboard” that lets you clip and share things you find on the web.
III has gathered some fun images and reminders about showing your love, insurance style… such as making sure that any expensive gifts are insured and practicing safe shopping when making online purchases for your sweethearts.
They also posted a series of three quirky video clips – life insurance promoted by fruit flies. Yes, fruit flies – you will have to watch them to see for yourself. This is part of an informational campaign called Insure Your Love, which is sponsored by the Life Foundation, ostensibly to create some buzz (ahem) around life insurance. If you are wondering what life insurance has to do with fruit flies, you can learn more at Fruit Fly Q&A, which features more clips with Frank and Fran, the stars of the fruit fly campaign.

Unclaimed property

There’s a total of more than $32 billion in the nation’s unclaimed property pools representing more than 117 million accounts. It’s mostly money or assets that were either forgotten or abandoned – and in many cases, the abandonment occurred when the account holder died and nobody else knew the account(s) existed. Don’t let your property become part of that pot!
We’ve previously talked about the importance of updating your beneficiaries on insurance polices and other financial records. Just like changing batteries in your smoke detector and getting your car inspected, you should set a routine time to do this annually – failing to do so might leave your loved ones wrangling with court proceedings – or even totally unprotected. The importance of planning cannot be overemphasized. Not to be grim, but you simply never know when your time will be up. For a statistical assessment, see our prior post What are the Odds where we have a lot of risk tools that you can play with. They range from actuarial tables to to calculators for finding out your relative risk of dying in the next year or being attacked by a shark.
OK, you get the point. Planning is important. This past week, the Wall St. Journal featured an excellent and very helpful article in their finance section about The 25 Documents You Need Before You Die – alternately titled as “Designing your death dossier,” which makes it sound pretty fancy. The article makes the point that it is not simply enough to ensure that your policies are updated – it’s also critical that somebody in your family knows what and where all your important documents are.
We counted more than 25 important documents referenced in the article – but it is unlikely that all will be relevant to your situation. Nevertheless, it’s a great reference article to bookmark and keep as a checklist for your annual planning.
Oh, and about that unclaimed $32 billion, if you think any of it might rightfully belong to you, here’s a good place to check: The National Association of Unclaimed Property Administrators will let you conduct a free search.

Quit smoking & save on insurance. Tomorrow is the Great American Smokeout

Tomorrow is the American Cancer Society’s 35th Annual Great American Smokeout, a good day to quit smoking if you haven’t already, or to support the smokers that you know in kicking their habit. Quitting smoking is not only a good decision with respect to your physical health, it can also be quite a boon to your financial health. Even beyond the cost of cigarettes themselves, smoking carries other high costs. Most life insurance, health insurance, homeowners insurance and even auto insurance policies carry higher premiums for smokers. It stands to reason: the price of insurance is based on the odds of having to make payment on a claim. Smokers are an overall riskier bet than nonsmokers. For life and heath insurance, the risks are obvious and well-documented: on average, smokers have significantly more health problems and die younger.
Property insurance is also more costly for smokers due to a higher risk of smoking-related accidents. Households with smokers have an increased risk of fires. According to the US Fire Administration, “… an estimated 9,000 smoking-related fires in residential buildings occur annually in the United States, resulting in an estimated average of 450 deaths, 1,025 injuries, and $303 million in property loss …they are the leading cause of fire deaths, accounting for 17 percent of fire deaths in residential buildings.” Smoking is also considered to be one of the major “distracted driving” culprits leading to an increase in auto accidents. And with any property, residual damage from smoke can decrease the property value and make resale more difficult. There may be other costs too: last year, it was revealed that Apple voided computer warranties due to second-hand smoke.
Save your health and save money in the process – that’s a win-win all around!
Stop smoking resources
American Cancer Society: Great American Smokeout Guide to Quitting Smoking
American Cancer Society: Great American Smokeout Resources and Tools
American Cancer Society: Helping a smoker quite: do’s and don’ts
American Lung Association – Help resources for quitting smoking
Centers for Disease Control: Smoking & tobacco tools and resources
Mayo Clinic 10 ways to help teens stay smoke-free
Teen’s Health: How can I quit smoking?