Archives: 2015

How to Handle Homeowners Policy Exclusions

Car-less But Still Need to Drive? Only have a business auto policy?

Paying for one’s own vehicle in addition to gas and insurance is just too costly for many Americans today, according to Matt Moore, vice-president of the Highway Loss Data Institute (HLDI).

As a result, the number of people who are using other methods of getting from place to place – such as car shares or rentals – is on the rise.

But if you don’t own your own vehicle, you don’t need auto insurance – right? Wrong. In some states, you aren’t allowed to drive anyone else’s vehicle without your own insurance. But fortunately, “named non-owners insurance” is available for those who don’t own vehicles, but may rent or drive others’ cars.

Named non-owners insurance provides bodily injury and property damage coverage, and is attached not to a vehicle, but to the “named” policyholder. It covers you in any vehicle you drive. Without it, you could be sued if you cause an accident driving someone else’s vehicle. For example, you borrow your friend’s car and cause an accident. If he or she has minimum liability on the car, and the liability coverage maxes out, your named non-owner policy will kick in to cover what’s left.

This coverage works for those who regularly rent cars or drive others’ vehicles, car-share participants, and those who are required to file an SR-22. Generally, named non-owners insurance is a great option for many people.

If you have a business auto insurance policy and no personal auto insurance you may have a signficant uncovered exposure.  In this situaiton you will need to have “drive other car” coverage.  Without this endorsement on your policy you are only covered on company vehicles.  Check with you insurance professional for more details on this vital coverage

You Can Stop Time From Flying By…

When we were kids, time seemed to crawl. The months between seasons, holidays, and birthdays just dragged and dragged. But in adulthood, time seems to fly by. And apparently, it’s not just our imagination.

One of the explanations for “time flying” is Habituation Hypothesis – a psychologists’ term that explains the differentiating details we don’t tend to notice when we go about our lives on autopilot. According to psychologists, we tend to notice fewer and fewer of the details that make each day unique; time seems to pass more quickly. Children, however, are always having new experiences and so notice more.

Dopamine may also affect how we experience time. According to an article in the New York Times, the neurotransmitter, when stimulated by ADHD drugs such as Ritalin, increases its function in the brain and seems to speed up the perception of time. Those drugs that block dopamine receptors slow the perception of time.

As for you…if you want to stop time from flying, skip the drugs and start noticing those details that make your day special.

Take a New Look at Love This Valentine’s Day

April is supposed to be the cruelest month, as penned by poet T.S. Eliot in “The Waste Land.”

Maybe so, but many of us would nominate February for the cruelest month title, both for its calendar position (just after New Year’s) and its weather (gray and cold). But February has an ace in the hole: Valentine’s Day.

What could be warmer, brighter and, well, lovelier, than a day devoted to love? But is it always about Eros – romantic love – as we tend to define it now?

Maybe the ancient Greeks had something when they used four – not one – words to connote different types of love: Eros, of course; agape, which is a deeper, selfless type of love; philia, meaning friendship; and storge, the affection parents have for their children.

These days we tend to get caught up in the trappings of Valentine’s Day – shopping for gifts, planning date nights, and buying chocolate everything. Why not look beyond the traditional and consider those other kinds of love?

For example: Make a point of telling your friends how much they mean to you. Or try agape and make a charitable contribution in the name of love to people in need. You frequently tell your kids and spouse how much you love them (if not, you should), but storge can also mean telling your parents how much you love them.

Valentine’s Day can be special, not just another buying opportunity. This year, why not make like the ancient Greeks and spread your love around?

How to Handle Homeowners Policy Exclusions

Insurance is for the unexpected, but what if the unexpected is one of the exclusions on your homeowners insurance? Does that leave you up a creek without coverage? You may be able to protect yourself from these situations. Here are three scenarios based on typical homeowners insurance exclusions:

Floods: If you live by any body of water, you may be in at risk. Homeowners insurance doesn’t cover losses due to “rising surface” water. It also excludes coverage for water issues caused by things like blocked gutters. Your agent can find out if you live in a high-risk flood zone. You can also view local flood maps, which are available from city or county governments.

What to Do: Buy flood insurance; it’s issued only through the National Flood Insurance Program (NFIP), but most agents can write the policy for you. The maximum coverage is $250,000 for the home and $100,000 for personal contents.

“Wear and Tear”: What happens if your large appliances or home electronics start to wear down unexpectedly, or if kitchen tiles crack, the foundation settles or wood floors bow? Homeowners insurance doesn’t cover these eventualities. Is there something you can do?

Top 10 Insurance Terms

Directors and Officers Insurance: Debunking the Myths

Companies often don’t believe they need the much-misunderstood commercial liability insurance product known as directors and officers liability insurance (D&O).

Acts leading to claims: This liability insurance provides protection from financial damages and covers legal defense expenses from claims relating to things like

• mistakes
• omissions
• breaches of duty
• misleading statements or misstatements
• neglect

D&O insurance protects individual directors and officers of a company from financial damages due to actual or alleged wrongful acts committed while in these jobs. It covers past and present directors and officers, and sometimes employees. One common misconception is that D&O provides corporate leaders with blanket coverage, but in fact D&O doesn’t protect against negligence or illegal acts.

Who needs it? Publically traded companies should buy D&O insurance when a board of directors or an advisory committee is struck and/or when the company is looking for investors. In the latter case, investors will usually require D&O insurance as a condition for putting up funds. Non-profits and private companies should also consider D&O, depending on their business type. And small businesses also shouldn’t automatically dismiss it; there are many reasons managers, directors, and officers of even small companies may be sued.

Confused? Discuss it with your advisor.

MARKETING
The Customer Isn’t Always Right: How to Draw the Line…

However many times you’ve repeated over and over to yourself that the customer is always right, there will be times when you simply have to draw the line and tell the customer that he or she is wrong.

It may be due to a manipulative client who is trying to wring concessions from you, or it may just be that the customer is irrational or out of line in their demands.

But whether it arises from a misunderstanding about deliverables, timing, terms or pricing, it is always traumatic to the employee or manager. How you react and the degree of professionalism you bring to the situation are crucial to the eventual outcome.

Here are some tips for handling a conflict, disagreement, or dispute when a client is just plain wrong.

• Listen actively; let the client state his/her position and ask probing questions
• Focus on the issue, not the person
• Do not argue, offer trite excuses, or assign blame
• Don’t go behind the person’s back to someone else in their organization
• Answer follow-up calls and emails promptly
• Have a co-worker attend your meetings or sit in on your phone calls with this client
• Be conscious of your body language, facial expressions, and tone of voice during every encounter with the customer.

When you know that this customer is wrong, you may feel powerless and unsure about how to deal with the situation. You may have concerns that your reputation will be tarnished.

Many companies are now providing support to employees who are dealing with such situations by offering conflict resolution training and maintaining a culture that empowers employees to know when and how to draw a line.

HOT BIZ TRENDS
How Millennials Will Change the Ways We Do Business

As baby boomers move on to greener fairways, a new cohort is taking their place: millennials.

And they’re going to be big. Ray Williams, president of Ray Williams Associates, notes in a Financial Post article: “By 2020, nearly 50 percent of the U.S. workforce will consist of Millennials.”

Born roughly between 1980 and the early 2000s, millennials are said to be self-centered technology addicts who are distrustful of authority and tradition.

So, given those traits, what’s ahead for the way we do business?

In “The Trophy Kids Grow Up: How the Millennial Generation is Shaking up the Workplace,” Ron Alsop suggests that with millennial employees, “employers are facing some of the biggest management challenges they’ve ever encountered.”

In expanding on this point, Kate Taylor writes in Forbes: “The 9-to-5 job may soon be a relic of the past if Millennials have their way…freelancing and self-employment are on the rise.

Meanwhile, 60 percent of Millennials are leaving their companies in less than three years…” at an enormous cost to employers.

Alsop notes some anomalies: For example, millennials applaud the flexibility provided by the virtual office, but demand defined rules and responsibilities; they’re self-absorbed, yet civic-minded and philanthropic. “Millennials…bring a set of values and priorities that differed significantly from the generations that came before them.”

Concludes Chris Komisarjevsky in HuffPost: “In our digital age, these millennials have power and influence well beyond their age.”

INSURANCE 
10 Insurance Terms You Must Understand

In a virtual world, your commercial insurance policy can seem like just so much more boring paperwork. However, if you’re a business owner, get over it; it’s essential you read and completely understand your policy, however boring. To get you to that place, here are some common – and important – business insurance terms you need to know:

Actual Cash Value (ACV): This refers to the cost of replacing destroyed or damaged property with like or similar property. However, depreciation is taken into account, so whatever the insurer pays to replace the property will have deductions for depreciation. For example, a surround-sound system installed in your restaurant 10 years ago is destroyed in an electrical fire. Your insurance would pay an amount to replace it with a similar or like item, less any depreciation value to account for value lost over a decade. If you have high-value items such as electronics, artwork, or antiques, consider replacement cost coverage, which allows a higher claim payout, because it doesn’t deduct for depreciation.

Act of God: These are naturally occurring perils over which policyholders have no control, such as earthquakes, devastating windstorms, typhoons, or similar events.

Aggregate limit: An aggregate limit is the maximum amount you can receive for a specified period of time. For example, you may have an aggregate limit of $200,000 for one year, which would mean that regardless of how many separate claims you make, once your policy pays out that amount for the year, it won’t pay more. Some policies have general aggregate limits, meaning the total amount your insurer will ever pay, regardless of how many claims.

Exclusion: These are “named provisions” that specifically identify items that aren’t covered, including losses occurring from specified actions or issues.

All-Risk policy: This policy will pay for losses regardless of the reason the loss occurred.

Named Perils policy: The exact opposite of an “all-risk” policy, “named perils” specifically defines what causes of loss will be covered. Usually, these include vandalism, fire, or acts of nature. This policy provides coverage ONLY for events listed in the policy, and although it’s usually very affordable, it offers very limited coverage.

Valued policy: Also referred to as an “agreed amount” policy, this states that an event resulting in a complete and total loss will be covered up to a specific, pre-determined amount as stated in the policy.

Endorsements: These are provisions added to a policy that provide extra coverage, alter a policy in some way to account for special coverage needs, or define exclusions or inclusions. Often referred to as “riders”, they can be thought of as amendments to policies.

Real Property: This refers to things such as the land or items permanently affixed or attached to it: sheds, detached garages, permanent fixtures like fences, and sometimes heavy machinery and equipment.

Personal Property: Personal property is different from real property in that personal property is easy to relocate. If you turned your building upside down, anything that falls out is considered personal property, such as furniture, computers, and office equipment.

Dos and Dont’s in Examining Your Auto Policy

How to Ring in a Happy New Year With Peace of Mind

We know that risks from burglaries and house fires increase during the holidays; however, there are risks to your home all year round. Here’s how to ensure you’re protected in 2015.

Purchase insurance. Many renters believe they have coverage from their landlord’s insurance in the event of a fire. In fact, the landlord’s insurance will only cover the building’s structure; renters need their own insurance for their possessions.

Renters also need liability coverage. If you are the cause of a fire that affects your neighbors’ property, you’ll need liability insurance to protect you from losing everything if they sue you for their losses. Even homeowners without mortgages, many of whom don’t think it’s necessary to purchase homeowners insurance, still need the ability to rebuild if their homes are destroyed.

Understand your policy. Read your policy carefully and ask your agent about what is and isn’t covered. For example, homeowners insurance doesn’t cover floods; flood insurance must be purchased through the National Flood Insurance Program.

Take inventory. Rather than carrying the same limits as before, consider what you stand to lose and what it would cost to replace everything you own. The average renter has about $30,000 worth of personal property, and for families or antique collectors that could be much higher. Even if you believe your possessions aren’t particularly valuable, you’ll still need to replace them.

Conduct your inventory, determine estimated values, add them up and purchase this amount of personal property coverage. Now you can launch the new year with peace of mind.  

Things We Love to Hate: How ‘Hold’ Music Began

If you’ve ever wanted to incinerate your phone rather than hear one more note of that infernal on-hold music, you’re not alone. Russ Juskalian of Newsweek reports, “Of all the depressing statistics about a lifetime of consumer existence, this may be the most distressing: each of us is destined to spend roughly 1.2 years on hold.” He calls it “a near-death experience.”

Is Eric Satie to blame?

Simon Morrison, a Princeton Musicology professor, says we can thank French composer Erik Satie for the birth of background music, which he began writing in 1917 and referred to as “furniture music.”

Or Alfred Levy?

Perhaps. But according to Tom Vanderbilt of Slate, “…in the spring of 1962, an application appeared in the U.S. Patent Office humbly titled, Telephone Hold Program System.” The filer was Alfred Levy, a factory owner who thought music might keep callers from hanging up while on hold.”

And now, there’s research behind it. In his Newsweek article, Juskalian says, “Modern corporations, with the help of psychologists, have actually made a science out of keeping you on the line, using harmonic soporifics in an effort to subdue your rage.”

However, a recent paper for the American Psychological Association offered these alternatives: tell customers where they are in line instead of apologizing every few minutes (cue the sounds of thousands of customers hanging up on your apology). Your customers will experience more satisfaction when they feel the line is moving quickly. Does that mean hold music is on its way out? Hold on!

This Month’s Smile: Knock-Knock Jokes

Adult or kid, few people can resist good (and not so good) knock-knock jokes. Start the new year off right with these groaners.

Knock Knock! Who’s there? Lettuce. Lettuce who? Lettuce in, we’re freezing!

There’s probably an eager little kid waiting to “get you” with these two:

Knock Knock! Who’s there? Doris. Doris who? Doris locked, that’s why I knocked.

Knock Knock! Who’s there? Cowsgo. Cowsgo who? No they don’t; cowsgo moo.

Finally, if you’re on the receiving end of these jokes, this may, but probably won’t, work: Knock knock! Who’s there? Dewey. Dewey who? Dewey have to keep telling these dumb jokes?

Dos and Don’ts in Examining Your Auto Policy

Ready for 2015? We are, and want to ensure you’re saving money and understanding your auto insurance coverage. So here are a few ways you can do just that.

You probably haven’t even looked at your policy since last year. Here are some dos and don’ts.

• DO pick up your policy and read it, making notes of any questions, so you can ask your insurance agent later.
• DON’T head for the Internet. Only an agent who knows and understands your situation can give you the right answers.
• DO understand your coverage options: You may not have the necessary coverage or have too much. Many people think full coverage includes things like roadside assistance and rental car coverage, when, in fact, you may only have liability, comprehensive, and collision coverage. Ask about additional coverages.
• DO ask about discounts: What discounts do you have now? What else is available? People’s lives change: If you married and had a child, you may be eligible for a new family discount; or a good student discount, if you have a 3.0 GPA; or an average 3-7 percent affinity discount for belonging to or working for certain organizations or companies.
• DON’T rely on state minimums: They usually don’t provide sufficient coverage, given current vehicle and healthcare costs. Purchase as much liability coverage as you can afford; it doesn’t cost much to increase liability limits (often just a few cents for an additional $50,000 or more in coverage).
• DON’T pay for unnecessary coverage. If your older vehicle is only worth $1,000, carrying comprehensive and collision coverage with a $500 deductible isn’t economical. The insurer would only pay $500 after you paid the deductible. You could have banked your premiums and used it towards replacing the car.
• DO work with your agent to pinpoint your needs and come up with the appropriate auto policy for 2015.

Wellness Plans: Good Health is Good Business

Sorry Chef: Big Data is Changing High-End Dining

Everyone knows the customer is always right. Well, almost everyone.

What about those culinary maestros crooned over in magazines such as Vanity Fair and Bon Appetit with the kind of adjectives usually reserved for the Duke and Duchess of Cambridge?

You know the type – gourmet chefs on a mission to teach untutored restaurant goers the finer points of dining.

These are the divas of the kitchen, who, if you dare to ask for salt, might indignantly toss you and your naïve tongue right out the door.

But wait! One group of chefs is actually asking customers their opinions. Even better, they’re using their comments to tinker with dishes and menus. Can it be that haute cuisine is “crowdsourcing”?

The chefs work for Dinner Lab, described in a recent New York Times article by writer David Segal as “a pop-up restaurant company…dedicated to the notion that high-end chefs ought to listen to customers.”

Adds Segal: “This is a surprisingly radical idea … at the wallet-thinning end of the dining spectrum, you can (usually) send your compliments to the chef, or you can shut up.”

At a recent pop-up dinner, chef Christopher Sorter table hops, asking for diners’ reactions.

But of wider value are the customer comment cards, which are aggregated and fed back to the chefs.

The company’s chief executive, Brian Bordainick, sees this “big data” as a step towards revolutionizing the high-end restaurant industry; the company hopes to sell the information to clients in 40 cities at home and abroad.

ENTREPRENEURS
Considering a Business Partnership? Get a Pre-Nup First

According to Bloomberg Businessweek, “A business partnership is usually hatched in a state of inspired optimism when two or more seemingly like-minded individuals come together with an idea to create a product or service and develop it into a business.”

A good partnership is like a good marriage in which each partner supports the other and often supplies something the other may lack. Whatever the inspiration, to make it work as it should, it’s important to detail expectations – to know who does what and get it on paper before the marriage – as with a pre-nuptial agreement.

This is what these famous partners understood:

• Thomas Edison partnered with J.P. Morgan and the Vanderbilts to found the Edison Electric Light company. Edison supplied the ideas, and his well-heeled partners supplied the money – an excellent arrangement indeed. Today, that company is General Electric.
• Computer whizzes Bill Gates and Paul Allen predicted the future: software. Their partnership produced Microsoft, the biggest software company in the world. Similarly, Steve Jobs’ marketing brilliance and Steve Wozniak’s software knowledge created Apple.

They were the savvy ones. Coco Chanel understood fragrances but sold 90 percent of her company to marketing genius Pierre Wertheimer and Theophile Bader, owner of Galeries Lafayette, a famous French department store. Chanel No. 5 became one of the best-selling perfumes in history. As for the business relationship, it was acrimonious.

If you’re contemplating a business partnership, unlike Chanel, consider these must-do’s: Conduct your due diligence to understand what you’re getting into, and prepare in advance for the possibility of a break-up.

In business, a pre-nup is called a partnership agreement. Write it up – before the honeymoon is over.

INSURANCE 
Wellness Plans: Good Health is Good Business

As the New Year approaches, you may be thinking about resolutions. And, as per usual, those resolutions (such as eating healthier and exercising more) seem like distant memories as the year goes on.

What we fail to realize is that most major lifestyle changes like those mentioned above are easier to make when someone is beside us for support. Resolutions have a better chance of working when we work on goals together.

Businesses need resolutions too, and if you want your business to be successful in 2015, there’s one resolution you may want to consider – one that will make you an ally (albeit an unlike one) in helping your employees to keep their fitness resolutions: wellness programs.

According to a survey of employers by Fidelity Investments and the National Business Group on Health (NBGH), some nine out of ten companies now offer wellness programs as part of their benefit packages to encourage their employees to lead and maintain healthy lifestyles. The survey indicates a growing understanding on the part of employers that healthy employees are good business.

Wellness programs lower insurance costs

Towers Watson found in its survey that businesses pay over $9,000 on average for each employee’s health insurance. Group health insurance works like other types of insurance: if their employees are deemed high risk due to unhealthy lifestyles, their employer will pay more for group health insurance.

Consider this example: Employees battling depression can raise employers’ costs by up to 70 percent. Exercise is a proven way to treat depression and a major component of most wellness programs. The conclusion: It’s cheaper to insure healthy employees, and wellness programs can help employees achieve and maintain good health. Therefore, wellness programs virtually pay for themselves.

Fewer sick days equals increased productivity

Those living healthy lifestyles aren’t as susceptible to illness, and wellness programs help reinforce and maintain this. Productivity losses resulting from absenteeism due to illness is costing employers billions of dollars each year; the impact of unhealthy lifestyles is taking its toll on individual employers and on the country as a whole.

Return on investment

Not only are there savings on healthcare premiums, but a multitude of companies are also seeing additional benefits from wellness programs and healthy employees. For example, depending on the state you live in, you could be eligible for a tax credit, possibly reducing your company’s taxable income.

Additionally, you could see savings on workers compensation insurance premiums, as fewer workers compensation claims are filed. The numbers are certainly attractive – businesses that implement wellness programs may see an average decrease of up to 30 percent in workers comp claims, as well as in long-and short-term disability claims. And you may avoid many potentially expensive lawsuits.

These are just a few ways wellness programs will work for you. It’s not just about becoming a caring employer, it’s also good business.

Your insurance agent can help you determine what kind of wellness program is right for your company.