Saving on Auto Insurance

auto savings

 

 

 

 

 

There are a number of strategies one can use to save on automobile insurance and get the most for the insurance dollar:

If you have good medical coverage, consider dropping the medical option on your automobile policy since it mostly is a duplication of coverage provided under most health policies.

If you are a senior, take a safe driving course and get an additional discount. Insure your car with the same company that insures your home and get a 10% discount.

If you do not drive a lot, consider high deductibles or even self-insuring on collision and comprehensive. The less you drive the less chance you will be involved in an accident.

Some autos are more expensive than others to insure Each car is assigned a “symbol”. The higher the symbol, the higher the cost of insurance. If you are considering buying a car, call your agent and ask what symbol it is and how it affects your premium.

The cost to raise your liability limits from $100,000 to $300,000 is surprisingly inexpensive – and you triple your coverage.

If you don’t drive a car for long periods of time (winter lay-up) consider suspending the insurance for that period of time.

Insurance is high for young drivers – especially if they have their own car. Consider buying a reliable older car for your teenager where you can self-insure for collision and comprehensive without risking a big investment.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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Automobile Rates

auto savingsAutomobile insurance has always been a hot topic since it affects virtually all of us. The premiums involved are significant.

Thankfully, rates have stabilized and, in many cases, premiums are declining. There are a number of reasons why this has occurred.

Companies now share information with each other.  Because of this the correct premium can be established right from the very start since the applicant’s record is readily available. Before this system was implemented, insurance agents and companies had to rely on the “memory” of the prospective insured who often failed to disclose every incident. Now every individual is charged the appropriate premium based on his or her motor vehicle record and loss history.

People are more safety conscious and certainly are more aware of the dangers and penalties of driving under the influence of alcohol. Teen-awareness seminars and “safe ride programs” have done much to curtail the high incidence of youthful accidents.

Cars aren’t made like they used to be – and thank goodness! Automobiles are much safer now with the advent of airbags, anti-lock brakes and other safety features. The better vehicular design has done much to reduce bodily injury claims.

Even though premiums are on the decline, be careful of companies that use the overused slogan “great rates for safe drivers”. Some insurance carriers advertise low rates for a safe driver but as soon as you have an accident you may be considered “unsafe” – and you might be dropped like a hot potato. Choose an insurance carrier that won’t cancel you at the first sign of trouble and, above all, choose an agent that will go to bat for you if you are unfairly treated.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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Getting the Right Insurance Means Consulting a Professional

insurance professional

Selecting an insurance program solely on the lowest price is dangerous territory. Unlike other products insurance is a “promise” to perform. The product is invisible except for a piece of paper that is filled with tricky language intermingled with double negatives. Most insurance companies and polices are sound but I recommend that you talk to someone that completely understands insurance before you entrust the protection of your assets to an insurance company.

As a consultant, I have been brought into many cases where the consumer did not get the coverage he or she thought was in place. All insurance programs are great – until there is a claim – that is not covered.

Find a knowledgeable insurance professional that will help you choose the coverage and options that are best for you. For instance, if you are the breadwinner of the family make sure that you “load up” on the uninsured/underinsured motorist option on your auto policy. Some people think this coverage is strictly for medical reimbursement. The most important feature of this coverage is the disability award provided in the event that you are disabled by another driver who has little or no coverage to compensate you for the injury. How about all those exclusions under the homeowner policy? Are you aware of them? Did you know that many homeowner policies are all risk on the structure but not all risk on the contents? If you rent a car should you take the insurance offered?

Insurance is not a shelf product and there are traps waiting for the complacent consumer. Find someone who is available to answer questions like the ones above. Like the old saying goes, you get what you pay for.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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Insurance Needed for the Long Term

long term insurance

One of my insurance colleagues in the estate-planning area points out two critical issues we should be concerned about: dying too soon – or living too long.

Naturally, most of us would find dying too soon a much bigger concern. If you are worried about the economic implications of death, life insurance is a good remedy. However, living to a ripe old age may bring an unanticipated financial burden as well – especially if convalescent care is required.

Neither Medicare or health insurance policies will pay for services provided for convalescent care. Medicaid will step in but only after your own personal assets have been expended. The state of Connecticut is concerned that many citizens will have their savings depleted and will have to resort to Medicaid in the event of a lengthy convalescent stay.

Because of this, the state has developed a “partnership” arrangement with certain insurance companies in an effort to encourage the purchase of long-term-care polices.

Fortunately, there are a number of very good long-term-care (LTC) insurance policies that will provide per diem funds for this type of care.

You can choose how many years it will be available (1 year, 3 years, a lifetime) and the waiting period before benefits  will be paid (30 days after convalescence, 90 days, etc.)

Many contracts will reimburse for care in your own home if you choose not to go to a facility. Some will pay for modifications such as ramps, a remodeled kitchen or a modified bathroom.

Many people procrastinate over purchasing  long-term-convelescent policy because of the expense and the thought that ending up in a nursing home is “unthinkable.” If you wait too long to invest in a LTC contract, the premium will be prohibitively expensive. There is a big in your mid-60′s as opposed to late 70′s.

It’s easier to think of your premiums as buying a “reserve”: $1,800 a year will buy a “reserve” of up to $365,000 (a contract for 5 years at $200 a day) for someone in their mid-60s.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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Commercial Lease

commercial lease

Proper insurance can take the sting out of most claims, but, if you experience a major loss, your prior agreements with other parties may hinder the recovery process or reveal gaps in insurance.

Take, for instance, that commercial lease you quickly signed but never got around to actually reading.  All leases are not standard and many contain clauses that obligate the lessee to strict and sometimes unreasonable demands from the Landlord.  You are responsible for the space you rent and your responsibilities are contained in the lease agreements. Do you have to include the Landlord as additional insured under your insurance policy? If so, for what limits? Does the agreement specify that you have to replace plate glass, doors, outside siding, etc. that are associated with your space? Does your insurance include coverage for this?

If you are the only tenant, don’t be surprised if you are instructed to insure the entire structure. The tenant usually has to insure that portion of the building occupied by the business. For example, if you rent 20% of the building and the building costs $500,000 to replace, the tenant (lessee) has to insure their space for $100,000 – just as if you owned it. This is called “fire legal liability” in the insurance world. Your liability policy will apply to the rest of the building if you are responsible for damage to it but will not pay for the space you occupy.

The only way around this is to introduce a clause in the lease referred to as a “Waiver of Subrogation”.  The waiver is an agreement between Landlord and tenant that each is responsible for their respective interests. It is a “quid pro quo” arrangement which may make fire legal coverage unnecessary (ask your attorney about this).

Of critical importance is the procedure after a loss. Who pays for the reconstruction of tenant improvements? Is the lease terminated if restoration is not accomplished by a certain date? Does the Landlord have the right to approve every thing that is done in the settlement of your loss?

Make sure you understand your obligation as lessee before you sign a lease. Have your attorney who specializes in lease negotiations look it over. Ask your insurance professional to comment on it also.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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So What’s Your Plan?

disaster plan

Insurance is a very important ingredient in the recipe to keep a business going after a disaster strikes. Yet, insurance alone will not guarantee that your Company will retain its customer base during and after the recovery period. Therefore, it is important to develop a business disaster plan that will focus on two strategies – to get back into business as soon as possible and, secondly, to keep your clients happy during the down period.

Many services and retail businesses have the advantage of relocating quickly and returning as a functional operation in a short period of time. Proper insurance coverage will pay the “extra expense” to set up shop and promptly replenish lost inventory and equipment.

Most manufacturers, however, cannot relocate and must stay put in a nonproductive mode until the facility is repaired.

A good disaster plan that is forged before a loss occurs can help your business continue to operate even under difficult circumstances. Some techniques that should be considered are as follows:

  1. Make a deal with a friendly competitor to manufacture your product or service your customers during the recovery period. Your Company must be prepared to do the same if your colleague suffers a loss.
  2. Keep backup records and computer discs away from your headquarters so that they can be accessed easily and utilized if the originals are destroyed.
  3. Store a few months inventory of goods at another location so that your customers will continue to receive your goods even if you have no manufacturing capability.
  4. Seek out alternative suppliers beforehand so you don’t have to scramble if your major supplier suffers a loss of their own.

A copy of the disaster plan should be given to each manager so that he or she can refer to a specific emergency action plan. The manual should contain the names, addresses  (including email), phone and fax numbers of key vendors, support personnel, and customers. Some larger Firms have gone so far as to have a duplicate second office already set up in case of an emergency.

You will find that for the most part the public will be supportive and sympathetic regarding a Firm’s setback because of a loss. Nevertheless that support will wane unless it is perceived that you are determined to get back into business – fast!

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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“A Matter of Trust”

trust

The recent episodes of corporate dishonesty and negligence is disturbing and no one wants to be on the short end of a business deception. When one places their insurance with a Firm there is an assumption that there will be an honest and competent approach from those persons protecting your assets. There are several methods to test the credibility and competence of those handling your insurance affairs. The following are some recommendations:

1. Ask someone you already trust and respect to recommend an insurance broker. The recommended party presumably has demonstrated their capabilities through a long term relationship with your friend.

2. Your insurance representative should be financially sound and the minimum recommended ratio of current assets to liabilities is 2:1. Their accountant should verify this.

3. It is suggested that you contact the State Insurance Department to see if there are an complaints about the insurance Firm you are researching.

4. Request that the Firm provide testimonial letters and references for you to call.

5. As a test for competency, research the education of the Firm’s personnel and how many employees are licensed or have advanced degrees in insurance. The Firm should profile their employees and comment on how long they have worked for the Firm.

Insurance is a complex business and it is crucial that you deal with honest and technically proficient individuals that will give you the right counsel. If an insurance Firm is unwilling to provide evidence of their capability, don’t deal with them.

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The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660 .

An Umbrella for Stormy Weather

umbrella policy

All of us have the potential of experiencing “stormy weather” when it comes to insurance claims. Even careful drivers could find themselves negligent in a car accident where bodily injury claims reach staggering amounts. Although severe accidents are rare, it is advisable to “load up’ on insurance coverage for our protection against liability claims from others you may injure. A good way to do this is to purchase what is referred to as an “umbrella” policy. Many think that the term “umbrella” is some mysterious all-encompassing insurance contract that will cover everything imaginable. The umbrella is merely a policy that provides excess liability insurance. It is additional insurance beyond what is provided by other policies you may have. For instance, if you have an auto policy that has $300,000 of liability limits and you purchase an umbrella for $1,000,000, your total protection is $1,300,000. The umbrella will provide excess liability over a variety of insurable interests such as auto, home and investment (non business) properties, and boats. The cost of an umbrella is surprisingly low. The premium for a $1,000,000 contract providing excess liability over two cars and a home is approximately $180 a year. Personal insurance umbrella limits are available up to $10,000,000 usually.

Umbrellas are frequently used in business insurance as well. Limits could exceed $100,000,000 for some industries where there is a possibility of catastrophic loss. Movie theatres and other businesses where a large number of people congregate in a confined space purchase high limits.

Umbrellas normally provide the same coverage found in the underlying policy and some provide expanded coverage such as automobile liability while driving in other countries.

Ask your insurance agent to design an umbrella program that is right for you.

For further information about the personal and commercial umbrella and other insurance matters contact Guy Hatfield at 203.256.5660.

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Insurance Ads: promises, promises

Promises

Lately there seems to be a frenetic blitz of advertising by several insurance companies where they imply a promise to provide substantial savings in home and auto insurance. It reminds me of the book, “How to Lie with Statistics.”

Unfortunately, there is very little accountability on the data behind their grandiose statements. Equally unfortunate is the fact that those insurance companies who spend a disproportionate amount of their budget wooing customers through advertising have reduced the placing of insurance to a commodity-as if you were buying a bag of potatoes. There seems to be no end to their insatiable appetite for more business. I personally admire the quiet companies that would rather spend their money and resources on claims and not on advertising and self-promotion.

The discerning consumer recognizes value in products and services purchased, and, although price is a consideration, the quality or value provided is more important. Would you pick a lawyer, dentist, doctor, accountant, boat, car or vacuum cleaner because it was the cheapest? Of course not, and one should treat the purchase of an insurance product the same way. There is a quality behind that insurance policy and the person selling it that will be manifested in the event of a claim.

For instance, if you have a disastrous fire in your kitchen, is your insurance company going to work with your contractor or insist that you use one of theirs? If you have a major collision loss on your car, are you going to be directed to a body shop chosen by the claim adjuster or will you have a say? The answers to questions like these depend on the insurance carrier you choose.

Insurance is a tricky business and not all insurance contracts or insurance companies are the same. Pick a quality company that has a fair price. With all the competition in the insurance field, there are very few companies that have an unfair price. I recommend a trusted advisor, whether it be an agent or consultant, to help you with the process. As the old saying goes, you get what you pay for and that includes your insurance coverage.

If you have questions about your insurance coverage, please contact us.

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Welcome

My name is Guy C. Hatfield and I am an owner of Hatfield Insurance Agency Inc. , a family owned and managed insurance brokerage since 1905. I have been in the business since 1977 and have the Chartered Property Casualty Underwriter (CPCU) designation which is achieved through courses sponsored by the American Institute of Insurance with 10 national examinations. I also work with attorneys as an expert witness involving insurance disputes. In my work with attorneys I see first hand the myriad of mistakes and misinterpretations made by insurance personnel and insureds alike. Insurance is a complicated field and unfortunately it is often treated as a commodity with inadequate attention to coverage detail and adequacy of limits.I plan to provide specific information on my blog which I hope will be of assistance. This will be information on insurance topics such as coverage  exclusions, limitations, policy conditions etc. which are  largely unknown to the average insurance buyer.

I welcome comments, questions, as well as problems that you may be having regarding insurance.

You can participate by signing up on my blog through email using the RSS feeder button.

Thank you, Guy Hatfield CPCU CIC

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