Equifax Finance Blog » Linda Rey

Your Teenage Driver and Your Auto Insurance Policy

Linda Rey — Thu, 10 May 2012 14:26:33 +0000

My parents let me start driving as soon as I was able so I could help them run errands, but in my line of work I see too many car accidents involving teenagers to think this is a safe practice today. Teenage driving safety is one of my biggest concerns—an insurance policy can protect you financially, but it can’t take back a car accident.

According to the Center for Disease Control, car accidents are the number one cause of death among American teens. There are simply too many distractions for inexperienced teenage drivers to process what could be life or death decisions. Scientists from the National Institutes of Health (NIH) have found that vital areas of the teenage brain don’t fully develop and mature until age 25. Plus, research by the NIH’s National Institute of Mental Health suggests that emotional immaturity, not inexperience, is the primary reason teenage drivers are responsible for far more car accidents than any other age demographic.

Your insurance policy will probably reflect the higher risk for teenage drivers, but let’s take a look at what you need to have in an auto insurance policy to help protect the teenage drivers in your life.

What do you need to do for a teen with a learner’s permit?

The first step to becoming a licensed driver is to qualify for a learner’s permit. Some states require teens to pass a permit test, and others have different requirements, but in most cases once teenage drivers have a learner’s permit, they can drive a car with another licensed operator in passenger seat. Allowing teenage drivers to practice driving with a trusted adult is one of the most important parts of educating them on safe defensive driving techniques.

At this time, it is the parent’s responsibility to notify the insurance company that there is a teenage driver in the household. There usually isn’t anything written in the policy to prevent coverage if you don’t disclose the new driver, but it’s in your best interest when a young driver has access to and is operating the vehicle.

Extra charges and insurance discounts

Be careful—there can be exorbitant surcharges to add a driver to your existing automobile policy. Insurance companies can justify these charges because of all the research that has been done regarding accidents and injuries involving teenage drivers. Teenage drivers carry the highest amount of risk, and so if you have a teenage driver in your family, I always recommend carrying the highest limits of liability possible under your automobile policy.

However, if your teenage driver shows a history of safe driving, know that his or her insurance policy premiums will drop over time. You can also ask your insurance agent about good student discounts or other insurance discounts available to teenage drivers that can further lower the premium.

Linda Rey is a licensed insurance agent at Rey Insurance with a broad spectrum of expertise in life, accident, health, property and casualty insurance as well as retirement planning and college funding strategies.

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Your Health Insurance Policy: Therapy Coverage

Linda Rey — Thu, 03 May 2012 01:49:11 +0000

It’s one thing to go to the doctor if you have an illness or other immediate need for care and to have that visit covered by your health insurance policy. But some people also need to see a medical professional for issues such as mental illness, physical therapy, or other health concerns.

Not all insurance plans cover these treatments, and coverage can depend on the state, the carrier, and the specific plan design. However, you can work with your healthcare provider and your insurance agent to find the best health insurance policy to fit your needs.

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Coverage for mental health and substance abuse treatment

Most state laws require a certain amount of coverage for mental illness and substance abuse treatment, but there are discrepancies in the level of benefits provided when compared to the benefits offered for the treatment of a physical illness.

Insurance plans usually limit the number of visits within a given time frame, and co-payments and deductibles may apply to those visits. Inpatient and outpatient care for mental illness and substance abuse treatment are usually covered in some manner. Check your summary of coverage and benefits for the exact number of days of care covered and what, if any, co-pays you’ll need to contribute.

Coverage for physical therapy and short-term rehabilitation

If you find yourself in need of physical therapy or short-term rehabilitation, check your plan to determine how many days are covered for either inpatient or outpatient care. Be aware that these limits are often subject to your lifetime and are not per year. You’ll also want to check the admission charges and co-pay fees for which you will be responsible.

Coverage in and out of network

For all medical care, including mental health treatment and physical therapy, make sure to see if your providers are considered to be in or out of network. For a plan with out-of-network benefits, all treatment will be subject to your deductible and co-insurance for out-of-network physicians and facilities. But if your plan does not offer out-of-network benefits, then you will not have coverage unless you seek care from a participating provider or facility.

As always, talk to your insurance agent if you have any questions about your plan, and check in before you pursue treatment to make sure you’ll receive the coverage that you need.

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If a Tree Falls…Who Makes the Insurance Claim?

Linda Rey — Thu, 26 Apr 2012 14:10:52 +0000

2011 was the year of big storms, and many people made a homeowners insurance claim as a result. We should have known it was going to be a crazy year for weather when a powerful storm hit one third of the nation between January 31, 2011, and February 2, 2011. Then, one of the worst storm outbreaks in the United States occurred in April 2011 with a series of tornados. That same year, Hurricane Irene proved to be one of the costliest storms on record, and 2011 ended with unusually early snow—on Halloween—in the northeast.

All of these storms caused downed trees, property damages, and a flurry of homeowners insurance policy claims. They also opened up a new chapter in one of the most common insurance conundrums for homeowners: If your neighbor’s tree falls on your property, whose insurance policy is responsible?

Whose insurance policy will cover storm damage?

Before letting a storm damage both your property and your relationship with your neighbors, take a look at some examples for tree and property damage. These will help you figure out whether your insurance policy or your neighbor’s policy will provide coverage. (These examples assume no injuries occurred as a result of the tree falling.)

Example 1: A healthy tree located on your neighbor’s property falls as a result of a storm. This is considered an Act of God. The neighbor is not responsible for that tree falling on your property, and you will need to file a claim under your own homeowners insurance policy.

Example 2: A tree on your neighbor’s property is diseased. You request, in writing, to have it removed to prevent damage. However, the neighbor does not have it removed and it falls on your property. In this case, your neighbor may be held responsible for paying to repair the damage to your property as a result of the fallen tree.

Does this all seem too easy? These two examples cover most of the fallen tree damage claims I’ve seen. If you have a different story, let me know about it in the comment section.

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Your Homeowners Insurance Policy and Fido

Linda Rey — Thu, 22 Mar 2012 02:29:18 +0000

I grew up with a wonderful dog, Maverick (maybe why my dad loved the movie Top Gun so much). Our dog brought great joy to my family, and I couldn’t imagine my childhood without him. However, while having a pet was wonderful, now I see that there are also effects certain types of pets may have on your homeowners insurance policy.

Annually, 350,000 dog bite victims need to go to the ER for immediate attention, and these visits can cost a great deal of money—the average insurance claim for a dog bite is almost $19,000. Even with this risk, most homeowners insurance policies do cover animal liability and injury sustained from a result of a dog bite.

It is important to note, though, that if you own dogs of certain breeds, some carriers will limit the coverages on your insurance policy. These carriers don’t want to pay the extra costs associated with animal liability, so they may specifically exclude it on the insurance policy contract. If they do cover certain high-risk animals, you may need to pay a surcharge.

This may seem unfair to the animal lovers out there, but you can blame the actuaries. The underwriters listen to the actuaries who tell them that certain breeds of dogs have a greater chance of injuring someone. As a result, there is a perceived greater risk to insure that home—and a carrier may decline to write a policy.

What breeds do insurance companies consider dangerous or questionable?

Not all dogs are considered dangerous, and if you happen to own dogs in any of the breeds on the following list, I’m not saying your dogs are dangerous. This is simply a list of dog breeds known to be denied on a homeowners policy.

Rottweiler
Pit Bull
Akita
Doberman Pinscher
Great Dane
German Shepherd
Chow
Mastiff
Alaskan Malamute
Presa Canario
Siberian Husky
Staffordshire Bull Terrier
Wolf hybrid

In addition, ownership of exotic animals listed on insurance companies’ Exotic Pet Species Index could pose a problem for your policy. Even if you purchase one of these animals at a pet store or from another reputable dealer, it could still be a liability. Talk to your insurance broker before bringing one of these animals into your home.

Snake
Alligator
Skunk
Raccoon
Chinchilla
Sugar Glider
Wild feline cub
Non-human prima
Bear

It’s fun to have a pet, but be smart about pet ownership. Make sure that your companion animal enriches your life and doesn’t become a financial risk to you and your family. Consult with your broker to review your circumstances.

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Condo and Homeowners Insurance: What’s the Difference?

Linda Rey — Thu, 08 Mar 2012 14:24:06 +0000

When I decided to buy a home in 2006, I had to figure out what I wanted. I decided, as a single female buying a home, that a condo was the way to go. I had owned two houses previously and realized that, after avoiding a lot of the work that goes along with owning a house, buying a condo was the right choice for me. Six years later, I still feel this was the best choice.

When someone is buying a home, whether in the form of a house or a condo, stress levels will be running high. A perk of my job is being able to help my clients with what can be the easiest part of the closing process—taking care of the necessary insurance policies. The differences between a homeowners insurance policy (HO-3) and a condo/co-op insurance policy (HO-6) are minor and are mainly in the Dwelling Limit, Other Structures, and the Loss Assessment coverages.

Coverage A – Dwelling Limit

A homeowners insurance policy includes coverage of physical damage to not only the interior of the house but also the exterior. A condo insurance policy protects only the interior of the condo unit, including walls, floors, and ceilings.

For a condo, the association will typically purchase a master condo policy that protects the exterior of the building and that is paid for through the common charges each unit pays. The dwelling limit (coverage A) for a homeowners policy is the value of the house minus an estimated value for land and location. The dwelling limit for a condo policy is much less and is typically estimated based on the value of any upgrades made to the unit. Don’t rely on the condo association’s bylaws. If you’ve invested in a new kitchen or bath, you could be underinsured.

Coverage B – Other Structures

The main difference between a homeowners insurance policy and a condo policy is that a homeowners insurance policy covers “Other Structures,” such as fences, detached garages, mailboxes, and so on, and a condo insurance policy does not.

Coverage D – Loss Assessment

A condo policy includes loss assessment coverage, which is not included in a homeowners policy. The coverage protects the unit owner in the event the association must assess all unit owners for uncovered costs as a result of a covered claim.

This situation could occur if, for example, a person was seriously injured and the judgment awarded was higher than the amount of insurance currently in force by the master condo policy. Another example would be if damage occurred to the common areas of the condo complex that was higher than the amount of insurance. In such a case, all unit owners could potentially be assessed to cover the costs.

Finally, the biggest difference between the two policies is the premium. A condo policy could be as low as a third of the premium of a homeowners insurance policy, depending on the size and value of the property. Talk to your insurance agent for more details.

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How to Provide Health Insurance for Your Small Business

Linda Rey — Thu, 01 Mar 2012 14:20:38 +0000

A big question asked by lots of employees and job seekers of their current or prospective employers is, “What kind of benefits do you offer?” Many Americans get their health care coverage through their own employer’s insurance plan or a spouse’s group health insurance policy, but for small businesses (those with fewer than 50 employees), offering health insurance benefits can be a tricky proposition.

As a small business owner, I am fortunate to be able to provide health insurance policies for both my staff and myself. However, because I am also an insurance broker, I see the difficulties facing small businesses from two sides. Health insurance can be expensive, and providing benefits to your employees while maintaining your business’s bottom line is a tough balancing act.

In the past year, I’ve worked with several clients who have had to deliver bad news to their employees. Plan options have been reduced, premiums have been increased, and eligibility and participation rules are narrower. And just like how creditors and lenders are more careful about who they will give credit to in this uncertain economy, insurance carriers are also tightening their requirements.

If you’re a small business owner with fewer than 50 employees, be prepared to have to do a little research. Assessing your and your employees’ needs can help you find a small business health insurance policy that makes everyone happy.

Why should you provide health insurance?

You’re more likely to attract quality employees to your small business if you provide the kind of benefits they can find at larger corporations. A group insurance plan is a big draw for employees. It is usually much cheaper and easier for employees to get coverage under a group health insurance plan than to get individual coverage for all the members of their family. If you’re held back by financial restraints, keep in mind that the money you pay toward employee health insurance premiums may be tax deductible. And remember that a happy and healthy employee is a more productive employee.

How can you qualify for small business group health insurance?

To quality for a group health insurance policy, you may have to be registered as a business in your state. Depending on the status of your corporation, different tax documents may be required by the insurance company. Businesses must usually prove payroll and the number of employees through quarterly payroll tax forms, or a W2, Schedule C, or K1.

How many employees will be covered under the health insurance plan?

A small business owner must have at least the owner and one employee on the payroll to be eligible for an employer-sponsored plan. The payroll employee must be paid via W2; an employee paid via 1099 is considered a contractor and is not eligible for enrollment.

The employer selects the health insurance plan and then the employees can choose whether or not to enroll. With fewer employees, and depending on carriers in your state, you may have a harder time getting coverage. Where I live in New York, for example, some carriers refuse to cover a “group of one,” which is when a business has only two employees and one turns down coverage.

How much are you willing to pay?

Employers usually aren’t on the hook for the total bill. Typically, an employer covers at least 50 percent of each employee’s monthly premium and may also contribute to dependent premiums. The employee pays for the remainder.

How much are your employees willing to pay?

Depending on your employees’ healthcare needs, costs can vary greatly. Lower deductible plans will have higher premiums, but they might be worth it if your employees anticipate needing regular checkups. If a lower premium is more important to your employees, a high-deductible, or catastrophic coverage, plan might be more appropriate. Privacy laws prevent you from asking specific questions about your employees’ medical situations, but you can gauge what they value most in a potential health insurance policy.

Answering these questions about your business and the needs of your employees can help you start putting together a small business group insurance plan. This might be tough work; the insurance market is a complicated place these days. Talk to a licensed insurance broker in your state who can help you figure it all out and find you an option that best fits your needs.

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FAQ: SR-22 Auto Insurance Policy Certificate

Linda Rey — Thu, 23 Feb 2012 13:33:41 +0000

Have you seen signs or commercials advertising an SR-22 in relation to your car insurance policy? Are you confused about whether it’s something new that you have to have for your insurance policy? This FAQ will explain what an SR-22 is and why you might need it.

What is an SR-22?
An SR-22 is not considered an insurance coverage part or an insurance policy. It is a certificate of insurance filed with the state that guarantees that you have the legally required insurance coverage for that state.

Why would a state require an SR-22?
An SR-22 is usually required for drivers who have something on their record that suggests they may not have the necessary insurance coverage. These activities might include:

Application for a probationary permit while license is suspended.
Conviction for driving without insurance.
Conviction of a DUI, DWI, or other major alcohol offense.
Conviction of multiple serious moving violations.
Failure to carry liability insurance when involved in an accident.
License reinstatement after a suspension or revocation.
Habitual traffic offenses causing too many points on one’s license.

How do I get an SR-22?
The only way to get an SR-22 is from your insurance company. You must have purchased an auto policy from an insurance company in order to secure this form, and you are required to tell your current insurance company about the need for the SR-22 so the company can file it for you. All states except Delaware, Kentucky, Minnesota, New Mexico, New York, North Carolina, Oklahoma, and Pennsylvania may require a driver to obtain an SR-22.

How much does an SR-22 cost?
The SR-22 that the auto insurance company files for you typically costs between $15 and $50. The cost of the insurance policy you are required to carry, however, varies based criteria including type of vehicle, location, coverage amounts, and motor vehicle record.

How long will I need to carry an SR-22?
Typically, an SR-22 lasts one to five years. The actual length of time varies by state and by the severity of the offense. Your state’s department of motor vehicles (DMV) will indicate for how long you will need it and when the requirement begins.

What happens if my auto insurance is canceled?
If the auto insurance associated with an SR-22 is canceled, the insurer must file an SR-26 to inform the state of the cancellation. The state will then typically penalize you by suspending your driver’s license and/or vehicle registration.

What happens if I move?
If you are required to carry an SR-22 and you move to another state, you must still maintain the SR-22 requirement for your former state. After you move, you will need to have an insurance company file SR-22s in both states.

What happens if I don’t own a car?
Even if you don’t own a car, you are still required to carry an SR-22. In that case, you will need to purchase a non-owner’s policy to fulfill your SR-22 requirement.

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Saving Money with an Insurance Policy Review

Linda Rey — Wed, 15 Feb 2012 02:39:14 +0000

Are you one of those “resolutionaries” who sets ambitious new year’s goals but has already forgotten them by the end of February? No judgment here—you still have time to accomplish your goals. Here’s an important goal that you can easily complete: This weekend, pull out your insurance policy and take care of yourself and your family by making sure you have adequate and proper coverage.

Haven’t done an insurance policy review in years? You’re my favorite client. You give me the opportunity to use my experience to give you the best recommendations for saving money and to accommodate your life changes. Here are my suggestions for what you should check at the beginning of each year to make sure your policy fits both your budget and your family.

Make sure your insurance policy has what you need

Have you taken inventory of your life? Do you have enough life and/or disability insurance to replace your earning capacity and keep your family safe and secure if need be? Review your financial plan with your advisor to make sure your family is sufficiently protected in the event of death or disability. Don’t procrastinate—there may be low cost ways to make sure your policy can grow with your family’s needs.

Find discounts without changing carriers

Sometimes your insurance policy review can be as simple as taking advantage of changes that were made to another policy or program from the same carrier you are already using. In this competitive market, insurance companies are trying to figure out how to gain market share or how to increase production. They will look at demographics and accident trends to see how they might change their policies to better serve the market.

Even if you have accidents or tickets on your record, you might get the benefit of a reduced premium on an existing policy if the actuaries change the plan in your favor. Check in with your insurance agent every so often to find out if your insurance policy has changed.

Shop around, then consolidate

Some people still think they can save a few bucks by shopping around for a different insurance policy. That’s usually not the case, and they will probably be wasting money by not instead consolidating all of their insurance policies of all types with a single company.

Don’t take my word for it; get a couple of quotes. You’re not married to any broker or agent who gives you a quote. You might even find an agent who tells you up front to stay where you are because he or she can’t help you save money. By the way, you should thank that person for being so honest.

Don’t give up on your new year’s resolutions just yet. Keep showing up at the gym to shed those extra pounds, and get your insurance portfolio review out of the way. Make an appointment to check that you’re on track with your portfolio, and then you can relax—until next year.

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Insurance Policy Tip: Safe Driving for the Winter

Linda Rey — Thu, 09 Feb 2012 01:34:24 +0000

In the winter, freezing temperatures and roads coated with salt can wreak havoc on your car, nevermind icy windshields, dead batteries, and cars that won’t start. Safe driving in all weather conditions can help you avoid car accidents and claims on your auto insurance policy, and some simple car maintenance and an emergency kit can help keep you safe on the roads and keep your car running through the rest of the season.

Winter car maintenance checklist

Winter is not the time to be thinking about saving money on your car maintenance. If you keep your car maintained throughout the year, you might be able to avoid more big-ticket car maintenance.

Change your wipers and refill your windshield washer fluid. During winter, you may want to consider using a washer fluid with an antifreeze solution that won’t ruin your paint job.
Check air pressure in your tires. The pressure in your tires will change with fluctuations in temperature, so be sure to monitor the pressure throughout the winter. In addition, depending on the weather where you live, you may want to switch to snow tires.
Get your oil changed if you’re due. Ask your mechanic or look in your manual to find out if you need to be using a different kind of oil in the winter.
Check and top off your fluids.
Have your battery serviced and tested.
Inspect cables for breaks.
Check terminals for loose connections.
Check ignition, brakes, wiring, hoses, fan belts, and spark plugs.
Check air, fuel, and emission filters.
Inspect the distributor.

Create a winter emergency kit

There’s a reason your car has a trunk, and it’s not to store 20 canvas shopping bags (or is that just my trunk?).
Consider stocking your trunk with the following items to help you handle an emergency situation:

Tool kit
First aid kit
High-energy foods like nuts and dried fruit
Bottled water
Jumper cables
Bag of salt or cat litter
Tire chains
Flashlight with extra batteries
Reflective triangles
Blanket(s)
Ice scraper and snow brush

Whether or not you’re enjoying winter weather, don’t wait to find out if your car is enjoying it too. Protect your vehicle, protect yourself, and protect your passengers.

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Winter Damage and Homeowners Insurance Claims

Linda Rey — Thu, 02 Feb 2012 04:46:16 +0000

I’m more of a winter person than a summer person—I’d rather endure 20 degrees over sweating through 100 degrees any day. However, your home and property may not hold up as well through the winter, and Mother Nature can be very temperamental. I urge everyone to make sure your homeowners insurance policy is ready to withstand any winter-related damage.

A typical homeowners insurance policy will protect you against certain damages and perils as a result of winter weather. It will cover damage to your home and other structures if it occurs as a result of falling trees, wind, or frozen pipes. Damage from heavy snow is covered if it causes a roof, porch, or other structure on the property to collapse.

Determine your policy’s winter damage coverage

An HO-2 insurance policy, also known as a “broad form,” covers 16 perils. In the winter, this policy usually includes coverage of such perils as the freezing of a plumbing system; damage from the weight of ice, snow, or sleet; and damage from a windstorm or hail. However, an HO-3 policy, known as a “special form” because it contains exclusions rather than inclusions, does not usually cover problems stemming from a power failure or from water damage. Talk to your agent about which type of policy you have and what the specific inclusions or exclusions may be.

Depending on your policy and the carrier, even if you have the coverage, I don’t always recommend making small claims for issues like for food spoilage in the event of a winter power outage. Typically the total amount that you would be eligible for is not worth it with a small claim—a claim for under $500 can cost more to process than the actual check that is issued. Additionally, each and every claim, no matter the size, remains on your record. Insurance carriers will look at your credit report to help determine your premium, and they’ll also look at your insurance record. Nuisance claims can be detrimental in the long run when you’re trying to qualify for a new policy or carrier—when underwriters try to price your policy, they will look at your record.

Take a look at your homeowners insurance policy this winter and check if any winter-related damages are specifically excluded. It’s better to talk to your insurance agent now, before you’re dealing with a winter storm and a rejected homeowners insurance claim.

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