Thursday, December 30, 2010
Monday, December 27, 2010
Sunday, December 5, 2010
CHRISTMAS TREE SAFETY TIPS
15 Must Know Christmas Tree Safety Tips
Let's face these days it seems like there danger in everything we do. But don't worry there are plenty of safety tips to ensure there are no mishaps this holiday season. Below is a list of things you can do to make you have a happy, accident free holiday season.
1. Make sure you buy the freshest tree possible (brittle leaves is an indicator that your tree is dry)
2. Cut off a half inch of the trunk of your tree, this will allow the tree to suck in more water
3. When choosing a spot for your tree, make sure there are no heating vents, radiators, fireplaces or used electrical outlets. 4. Make sure your tree is not blocking any exits 5. Make sure you keep candles and other sources of fire away from the tree at all times. 6. Make sure your Christmas tree lights are for indoor use and are the correct voltage. Also only buy UL lights because they are tested for safety. 7. Try to use miniature lights, they produce less heat and are more energy efficient. 8. Make sure your Christmas tree stand is secure and stable 9. Give you thirsty tree a lot of water and re-fill it everyday 10. Check all of your lights for shorts before you put them on your tree 11. Shake your tree free of dry bristles before you take it inside 12. Turn your Christmas trees off at night and when you're leaving the house 13. Keep flammable items like curtains, paper and combustibles away from your tree 14. Have a fire extinguisher nearby for those rare emergencies 15. Discard your tree right after Christmas to avoid having a dry, dead fire hazard in your house! And remember, most of all, to have a safe, and happy holiday season!
3. When choosing a spot for your tree, make sure there are no heating vents, radiators, fireplaces or used electrical outlets.
4. Make sure your tree is not blocking any exits
5. Make sure you keep candles and other sources of fire away from the tree at all times.
6. Make sure your Christmas tree lights are for indoor use and are the correct voltage. Also only buy UL lights because they are tested for safety.
7. Try to use miniature lights, they produce less heat and are more energy efficient.
8. Make sure your Christmas tree stand is secure and stable
9. Give you thirsty tree a lot of water and re-fill it everyday
10. Check all of your lights for shorts before you put them on your tree
11. Shake your tree free of dry bristles before you take it inside
12. Turn your Christmas trees off at night and when you're leaving the house
13. Keep flammable items like curtains, paper and combustibles away from your tree
14. Have a fire extinguisher nearby for those rare emergencies
15. Discard your tree right after Christmas to avoid having a dry, dead fire hazard in your house!
And remember, most of all, to have a safe, and happy holiday season!
Monday, November 22, 2010
North County Solutions for Change has a driving commitment to ensure that every child has a home. They help homeless families get back on their feet by providing support and permanent solutions to those that need help.
If you would like to support our Holiday cause this year, please bring a new, unwrapped hoodie sweatshirt (any size), or a new unwrapped toy for a child or teen to our office in Carlsbad (2801 Jefferson St). Your donation will help bring a smile to a child's face during this holiday season!
For more info on North County Solutions for Change, please visit their website at http://solutionsforchange.org/index.htm
Monday, November 8, 2010
Consider working on all of your mono-line auto policies by cross-selling Renter's Insurance to your clients. The article below will give you some info to use in your marketing effort.
Renters’ Insurance Needs
Persons who live in apartments or rent a residence are fortunate. Most insurance companies can protect their assets and belongings by using a policy that is designed especially for tenants. Typical policies cover your possessions for common causes of loss, additional living expenses related to making other living arrangements, medical expenses for treating people injured on your premises and, of course, lawsuits.
Protection under a standard renters policy is on an actual cash value basis (item’s replacement cost less depreciation).
Example: Stewart’s kitchen catches fire and his five year old refrigerator is destroyed. A new model of the refrigerator costs $750. His insurance company pays him $162, explaining that it’s the effect of five years of deteriorating value. Most companies offer coverage on a replacement cost basis if you purchase a separate endorsement.
Certain types of property are quite vulnerable to being stolen, therefore very limited coverage is available for items such as jewelry, furs, gems, gold, silverware, pewterware, money, securities, guns and accessories. Protection can be increased by adding additional coverage to the tenant policy or by purchasing a personal article floater policy.
Additional Living Expenses
A typical tenant policy provides a limit equal to 20% of your contents insurance limit. If your contents limit is $15,000, then your additional living expenses limit will be $3,000.
Liability insurance covers you for injury you cause to others and for damage to property that belongs to others. The policy also provides for the cost of a lawyer (if necessary) and most court costs. Examples of liability claims include: slips and falls; beaning a neighbor’s child with a baseball; hitting a golfer with your errant hook shot; or a friend breaking her hip when she trips on a skateboard your child left on the stairs.
COPYRIGHT: Insurance Publishing Plus, Inc. 1998, 2001, 2009
Saturday, October 30, 2010
Since Jen was the winning fan captain she drew this week's winning fan...watch the video below and stay tuned each week for the Tague Insurance Fan of the Week drawing.
Friday, October 15, 2010
We embarked on a one year journey into building a fan base on Facebook and really having fun rewarding the fans of Tague Insurance with the hopes that we will be able to broaden our relationships with prospects whom we would never have come into contact with outside of Facebook.
Tague Alliance is a SIAA California Master Agency. SIAA is the largest network of independent insurance agents in the country. We provide valuable resources to our member agents such as direct carrier appointments, high commissions, profit sharing, agency training and consultation, discounted rating and management systems, and many additional benefits.
Below is our current Fan of the Week Drawing video:
Friday, October 1, 2010
Congrats to this week's winner, Christopher Rusk. You won a $25.00 Visa card!!!
Sunday, September 26, 2010
When a loss happens under an insurance policy, besides a need to get the damaged or lost property replaced or repaired, the property owner has a number of immediate responsibilities. Besides being obligated to report the loss to her insurance company and to cooperate with the insurer in handling the claim, she also has a responsibility to minimize the loss. This obligation holds for both personal and commercial loss situations.
Most insurance policies contain specific references to the duty to protect property from further harm. It may be called a Neglect provision or Preservation of Property; regardless, insurance companies rely on their policyholders to make a reasonable effort to reduce the level of loss under their policies.
Here’s an example. Jenny’s restaurant staff is in an uproar as a fire has been discovered in a small storage area located behind the main kitchen. It’s after closing time, so Jenny only has to worry about clearing her employees out of the building and she orders everyone out and then arranges a role call to be certain that everyone is safely accounted for. Then she makes a call to the Fire Department. All the while, she stops anyone from attempting to extinguish the fire. As it turns out, the fire spreads from the storage area and into the kitchen, severely damaging the heart of her restaurant. After investigating the loss, Jenny’s insurer reduces her claim payment by $10,000. The lower payment is justified by their finding that the loss would not have been nearly as severe if Jenny had allowed her staff to use the available fire extinguishers and had made the emergency call more quickly.
Policy wording with regard to the duty to protect property typically notifies the policyholder that he or she is expected to take any and all available measures to save or preserve property in the midst of a loss. This does leave room for interpretation, but the obligation does fall comfortably in between the extremes of using heroic measures and failing to make any effort to protect property. A failure to meet the obligation can result in either a partial or, in extreme instances, a total denial of coverage for a given loss.
Here’s another example. The Laggleson family goes outside to check for any damage to their home after a violent windstorm. Besides a lot of scattered debris and an overturned patio set, they notice that a large limb from their Chinese Elm was blown onto their roof, creating a large gash. Several hours later a rainstorm comes through the area and the rain that pours through the hole damages expensive furniture stored in the attic as well as damages creates drywall damage to a bedroom ceiling and walls.
Scenario One – the initial damage occurred early on a Thursday morning with the storm occurring in the afternoon. The Lagglesons decided to go on to work and school and to handle things after returning home.
Scenario Two – the initial damage occurred on a Sunday morning, around 3 a.m. with the storm occurring around 6 a.m. The Lagglesons made several frantic calls but could not find anyone willing to come out to their home to deal with the open roof until Monday morning.
In both scenarios a failure to preserve the property after the initial loss created additional damage. However, it is only in the first scenario that the policyholder may suffer a consequence. In such cases, the loss circumstances have a significant bearing on how the insurer may respond and the policyholder’s actions are critical. A reasonable effort under the circumstances may mean all the difference.
If you need more help in understanding your responsibility after a loss, be sure to discuss your concern with an insurance professional.
COPYRIGHT: Insurance Publishing Plus, Inc. 2010
Friday, September 24, 2010
Friday, September 17, 2010
Friday, September 10, 2010
Friday, September 3, 2010
Please tell all your FB Friends to come and Like our page. All Tague Insurance Fans have a shot at being the Featured Fan and or winning the Fan of the Week drawing!!! Spread the word.
Friday, August 27, 2010
Wednesday, August 18, 2010
WCIRB Says 29.6% Rate Increase
As we reported last week, Workers' Compensation Insurance Rating Bureau of California decided to file its largest ever recommended increase in the workers' comp pure premium rate. It is 29.6%. It was decided on a “party-line” vote that divided the 8 carrier members from the 3 public members.
Public members of the Governing Board all voted to oppose the filing, but in the deciding count it was carriers 7 and the public 3. One labor representative who voted last go around with her fellow public members was absent, but her vote wouldn't have changed the outcome.
Public members were also rebuffed in attempts to get the committee to recommend a more moderate increase in the pure premium rate. Public member Bruce Wick, director of risk management for the California Professional Association of Specialty Contractors, urged the committee to exclude the loss adjustment expenses (LAE) reported by the State Compensation Insurance Fund which is the approach that the Department has taken in past decisions.
State Fund's expenses are out of line with the rest of the industry and ultimately inflate the LAE ratio used in the pure premium rate calculation. WCIRB has attempted to deal with this anomaly in the past by tempering the State Fund's data by 50%, which the committee voted to do so again. BY including State Fund’s results the increase is considerably larger. The tally on that vote was also 7 to 3.
State Fund's unallocated loss adjustment expense ratio was a whopping 51.4% last year compared to 8.9% for private carriers, while State Funds allocated loss adjustment expenses were 9.8% compared to the industry’s 13.8% respectively.
CDI has regularly rejected the WCIRB’s approach in the past and is expected to do so again. The change is not insignificant. According to data presented by WCIRB, the LAE ratio for private insurers is 19.8% but this ratio balloons to 22.5% when State Fund's data is included in its entirety. Under WCIRB's methodology the LAE ratio comes in at 21.1%, which is what will be in the filing.
Employers in the construction industry did catch a break in that WCIRB's final recommendation will not include a $1 per hour increase in the dual-wage classification rate. WCIRB proposed the increase to account for wage inflation in the sector, but even carrier representatives had a hard time believing that wages for California's construction workers were actually going up. The vote rejecting the increase was unanimous.
Stay tuned for additional coverage and analysis in the premium edition of Workers' Comp Executive.
Copyright 2010 Providence Publications, LLC. All Rights Reserved.
Sunday, August 1, 2010
Direct loss to covered property that involves either total or partial collapse of a building is insured by most "broad" and "special" commercial and personal property forms. However, the coverage only applies if the loss is caused by a hazard (peril) listed in the policy. "Collapse" has been removed from the Perils Insured Against section of such forms and is included under the Additional Coverage section. (Please refer to the form used.) However, two issues that make consideration of collapse coverage so difficult are the facts that collapse is often created by sources of loss that are, by themselves, ineligible for coverage (such as construction problems, acts of insects, rotting, etc.) and that collapse is typically gradual rather than sudden. Therefore, the peril’s dependent nature makes its handling significantly different from other perils.
COLLAPSE AND COMMERCIAL PROPERTY
Generally, collapse is covered for commercial property when caused by:
· any one of the specified causes of loss: fire; lightning; explosion, windstorm or hail; smoke; aircraft or vehicles; riot or civil commotion; vandalism; leakage from fire extinguishing equipment; sinkhole collapse; volcanic action; falling objects; weight of snow, ice or sleet; water damage
· breakage of building glass
· hidden decay
· hidden insect or vermin damage
· weight of people or personal property
· weight of rain that collects on a roof
· use of defective material or methods in construction, remodeling or renovation, but only if the collapse occurs during the course of the construction, remodeling or renovation
· if collapse occurs after construction, remodeling or renovation is complete and is caused in part by one of the causes listed above, the loss or damage is covered even if defective material or methods used during construction, remodeling or renovation, contributes to the collapse
For direct losses that do not involve collapse of the building or any part of the building but rather from some other type of collapse, there is coverage for otherwise covered personal property if:
1. the personal property that has collapsed is located inside an insured building and
2. the collapse was the result of an otherwise covered cause of loss
Example: A fire occurs in one section of Consumerland’s warehouse. The fire is put out, but it severely damaged the base of a 50 foot length of heavy duty shelving. The shelving collapses, destroying thousands of dollars worth of office equipment. Since fire caused the collapse, the damaged equipment is eligible for coverage.
Other types of property are covered for collapse if it is due to a covered cause of loss as listed above, but only if the damage or loss is a direct result of the collapse of a building covered by the policy form and the property damaged is also insured in policy. The other types of property are:
· outdoor radio or television antennas, satellite dishes, and their lead-in wiring, masts or towers
· awnings, gutters and downspouts
· yard fixtures
· outdoor swimming pools
· piers, wharves and docks
· beach or diving platforms or appurtenances
· retaining walls
· walks, roadways and other paved surfaces
Collapse is considered to be a sudden event; therefore, incidents involving settling, cracking, shrinkage, bulging, or expansion do not qualify.
The Additional Coverage for collapse does not in any way increase the limit of insurance provided in policy.
Example: Heavy monsoon-type rains pelted a covered building for more than two weeks. The weight of accumulated rain on the roof caused the building to collapse. As the building collapsed, it pulled down the satellite dish and several other antennas attached by lead-in wires, along with awnings, several outdoor light fixtures in close proximity, and portions of a fence. Further, the impact of the collapse damaged the adjacent sidewalk and parking areas. This all would be covered by the definition of collapse.
Example: However, there is no coverage when, as a result of the same monsoon, a mudslide occurred. The mudslide damaged the walls and lining of a swimming pool, filling it with mud, damaging pool equipment and fixtures. This would not be covered because the damage caused by a mudslide is not a covered cause of loss nor was the damage caused directly by the collapsed building.
COLLAPSE AND PERSONAL PROPERTY
There is coverage for direct physical loss to covered property involving collapse of a building or any part of a building caused only by one or more of the following:
1. Perils insured against in personal property (Coverage C). These perils apply to covered buildings and personal property for loss insured by this additional coverage;
2. Hidden decay;
3. Hidden insect or vermin damage;
4. Weight of contents, equipment, animals, or people;
5. Weight of rain which collects on a roof; or,
6. Use of defective material or methods in construction, remodeling or renovation if the collapse occurs during the course of the construction, remodeling or renovation.
Loss to an awning, fence, patio, pavement, swimming pool, underground pipe, flue, drain, cesspool, septic tank, foundation, retaining wall, bulkhead, pier, wharf, or dock is not included under items b through f above unless the loss is a direct result of the collapse of a building.
The same as with commercial property, collapse does not include:
Example: After being built, a restaurant starts to settle and this causes cracks in the walls and foundation. Damage of this type would not be covered in the policy.
Also, just like commercial property, the personal property coverage does not increase the insurance limit that applies to the damaged covered property.
WHEN DOES "COLLAPSE" OCCUR?
"Collapse," as specifically covered under Additional Coverage in the various standard provisions of property insurance forms, does not include "settling, cracking, shrinkage (or shrinking), bulging or expansion." With this in mind, we may look to dictionary definitions and significant court rulings for guidelines in determining if a structure has "collapsed." Webster’s International Unabridged Dictionary defines collapse as follows:
"To fall or shrink together abruptly, as the sides of a hollow vessel; to cave in; to fall into a flattened state; often, with the idea of design, to fall into, or to be reduced to, a more compact form (this table collapses) .”
"To break down or fail abruptly and utterly; to go to pieces; as, his health and plans collapsed together.”
"To cave in; crumble suddenly"
"To suffer a physical collapse; to fall suddenly helpless."
A major problem throughout the years has been the determination of the nature or degree of structural damage that must occur before a structure can be considered to have "collapsed" per a policy’s definition. Various courts have contributed much to our present understanding and determination of when coverage is applicable.
Courts have relied heavily on dictionary definitions, those meaningful and acceptable to the average person, in deciding cases involving application of insurance policies to losses. Though now more than 40 years have passed, it was a 1964 decision that substantially influenced how courts and insurers continue to handle this issue. What the courts said about "collapse" was more important than the cases’ particulars.
Graffeo et al. v. United States Fidelity & Guaranty Co., N. Y. Supreme Court, Appellate Division, decided January 6, 1964, was concerned with an "all risks" Homeowners policy. The court said:
"It is our conclusion that there was not a ‘collapse’ of the premises within the intendment of the policy (see Gage v. Union Mutual Fire Insurance Co., 122 Vt. 246; Employers Mutual Fire Ins. Co. v. Nelson, 361 S.W. 2d 704 Tex.). The Appellate Division in the Third Department has interpreted the ‘collapse’ of a building as used in an insurance policy to include ‘an element of suddenness, a falling in, and total or near total destruction.’ (Weiss v. Home Insurance Co., 9 A D 2d 598.). It is true that there is a minority view which construes ‘collapse’ as a ‘sinking, bulging, cracking, pulling away of the wall’ (Travelers Fire Insurance Co. v. Wahley, 272 F. 2d 288, applying Kansas law). The latter construction, however, if applied to the instant case, would do violence to other provisions of the policy, particularly the basic exclusionary clause with respect to settling, etc. Only recently the principle has been reaffirmed that courts cannot construe a particular provision of an insurance policy in such a way as to emasculate the clear intent of its other provisions. (Walters vs. Great American Indemnity Company, 12 N. Y. 2d 967.)”
"Since we find that there was no collapse within the purview of the policy, its basic exclusionary clause with respect to settling is applicable."
Sherman v. Safeco Insurance Company of America, Colorado Court of Appeals, No. 82CA-1311, June 16, 1983, confirmed that "collapse" need not be total. Judgment denying an insured’s claim for the collapse of a residence under Homeowners insurance, which provided coverage for "collapse of buildings or any part thereof," was reversed. The trial court had construed the term "collapse" to mean a complete falling down of the building, and since the insured’s residence did not completely fall down, concluded that a collapse did not occur. The appellate court, however, construed "collapse" as not necessarily involving a complete falling down, and also stated that the policy provided for collapse not only of the entire building but also of "any part thereof."
Eaglestein v. Pacific National Fire Insurance Co., Kansas City Court of Appeals, Missouri, February 3, 1964, also involved "all risk" coverage on a dwelling and comparable cracking of walls, etc. The court said:
"14 C.J.S., p. 1316, defines ‘collapse’ as follows: ‘To break down or fail abruptly and utterly, to cave in; to close by falling or shrinking together, to fall together, or into an irregular mass or flattened form, through loss of connection or rigidity and support of the parts or loss of the contents, as a building through the falling in of its sides.’”
"The policy on which this suit was brought did not insure against ‘collapse’ and stop. It carried a plain exclusion of ‘settling, cracking, shrinkage or expansion of pavements, foundations, walls, floor or ceilings’ from coverage.”
"We believe that the policy provisions are not ambiguous, certainly not under the factual situation before us. In our opinion, the phraseology used has a clear and commonly understood meaning and hence needs no construction over, above and beyond its plain meaning. We regard the opinions of those appellate courts denying coverage under a `collapse clause’ in those instances where the walls cracked or settled as being better reasoned and as having reached more logical results. We concur with the conclusion of the trial judge that plaintiff’s casualty, as shown by the evidence, is not covered by the policy."
The Ohio Supreme Court asserted, in the case of Olmstead, Trustee, v. Lumbermens Mutual, that there is no ambiguity in the word "collapse." The case was decided May 27, 1970 on appeal from the Hamilton County (Ohio) Court of Appeals. In summary, the court stated that, "The word, in its plain, common and ordinary sense, means a falling down, falling together, or caving into an unorganized mass."
Let’s look at one final court case regarding collapse:
"COLLAPSE" HELD COVERED ONLY ACCORDING TO ITS POPULAR MEANING
A "broad form" homeowner’s policy contained the following insuring provision: "We cover direct loss to the property owner insured under the Dwelling and Personal Property Coverage caused by ...13. Collapse of buildings or any part of a building....Collapse does not include settling, cracking, shrinkage, bulging or expansion...."
The insured filed a claim when large cracks and bulges were observed in the living room ceiling after he and his wife had lived in the house for nine years. A contractor he hired to inspect the damage reported that the sheetrock had separated from the truss or rafter, but could not determine the cause of the separation. The insurer denied the claim on the basis of "no coverage." In the course of litigation, the insured appealed a trial court judgment in favor of the insurance company.
The insurer contended that "collapse" means total destruction or caving in and further pointed to the specific policy language that, with respect to coverage provided, the named peril does not include "settling, cracking, shrinkage, bulging or expansion."
Citing various precedents and authorities, the appeal court said that the familiar rules of construction require the terms used in insurance policies "to be construed in their plain, ordinary and popular sense." Referring to Webster’s Third New International Dictionary 443 (1961) for such meaning, the court found "collapse" defined as follows:
"1: to break down completely: fall apart in confused disorganization: crumble into insignificance or nothingness: disintegrate ...2: to fall or shrink together abruptly and completely: fall into a jumbled or flattened mass through the force of external pressure: fall in... 3: to cave in, fall in, or give away: undergo ruin or destruction by or as if by falling down." Other definitions examined were similar.
The court said: "Applying the ordinary meaning of the word to the facts as found, the ceiling clearly has not ‘collapsed.’ Accordingly, there is no coverage under the policy, and the trial court is affirmed."
Editor’s Note: "Collapse" has been removed from the Perils Insured Against section and is included under the Additional Coverages section of policies used by numerous companies. The change is to make it clear that "collapse" is covered only when caused by specified perils enumerated with respect to Coverage C, plus several other stated causes.
(Owens et ux., Plaintiffs, Appellants v. Tennessee Farmers Mutual Insurance Company, Defendant, Appellee. Tennessee Court of Appeals, Eastern Section. C.A. No. 127. June 9, 1989. CCH 1989-90 Fire and Casualty Cases, Paragraph 1933.)
Wednesday, July 14, 2010
Besides worrying about the daily responsibility of running their business, commercial insureds may have other concerns such as rising insurance costs, reduced insurance availability, the impact on coverage due to experiencing recent losses, etc.
Businesses price their products to cover the costs of production as well as their sales and marketing expenses. Prices also reflect some post-sales costs such as repair or replacement under warranty. At one time many industries used a pricing strategy for their products that failed to reflect their true costs. They assumed that lower prices would promote increased sales and the higher sale volume would make up the cost difference. The strategy wasn’t successful. It hasn’t worked for the auto industry, the computer industry or the insurance industry.
The problems of the insurance industry became apparent within the turn of the century and were drastically exasperated by the events of September 11, 2001. That catastrophe substantially affected the insurance industry. Workers Compensation, a coverage that had never experienced a loss of that magnitude, was struck by a catastrophic loss. Property losses, business income losses, liability losses, life insurance claims, every category of insurance coverage affected by that man-made event.
The insurance industry’s beginning attempts to gradually correct their faulty pricing practices was replaced by the need for a sudden and violent change. For much of the current decade, insurance companies have had to handle many more claims being presented many years after their policies have expired. In the case of pollution, asbestos and employment practices, the industry is being asked to handle losses that policies weren’t designed to even cover.
Well, what can a business owner do to minimize their high insurance cost? Before considering sacrificing the amount of protection a business carries just to save money, consider alternatives. Some other solutions would be:
1. Review your coverage:
a. Take a close look at your insurance. Could you increase the deductibles to lower your premium?
b. Are you carrying physical damage coverage on commercial vehicles that aren’t worth it?
c. Are you insuring items you could replace out of pocket? Are there pieces of equipment that are insured when they could be replaced from operating funds without submitting a claim?
2. Review your exposures:
a. Could you reduce the premium by installing an alarm system or fire protection system? Would these premium savings offset the cost of the system?
b. Could you implement safety programs that would reduce the cost or make the insurance company more interested in providing coverage? For example: driver safety programs, back to work programs, safety training in proper use of equipment and job functions.
3. Identify your insurance goals:
a. Do you need an insurance company that can provide loss control services?
b. Do you need an insurance company that can provide claim-handling services for your Workers Compensation insurance?
c. Do you need an insurance company that will allow you to make payments by phone or on-line 24/7?
d. Do you need an insurance company that has a local agent/representative that can assist you in your insurance solutions?
Shopping and price are not the only issues in insurance. What you don’t know can cost you more in the long run than you could ever save in premiums. Discuss your situation with an insurance professional and make the choice that works for you.
COPYRIGHT: Insurance Publishing Plus, Inc. 2003, 2008
Tuesday, June 29, 2010
Thursday, June 24, 2010
Remember one simple fact: Those who sell on price will die on price!
Selling value: Don't get caught in the price trap 6/24/2010
Insurance sales conversations frequently start with an apples-to-apples price comparison. If that describes the approach you take, Josh Stirpe, director of Safeco's Licensed Sales department, wants you to tip the proverbial cart over and use a more effective approach.
"Once you start a conversation with price as the focal point, it becomes difficult to engage the client in a conversation about the value of a particular insurance policy, even if it costs a little more than their current policy," explains Stirpe, whose background in the industry includes a stint as an agent. "It's imperative to present a total package of benefits to them. Agents first must sell value, explaining what coverages and services the client will get."
"Statistics show that more than two-thirds of clients are willing to pay a higher price for maximum protection."
— Josh Stirpe, director of Safeco Licensed Sales
He recommends that you:
Avoid falling into the “price trap” by positioning yourself as a way to save the client money.
Find out why the client is shopping. Uncover the catalyst for the quote inquiry.
Take the time to understand all the risks in the household (not just those that are covered in the requested quote).
Tailor the presentation to the overall risk exposure.
Above all else, invest time in educating the client by providing examples he or she can relate to … Insurance is more than the lowest price; it is something that can protect the client's way of life in the event of a tragedy.
Value-selling policies results in loyal, long-term clients — boosting your retention. But that's not all your agency will gain.
"Producers also are more satisfied because they get away from being 'quote generators' and instead are doing what they got into this business for in the first place, to educate their clients and protect people," he says.
Benefits vs. price
While many consumers certainly look to save money wherever possible, research shows that price is seldom the primary reason people make a buying decision. According to comScore's Auto Insurance Survey, when offered a choice between low-cost/minimum coverage and high-cost/maximum coverage, the majority of consumers fall in the middle to upper-middle range. What that indicates is exactly what value-selling is all about: People are more interested in feeling protected than in saving a few dollars.
"Statistics show that more than two-thirds of clients are willing to pay a higher price for maximum protection," Stirpe notes. "A high percentage of clients will go that road with their agents who value-sell the protection."
The value-sell approach involves bringing to the forefront what you as an independent agent can provide that insurance consumers can't get elsewhere:
The ability to identify coverage gaps and overlaps
A knowledge of industry trends that affect consumers
The ability to customize a plan that meets each individual's protection needs
A variety of policy choices
"When insurance consumers initially meet with an independent agent, they may start out with a desire to see how they can save money, but quickly become ecstatic if an agent first educates them on benefits," says Stirpe.
He says price should be the last resort in the sales process. At the point that price does enter the equation (and of course it will for many people), you can remind customers that Safeco offers a variety of cost-cutting solutions, such as discounts when they purchase multiple policies, including Home, Auto and Specialty policies. Eighty-five percent of insurance consumers will consider hearing how bundling their coverages can translate into a discount.
"Clients will be less likely to shop elsewhere – including online – when agents value-sell and show that they are looking out for their clients' future."
Friday, June 11, 2010
Many thanks to all the members of Tague Alliance for their Safeco production over the years which has allowed us to qualify for this honor.
Friday, June 4, 2010
EFFICIENT PROXIMATE CAUSE DOCTRINE DID NOT APPLY TO THIRD PARTY CASE
Insurance Company of the State of Pennsylvania (ISOP) insured the City of Carlsbad (City) under a general liability policy that covered bodily injury and property damage losses to third parties resulting from City's negligence. It defined property damage as "physical injury to or destruction of tangible property, including all resulting loss of use of that property." However, an exclusion provided that ISOP would not defend or pay for claims or suits brought against City for property damage arising out of land subsidence for any reason whatsoever. The definition of land subsidence included landslide.
As a result of City's negligent maintenance and repair of a fire hydrant and water line located within the La Costa de Marbella Condominium Complex (Marbella), an earthen slope above it became saturated with water and failed. The resulting landslide damaged or destroyed 15 units and part of the common area. The Marbella Homeowners Association sued City, seeking damages for property damage and emotional distress. ISOP defended under a reservation of rights. City settled the lawsuits for $12,670,000. ISOP indemnified City for the bodily injury claims but denied coverage for the property damage claims. City sued ISOP, alleging breach of contract and breach of the implied covenant of good faith and fair dealing.
Both parties filed motions for summary judgment. City asserted that it was entitled to indemnification under the "concurrent causation doctrine" because the exclusion did not explicitly negate coverage that resulted from more than one cause, that the exclusion was illegal, and that it did not apply to landslides caused by man-made forces. ISOP argued that the exclusion unambiguously applied to all property damage arising out of landslide, that the concurrent proximate cause doctrine did not apply because there were not two separate and independent acts of negligence to cause the damage, and that the exclusion applied even if the concurrent proximate cause doctrine applied.
The trial court heard the motions together, denied City's in its entirety, and granted ISOP's in its entirety. City appealed on essentially the same basis as its initial motion. It asserted that the trial court erred because the exclusion was ambiguous as to whether it covered landslides regardless of cause, that it did not apply to landslides caused by man-made forces, and that it was entitled to indemnification under the "efficient proximate cause" doctrine and related Insurance Code. The Court of Appeal determined that, based on the evidence, there was no need to interpret policy language and that the issue was a pure question of law.
Under the "efficient proximate cause doctrine," when a loss is caused by a combination of covered and specifically excluded perils, it is covered if the covered peril was the efficient proximate cause of the loss. On the other hand, the loss is not covered if the covered peril was only a remote cause of the loss, or the excluded peril was the efficient proximate, or predominant, cause. An insurance company is liable for a loss where a peril insured against was the proximate cause, although a peril not contemplated by the policy may have been the remote cause of the loss; but is not liable for a loss where the peril insured against was only a remote cause. However, this doctrine is limited to first party cases, where an insured seeks coverage for its own property interests. In third party cases like this one, where coverage is sought for liability to third parties, the concurrent proximate cause doctrine applies. As a result, the first party cases that applied the "efficient proximate cause doctrine" that City relied on were irrelevant to the appellate court's analysis. City did not assert coverage under the concurrent proximate cause doctrine that applies to third party cases. Even if it had, it would not have applied because it applied only where there were two negligent acts or omissions, one of which independent of the excluded cause rendered the insured liable for the resulting injuries. The Court of Appeal affirmed the trial court's judgment in all respects.
Court of Appeal, Fourth District, Division 1, California. City of Carlsbad, et al., Plaintiffs and Appellants, v. Insurance Company of the State of Pennsylvania, Defendant and Respondent. No. D053843. Nov 20, 2009. 180 Cal.App.4th 176. 102 Cal.Rptr.3d 535
Thursday, May 20, 2010
So while "trust" is hugely important for the insurance carriers to foster with insurance clients, it is equally important for independent insurance agents to foster and focus on trust building with their clients. One key element in building trust with clients is being able to place their business with top rated insurance companies who have a stellar claims handling reputation and claims processing. A claim is when the trust factor is put to the biggest test.
Tague Alliance members need to realize that they must engage the client multiple times throughout the year in a number of different ways. Trust is built in multiple ways, but one key foundation of trust is the "relationship" that the agent has with their clients. This does not mean that you have to be best friends with every client, but it does mean that you need to be accessible when the client needs you, respond with relevant and efficient service, and be consistent in the handling of the client needs.
In addition, trust can be facilitated through "transparency" and "openness". A simple way to be more transparent is through the use of Facebook which can be used to create more personalization of your agency to your clients. This is a simple concept and one that takes time to create and manage. However, this personal extension of your agency helps to to foster relationship which in turn breeds more trust. Side note - if your agency is not careful about what is posted, said, and shown on a site like Facebook you can destroy all your good intentions very quickly. So the agency must be aware of posting only relevant consumer focused information that works toward building more client relationship.
The video below is meant for insurance companies, but has some good insights for Tague Alliance members and independent insurance agents in general.
Sunday, May 16, 2010
Tague Alliance, a SIAA Master Agency
As an insurance agent one of the most challenging things to work through with the insured is the "truth". There are many prospects that come to us for a quote on auto insurance and when we question them about accidents and tickets they suddenly have selective memory. To be fair, many of us cannot remember exactly when we may have received a ticket or had an accident. However, most of us know that we have had some type of incident during a given time period. I recently came across an article from Rough Notes Magazine regarding a court case where coverage was denied due to misrepresentations by the insured.
Insured responsible for statements on application
On October 22, 1992, Jaber (first name not shown) met with William Kasirye, an independent insurance agent, about automobile insurance from Prudential. He stated that he was married, employed, had not been cited for or convicted of a traffic violation in the past 60 months, and had not been involved in any losses or insurance claims during the 36 months preceding his application. At that time, Jaber paid a premium of $129 and Kasirye issued a binder effective immediately.
Prudential then requested and received a report from the Ohio Bureau of Motor Vehicles which showed that Jaber had moving violations in 1989 and 1991, and had been involved in an accident on January 2, 1992.
On November 9, 1992, Jaber submitted a notice of loss in which he reported his car had been stolen two days before. On December 7, Prudential sent him a letter denying liability and declaring the policy void from inception. The company returned the premium that Jaber had paid.
In May 1995, Jaber filed suit for declaratory judgment and sought reimbursement for his car and compensatory and punitive damages. Prudential asserted that the policy was void from inception since his statements in the application were warranties and that the application was a part of the policy. Also the binder had been issued based on the application.
The trial court entered judgment in favor of Prudential, and Jaber appealed.
Jaber contended that, although he had signed the application, the agent had filled in the answers to the questions and, thus, he was not responsible for the falsity of those answers. Furthermore, he asserted that the policy did not warn that any misrepresentations in the application would void the policy.
The higher court pointed out that the policy contained the following statement: "By accepting this policy, you agree that the statements on your Application are true and correct. This policy is issued relying on the accuracy of these statements." The binder that had been issued also contained a similar statement.
The judgment entered in the trial court in favor of Prudential was affirmed.
Jaber, Appellant, v. Prudential Insurance Company of America--No. L-95-347--Court of Appeals of Ohio, Sixth District, Lucas County--August 16, 1996--681 North Eastern Reporter 2d 478. *
©COPYRIGHT: The Rough Notes Magazine, 1998
After reading the case above there should be no doubt in the mind of the agent or the insured that true and accurate information must be represented on the insurance application! The insurance company has grounds to deny a claim if an insured misrepresents the facts when applying for the insurance policy.
Monday, May 10, 2010
Thursday, May 6, 2010
Monday, April 26, 2010
Monday, April 12, 2010
Monday, March 29, 2010
Tuesday, March 23, 2010
The article below is from National Underwriter online and is good food for thought for all agency owners.
Recruiting Young Producers Can Pay Big Dividends, Study Finds
In the summer and fall of 2009, Reagan Consulting—in conjunction with The Council of Insurance Agents and Brokers, UNUM, Chubb and Hanover—conducted “The Young Producer Study” to test the validity of these assumptions. (You can access the entire Young Producer Study at www.reaganconsulting.com.)
The study was designed to determine if there was an opportunity to hire more young production talent and document the best practices in hiring young producers.
Young producers were defined as producers hired when they were under the age of 30, hired in the last 10 years, and selling commercial property and casualty insurance or employee benefits.
The first part of the study was an assessment of the industry as a whole to determine the baseline level of hiring for these young producers. The survey included 206 agents and brokers (firms) throughout the country, with the data used as a proxy for the industry as a whole.
Based on the survey results, the success of young producers (48.6 percent) was approaching the success rate of all producers in the industry (53.0 percent), with the success of 23.4 percent of the young producers still unclear.
This data confirmed our belief that some firms were having success attracting, hiring and retaining young producers, and that there is an opportunity to learn from the best practices they were employing.
The next step was a deeper investigation of the firms and producers identified in the baseline study that were experiencing success. Fifty-four firms agreed to complete a detailed survey on their hiring and development practices for young producers. The firms also agreed to identify one or two young producers they considered successful.
A total of 91 successful young producers were indentified, completing a detailed survey about their educational background, a personality and behavioral assessment, and an interview. The firms also provided data on each successful young producer’s production history.
During this process we met and interviewed an extremely talented group of successful young producers and developed a deep understanding of the best practices employed by the successful firms in regards to attracting, hiring, developing and retaining young producers. There were three primary takeaways from our look at successful young producers:
• College Recruiting Works.
The 91 successful young producers that participated in the study were recruited from various sources, including other industries, other firms, college, insurance companies and in-firm transfers.
College, however, was easily the most popular source for successful young production talent. This certainly makes sense given that colleges and universities are concentrated sources of talented individuals, but it also contradicts conventional industry wisdom regarding college hiring.
Further, the success of producers hired directly from college was similar to that of those hired via other sources with regard to production numbers and time to validate.
• Well-Rounded Individuals Often Perform Best.
There wasn’t one characteristic of the successful young producers that stands out. Rather, what was apparent after analyzing the backgrounds of these individuals was their capacity to be involved in many activities and leadership roles while maintaining strong academic credentials.
However, interestingly, in terms of months until validation (when the commissions a producer generates at least equals their personal compensation, so they are in effect paying for themselves), a grade point average over 3.5 did not indicate greater success than that of those with a lower GPA, and within the group the producers with the highest GPA validated slowest.
Also, neither prior sales experience nor a specialty focus indicated success at a greater rate than that of those without prior sales experience or those that were generalists.
• Young Producer Economics Are Attractive.
When compared to hiring other experienced producers, the economics associated with hiring young producers can be attractive. As might be expected, the initial investment (salary) in a young producer is typically much lower than that of an experienced producer.
However, we also determined that successful young producers can perform at a level comparable to successful producers of all ages when give the appropriate resources.
Given the difficult economic environment we find ourselves in, both the relatively low initial investment of a young producer and the ability to generate organic growth for the firm could prove to be attractive.
With all that said, hiring, training and retaining young producers is a different game. Those firms that will succeed must do four things well.
• First, if they want to recruit college kids, they must establish a presence on college campuses as a means to identify the best talent.
• Second, the firms should invest in mentoring of the young producers to the point that mentoring becomes part of their firm’s culture.
• Third, young producers should be hired in classes, fostering a collegial bond among the young producers.
• Fourth, the young producers should be provided with resources that will make them successful.
In summary, young producers will not be able to rely only on experience to win business, and firms that can provide support to young producers via experienced producers or in-house risk management or other resources will have greater success.
None of this is to say that hiring experienced or “older producers” is a bad idea. However, “The Young Producer Study” confirmed our suspicion that a large, untapped resource exists for firms in their search for production talent.
There are compelling advantages young producers can bring to firms from a cultural perspective in the form of energy and enthusiasm, as well as practical advantages from the perspective of shareholder return and client relationship perpetuation.
While it won’t work for everyone, the opportunity to hire and develop young producers is compelling and worth exploring.
Brian McNeely (Bmcneely@reaganconsulting.com) is a consultant and Angi Bemiss(Angi@reaganconsulting.com) is senior vice president at Reagan Consulting Inc., an Atlanta-based management consulting firm that developed and produces the “Independent Insurance Agents and Brokers of America Best Practices Study.” More information about the firm can be found at www.reaganconsulting.com.