Mind the GAP

Every time you step off the Tube in London's Underground you hear a women's voice in her perfect British accent reminding you to "Mind the gap". It is a good thing too. At some stops on the Underground there is a pretty big gap waiting for you as you exit and if you got caught in one of those monsters you could be in some trouble. The same is true for the gap that occurs in leases and loans on cars. Normally over time a vehicle's value depreciates faster than the loan or lease can be paid off. This is commonly referred to as being "upside down" on your loan or lease. If during this "upside down" period you total a vehicle in an accident there is going to be a gap between what the insurance company will pay you (actual cash value of the car) and what you still owe on your loan or lease. The good news though is there is insurance that covers this gap and it is appropriately named GAP insurance.

GAP insurance coverage helps pay for the difference between actual cash value of the car and what is owed on the loan or lease. One thing to keep in mind though, GAP insurance from personal auto insurance companies does not cover the cost of warranties or other add on charges that might have been included in the loan or lease.

So for an example, you totaled your vehicle and the insurance company is going to value your car at $5000 but your loan was still $7000. Let’s also say that of the $7000, $500 of it is because of the warranty that you had purchased. Therefore, the insurance company (if GAP insurance was on your policy) would give you $6500 ($7000 due on the loan minus the $500 warranty cost) instead of $5000.

Cost Savings Ideas

There is constant talk today about cutting costs. Here are two options that might help you save a few dollars on your insurance in this rough economy.


1)Raise your deductibles:
A typical homeowner policy has a deductible of $500 and a typical auto insurance policy has $100 for comprehensive and $250 for collision deductibles. One way to help save a few dollars on your annual insurance bill is to increase your homeowner deductible to $1000 and your comprehensive and collision deductibles on your auto to $500 each. Note that when you do this you bring a little bit of the financial risk back on yourself. A good rule of thumb to help figure out if the deductible change is worth the risk is to take the savings you will get for increasing your deductible and multiply it by three. If that number is larger than the difference between your old deductible and your new deductible in my opinion you are taking on an appropriate amount of risk for the savings.

2) Drop physical damage on your old vehicles.
If a car is 10 years or older it is probably worth researching whether you should have comprehensive and collision coverage on your car (many people know this as "full coverage"). Two ways to help you decide if dropping comprehensive and or collision from your car is worth it are:

1. The Insurance Information Institute says that if your car is worth less than 10 times the amount you pay annually for comprehensive and collision coverage it isn't worth keeping the coverage.

2. Another way to analyze if it is worth keeping the coverage is to take the premium you pay for collision and add it to your deductible amount. That is the total amount that it costs you to insure your car. (i.e. Your annual collision premium is $250 and your collision deductible is $500. If you total your car you will have paid $750 ($250 in premium and $500 in deductible) before you received any money from your insurance company) If in your mind it isn't worth spending that kind of money to save your vehicle if it was totaled than you might want to consider dropping that coverage.

Insurance and Your College Kids

Out in front of our Oxford, OH insurance office, it is a busy place. Today 16,000+ Miami University students return to begin a new school year. This annual pilgrimage brings up potential insurance issues pertaining to what parent's personal insurance policies cover or don't cover. Three areas that parents should be aware of:

(1) If your son or daughter is going away to school over 100 miles from home without a car, most companies will rate your Personal Auto Policy for them being married which is a nice discount. Let us know if this discount might apply to your family and your Personal Auto Policy.
(2) Most insurance companies will extend personal property (contents) coverage and personal liability for your son or daughter while they are in college and living in a dormitory. Some, but not all, will also extend coverage if they are living in off campus facilities such as an apartment or other student housing. Please check with us to see if your insurance company provides this extended protection. If not, we should be able to write a Tenant/Homeowner for your student to cover both their personal property and personal liability while they are an undergraduate. If they are in graduate school, they should definitely have their own Tenant/Homeowner Policy.
(3) If you or your children are using a rental truck to take their things back to college, U-Haul, Penske, Hertz and other will offer you coverage on the vehicle (collision damage waiver) and extended liability. While these may be covered by your Personal Auto Policy, not all companies extend the protection, so check with us before renting the vehicle. Whether or not they are covered will depend on the length and Gross Vehicle Weight of the vehicle and several other factors. We may be suggesting you buy the extra protection from the rental company before your trip.

Washington and Oregon drivers at odds over self-serve gas

Washington and Oregon Drivers Worlds Apart on Self-Service Gas Laws

PEMCO Insurance has released a survey that shows a big difference in opinions on pumping your own gas between drivers in these bordering states.


The release shows that 63% of Oregon drivers support their state’s ban on motorists pumping their own gasoline, while 60% of Washington drivers – male and female – support being able to pump their own gas. About half of Oregon drivers said they would support a change in their self-service ban if it meant saving as little as five cents per gallon.


While Washington allows self-service gas stations, Oregon is one of just two states that ban self-service gas stations, with New Jersey the other state. The laws in these two states require gas stations to train attendants to pump gas for customers and prohibit drivers from pumping their own gas.


“The Oregon legislature says that full-service gas stations are especially necessary because of Oregon’s high rainfall, which increases the risk of people slipping on wet pavement and falling on spilled gasoline,” said PEMCO spokesperson Jon Osterberg.


The self-service ban was passed by the Oregon legislature in 1951 (although self-service gas didn’t become popular nationwide until the early 1970s) on the basis that self-service gas stations are less safe, increasing the risk of accidental fires. The Oregon Revised Statutes also defend today’s law on economic grounds, citing that “self-service dispensing at retail locations contributes to unemployment, particularly among young people.”


According to the PEMCO poll, Washington residents are unconvinced of the economic benefits of gas-pumping laws. The poll presented drivers with a proposed scenario suggesting that a shift from Washington’s self-service model to the full-service law would result in an increased cost of about five cents per gallon and create new jobs for Washington residents. Despite the prospect of new jobs, nearly two-thirds of Washington drivers said they would oppose costlier gasoline.
Oregon drivers, however, are more motivated by economic factors – about half (49 percent) said they would consider favoring a change in the self-service ban if it meant saving as little as five cents per gallon.


So, as it stands now, once you drive across the Columbia River into Washington, you'll need to get out of your car and pump the fuel yourself, since you won't find anyone to help you.


And as for you Washingtonians, don't forget that it's illegal to pump your own gas, so hopefully you won't be waiting long!

Source: PEMCO Insurance Northwest Poll  www.pemco.com/poll

Cyber Liability Insurance

As absolute dependence on computers and computer stored information grows there are new ways companies can be sued by third parties for damages.  When private information such as dates of birth, social security numbers, credit card numbers, etc are stolen off of your business' computer systems, it is called a data breach, and they are very costly to manage.  The insurance industry has calculated this cost to be about $200 per individual whose information was taken.  Also, if a malicious virus is distributed from your computer to a customer’s computer system and causes damage, you could be held responsible for cost to repair their system.  Your basic general liability policies are not designed to pay for such claims so many times when businesses look to their business policies the coverage is not there to help with these expenses.  Because of that, insurance companies have developed a new product called cyber liability.  It is designed to step up and pay for the third party damages caused by your data breaches and damage by viruses to other’s computer system.

So what kinds of business should be looking into this new cyber liability products?  Any business with a computer, especially one that stores or interacts with any private information or distribute emails to others should look into this product.  Restaurants and retail stores that take credit cards, professional business that store dates of birth, driver’s license numbers and social security numbers, even doctors’ offices are at risk for the types of claims mentioned above.  Unfortunately, even if a business has the best firewalls and antivirus software, they still are at risk of data breaches and malicious viruses.  Cyber liability is something designed to help protect your business assets if an unpreventable claim strikes.

MSN Health recently published on their website a great article about firework safety.  We wanted to post this article as both a way to wish you a Happy Fourth of July and to make sure you keep it a safe Fourth of July.  Here is the article.  To go directly to their site click here or read below:

Fourth of July Safety Tips

By Hank Bernstein, D.O., Harvard Health Publications

Each year, especially during the early summer weeks around the Fourth of July, thousands of people are treated in emergency departments for fireworks-related injuries. While some are minor, many of these injuries are serious, for example, resulting in burns or blindness. In 2008, seven deaths from fireworks-related injuries were reported; perhaps these could have been prevented.

 

Children should never be allowed to use fireworks! Of the 9,800 fireworks-related injuries reported to the U.S. Consumer Products Safety Commission (CPSC) in 2007, almost half occurred in children under the age of 15.

 

All fireworks are dangerous—even sparklers—which cause the majority of fireworks-related injuries to children under the age of 5. Sparklers burn at very high temperatures (up to 2,000 degrees Fahrenheit), sending out sparks that can easily set clothes on fire and cause permanent eye damage.

 

Because the risk of injuries when using fireworks is so high, the American Academy of Pediatrics (AAP) supports a nationwide ban on the private use of any and all fireworks. Instead, families should attend public fireworks displays, which are much less dangerous.

 

While a few states have banned all consumer fireworks, most have not. Until every state bans fireworks, the CPSC and the National Council on Fireworks Safety recommend taking the following safety precautions to make it less likely that someone will be injured by these potentially dangerous devices:

 

• Never allow children to touch fireworks of any kind, including sparklers even after they have "gone off". It can be hot, or even explosive and debris from fireworks can be extremely dangerous.
• Older teens should only be allowed to use fireworks under close adult supervision.
• Fireworks must never be used while drinking alcohol or using other drugs.
• Obey all local laws.
• If allowed in your area and you choose to do so, buy fireworks only from reliable sellers.
• Store fireworks in a dry, cool place.
• Only use fireworks outdoors and always have a good amount of water close by (a garden hose and a bucket), in case of emergency.
• Read and follow label directions.
• Light only one firework at a time.
• Never hold any part of your body directly over the firework while lighting it.
• Be sure all other people are out of range before lighting fireworks.
• Never throw or point fireworks at anyone.
• Never light fireworks in a container, especially a metal or glass container.
• Never light fireworks near a house or building, dry leaves or grass, or any other materials that can catch on fire.
• Never re-light a "dud" firework. Instead, wait 15 to 20 minutes, then soak it in a bucket of water and throw it away.

Information contained in this article was adapted from the American Academy of Pediatrics and the Consumer Product Safety Commission.

 

 

 

iPhone Apps for Insurance Companies

Over the last year mobile applications for smart phones have begun to pop up amongst the different insurance companies that Fey Insurance represents. It started with Travelers and Progressive and has expanded into Safeco, Chubb and now Cincinnati Insurance Company. The applications all allow you to view your current policies and auto ID cards. They help give you contact information to report claims as well as advice on what to do during a claim. Some of the applications actually allow you to report the claim directly from the mobile device.

So how do you get your insurance carriers mobile application? First go to your most recent insurance policy declaration page for either your home or auto insurance. Double check which company you have. Once you know which company you have your insurance with then pull up the applications icon on your iPhone. In the search box type the company name. Once you have located the insurance company's application be sure to download it to your device. Some of the applications will allow you to setup your account right in the app but others may require that you first go to the insurance companies website and create a login.

When you are all finished creating a log in you are then set to use the app and have your personal insurance information handy at any time. Each app also has a button you can press to give us a call directly for more detailed assistance. Try it out today.