While you might be familiar with the terms “bodily injury” and “property damage” which refer to accidentally harming others or their property (respectively), there is another source of loss faced by most persons called “personal injury.” Unlike events that result in a person suffering a serious injury or property that is damaged or destroyed, personal injury usually involves interference with another person’s legal rights or hurting another person’s reputation. Typically, personal injury includes the following acts:
- False arrest, detention or imprisonment – Example: A homeowner locks a teen she suspects of stealing in a bedroom for an hour until the police arrive and it turns out the teen did nothing wrong:
- Malicious prosecution – Example: A gentleman accuses his neighbor of stealing a laptop from his home and files charges with the police;
- The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor – Example: A boarder comes home from work and finds his room’s door padlocked. The homeowner/landlord did it after the boarder, for the third night in a row, plays his stereo loudly;
- Oral or written publication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services – Example: A homeowner is the president of her PTA and she also publishes articles for the association on her Website. After an argument with another PTA officer, the president recounts the incident on her site and includes some insults and false items about the person; or,
- Oral or written publication of material that violates a person’s right of privacy – Example: A woman is visiting a friend. During the visit, she overhears her friend’s conversation with her doctor. The next day, the person reveals to others that the friend, a young, single female, is having medical problems due to an unexpected pregnancy.
Naturally these are the type of incidents that could result in lawsuits. However, they are also the sort of events that are excluded from coverage by the typical homeowners policy. The major reason for their exclusion is that they are deliberate acts rather than being accidental. One way to get some coverage for such losses is to purchase personal umbrella coverage. It may be worthwhile to discuss your possible need for personal injury coverage with an insurance professional.
Insurance Perils – Part 2
Various insurance property policies refer use the terms “hazard,” “peril,” or “cause of loss.” In any instance, the reference is to any number of events that could create damage that the policy covers. While some events are commonly understood, others aren’t. Further, the term that appears in an insurance policy may not mean the same as it does in the dictionary.
This is part two of a two-part discussion on different causes of loss. If you haven’t yet, please be sure to read part one.
Damage caused by direct physical damage with “vehicles” is covered by the vehicles peril. Damage caused by objects thrown by vehicles (such as stones, etc.) is covered as well. The vehicles peril does not include loss to a fence, driveway or walk caused by a vehicle owned or operated by the insured or a resident of the described location.
Smoke damage is usually referred to as “sudden and accidental damage from smoke.”
Any sudden and accidental damage from smoke caused from any source except smoke from agricultural smudging or industrial operations would be covered. The terminology used makes clear that the damage must occur over a short period of time. A prime source of claims is furnace malfunction that results in the backup and blowing of smoke and grit into rooms through a central heating system.
Agricultural smudging would include damage from burnoff of growing materials on or near the covered premises and use of smudge pots to protect growing crops and trees from frost. Damage from smoke associated with businesses would include that caused by the “blowing out” of smokestacks in the course of periodic cleaning. Excluded damage would also include damage caused by smoke from malfunctioning industrial heating and processing equipment.
Damage caused to insured property by the eruption of a volcano is covered under the Dwelling Policy Program; however, loss caused by earthquake, land shock waves or tremors is excluded.
This peril is designed to address the damage caused by the eruption of a volcano, including the ensuing lava flow and airborne particles. In most policies, one or more volcanic eruptions that occur within a 72-hour period is considered to be a single covered event.
Vandalism and Malicious Mischief
Vandalism and malicious mischief are generally cited as a single peril meaning willful or malicious physical injury to or destruction of property. Historically, malicious mischief has been added to vandalism to identify the covered peril because it has a special meaning by definition, and because it embraces a number of situations that are not technically covered by “vandalism.”
“Vandalism” means willful destruction or defacement of things of beauty. It implies general hostility to nice things and satisfaction from their destruction. It is derived from the name of a Germanic people who overran Gaul, Spain and northern Africa in the 4th and 5th centuries and who sacked Rome.
“Malicious mischief” implies damage to property motivated by hatred or spite. It is not associated with beautiful things, but rather with utilitarian things such as machinery and business buildings and their contents. Acts leading to this kind of destruction are premeditated and include those arising from resentment and ill will during labor disputes.
Accidental damage is not covered under the “vandalism” peril. Coverage applies only when the damage is intentional. The vandalism and malicious mischief peril does not include loss to property on the “residence premises” if the dwelling has been vacant for more than 30 consecutive days immediately before the loss. A dwelling being constructed is not considered vacant. Furthermore, the vandalism or malicious mischief peril does not include loss by pilferage, theft, burglary or larceny.
Damage By Burglars
Damage caused by burglars refers to the damage caused during a break-in and not to the actual stolen property. For example, if two burly burglars attempted to remove a grand piano from the insured residence, the actual damage to the walls, floors and doorways caused by the piano being moved would be covered. The actual loss of the piano would not. Typically there is no coverage for loss to property in a building that has been vacant for more than 30 days immediately before the loss.
This peril covers damage to the exterior of the insured premises and its contents if the falling object first damages the roof or exterior wall. Damage caused by any falling object is covered, including falling trees; however, damage to the falling object itself is not covered. This peril does not include loss to outdoor radio and television antennas and aerials including their lead-in wiring, masts and towers, outdoor equipment, awnings and fences.
Weight of Ice, Snow or Sleet
Damage to the insured building and/or contents due to the weight of ice, snow or sleet is covered. This coverage excludes loss to certain property, such as: awnings; fences; patios; swimming pools; foundations; retaining walls; bulkheads; piers; wharves; or docks.
Damage to insured property caused by accidental discharge or overflow of water or steam from within a plumbing, heating, air-conditioning or automatic fire protective sprinkler system or household appliance is covered. Coverage includes the cost of tearing out and replacing any part of the building on the residence premises necessary to repair the system or appliance from which the water or steam escaped.
Damage caused by continuous or repeated seepage or leakage to the insured property is not covered; the cause must be sudden and unforeseen. Damage caused by freezing is not covered under this peril. Further, this type of loss is not covered if the dwelling has been vacant for more than 30 days immediately before the loss. A dwelling being constructed is not considered vacant.
Sudden and Accidental Tearing Apart
Sudden and accidental tearing apart, cracking, burning or bulging of steam or hot water heating systems, air conditioning systems or fire protective sprinkler systems or appliances for heating water is covered. The emphasis on this peril is that damage caused by the steam, hot water and related systems must be sudden and accidental as opposed to gradual and foreseen.
Loss caused by the freezing of a plumbing, heating, air-conditioning or automatic fire protective sprinkler system or of a household appliance is covered. This peril does not include loss on the residence premises while the dwelling is vacant, unoccupied or being constructed unless the insured has taken reasonable care to maintain heat in the building or shut off the water supply and drain the system and appliance of water.
This peril involves damage to insured property as a result of sudden and accidental artificially generated electrical current. Tubes, transistors and similar electrical components are not covered.
Insurance Perils – Part 1
If you ever had to look at your insurance policy for a home, seasonal home or rental property, you probably ran head-first into the terms “hazard,” “peril,” or “cause of loss.” In any instance, the reference is to any number of events that could create damage that the policy covers. While some events are commonly understood, others aren’t. Further, the term that appears in an insurance policy may not mean the same as it does in the dictionary.
This is part one of a two-part discussion on different causes of loss. After reviewing the information below, please be sure to read part two.
Fire has been defined by the courts as “combustion sufficient enough to produce a spark, flame or glow.” By definition, a fire is not smoke. A fire is not charring. A fire must produce a spark, flame or glow. And not all fires are covered under the fire peril. Over the years, the courts have distinguished between “friendly” and “hostile” fire. A friendly fire is one that burns where it was intended to burn: a flame on a gas stove; a fire in a fireplace; fire in an outdoor grill.
A hostile fire is one that burns where it was not intended to burn: the kitchen drapes; the rug by the fireplace; a tree near the outdoor grill. Only direct damage caused by hostile fire (including smoke from a hostile fire) is covered by the fire peril.
Lightning is “naturally generated electricity from the atmosphere.” Damage covered by the lightning peril may be the result of lightning itself or the result of a fire caused by the lightning.
With regard to lightning, there is rarely a coverage problem when there has been a direct strike. The other common cause of lightning loss is the surge of electricity, typically caused by lightning striking power company equipment. Appliances in a house can be damaged by the electrical surge. The cause must be established for coverage to apply. A surge from malfunction of power company equipment, or a short circuit, would not qualify.
In basic or stripped-down policies, explosion refers to any explosion that occurs within a structure that is covered by a given policy. However, several types of explosive events are usually excluded such as:
- bursting of water pipes
- electrical arcing
- explosions of steam boilers or pipes owned, leased or operated by the insured
- rupture or bursting of pressure relief devices
In more comprehensive polices, explosion also applies to events that originate externally.
The peril of windstorm involves damage caused by direct action of the wind, including high winds, cyclones, tornadoes and hurricanes. Windstorm coverage primarily covers wind damage to a building’s exterior, but will also cover interior damage if the wind breaches the exterior (causes a hole or opening in a wall or roof).
Note that the wind must reach sufficient velocity to have caused direct damage at more than one location to establish a “windstorm” loss. However, leakage through an aging roof during heavy rain is not a basis for a windstorm claim. The windstorm peril does not cover loss to the following property when located outside of the insured building: awnings, signs, radio or television antennas or aerials including wiring, masts or towers; canoes and rowboats; lawns, plants, shrubs or trees.
Hail damage is just that: damage caused by the direct action of hail to insured property. As with windstorm, the hail or some other covered peril must cause damage to the outside of the insured dwelling allowing hail to enter the premises in order for interior hail damage to be covered. As a result, if a window were left open, allowing hail to enter a building, that damage would not be covered.
Similarly, the hail peril does not cover loss to awnings, signs, radio or television antennas or aerials including wiring, masts or towers; canoes and rowboats; lawns, plants, shrubs or trees when located outside of the insured building.
Riot or Civil Commotion
Riot usually refers to a gathering of three or more people that results in the use of force or violence against individuals or property. Damage caused to the insured property due to riot is covered under this peril. Coverage includes direct loss caused by striking employees whether a riot occurs or not. Civil commotion can be defined as an uprising or disturbance by a large number of people. As with riot, damage caused to the insured property due to such an uprising would be covered under this peril.
Bouvier’s Law Dictionary summarizes five necessary elements of a riot: At least three persons must be involved; there must be a common purpose; there must be actual inception or execution of that purpose; there must be an attempt to help one another or to cooperate by force if necessary; there must be display of force or violence in such manner as to alarm a person of reasonable courage.
There may be no valid distinction between riot and civil commotion. “Civil commotion” has been described in courtrooms as “an uprising among a mass of people which occasions a serious and prolonged disturbance and an infraction of civil order, not attaining the status of war or armed insurrection. It requires the wild or irregular action of many persons assembled together.
The aircraft peril provides coverage from damage caused by aircraft, including self-propelled missiles and spacecraft.
Webster’s New World Dictionary of the American Language defines “aircraft” as “any machine or machines for flying, whether heavier or lighter than air; airplane, dirigible, balloon, helicopter, etc.”
This peril would apply to damage caused by the falling of an aircraft or any of its parts, on a covered dwelling and its contents.
A Safer Prom
Most young men and women point to their high school prom as being a particularly important point in their lives. For many, it represents their first chance to participate in a formal event. It is also considered a chance to act as a full-fledged adult. The event involves arranging companionship, dining, dancing and socialization. However, not as much time is usually devoted to making the event as safe as possible.
It is almost inevitable that a prom will involve serious exposure to alcohol or other intoxicants. The evening also involves many young, inexperienced drivers who are excited about making their way to different destinations such as pre and post prom activities. Sadly, all of these factors have combined to make prom season both dangerous and deadly. Serious traffic accidents often become the main feature of what should be a night of joy.
Potential prom-goers and their parents need to create a strategy to help make prom night both memorable and safe. Here are some tips:
- Parents should get the details of all activities, including dinner and pre and post prom events
- Confirm the night’s events with school officials and other parents
- Clearly lay out your expectations to your son or daughter about how they are to enjoy their evening
- Discuss all details about transportation, whether they are drivers or passengers
- Be sure that communications are set up. If the child does not have a cell phone available, find out the numbers where he or she can be reached during different phases of the evening
- If practical, consider arranging for a third party to handle transportation (limo or taxi service)
- Consider an amnesty arrangement. In other words, let your child know that they can contact a parent for emergency transportation should something go wrong and, for that evening, they’ll be no lectures or punishments
Help your son or daughter make prom night a bright memory rather than a tragedy. Plan on making safe fun everyone’s priority.
Identity Theft – Part 2
Part 2 is a brief explanation of what can be done to prevent ID Theft. Please see Part 1 for an explanation of what is meant by ID Theft.
While “identity theft” may seem like a trendy new, crime category, the truth is the opposite. ID theft is another form of fraud
To date, personal insurance is not a particularly important tool for protecting against ID theft. The type of loss is not something to which an auto, home or similar policy responds. While homeowner policies do typically protect against credit card loss, coverage is usually just for the modest amount that falls below the minimum liability imposed by federal law (currently $50 per card). The true damage to individuals from ID theft are the costs associated with clearing up the after-effects, such as correcting one’s credit history and straightening out various accounts and records. This effort may take years and hundreds to thousands of dollars in legal fees.
Insurance companies may soon develop coverage for ID theft, such as assisting with legal fees or paying costs related to dealing with third parties to correct records. Right now, preventing falling victim to this loss is up to Jane or Joe Insured. What can be done? Here are some suggestions:
- Keep your account information and Social Security Number (SSN) safe. One idea: keep home records in a locked file.
- Keep details about your various account numbers in a safe place so you can act faster to take care of stolen or lost cards.
- Be very careful with on-line transactions. Is the Website you use secure?
- Find out the privacy guidelines and safeguards of the businesses and parties you deal with.
- Challenge those who request an SSN. Why is that information needed? Can some other information be used as an alternative?
- Think about buying and using a paper shredder. Many who steal information do so by going through garbage.
- Write companies who send unsolicited charge cards and get off their lists.
- Check bank and business statements thoroughly for irregularities. Track down the reason for any unusual transactions or entries.
- Ask stores that use credit cards if they transmit the information with a wireless network. If yes, ask what safeguards do they have against airwave theft.
- If you ever have a charge card transaction involving an imprinter that uses a carbon set for copies, ask for the carbon or watch the clerk destroy the carbon before it’s thrown away.
- Collect mail from mailboxes quickly and don’t put outgoing mail in your own mailbox for collection by a mail carrier. These practices give thieves an opportunity to fish for checks and private information.
Remember that these are just a few suggestions. Taking steps to minimize the chance of ID theft is a lot of work. That is a major reason that ID theft will continue to be a problem to individuals and businesses.
Identity Theft – Part 1
Part 1 is a brief explanation of ID Theft and its consequences. Please see Part 2 for information on what can be done to prevent it.
While “identity theft” may seem like a trendy new, crime category, the truth is the opposite. ID theft is another form of fraud that has been around for as long as there have been dishonest people. It is shining under a media spotlight because technology has recently opened many more opportunities for this sort of crime. Credit cards, funds transfer cards, ATMs, and the Internet have all combined to make identity theft a major problem for individuals and businesses.
ID theft is a general term that describes any dishonest and unauthorized use of private information. In the past the term rightfully described forgery or passing oneself off as another person to trick someone out of a payment or property. Today, consider it as any act where an unauthorized party secures goods, services, or other financial benefits by the fraudulent use of another person’s confidential information.
The favorite piece of information is a social security number. This information has routinely been used for so many reasons that it can unlock many doors to other private information such as driver’s history, credit information, bank accounts, loan information, credit cards, occupational history, military records, mortgage information, investment accounts and so on. Having this critical bit of information can allow a criminal to use another party’s accounts, secure loans, charge a host of goods or services; the list is only limited by the criminal’s resources and imagination.
A complication of ID Theft is that it is a by-product of modern commercial life. Lenders, retailers, supermarkets, gas stations, airlines, travel clubs and everyone else has elevated charge accounts into the premiere way to do business; either live or electronically. This “ease” comes at great cost. As naïve as it sounds, business still operates on the assumption that everyone is honest. Few businesses have adequate safeguards to protect the information they collect on customers. Many businesses commonly mail out charge cards and other solicitations that include private account information. Further, since businesses are often embarrassed that information has been stolen or compromised by hackers, many businesses keep such invasions secret or substantially delay reporting incidents to authorities and to their customers.
In light of business practices and attitudes, it’s basically up to the individual consumer to guard against ID theft. See Part 2 for tips on guarding against it.
Credit Based Scoring And Insurance
Insurance companies use other important sources of information besides an application to determine if a person qualifies for a policy. For auto coverage, motor vehicle reports are ordered. For home coverage, physical inspections may be needed. Another tool that is widely used for underwriting is credit-based scoring. Use of this item is currently controversial and its origin lies in the commercial use of credit histories.
Banks and other lenders have long used credit history in their lending process. In recent years, it has been found that certain elements of a person’s credit history can be used as an indicator of whether that person is likely to suffer insurance claims. Credit-based scoring is a process that creates a numerical score that is developed from information such as amount of debt, number of credit cards held, pattern of payments, defaults, etc. A benchmark score is established and is then used to help determine the acceptability of insurance applicants. Credit-based scores are also used by insurers to help decide what should happen with current customers. For instance, a company may choose to increase or decrease the premium charged for current coverage or change the level of coverage provided.
In credit-based scoring, the higher the score, the less likely the chance that a person will experience insurance losses. Therefore, if your credit history, such as outstanding losses, bill payment history and type of credit results in a high score, it is much more likely that your insurance application will be approved. Credit-based scoring is controversial. There is much information that proves a strong relationship between a credit-based score and a person’s likelihood of being a profitable customer. In other words, there is a high correlation. However, insurance consumers and regulators have demanded more information that demonstrates cause and effect.
Insurers are enthusiastic about the use of credit-based scoring. It is hailed as an aide to improve their pricing and profitability. However, there is a reluctance to provide details on how scores are developed. Companies have claimed that the information is considered confidential. Insurers fear that revealing details on credit-based scores would result in losing valuable information to competitors. Currently, while some states have approved the use of credit-based scoring, other states are either challenging its use or granting approval after establishing guidelines for its use.
If you have been affected by a credit-based score, you’re entitled to know. You can also get information on how to be sure that your credit history is accurate. An insurance professional is a good source to help you with questions on how your credit may be affecting your insurability.
Insurance, War and Terror
If you are an American citizen, your attention has been riveted by the events from September 11, 2001. You also likely have several concerns that are also shared by a great many fellow Americans such as:
- How do the events affect my insurance protection?
- Are war and terrorist acts the same?
- Exactly what is excluded by my policies?
- Do I have to buy special coverage to protect my belongings?
It is understandable to be concerned and confused over the above issues, especially since everyone is being inundated with news and other information. Insurance related to personal lines (any coverage that protects personal property rather than business) is more standardized than commercial insurance, so the coverage concept in policies for cars, homes, and personal liability are similar.
Most policies prohibit coverage for causes of loss considered “uninsurable.” Not surprisingly, coverage for war is one cause of loss that is excluded. Typically auto and homeowner policy wording not only excludes war, but any military actions similar to war such as rebellions, large-scale civil disturbances, and revolutions. Further, coverage is excluded regardless whether the government has formally declared a state of war. On the other hand, acts of terrorism are distinct from war and, as we have learned to our sorrow, involve individuals committing acts against other individuals rather than against governments or military personnel. Generally speaking, loss caused by such acts would be covered. However, it is always in your best interest to look at exactly what appears in your policies. It would also be helpful to contact an insurance professional to discuss any of your concerns in enough detail so that you understand your situation and your coverage needs.
Did I Notify My Insurer?
You take the time and money to identify what you need to insure, what company you wish to protect, reading and understanding the various policies that cover you and your possessions. Isn’t the importance of telling your agent or insurance company about a loss obvious? Surprisingly, no, it isn’t. The Notification Obligation
Fulfilling the coverage promise of an insurance policy is all about communication. An insurer makes a promise to protect you against certain types of loss, but it can’t follow-through unless it knows about a loss. Prompt notification is so important that it is a formal policy provision and your failing to meet its requirements could result in you losing the protection you paid for.
Depending upon the policy, items having to do with notification may be under a separate policy part or spread among several areas. However, a policy typically requires you to do the following:
Contact the agent or insurer as quickly as practical – the practical requirement replaced the previous use of “possible,” since some companies unreasonably denied coverage because notification was not instantaneous. The difference between words may seem minor, but it gives you some consideration for circumstances that could affect how quickly you contact your agent or insurer about a loss.
Identify Yourself – Perhaps one day your insurer will be able to recognize your voice over the phone and immediately pull up your file. Until then, be prepared to at least tell your insurer your full name (or, if different, the name the insurance policy is under) and the policy number.
Give adequate details – What, When Where, Why and How. It’s important that the insurer has enough information to take proper action, including giving you instructions on how to have your loss handled. This information forms the basis of opening a claim file, assigning the loss to a claims person and beginning investigation of the claim.
Give the insurer copies of any communications regarding a loss or possible loss (such as a threat of a lawsuit) – You should not guess about whether a legal notice or request to be paid for damages is important, even when an actual lawsuit has yet to be filed. Send a copy of the information to your insurer and let them decide. Prompt Notification helps Everyone
Complete and quick communication about losses gives you the best chance to get needed coverage and gives your insurer an opportunity to handle a possible claim efficiently. It also allows the insurer to control issues that could let lawsuits get out of control, such as the ability to offer payment for medical expenses or to contact and question witnesses.
Don’t hesitate! Contact your agent or insurer and get your loss handled.
Do I Have To Sue?
This is a brief discussion on mediation and arbitration, alternatives to resolving insurance policy disputes. It’s Still A Contract
The insurance policy may cover your home, car, boat, life, airplane, jewelry or business, but one element remains the same, the policy is a contract. This written agreement is, at the core, a promise from the insurance company to pay you if a covered loss occurs. But, even when the promise is fulfilled, there may be a serious dispute over the amount of payment. Quite often the method used to resolve the problem is a courtroom. Need For Alternatives To Lawsuits
In many instances, filing a lawsuit is unavoidable. For instance, when a person seeking coverage has his claim denied, a lawsuit may be the only action that is available. However, looking for satisfaction in court can be its own problem. Court calendars (dockets) are often backed up so it could take months or even years before a hearing can take place. When the trial begins, it can take a long time, possibly involving one or more appeals. The legal costs can be staggering. Depending upon the case’s complexity, it will involve court costs, filing fees, attorney costs, research costs, fees for expert witnesses and a host of other expenses. These factors increasingly act as incentives for finding other methods to resolve disputes. Alternative Dispute Resolution
When disagreeing about the amount that should be paid for a loss, there are a couple of popular alternatives to suing your insurance company: mediation and arbitration. Each is a form of Alternative Dispute Resolution (ADR) since they can be tried as an alternative to going to court.
Mediation – This process involves the two parties meeting to discuss their situation with the help of a mediator. The mediator typically has special training and a legal, financial or similar background. As a disinterested party, the mediator studies information from both parties concerning the dispute. Once familiar with the situation, he arranges to meet with the parties. A mediation session often starts with each party having a chance to fully explain their position to the other party and the mediator. The facilitator then takes time to discuss each party’s position in private. Afterwards, the mediator shuttles between the parties and, probing and using the information he gains, he tries to reach a point where both parties can agree on a settlement. The most important features of mediation is that the process is voluntary and the disputing parties are actively involved in reaching a solution.
Arbitration – This is a method that is frequently required by a condition of an insurance policy. With arbitration, you and the insurer each select a representative (arbitrator). Once the arbitrators are selected, they agree on another arbitrator who acts as the arbitration judge. The three persons discuss the merits of the situation and, once any two of the three persons agree on a settlement amount, the process ends. Arbitration differs from mediation in two important respects. First, the disputing parties are bystanders, awaiting for a decision to be made. Second, arbitration is binding on both parties.
Is any course of action perfect? No, but sometimes it is good to know that, when a disagreement occurs, you have more than one option to get it settled. If you need more information, an insurance professional is an excellent source.
Are Your Grown Kids Properly Covered?
Who Are Insureds?
A pivotal point in every mature parents’ life is the time that their children leave to start their own households. Among the items that may be overlooked during this time is whether your grown children have bought their own insurance.
Most personal insurance policies define insureds to include the following:
- The person named (shown) on the policy
- The named person’s spouse (who lives in the same residence)
- The other relatives of the named insured who live at the same residence
The problem with coverage begins when the living arrangements change. Related, But Not Residents
Blood is often perceived to be thicker than insurance contracts, but policy wording prevails. An adult son or daughter may think that, when a loss happens, coverage is available from mom or dad’s homeowners or auto policy, but it isn’t. Policies are typically clear. A relative is covered, but only if the relative is a full-time resident of the named insured’s household. Even if the nonresident child lives next door, her parents’ policy is not going to spread its coverage to take care of her belongings.
If this fact appears harsh, know that insurance contracts are meant to handle sources of loss that can be easily identified. Person A’s cars or home is protected by Person A’s auto or homeowner policy. Imagine if that weren’t the case.
Example: The Rabbitfield’s home and cars have been insured by Plausible Fire & Casualty for 20 years. In the last five years, the Rabbitfield’s children have grown and started their own households. Per the Plausible home and auto policies, the insurance premiums and two policies that covered the original family’s two cars and one home, now cover the original home and cars PLUS the following:
- Son Jimmy Rabbitfield’s apartment and car
- Daughter Chana Rabbitfield’s home and two cars
- Other son Perry’s home, seasonal home and two cars
- Other daughter Bonnie’s apartment and car.
Besides covering all of the property, the Rabbitfield parents’ policies ALSO cover everyone’s personal legal liability.
While it might be a bargain for insurance consumers if a single auto or homeowner policy could be stretched this far, it’s not likely that the insurance industry could survive the flexibility. Being Independently Insured
Understandably, insurance is not always a priority for adult children who are now on their own. In the beginning, there’s often a phase where the kids commute between “home base” and their new apartment or home and their property is at both locations. The new grown-ups typically have few possessions, especially possessions of high value, and this adds to the likelihood that insurance is overlooked or seen as unnecessary. However, even when possessions are few, EVERYONE has a legal responsibility to handle the damage they accidentally cause to other people and/or other people’s property. When a child reaches adulthood, they’ve also reached the point where they need to get their own insurance.
If an adult child asks you for insurance advice, give them the name of an insurance professional you trust to help them get the exact protection they need.
Can You Give Me An Example?
Today, communication can be performed faster, more efficiently and more conveniently than ever before…but we all still struggle with communicating effectively. In many respects our true accomplishment has been to spread confusion at cyber speed. One thing that remains the same, regardless of technology, is the need to be sure that the people who receive our message understand it as well. However, when people get together, the speaker often takes it for granted that the listener understands, even when the topic is complex. Fortunately there is a technique that we can borrow from early mankind to aid our communication efforts…storytelling.
While it’s common to see short stories or examples used in training, schools and textbooks; examples are rarely used in important business discussions; particularly insurance discussions. Any person who wants to understand their policy needs, coverages and exclusions, should just ask for examples. Insurance policies are contracts and, like other legal documents, can be complex and confusing. Often an illustration is more useful than an overly detailed discussion of policy language. Instead of trying to dissect how one clause modifies or makes exception to another, ask the speaker if they can demonstrate their point.
A person who can create a good example is someone who has a thorough understanding of his subject and that understanding can be passed along to the listener. The listener often appreciates the work it takes to create examples and this can ease future communication. So take an active role whenever you communicate with an insurance professional and ask: Can you give me an example?
Professional Insurance Designations
Are you confused by seeing an insurance agent’s name towing a long string of letters? Well, that’s understandable. The public is familiar with the abbreviations used by lawyers, professors, scientists and doctors. Although not as well-known as M.D. or PhD, Insurance Land has its share of such abbreviations, called professional designations. These designations indicate that the individual has completed different courses or programs. The insurance business is complex and full of changes, so it’s very important that agents try to keep up to date on subjects that affect their business.
The need to keep current is so important that an agent’s pursuit of knowledge is mandatory. Most states require that an agent be licensed in order to sell insurance policies or even to give insurance advice. Different states also require that its licensed agents maintain a long-term commitment to learning. In such states, agents must complete a number of hours of training or education in order to have their licenses renewed.
Another incentive for continued learning is provided by certain insurance programs. Once a participant qualifies for a designation, he or she may also be required to pursue continuing education in order to remain in good standing. Finally, many agents are personally motivated to keep current in their insurance knowledge. Naturally, these factors result in agents who have completed programs that award designations.
The following is a short reference of the more common insurance designations.
|ACSR||Accredited Customer Service Representative|
|AIC||Associate In Claims|
|AIM||Associate In Management|
|ARM||Associate in Risk Management|
|AU||Associate in Underwriting|
|CFP||Chartered Financial Planner|
|ChFC>||Chartered Financial Consultant|
|CIC||Certified Insurance Consultant|
|CLU||Chartered Life Underwriter|
|CPCU||Chartered Property Casualty Underwriter|
|CPIW||Certified Professional Insurance Woman|
While a designation MAY indicate a greater level of expertise, the bottom line is experience. Designations are not nearly as important as whether that person helps you with your insurance needs. So talk to your agent, ask plenty of questions and listen to the responses. If the agent has helped you understand something about insurance or has helped you get affordable protection against losses….then you have had contact with an insurance professional.
What If I Don’t Agree With My Insurer?
You’ve Got A Contract
Ownership of an insurance policy means that you have a contractual relationship. Paying a premium to an insurance company obligates it to provide coverage. Most companies try to be clear about what you can expect for your premium dollars. It’s up to you to understand the critical points of your policy, such as the following:
- Who or what is protected?
- How does coverage take place?
- When is coverage effective?
- How much coverage is provided?
- What are the responsibilities for reporting losses?
Under an insurance contract, you the policy owner (or insured) and the insurer are partners. Partners often learn to understand and work with each other quite well. However, sometimes disagreements occur and you should be aware of how you may look to your policy for help.
Arbitration & Appraisal
Two common areas of disagreement are over whether coverage exists and how much should be paid for a covered loss. Arbitration is a tool for addressing the former issue, while the latter is frequently handled by appraisal.
A policy owner may have a claim rejected. The insurer, in most cases, should offer an explanation for declining coverage. (Of course, if no explanation was given, the policy owner’s first step should be to request this information). The insured and insurer may discuss their viewpoints and, failing to reach either an understanding or a compromise may choose arbitration. This process typically requires each party to:
- select their own qualified arbitrator
- permit the two arbitrators to select a third arbitrator to act as a judge
- allow that agreement among any two of the three parties stands as the decision
- each party pays for its arbitrator and share the expense of the judge
The appraisal process is often similar or even identical as both parities usually:
- select their own qualified appraiser
- permit the two arbitrators to select a third appraiser to act as a judge
- allow that agreement among any two of the three parties stands as the decision
- each party pays for its appraiser and share the expense of the judge
Items that can have a big impact on either process are any local or state laws, the actual policy wording and the arbitration/appraisal procedure that may vary by locale.
Of course, sometimes arbitration or appraisal fail to settle differences, so legal action may be the last resort. However, many policies also have provisions on lawsuits. Typically an insured is prohibited from filing a suit unless it’s done within a certain time period. Further, the insured has to use all the other options for resolving the conflict. While lawsuits are sometimes inevitable, it’s important that insurance consumers be aware of alternatives. It’s even more important to take advantage of discussing your insurance coverage with a qualified insurance professional. Their expertise can be invaluable in dealing with complex insurance situations.
How Does Your Insurer Defend You?
Two Distinct Obligations
Consumers who have any significant experience with buying insurance protection for their auto, home and other property are likely to understand how coverage is provided for their liability and/or their property. Conversely, few may be aware of the role that an indirect coverage plays in the obligation owed by an insurer to its customers.
A liability insurance policy, either vehicle or personal liability, is designed to protect you against your legal obligation to pay others because you have caused them personal injury, damaged their property, or have done both. Further, such insurance policies also promise to defend you against claims or lawsuits that are filed against a policyholder. In other words, besides paying for claims or suits, a liability policy also pays for the legal costs and fees associated with liability losses. What Is Covered Under Defense Costs?
The defense costs generally include:
- attorney fees (including cost of legal staff and expenses)
- court costs of the applicable jurisdiction
- costs of filing necessary legal papers
- if applicable, costs of expert witnesses
- costs associated with investigation, etc.
Is Defense Provided Within The Insurance Limits?
Defense Coverage can be offered in two ways. It can be provided as part of the insurance policy’s liability limit or as a separate coverage. You must read your policy’s insuring agreement(s) carefully because the method has a huge impact on the amount of your insurance protection. Let’s say that Policy A and Policy B both provide liability insurance limits of $100,000; Policy A provides defense coverage as part of the insurance limits while Policy B gives separate protection. Now let’s see what can happen:
Example: Jay Lowcare is sued by his son’s teacher, who came to his home to deliver some homework for Valiant Lowcare (who’s suffering from strep throat). When the teacher started down the wooden stairs of the Lowcare’s front porch, the second stair broke. The teacher suffered cuts and compound fractures to his left leg. Jay Lowcare knew that the stairs had been weakened by termites, but hadn’t bothered to replace the stairs or warn anyone. The damages (medical and rehab costs) totaled $95,000 and the defense costs were $18,000. Here’s how each policy would handle the costs:
Expense Policy A Policy B
Defense Cost $18,000 $18,000
Damages $95,000 $95,000
Total Paid $100,000 $113,000
If Jay Lowcare’s protection worked like Policy A, Jay would be personally responsible for paying the remainder of the damages because the defense costs ate into his insurance limits. Policy B’s method of providing coverage offers the most protection.
If you’re not sure how your policy handles the cost of your legal defense, talk to an insurance professional and make sure you get the coverage you need.
Telecomuters and Insurance
Do you work from your home for either part or all of your work week? Is it an on-going arrangement with your employer? Yes? Congratulations, you are a telecommuter. The increased flexibility you enjoy by not having to fight commuter traffic or squeeze into a cubicle is accompanied by special insurance considerations. Consider the following if you haven’t already adjusted your coverage to handle your telecommuting situation.
You may have gaps in coverage caused by your employer’s business property that is kept in your home or your own property that is used to perform your job. In either case, your home or tenant’s policy severely restricts or excludes coverage for property related to business use. This situation has a further complication. Business property usually consists of high-valued items that are vulnerable to damage and/or to theft. Such property includes fax machines, copiers, computers, computer peripherals (monitors, printers, scanner, modems) and phones, answering machines, PDAs, etc.
While your home or tenant’s policy protects you against most instances in which you cause others injury or damage others’ property, the situation is changed when the loss has a business connection. Personal insurance policies that include liability protection typically exclude business-related losses. Further, different policies can be quite broad in interpreting how a loss is connected to “business.” Liability Policies A and B would routinely respond to handling an insured who spilled hot coffee on a guest in his home. What if, instead of being a social guest, the visitor was your employer’s client? Policy A may still offer coverage because it considers the coffee spill to be a common home hazard. But Policy B may flat-out exclude the loss because the injured person was in the home for a business reason.
Instead of using your personal vehicle for going to and from work, more of your vehicle use may be related to your job. Many instances of job related use might be excluded from your personal auto coverage.
Simple events may be complicated when they occur in the course of performing your job at home. Coverage for injuries suffered while going up the stairs or experiencing a prolonged illness may cause coverage questions for your employer. Individual company or state-mandated coverage for employees may not apply to work-related accidents that occur at home.
Document What You Do
In order to determine what insurance coverage needs you have to address, you must clearly identify your exposure to business losses. Document the following:
- What routine job duties do you perform in your home?
- Are any tasks hazardous?
- Who visits your home because of your job (clients, vendors, repair personnel, suppliers, others). Be Specific.
- How often do such persons visit?
- Is a certain part of your home dedicated as a work area/office?
- What equipment is used in your job? (Is the equipment used only for your job? Who owns each piece of equipment?)
Once you have a good idea of the loss exposures from performing your job at home, you need to discuss your situation with an insurance professional. An insurance pro can help you find additional coverage options as well as help to identify what coverage gaps must be addressed by your employer. While it can be liberating to telecommute, you must make sure that you haven’t given up important protection along with your cubicle.
Watch What You Waive
What’s A Waiver?
To “waive” something is to intentionally give up some right or interest. Given that fact, it makes perfect sense that “waive” rhymes with “wave”. Whether you’re waiving or waving, you’re saying goodbye. In the case of a waiver, you may be “saying” farewell to a right to hold another party accountable for their acts.
Waivers are being used more often and they benefit the person or organization that asks you to sign one. A popular reason for using a waiver is to avoid the legal consequences of sponsoring an activity or event such as the following:
- playing school or community league sports
- church related sports groups
- intramural sports
- sports clinics
- field days
- bicycle races
- sky-diving classes
- motorcycle training
- horse riding
- school, church or other association field trips
- joining an aerobics class.
What Happened to Permission Slips?
The use of permission slips has decreased along with the willingness to assume responsibility for a given activity. Permission slips are ineffective when faced with a chance of being sued. Therefore, parties sponsoring events experienced a type of evolution in the forms they used to protect themselves:
- Permission slips allowing participation in an activity or event
- Permission slips including authority to act in emergencies (but the party may still be accountable for their action)
- Permission slips waiving any right to sue for actions occurring during an emergency
- Waivers for suing over any accident arising from both routine and emergency aspects of an activity
- Waivers for suing over any accident arising from both the routine and emergency aspects of an activity AND agreeing to assume the sponsor’s legal responsibility for the event.
Better Waived Than Sorry?
Sometimes, waivers are like advertising…they’re only effective when you believe in them. For instance, the person signing the waiver may add a comment that he or she has only signed the waiver as a formality, or under duress or protest. Often there are flaws connected with the waiver, such as incorrect or even illegal wording. For instance, a parent is required to sign a waiver for possible injuries to a child when some law doesn’t permit a parent to waive a minor’s rights. Another example is when state law may hold someone liable for certain acts, regardless of any waiver or agreement. Other things affect the enforceability of waivers such as:
- who is sponsoring the activity (profit or non-profit organization)
- the age of the persons being required to waive their rights (minors, adults, seniors)
- the nature of the activity (short trip to museum or horseback riding)
- the ability of the person waiving their rights to understand their actions
- the details surrounding any injury
- whether the parties affected by the waiver benefit equally from its use (for instance, a dangerous team-building exercise where an employee is required to participate or face termination)
- the qualifications of the staff holding the event
Read Before Waiving
Waivers are sometimes unavoidable, unless you choose to skip the event or activity. Other times, waivers are used when they are unnecessary. The problem is in that wide, fuzzy, middle-ground. It’s in such instances that you should take the time to read and understand a waiver before signing. It may even make sense to get competent, professional legal advice. Perhaps you can’t avoid assuming some risk or giving up your rights, but at the minimum, read before you sign so that you understand what could happen.
Managing Your Losses
What Is Loss Control?
Do you know that insurance is just one of a variety of methods for controlling the chance that you’ll suffer from accidental losses? Insurance is a method of loss control. Loss control is important because your personal environment is filled with opportunities where losses can occur. Most folks would like to minimize their chance of suffering a significant loss. The process of identifying and acting upon situations which may lead to losses is called “loss control.”
Loss control may involve both simple and complex ways to reduce the likelihood of facing a loss. Besides insurance, you can choose to use protective devices, oral or written contracts to shift the responsibility for a loss to someone else, avoid ownership of items that may cause a loss (such as large pets), avoid dangerous hobbies and activities, or change your environment. Let’s look at some areas where you might exercise loss control.
Loss Control With Your Automobile
- Use a bike or public transportation instead of owning your own car
- Borrow or rent a car when needed
- Take a defensive or advanced driving skills course
- Practice defensive driving
- Obey traffic laws
- Adjust driving habits according to driving conditions
- Park or store your car where there is greater security
- Install security alarm and/or other anti-theft devices
- Properly maintain the car in good condition, especially safety devices such as brakes
- Purchase or use cars that have higher safety ratings
- Don’t lend your car to inexperienced or inconsiderate drivers
- Have an emergency kit available, including first aid
Loss Control In Your Home
- Keep the inside and outside of the home in good repair
- Carefully store flammable liquids
- Install security alarm and/or other anti-theft devices
- Consider an apartment or condo which avoids certain risks of home ownership
- Warn visitors about any known hazards in your home
- Avoid running a business from your home
- Take precautions when your premises includes attractive nuisances such as playsets and swimming pools
- Keep dangerous objects out of the reach of children
- Carefully scrutinize activities that may create a bigger exposure to loss such as dangerous hobbies or highly visible activities (volunteer work for organizations that may create extra chances for losses)
- If you are involved in high risk hobbies or activities, get the training and/or take precautions to be sure that your participation is as safe and responsible as possible
- Take care with heating and electrical devices and systems (such as portable heaters, loads on electrical circuits, etc.)
- Keep first aid kit available
- Have a fire escape plan, including any needed safety devices (such as escape ladders from 2nd floor exits)
Miscellaneous Loss Control
- Store important papers in a secure, fire-resistance box or even in the corner of a freezer.
- Keep all the negatives of photos, so they can be reproduced
- Make videotapes of personal property as a record of your possessions
- Make copies of personal videos
- Be sure to carefully read contracts or agreeements before accepting them
- Arrange to exchange and keep important papers and mementos such as copies of videos and photos with friends so they’re easier to access and less expensive than storing in a safety deposit box
Of course the help of an expert is invaluable and your insurance agent is a very helpful source for reviewing any actions you’re considering to reduce your chances of facing a loss. So contact your agent for his or her expert assistance.
Who Regulates Insurance?
Insurance regulation is dominated by state laws due to insurance not considered to be a tangible good. If it were, it would be commerce which is regulated by the federal government. Since insurance was defined as an intangible good, its regulation fell to the individual states. Following are some key events that helped create the regulatory status of the insurance industry.
Paul vs. Virginia
In the 1860s, a New York insurance agent extended his dealings to Virginia. Legal action was filed against the agent for failing to comply with Virginia law. The case made it to the U.S. Supreme Court, which had to address whether individual states maintained the right to regulate insurance. The court preserved the assumption that insurance was not interstate commerce and should stay under each state’s jurisdiction.
In 1943, the Department of Justice sued a group of insurers known as the SouthEastern Underwriters Association (SEUA) for violating the Sherman Anti-trust Act. The SEUA members’ agreement to use uniform insurance rates amounted to price fixing, a violation of federal law. The association’s defense contended that insurance was not commerce, so it was not subject to federal law. The case was appealed to the U.S. Supreme Court and in June of 1944, the Court reversed itself and ruled that insurance was commerce and, therefore, subject to federal regulation.
This act was passed In 1945. Through this law, Congress reaffirmed the power of individual states by permitting the states to continue to regulate insurance. However, in order to maintain regulatory control after July 1, 1948, each state had to enact the same type of anti-trust laws used by the federal. All of the states eventually passed their own anti-trust laws, keeping insurance regulation at the state level.
A recent law’s impact on insurance regulation is currently evolving. In late 1999, President Clinton signed the Gramm-Leach-Bliley Financial Services Modernization Act. This law removed long-standing distinctions that existed between insurance companies, banks, and investment services. The law was in response to marketplace and technological developments that blurred the traditional roles of different financial service providers. The law’s primary goal is to allow players in the financial services market to offer more complete services to consumers more efficiently and at less cost. The act also has created serious obligations on the use of information gathered on financial service consumers. The impact of this important act will likely be more insurance regulation at the federal level.
Unfair Claim Practices? – Part 2
In part one of this article, we explained that policyholders have the right to expect their insurers to handle valid claims in a fair manner. We also explained that most states have rules that prohibit unfair claim practices. Here are some examples of such practices:
- Attempting to settle a claim based on an application which the company has changed without the insured’s knowledge or permission
- Delaying a claim investigation by requiring unnecessary reports or documents
- Failing to act promptly after receiving information concerning an insurance claim
- Failing to comply with prompt claims investigation standards
- When applicable, failing to pay a claim quickly, fairly and equitably
- Failing to promptly settle claims where liability is reasonably clear under one portion of the policy to influence settlement under any other portion of the insurance policy coverage
- Failing to promptly and clearly explain the basis in the policy or the law for either denying a claim or offering a compromise settlement
- Discouraging a policyholder from using arbitration
- Misrepresenting significant facts or insurance policy provisions
- Refusing to keep an insured informed of claim developments within a reasonable time after receiving a completed proof of loss statement
- Denying claims without a reasonable loss investigation
- Offering very low settlements to encourage insureds to sue
- Settling claims for amounts that are lower than a reasonable person would expect
The best way to avoid problems is to deal with reputable agents and companies who are committed to properly serving their customers. Your insurance agent would be happy to discuss your concerns and/or expectations about making an insurance claim. Take advantage of his or her expertise.
For more information on claims practices, please see part one of this article.
Unfair Claim Practices? – Part 1
The complexity of an insurance policy can cause problems when it is time to file a claim. Requesting payment for a loss under your home, auto, boat or other policy is what insurance is supposed to be about. You’ve paid your premium with the assurance that, should an eligible loss occur, you or your property will be protected. Faithfully handling your premium payments gives you the expectation that your insurance company will perform. “Performance” of the insurance contract refers to the insurance company’s obligation to investigate and, if applicable, pay for a loss. Loss payment includes taking care of expenses associated with settling a loss or handling the defense costs of a lawsuit.
It is unfortunate, but sometimes an insurance company may have an attitude toward paying claims that fails to meet your expectations. In fact, a company may actually deal with you unfairly. Your right to fair treatment is protected by the efforts of individual state governments. States agencies, typically via a special insurance or commerce division, are responsible for seeing that insurance companies and agents are true to the commitment represented by the insurance policy.
Most states actively enforce the requirement that insurers fairly settle valid claims against their policies. Insurance companies and agents operating within a state are also provided with complete information regarding unacceptable claims practices. A state’s rules on settling claims are based on the National Association of Insurance Commissioners (NAIC) Unfair Trade Practices Model Act. The guidelines, developed from the original act and other regulations (which vary by state) are meant to shield you from practices that are misleading, unfair or deceptive.
For more information on such practices, please see part two of this article.
Am I Protected Against Insurance Fraud?
What Is Fraud?
Every person who assumes the responsibility of carrying insurance to protect against their liability to other and to protect their property is affected by insurance fraud. While you and your insurer may disagree about a number of issues; when it comes to fraud; you are both victims. But you are not helpless victims. As an insurance consumer, it is important for you to know some basic information that may protect you from becoming a victim of insurance fraud.
The American Heritage College dictionary defines fraud as: a deception deliberately practiced to secure unlawful gain.
In common terms, insurance fraud is lying to or deceiving an insurer in order to make money or to become insured. Some common fraud schemes include:
- “padding” (inflating the true amount of) a claim
- lying or hiding (concealing) important information when applying for insurance
- submitting false claims
- “staging” accidents
- faking theft claims
- engaging in arson for profit
As a consumer, fraud should concern you since the cost is passed directly on to you in the form of higher insurance rates. You can play an important role in reducing fraud. Fighting Auto Insurance Fraud
Persons attempting to commit insurance fraud often do so by deceiving innocent drivers during actual accidents or by involving innocent drivers in “staged” accidents. Do the following in order to minimize this risk:
- Drive defensively, keeping space between you and surrounding cars,
- When traffic slows, begin braking before the car in front of you does,
- Be careful when turning into a lane that allows two or more autos to turn left at the same time. Victims of insurance fraud are often people who float across the line when turning and then are intentionally sideswiped by a person who is “staging” an accident.
- If you are in an accident, write down license numbers of all cars involved in the accident, get the names and contact information of all persons involved and their insurers. Count the number of passengers in the other cars and get their names, addresses and any other pertinent information.
- Call the police and get a police report even if the damage is minimal. DO NOT let another driver talk you out of calling the police.
- Carry a disposable camera in your glove compartment and take pictures of the damage to the vehicles and of all drivers and passengers in the cars.
Fighting Homeowners Insurance Fraud
It is far more difficult to involve an innocent party in homeowner fraud. However a homeowner can help himself and help deter fraudulent claims by properly maintaining their home; removing or repairing items that could present trip hazards to outside parties. Also, if someone is hurt in your home or premises, be certain that you get full information and make certain that a person gets any needed treatment. Carefully document any incident, including all impressions about likely injury. Have a healthy skepticism over any information on medical bills or claims.
Report suspicious actions such as a friend who asks you to store valuable property and you then find that the person has reported a theft to his insurer or a fire has occured at their home.
Think of insurance fraud as money out of your pocket-because it is. According to the US Chamber of Commerce, fraud adds 25% to property and casualty insurance rates.
If you are involved in an accident and you are suspicious that fraud may be involved, call the National Insurance Crime Bureau at 1-800-835-6423.
What’s Wrong With Insurance Information On The ‘Net?
Let The Buyer Beware
The Internet continues to be an explosive and revolutionary player in the Age Of Information. Many different types of business use this medium, with its connection to savvy, technologically astute consumers, as a way to promote insurance products. As we make our way in the 21st century, we should remember ancient advice – “Let the buyer beware.”
What Is The Danger?
In some respects, the ‘Net may be no more dangerous than business transacted via any other medium such as in person, via phone, catalog, wholesale club, etc. BUT, the need for being a careful consumer is critical to whatever medium is used. A large problem is that seeing information published gives the information a high level of credibility; this includes the information you’re currently reading. Our advice is to be certain of the information before acting on it. Although it’s true that ten sources of information can give you ten different answers, it’s preferable to seek and sort out different grains of truth than to have blind faith in a single source.
Why Is There Danger?
The ‘Net holds many wonders, but it also provides many opportunities for acquiring information that may be useless and even harmful. Any ‘Net user should remember the following:
- it is often impossible to verify who has posted the information and whether the source has any expertise in the subject matter
- material that appears on the net may be presented as facts when they are actually opinions or ads
- the information may be accurate for one purpose or set of circumstances, but it doesn’t tell you how the information applies to other situations; at the very least, it should contain a disclaimer
- no credible party may have taken responsibility for keeping the information accurate and current
- the person or organization that posted the information may possibly have a criminal intent
- ‘Net publishers forget that their audience is global and the information is for a specific group or geographic location
So Is This Information Any Good?
That depends upon what you do next. When seeking information to meet your insurance needs, it’s important to discuss your concerns with a knowledgeable source. A professional insurance agent is a good source for getting the answers you need to fit your unique coverage situation.