Wednesday, August 28, 2013

Commercial Insurance Rates on a Steady Rise

Commercial insurance rates has been on the decline for the past few years. This trend has now reversed and rates have been on the upswing for the last 4 months with June showing a 5% increase. This had to happen sooner or later – what goes down must come up. The current rise has been sparked by the impact of natural disasters, fraud, general issues of theft and changes in regulations.

The biggest increase has been in commercial auto insurance where rates have increased by over 6%. Property, directors and officers, general liability and employment practices liability insurance (EPLI) came next at over 5%.

What Next?

At present the commercial insurance market is relatively stable and the indications are that it will remain this way. There were no surprises or unexpected increases in commercial insurance rates in June and there are no signs of any drastic changes happening soon. Even the effects of Hurricane Sandy seem to have had little impact on commercial insurance. One reason for this could be that the bulk of the damage and losses were caused by flooding which is not something that the American insurance industry is responsible for.

According to insurance market analysts, the way ahead is that of slow and steady rate increases. Some months may show a decline in rates but it would be a mistake to read too much into that as these are going to be only small bumps in a regular upward movement. What could affect market dynamics and prove the predictions to be wrong are the recent moves by Berkshire Hathaway to make an entry into the primary casualty and property insurance markets. The company has not yet revealed its plans or the size of its entry vehicle. If the entry is on a large scale then whatever action it takes will have a significant impact on insurance rates.

A steady rise in insurance rates is not good news for businesses. Overheads are already high and any increases will be hard to absorb. But there is no point is a business owner burying his head in the sand. It makes sense to examine the possibilities and options available and plan on ways to minimize the impact without reducing the coverage. In fact this kind of analysis could even reveal where additional coverage is called for – another cost perhaps, but one that is worth incurring.

What Is Your Insurance Costing You?

The rising commercial insurance rates will, in all probability, continue to move upwards in the foreseeable future. Now is a good time to review your commercial insurance policies to see if your coverage is adequate and if there are ways in which you can cut your insurance costs without compromising on the coverage you have. Even if you have been insured for a long time with no problems, revisiting your policies to see if they reflect the changes in your business is a good idea. Contacting your broker to provide you with a professional analysis of the coverage you have vis-à-vis your present insurance needs will help you to make the changes required, if any. And a broker’s expert knowledge of insurance will help you to find the most cost effective solutions.

Monday, August 26, 2013

California's Unclaimed Insurance Money - You Could be a Rightful Owner

Considering that we live in an information age, one would not expect that information, especially contact details, could be difficult if not impossible to find. And this is not in reference to those who wish to hide – it applies to those who need to be contacted for legitimate reason – often those that benefit them. But because computers can only recall data that has been fed into them, and when data has not been fed, nothing will come out. That is one of the main reasons why around $ 1 billion in unclaimed life insurance benefits are pending today.

Who Loses? And How Much Do They Lose?

According to Consumer Reports magazine, the average unclaimed life insurance benefit is around $2,000 but in some cases it can be as high as $300,000. The report also says that the chances of a person being the beneficiary of a lost, forgotten or unknown insurance policy are 1 in 600. Six hundred to one may not sound like much in the way of odds but when this is placed in the context of 300 plus million Americans, the number of people losing out becomes huge – over half a million people in this country may have benefits due to them that they do not know about. The unclaimed money will usually go to an unclaimed payment trough and then to the general fund.

Why Does This Happen?

There are two main reasons for this – faults on the side of the person who has the policy and failures by the insurance companies. Life insurance policy holders change jobs and move to new homes all the time. They often forget to inform their insurance companies who are then not able to contact them when benefits are due. Also, even if the insurance company was informed, mergers and acquisitions in the world of insurance are frequent and when this happens, records can get misplaced or lost. Or it could just be a clerical error that allows a policy holder’s contacts information to slip through the cracks.

Always make sure that your attorney has complete details of all your life insurance policies so that claims can be made at the right time. It is also a good idea to provide the information to a close and trusted relative it that does not cause family complications.

On the insurance companies side regulators in California found an industry wide practice of failing to pay death benefits even when companies has access to federal death records. In some cases it was found that even when the companies received direct confirmation of the policy holder’s death, payment was still withheld. There have even been cases where companies continued to collect premiums after the policy holder’s death by drawing down the policy’s cash reserve.

The Solution

The major insurance companies have agreed to modify their procedures to reduce the amount of unclaimed benefits with them and to make claiming easier. And keeping your attorney informed about your policies will ensure that your heirs have this information available to them.

It is easy to overlook old life insurance policies. And these policies may not fit your current needs. If you have any questions about your insurance policies or need any assistance, contact Insurance by Allied Brokers to discuss your old life insurance policies and review them to see if they are relevant to your current situation. Also obtain the broker’s assistance, if needed, in updating your information lying with the insurance company.