I’ve been an Auto, Homeowners, and Business Insurance Agent since the winter of 1992.  Any time I have had the opportunity to speak to another Auto & Homeowners Insurance Agent about serious claims during the winter months, 9 times out of 10, the Winter of 1991/1992 is the insurance claims season we all refer to most often. Since that winter, there have been very few winter claims seasons we can refer to as very serious and heavy with winter time claims.

The winter of 2010/2011 has been very difficult for Auto, Homeowners and Business Insurance Companies alike. More frequent and record snowfalls have continued to pile one on top of another as snow accumulates on both business and residential roof tops in many parts of the United States.  The northeast states have been hit harder than other parts of the country. A growing concern among auto home and business owners is that the accumulating snow and ice will cause much more serious property damage than normal. If the snow & ice builds to a point where a roof gives way, Interior water damage will add to the severity of the claim. Another concern is falling trees from both wind and the weight of snow and ice. Ice one power lines which causes both power outages ans power serges cause damage to computers and delicate electrical devices. Of course the other normal occurrences like frozen pipes, auto accidents and the other common winter-related problems which cause claims during the cold months.

The following measures can be used to prevent problems from ice and snow loads during the winter months:

Clearing snow and ice off your home and garage roof is the best way to avoid damage which will result in an insurance claim. If your roof is not reachable from the ground, a roof rake is an effective way to remove snow from the roof edges where ice dams occur. If you can’t reach your roof from the ground, you may want to consider contacting a contractor.

Don’t ever attempt to climb on a snowy or icy roof from second story windows. Never place a ladder on snow or ice ground if you can not safely access your roof from the ground.

Shovel snow and collected ice from around your gutter downspout so that they can drain freely when the snow starts melting. This will help prevent ice buildup in gutters.

Closely monitor building conditions by regularly checking the roof and gutters of homes or businesses. If there are signs of damage, contact a qualified structural engineer.

When your home, car or business has been damaged as a result of a winter storm or collecting snow, make sure you secure the area to prevent further property damage. Immediately contact your insurance agent’s office to recommend you of the damage and see if you qualify to file an insurance claim. Your agent will give you guidance and the next steps to take help begin the recovery process.

– Mike

7/10/11 UPDATE  Obviously the winter of 2010/2011 is now over.  We still have a good 60 days left  in the winter season when I completed the earlier post.  Homeowner, business owners  with Flat Roofs in Phila were hit very hard this last winter.  Those insurance companies which insured those homes with these trouble areas took a real beating.  In most cases a snow fall will come and melt within a few days or a week. Flat Roofs are equipped with a Drain Box which will divert rain and melting water to the ground and into the sewer. A number of snow falls came on top of each other building up the total weight on the roof.  This weight of the snow and ice caused significant damage.  The damage came with an extended and larger cost to the entire insurance industry.

Over the fifty years, Americans all over the United States have struggled with a difficult debate about the “so called” flaws in our Health Care System.  Some say it’s a good system and some feel it’s just plain bad. Regardless of what side of the issue you come down on in this squabble, in 2010 a national health care law, commonly called Obama Care, was passed and signed into law by President Barack Obama. As far as this agent is concerned, I’m sadly confident the new health care law will adversely affect auto insurance rates and cause financial distress for every auto insurance buyer across our great nation.

The bottom line is this; what ever laws which affect health care and health care reform will directly and negatively impact auto insurance premiums for every American who buys auto insurance. The problem will come down to cost shifting between traditional health care providers, the government and auto insurance carriers. In today’s insurance system, there is a very fair equity based agreement between all insurance companies about claims. It’s referred to as Claims Subrogation. Here’s how it works. If insurance company “A” makes payment on a claim for which insurance company “B” is responsible, company “B” will reimbursed company “A” for the full amount defrayed by company “A.”

When Obama Care starts to take hold in 2014; reimbursement rates for both State and Federal Programs such as Medicare and Medicaid will be responsible for reimbursing auto insurers for the medical bills the carrier pays on behalf of its auto insurance customers.  Reimbursement rates from both Medicare and Medicaid are far too low to cover an insurance provider’s expenses. Auto Insurance Carriers and other medical reimbursers of medical services will then need to charge higher rates to make up for the reimbursement shortfall.

Currently, the medical part of an Auto Insurance Policy is between 15% and 18% of an Auto Insurance Policy’s state minimum premium. In order to make up for this lost revenue, an auto insurance carrier may need to raise its customer’s rates.  On an average, the typical auto insurance customer could see an increase of 15%. This would translate to a $150.00 to $180.00 annual increase for most drivers. I’m sorry to say, this is not change I can believe in. In fact, once americans are forced to pay these drastic monthly increases in the medical insurance premiums; Obama Care will defeated and President Obama will be out of a job.

Because the negative effects on the entire health care system, such as outlined above, was not studied by law makers prior to the passing of Obama Care, it’s hard to tell how adversely last year’s health care reform law will affect auto insurance rates. What is certain, cost shifting will increase as the rolls of Medicaid and Medicare recipients are expanded and the other changes come into effect. It’s entirely possible that 15% to 18% higher auto insurance rates could be a low estimate. Since No-Fault Auto Insurance has been outlawed in most states, the auto insurance system has been self-sustaining. Unfortunately this will not be the case once health care reform reaches your car insurance monthly payment.

Mike Dortch, licensed Property/Casualty/Health Insurance Agent

7/8/11  UPDATE:  Since I first posted this article in February;  Obama Care has been proven to be flawed.  At least 2 dozen of the United States’s largest Corporations have requested waivers to not take part in the program. Personally; I have felt the effects of this new law.  On May 1., InsureDirect.com’s health insurance bill increased by ?12,000.00 for no reason. Instead of accepting the increase, I took an option of increasing our prescription deductible by $3000.00 and my Hospital deductible by $9,000.00.