Monday’s Post 10/31/11 –  A Florida county has submitted its own ordinance to discuss the outlandish number of scams perpetrated by fraudulent medical clinics.  Hillsborough County State lawmakers’ have promised to discuss the insurance fraud issue and revise the state’s automobile no-fault laws. The debate  is over PIP (Personal Injury Protection) and the fraud  within medical centers in Hillsborough Country. Through an unanimous vote, the Hillsborough Country Board of Commissioners passed sets of revised decrees that mandate medical clinics which primarily treat victims of a car accidents and earn most of their income through auto PIP insurance claims.  These clinics must acquire a new county license. Kevin Beckner, and County Commissioner, said that the new ordinance is essential to cut fraud which cost residents up to $350 each in higher auto insurance premiums. According to a National Insurance Crime Bureau report, residents of Hillsborough County pay nearly $16 million higher in car insurance premiums because of medical clinic fraud. As a result, Hillsborough’s local economy has been greatly affected.  Florida ranks number one in fake accidents, according to the NICB (National Insurance Crime Bureau).  From 2008 to 2009, the number of such “staged” accidents in Florida has increased by nearly 170%.  The number of medical and pain clinics that chiefly treat Personal Injury Protection (PIP) patients has increased dramatically. There are  160 such clinics in Hillsborough Country alone; as compared to over 70 in Pinellas Country, 22 in Pasco County, 20 in Manatee County and 17 in Polk County.

Commissioner Beckner who proposed the law says that the new ordinance aims to shut down fraudulent clinics and simultaneously protect the medical clinics which are performing legitimate medical care. Technically, a PIP medical provider is a person, clinic, or other business whose PIP clients account 90% of its gross income or bills insurers more than $200,000 in PIP claims annually.  Due to the new ordinance, these clinics are required to be open for business at least three times weekly from 9:00AM to 5:00PM and can accommodate walk-in patients or provide patients with appointment options for services, therapy and other treatment.  A licensed physician must be physically present at least three days weekly for four hours a day.  Each physician is restricted to run more than five PIP medical provider clinics. A license application costs $500 which is non-refundable and an annual payment of $1500.

Violators of the new ordinance are to be fined $500 and a maximum of 60 days imprisonment. In the same sense, a physician whose license has been cancelled will not be permitted to operate another clinic for five years. Critics exclaimed that the new law is overreaching since it dictates a physician’s working hours and inhibited limits on their income sources.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Sunday’s Post 10/30/11 –  Residents of Alabama who have homeowners insurance with Alfa Insurance Company can now enjoy a multi-policy discount with their new auto insurance coverage just introduced by the insurance carrier. Just recently, Alfa Insurance Co. publicized that it will no longer countersign and underwrite a mono-line homeowner policies in Alabama. According to the company, this will only provide coverage to homeowners who place their auto insurance with the company. From this, agents will have the choice of using other carriers for their independent homeowners business.  Alfa Insurance Corporation has established its name as a property & casualty insurer which provides insurance and other financial services in the United States. It operates in states of Alabama, Georgia, Texas, Missouri, Indiana, Ohio, Virginia, Tennessee, Arkansas, Kentucky, Florida and North Carolina.  The addition of the auto insurance product will give their 500 independent agents will be in a better position to cater the needs of each client. 

The companies new personal approach will work best when they can attend to all a person’s insurance needs. Many Alfa agents are concerned with the idea of tying up home and car insurance has become a trend not only with Alfa, but also with other auto and homeowners insurance insurers.  The feeling is if other companies will follow with the same idea so patrons will not find themselves choosing between two insurers, or be stranded with the decision they have to make one.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Saturday’s Post 10/29/11 –  A New York Court came up with a decision regarding a driver from Syracuse who killed a pedestrian while being glared by sun’s rays cannot appeal for an “emergency doctrine”.  In the decision released by New York State Supreme Court of Appeals last October 13, 2011, an attentive driver would be mindful that the sun’s glare would interrupt his driving along the road. With this, the case should be pursued since the accident manifests the driver’s inattentiveness.

The incident happened late February in Syracuse near an office complex. The place is bound to have a number of road accidents because of heavy pedestrian traffic around the area. Derek Klink was driving that morning when he was distracted by the sun’s glare and struck Irene Lifson while she was crossing the street near the complex. The Complainant took legal actions to sue Klink and the city of Syracuse. The complaint alleges says that Klink is a negligent driver and the failure of the city to plan for pedestrian traffic. The subsequent trial was limited to the issue of liability.

In the testimony of Klink about the accident, he was temporarily blinded by the glare. He stopped at the stop sign and made a left turn but his view of the oncoming traffic was partly obstructed by cars found on the left lane. For him to see approaching vehicle, he had to go through his car’s window.

The heavy mass of pedestrian crossing was seen by Klink, and he was sure that the road was clear before he made a left turn by turning his head on the different directions. His attention was focused on his right (toward the incoming traffic). When he looked back to his left, he was blinded by the sun all of a sudden. Because of the glare, he looked down to his right and when he looked up, he saw Lifson. Although he used the brake, he did not manage to avoid hitting Lifson, having her seen some seconds before the collision.  The lower court favored the driver’s testimony and said that he was only confronted with an emergency which he has no control. The jury is willing to reject such proposition, but if it will be proven that he had faced an emergency and acted reasonably, then it was to find Klink.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Friday’s Post 10/28/11 –  Travelers Insurance Company has introduced a money-saving program for its auto insurance policy holders. IntelliDrive, is a mileage- based auto insurance product. This was primarily launched to help low- mileage drivers cut annual vehicle expenses starting with a reasonable price cut of up to five percent immediately upon enrollment. Moreover with an increase in mileage, more cut offs in prices are available for drivers and other patrons. This includes an additional 20 percent discount at renewal given to regular customers depending upon the number of miles driven.

By simply plugging a small electronic device into the customer vehicle, IntelliDrive can measure mileage. It can also provide information on vehicle usage and personal driving reports. These include driving style and environmental impact such as fuel economy and carbon footprint which can help the customer adjust their mode of driving to cut fuel expenses. The information provided by IntelliDrive can then be can be accessed by customers electronically through a secure website.

Another advantage of this application includes optional alerts which can be defined by personal customer settings. These electives on vehicle settings depend on the discretion of the owner and can vary from one customer to another. For example, parents could set up vehicle alerts to notify them via email when the vehicle is driven aggressively, leaves a defined area, exceeds a certain speed limit or is used during an unauthorized driving period. With IntelliDrive, parents can confidently leave vehicles in their homes without the worry of improper vehicle usage by their children. Also customers can watch and improve their driving practices for safer and fuel thrifty trips in the future.

This beneficial insurance product is now available in Illinois, Ohio, Oregon and Virginia. With a visit to a nearby independent insurance agent or by simply contacting Travelers, IntelliDrive can be purchased. The aforementioned discounts and advantages may apply only to certain coverage, limited to certain states and benefits are subject to individual eligibility. InsureDirect.com invites all it’s Travelers Insurance Clients to call us about IntelliDrive.  I am personally looking forward to the product being available in Pennsylvania.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Thursday’s Post  10/27/11 –   AARP, which stands for American Association of Retired Persons, is a United States-based non-governmental organization and interest group which caters the wide range of needs its members, usually those in their fifties. To better protect the interests of the older citizens in our society, The Hartford Financial Service Group, Inc. made its AARP-branded auto insurance program available through the collaboration of  United Valley Insurance of Fresno, Calif.  The Hartford Financial Service Group, simply known as The Hartford, is the leading provider of life insurance, group and employees’ benefits, automobiles and homeowners insurance and business insurance, as well as annuities, mutual funds, and college savings plans. This time the service group takes into consideration the welfare of senior citizens by securing them with an auto insurance program. This includes services like roadside assistance, 24/7 hassle free claim good turns, antique auto coverage and the like. United Valley was chosen after giving the needs of a number of eligibility requirements which include demonstrating a commitment to community service, meeting a high level of business and ethics standard, and completing a training program designed to highlight the needs of the older population.    Such help is offered through selected and authorized independent agents. These products are available from The Hartford by phone, in the internet, or by mail. This AARP-branded insurance program is intended in consultation with The Hartford.  Advance 50 Team, which is composed of highly credentialed member with edged knowledge in aging-related fields, provides rich academic background with the psychological, sociological and financial dimensions of aging. Through this, it helps customize products and services designed to suit the needs of the old ones.   Features of this program include lifetime continuation agreement which gives assurance to the consumer’s insurance policy that it will not be rejected as long as the requirements are met, and RecoverCare which is made to help customers pay help with daily responsibilities like cooking, cleaning and the like for them to recover from traumatic experiences before  a car accident.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Wednesday’s Post 10/26/11 –  Recently, one of the greatest tragedies to ever occur in the U.S. was when Hurricane Irene struck land. Irene will possibly cost U.S. state and local governments billions of dollars in damages, but funds from the national government might ultimately cover much of this expense.

It may be too early to estimate the entire cost of the storm, but New Jersey Governor Chris Christie said New Jersey alone may have suffered tens of billions of dollars in damage. The timing is terrible for municipalities as they dig their way out of their hardest imagined economic period in decades after the financial crisis and recession which sank budgets and forced widespread cuts in expense and increased taxes. In the state of Maryland however, the national government will reimburse the state for 75 percent of what it spends on emergency preparedness and of the immediate response activities to the storm in a trend that may be replicated across the region. Just how well the United States can handle the unexpected expenditure but that is a different question as it battles record budget deficits and increasing fears of a double dip recession. According to New York Governor Andrew Cuomo, the cost to the state would be high, but mitigated by a centralized disaster relief declaration. Cuomo told ABC News that the bill would come to millions of dollars. “It’s my guess costs will be in the tens of millions,” he said. He added that President Barack Obama’s declaration of emergency for New York would allow the state to be reimbursed for many of the costs of the hurricane. New York State adopted an on-time budget in April that cut millions of dollars from many high-priority areas, such as education.

“It’s the last thing we needed now,” Cuomo said. “We just came through a tough budget session and we didn’t need any additional costs.”

New York City did not suffer as much damage as had been feared, but still the city’s costs will mount up.

Asked if the national government would pick the overtime the city was spending to keep thousands of employees working in the aftermath of the storm, Mayor Michael Bloomberg on Sunday said,”My guess is probably not. Keep in mind, it is substantial, but the city runs with overtime all the time.” In New Jersey, however, the governor said the costs are expected to be astronomically high. “I’ve got to imagine that the damage estimates are going to be in the billions of dollars, if not in the tens of billions of dollars,” Gov. Chris Christie said in an interview on Sunday on NBC’s “Meet the Press” program. Immediately, Pres. Obama has declared Virginia in a state of emergency, but the state was not certain it had enough damages to meet criteria for a major disaster, which would send it extra national funds. “This storm wasn’t a catastrophe. We can’t get in a helicopter and fly by and… call the president and say, ‘Yeah this one’s a go.’ What we have to do is go through a damage assessment process,” said the State Coordinator of Emergency Management Michael Cline.

The U.S. Federal Emergency Management Agency announced on Sunday that it has begun its damage review of states affected by the hurricane that left at least 11 people dead [Later figures put the death toll at 21].  “We are starting assessments in North Carolina,” FEMA administrator Craig Fugate said.

Many of the actions governors must take to mitigate the impact of the storm can be expensive, though he said an emergency declaration “helps offset the costs with 75 percent funding from the federal government.”  He later told a briefing that there are “no dollar figures, not at this point” and that it would take the federal government several days to begin creating estimates.

The recession hit states’ budgets hard, leaving them fewer funds to respond to emergencies and in fiscal 2010, the latest year data is available, the median budget for crisis response fell to $3.3 million from $3.41 million the year before, according to the National Emergency Management Association. North Carolina, for example, pulled money from its disaster relief funds and other reserves to patch a budget this fiscal year. To save money last year, New York consolidated its homeland security, emergency management, fire control and infrastructure offices. And New Jersey has implemented spending cuts of 10 percent and cut aid to local governments.  Then there are the insured losses to consider.  Catastrophe modeling company EQECAT estimated Irene caused between $200 million and $400 million in insured losses in North and South Carolina, with most of them in North Carolina. Combined with its estimate of $300 million to $600 million in insured losses in theCaribbean, EQECAT puts Irene’s total damage so far at $500 million to $1 billion. EQECAT expects to release loss estimates for more states on Monday. Moreover, follow-up assessments were conducted and results are expected to  be released soon.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Tuesday’s Post  10/25/11 –  Many Florida homeowners expected relief from the higher property insurance bills that followed the busy 2004 and 2005 hurricane seasons. But more than 4 million homeowners are about to get hit by rate hikes and disappearing coverage. State regulators have approved $718 million in rate increases.  The insurance industry and its advocates blame the increases on nearly three years of government attempts to control rates. Florida insurers claim they have been losing money. A consumer advocate says those payments are inflated and add hundreds of dollars to individual homeowners’ bills. Most Florida insurers don’t need to publicly report those profits, but two that do posted earnings of $32 million despite telling state regulators their insurance operations lost $16 million and required double-digit rate hikes, the newspaper reported. Since 2005, more than 2 million Florida families have been dropped by their carriers while the average statewide premium has increased 44 percent. In coastal regions, rates have doubled and tripled.

Since 1998, Florida insurers have collected $20.5 billion more than they paid back in claims, $18 billion of that since 2005. Yet the industry still says it is losing money, according to the newspaper’s report. Last month, Insurance Commissioner Kevin McCarty told Florida officials that the market remains in a slump, with 58 percent of carriers reporting losses. When seeking rate increases over the past year, insurers have cited sinkhole losses, mitigation discounts and increasing expenses for reinsurance, which is the coverage they buy from unregulated corporations that agree to pay their hurricane losses. The largest increase to a for-profit carrier was $88 million approved this month for Universal Property & Casualty.

State Farm’s most recent rate hike is expected to generate $73 million in new revenue on top of a 29 percent rate increase last year. The current increase, an average 21 percent, applies only to customers with discounts for using storm shutters or other protective features on their homes. The insurance industry and its advocates blame government attempts to control rates.  “When you charge artificially suppressed rates, it creates water behind the dam,” said former House insurance chairman Don Brown, an ardent supporter of rate deregulation and consultant to Gov.-elect Rick Scott. “It continues to pile up.”

A Herald-Tribune review of U.S. Securities and Exchange Commission filings found several companies that told investors they were profitable while telling state insurance regulators the opposite.

Universal Property and Casualty declared $11.3 million in insurance losses for its insurance company subsidiary. But after adding back in the money Universal pays itself for management services, the company told stockholders in SEC filings that it made $29 million before taxes the first half of 2010, the newspaper reported. The holding company was still posting profits in November when its insurance carrier asked regulators for a 14.9 percent hike. Homeowners Choice similarly declared a $4.8 million loss as of June 30, but SEC documents show it told investors its holding company made a $3.2 million pre-tax profit, according to the Herald-Tribune. Both were granted rate hikes.

Most Florida-based insurance companies now are set up to pay sister companies for management services, claims adjusting or other tasks. These companies often have the same owners as the insurer and operate with no employees of their own.  Because payments to affiliates are set as a percentage of premium, any rate increase to homeowners is also an increase in what the affiliates get paid.  The Herald-Tribune documented $1.9 billion in such payments in 2008 alone.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Monday’s Post 10/24/11 –  As a worldwide insurance-rating and information agency surfacing for more than hundred years of existence, A.M. Best Company is a full-service credit rating organization steadfast in giving reliable statistics in insurance industry. People who have bought insurance policies refer to company’s ratings and strategic analysis in assessing strength and creditworthiness of risk-bearing entities.

Just recently, A.M. Best Co. publicized the demotion of the rating of ILM Group and its constituents to B+ (Good) to B++ (Good) and also its issuer credit rating to “BBB-” from “BBB”. This includes Indiana Lumbermens Mutual Insurance Co., Lone Star National Insurance Co. and National Building Material Assurance Co.. All of the enumerated firms are cited in Indianapolis. All of the ratings, as observed, have been changes to stable from negative.  Indiana Lumbermens Mutual Insurance is regarded as one of the premiere mutual insurance company which provides intelligent insurance solutions to the building materials and forest product industries. It has also leveraged its extensive experience in the business to help its clients position themselves for profitability and growth. With this, the company is regarded as one of the leading specialty property and casualty insurance providers.  A.M. Best noted that such downgrading is just a mere reflection of ILM’s unbalanced underwriting in a span of five-year period. Such dilemma is primarily contributed large property losses, accumulation of weather related losses, relatively high underwriting expenses and areas of adverse loss reserve development in years of tragedy and misfortune.     Though ILM’s risk-adjusted capitalization boosts the rating of the company, factors like competitive market conditions, weak underwriting results and challenging macroeconomic conditions have dragged the overall score of the corporation which has great impact on their operating performance for some years.  Even if plausible strategic initiatives to improve the group’s underwriting performance were already laid on the table, execution of the company’s business plan should first be strengthened into profitable results. A.M. best is worried by ILM’s underwriting performance as well as further erosion of capital for 2012 since the company will continue to surface in the market with greater competitive market conditions.

-Mike 

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Sunday’s Post 10/23/11 –  Drinking alone may not seem that heavy in one’s pocket, especially if it is done during special occasions or even in unplanned gatherings. Yet accumulating medical expenditures as well as other costs to society, each drink may cost about $2, says a recent federal research released some months ago. Beyond the money spent by consumers at a bar or liquor store and the tips they might give Mr. Waiter, a study from the Centers for Disease Control and Prevention calculated societal costs from binge and heavy drinking of people. For more than a dozen years, this is the first federal approximation. The study included – among other things – money lost in decreased work productivity, property damage for car crashes and other like accidents, expenditures for other alcohol-associated medical problems such as liver cirrhosis, and also bucks spent jailing alcohol-indulged law offenders such as drunk.

AutoOne Auto Insurance Company, being one of the most established commercial automobile assigned risk services in  Arizona, California and Colorado, will now change ownership. Employees of the company are now waiting for the sale to be completed which includes a number of changes in the company like reducing the size of the business. The company  headquartered in Melville, New York with Claims facilities also in Syracuse,  AutoOne is considered a division of the OneBeacon Insurance Group, a Bermuda-based investment company which earned a rating of A (excellent) by A.M. Best.  It is considered a high-risk personal auto insurance provider. The company also offers Assigned Risk Solutions in 22 states, covering 28 programs array of services to meet their clients’ needs.

            In August 2010, OneBeacon Insurance Group publicized that the company is selling AutoOne to Interboro Holdings Inc. of New York. Completion of the deal is still in progress and is expected to be completed before the year ends. The insurance company and its Select Division have a total of 103 employees cited in Melville and 35 employees in Syracuse.   The employees are expected to be hired by the new owner of AutoOne. “At this point, there have been interviews conducted by the buyer and they will be making decisions on which employees they will be bringing on board”, says OneBeacon. David Nichols, Chief executive Officer of Interboro Holdings Inc. admitted that his corporation is still in the evaluation process. He noted that his business is trying to find the best way to use AutoOne and AutoOne select which will protect and unite common interests of the two companies. Part of the evaluation is the assessment of the number of employees necessary to continue to the business. Nichols also emphasized they cannot give at this time the exact number of employees they will be hiring since according to him, they are not in the position to do so since evaluation process is still ongoing.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602