Insurance and Older Americans

Courtesy of Insuring Florida

According to the U.S. Census data, in 2010 there were 22 people over the age of 65 for every 100 people. By 2030, that number will rise steeply ? with 35 of every 100 Americans being over 65 years old. That’s 19 percent of the population. No surprise that Florida ranks #1 with the most households with senior citizens. Obviously, the need for long-term care insurance will increase.

Most people buy long-term care insurance around age 60, says the U.S. Dept. of Health and Human Services. The younger you are when you buy it, the more likely you are to be accepted for coverage. If you apply in your 50s, there’s a one in 10 chance you’ll be rejected. If you apply in your 60s, the chance of rejection is two in 10, and the odds against you double if you wait to apply for coverage until you hit your 70s. Of course, the younger you are, the lower the premium will be for a given set of benefits and features. Once the premium is set, it stays at that amount for the life of the policy, unless the claims for the group of people who have bought that type of policy require rates for the group be raised to cover claim payments.

You’ve got lots of options in planning for the silver and golden (and platinum) years. Some people think they should invest what they would have paid in long-term care, rather than buying an insurance policy. But that may leave you vulnerable if you need the benefits earlier than planned. Like most things in life, do your homework on long-term care. And, celebrate your years ? since this is Older Americans Month, and the theme is “Never Too Old to Play.” I like the sound of that!

Prepare Now for the Summer Storms

Courtesy of iii.org

It?s 2017 ? and another hurricane season is about to be breathing down our necks. Maybe you?ve grown immune or indifferent after seasons of weather threats proved wrong. A word of advice: Never let your guard down.

Did recent reminders of the need for storm vigilance get your attention in 2016? Hurricane Hermine and Hurricane Matthew hit Florida last fall. If neither storm affected you, it might be easy to ignore them. The weather is wild and, despite all the scientific tools available, it?s hard to predict where the winds will go and how powerful they will be.

What you don?t know about preparing for bad weather can hurt you. For example, did you know that Hurricane Matthew last October blew up to be a Category 5 hurricane within a 24-hour time frame? If you are surprised, so were weather experts; they said no other storm had intensified that quickly. Read the report about Matthew defying weather forecast models, and then thank our lucky stars that it landed as a Category 1.

What if you prepared for a Category 1 (wind speed up to 95 miles an hour), but a Cat 5 with winds of 165 mph arrived instead? We don?t like to think about it, but thinking on it and acting on it ? in advance ? is storm-defying behavior. It?s time to review our Hurricane Season Insurance Checklist.

You may also like to up your awareness for the upcoming season by listening in to a couple of hurricane season awareness webinars from the National Hurricane Center. The NHC will be talking about new capabilities to issue advisories and warnings and also has a topic on inland flooding, which is an overlooked, yet deadly, threat.

Great Tips for Pool Safety

Courtesy of iii.org

Whether you have a luxury in-ground pool, or plan to blow up an inflatable kiddie pool, it is important to consider the safety implications.

There are an estimated 7.4 million swimming pools and five million hot tubs in residential or public use in the United States, according to the Centers for Disease Control and Prevention (CDC). Furthermore, there are over 3,400 fatal unintentional drownings in the United States each year, with more than one out of five drowning victims being a child 14 years old or younger, according to the CDC.
The I.I.I. suggests taking the following steps if you own or are considering purchasing a pool or spa:

  • Contact your town or municipality
    Each town will have its own definition of what constitutes a “pool”, often based on its size and the depth of the water. If the pool you are planning to buy meets the definition, then you must comply with local safety standards and building codes. This may include installing a fence of a certain size, locks, decks and pool safety equipment.
  • Call your insurance agent or company representative
    Let your insurance company know that you have a pool, since it will increase your liability risk. Pools are considered an “attractive nuisance” and it may be advisable to purchase additional liability insurance. Most homeowners policies include a minimum of $100,000 worth of liability protection. Pool owners, however, may want to consider increasing the amount to at least $300,000 or $500,000. You may also want to talk to your agent or company representative about purchasing an umbrella liability policy. For an additional premium of about $200 to $300 a year, you can get $1 million of liability protection over and above what you have on your home. If the pool itself is expensive, you should also have enough insurance protection to replace it in the event it is destroyed by a storm or other disaster. And, don’t forget to include the chairs, tables or other furniture around the pool deck.

If you have a pool, the I.I.I. recommends taking the following safety precautions:

  1. Install a four-sided barrier such as a fence with self closing gates to completely surround the pool. If the house forms the fourth side of the barrier, install alarms on doors leading to the pool area to prevent children from wandering into the pool or spa unsupervised. In addition to the fences or other barriers required by many towns, consider creating several “layers of protection” around the pool, in other words setting up as many barriers (door alarms, locks and safety covers) as possible to the pool area when not in use.
  2. Never leave small children unsupervised?even for a few seconds. And never leave toys or floats in the pool when not in use as they may prove to be a deadly temptation for toddlers trying to reach them who might then fall into the pool.
  3. Keep children away from pool filters and other mechanical devices as the suction force may injure them or prevent them from surfacing. In case of an emergency, know how to shut off these devices and clearly post this information so others can do so too.
  4. Ask if pool users know how to swim. Learners should be accompanied by a good swimmer. If you have children, have them take swimming lessons as early as possible. And, do not allow anyone to swim alone.
  5. Check the pool area regularly for glass bottles, toys or other potential accident hazards. Also, keep CD players, radios and other electrical devices away from pools or nearby wet surfaces.
  6. Limit alcohol use around the pool, as drinking alcoholic beverages negatively impacts balance, coordination and judgment?and its effects are further heightened by sun exposure and heat. The CDC reports that alcohol use is involved in up to half of adolescent and adult deaths associated with water recreation.
  7. Clearly post emergency numbers on the phone, in the event of an accident. Keep a first aid kit, ring buoys and reaching poles near the pool. You may also want to consider learning basic water rescue skills, including first aid and CPR training. For additional information, contact the American Red Cross.

Wanna Cry Creates Huge Business Losses

Courtesy of iii.org

A wave of cyber attacks hit targets in 150 countries on Friday, May 12–and this number is expected to grow, according to law enforcement authorities. This fast-spreading hack is unprecedented in how it spreads ransomware via a “worm.” The white paper, “Cyberrisk: Threat and Opportunity” examines how insurers contend with these evolving hazards to networks and data.

  • Interest in cyber insurance and risk continues to grow beyond expectations in 2016 in part due to high profile data breaches, but also due to awareness of the almost endless range of exposures businesses face.
  • Attacks and breaches have grown in frequency, and loss costs are on the rise.
  • Insurers are issuing an increasing number of cyber insurance policies and becoming more skilled and experienced at underwriting and pricing this rapidly evolving risk. More than 60 carriers now offer stand-alone cyber insurance policies, and it is estimated the U.S. market is worth over $3.25 billion in gross written premiums in 2016, with some estimates suggesting it has the potential to grow to $7.5 billion.

Some observers believe that exposure is greater than the insurance industry?s ability to adequately underwrite the risk. Attacks have the potential to be massive and wide-ranging due to the interconnected nature of this risk, which can make it difficult for insurers to assess their likely severity. The under reporting of attacks means that accurately evaluating exposures is challenging. Several insurers have warned that the scope of the exposures is too broad to be covered by the private sector alone, and a few observers see a need for government cover akin to the terrorism risk insurance programs in place in several countries.

Insurance in Florida, the Future of No-Fault

Courtesy of iii.org

The Florida Legislature is again looking at ending no-fault auto insurance in Florida. Sound familiar? Tweaking no-fault (also known as personal injury protection ? PIP) is a frequent topic for legislative debate.

You may recall a fix to fight no-fault fraud came in 2012. Regulators issued a report in 2015 that said the fix appeared to be working. Regardless, it seems the desire to do something about rising auto insurance rates may be driving the desire to abolish no-fault. Florida is one of 12 states with a no-fault law. Proponents say it allows those injured in a car crash to recover costs for medical treatment under their own insurance policy, without needing to determine who is at fault for the accident. Among the proponents are hospitals, which say about one-third of the people they treat for auto injuries only have no-fault coverage. Critics discount that view, saying no-fault duplicates coverage that most people already have with medical insurance.

What will replace no-fault/PIP if the legislation becomes law? A requirement for bodily injury coverage, which applies to injuries you as a driver cause to someone else. This may cost more than no-fault coverage for some people. With this change, the Legislature is also considering raising the compulsory financial responsibility limits. Any time most people hear the word “raising” they think it might cost more money, and it might ? but here’s the other side of that:

Florida has the lowest financial responsibility requirement of any U.S. state. That means we set the bar very low for the responsibility drivers have if they cause a car crash with injuries. And, the end result is that too many people are not fully compensated, so while they are trying to recover physically from injuries caused by another, they may also be suffering financially. Raising that bar is about accountability.

A reminder: Insurance of any type (auto, home, health, business) is about protecting your assets. Always, always (always!) make sure you have insurance equal to the total value of the assets you own.

Motorcycle Safety Statistics

Courtesy of iii.org

  • In 2015, 4,976 people died in motorcycle crashes, up 8.3 percent from 4,594 in 2014, according to a National Highway Traffic Safety Administration (NHTSA) report.
  • In In 2015, 88,000 motorcyclists were injured, down 4.3 percent from 92,000 in 2014.
  • In 2015, motorcyclists were 29 times more likely than passenger car occupants to die in a crash per vehicle mile traveled, and almost five times more likely to be injured.
  • Motorcyclists accounted for 14 percent of all traffic fatalities, 4 percent of all people injured, 17 percent of all occupant (driver and passenger) fatalities, and 4 percent of all occupants injured.
  • There were 8.6 million motorcycles on the road in 2015.

In 2015, 4,976 people died in motorcycle crashes, up 8.3 percent from 4,594 in 2014, according to the National Highway Traffic Safety Administration (NHTSA). In 2015, motorcyclists were 29 times more likely than passenger car occupants to die in a crash per vehicle mile traveled, and almost five times more likely to be injured.

(Note: statistics on fatal motorcycle crashes are also available from the Insurance Institute for Highway Safety.)

KEY FACTS

  • According to the latest data available from the Federal Highway Administration, there were 8.6 million private and commercial motorcycles on U.S. roads in 2015, compared with 8.0 million in 2009.
  • 2015 Crash Data: According to the U.S. Department of Transportation?s National Highway Traffic Safety Administration (NHTSA), 4,976 people died in motorcycle crashes in 2015, up 8.3 percent from 4,594 in 2014. In 2015, 88,000 motorcyclists were injured, down 4.3 percent from 92,000 in 2014.
  • In 2015, 40 percent of motorcyclists killed in motor vehicle traffic crashes were not wearing a helmet.
  • The fatality rate per registered vehicle for motorcyclists in 2015 was six times the fatality rate for passenger car occupants, according to NHTSA.
  • Motorcycle Theft: The National Insurance Crime Bureau (NICB) reported that motorcycle thefts rose 6 percent in 2015 to 45,555 from 42,856 a year earlier, based on data from the National Crime Information Center of the FBI. However, motorcycle thefts are down 32 percent from 2006 when they totaled 66,774, according to the NICB.
  • The NICB?s report also details the seasonal nature of motorcycle thefts. More motorcycles are stolen during warm months?July and August had the most motorcycle thefts in 2015 while January and February had the fewest. The top five makes stolen in 2015, from highest to lowest, were American Honda Motor Co., Yamaha Motor Corporation, American Suzuki Motor Corporation, Kawasaki Motors Corp. and Harley-Davidson Inc. California had the most motorcycle thefts in 2015, followed by Florida and Texas. By city, New York, New York, had the most thefts, followed by Las Vegas, Nevada, and San Francisco, California.

FATALITIES AND INJURIES

According to the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) the following terms are used to define motorcycle occupants: a motorcycle rider is the operator only; a passenger is any person seated on the motorcycle but not in control of the motorcycle; and any combined reference to the motorcycle rider (operator) as well as the passenger will be referred to as motorcyclists.

According to NHTSA, in 2015, 4,976 people died in motorcycle crashes, up 8 percent from 4,594 in 2014. In addition, 88,000 motorcyclists were injured, down 3 percent from 92,000 in 2014. In 2015, 40 percent of the motorcyclists killed were not wearing helmets.

By Age: Older motorcyclists account for more than half of all motorcyclist fatalities. NHTSA data show that in 2015, 54 percent of motorcyclists killed in crashes were age 40 or over, compared with 47 percent in 2005. The number of motorcyclists age 40 and over killed in crashes increased by 17 percent from 2006 to 2015. In contrast, fatalities among all motorcyclists rose 3 percent. NHTSA says that the average age of motorcycle riders killed in crashes was 42 in 2015, compared with 39 in 2006.

Older riders appear to sustain more serious injuries than younger riders. Researchers from Brown University cited declines in vision and reaction time, along with the larger-sized bikes that older riders favor, which tend to roll over more often, and the increased fragility among older people as the causes. The study used data on riders age 20 and over who needed emergency medical care following motorcycle crashes from 2001 to 2008. The riders were put in three groups by age: 20 to 39, 40 to 59, and 60 and over. The data showed that while injury rates were rising for all age groups, the steepest rise occurred in the 60 and over group, who were two and a half times more likely to have serious injuries than the youngest group. They were three times more likely to be admitted to the hospital. The middle and older groups were also more likely to sustain fractures, dislocations and other injuries, such as brain damage, than the youngest group. The authors published findings in the journal Injury Prevention in February 2013. The study is entitled Injury patterns and severity among motorcyclists treated in US emergency departments, 2001?2008: a comparison of younger and older riders.

By Driver Behavior

Alcohol use: According to NHTSA, in 2015, 27 percent of motorcycle riders who were involved in fatal crashes had a blood alcohol concentration (BAC) of 0.08 percent or over (the national definition of drunk driving). This compares with 21 percent of passenger car drivers, 20 percent for light truck drivers involved in fatal crashes, and with 2 percent of large truck drivers.

In 2015, fatally-injured motorcycle riders between the ages of 35 to 39 had the highest rate of alcohol involvement (37 percent), followed by the 45 to 49 age group (36 percent).

In 2015 motorcycle riders killed in traffic crashes at night were almost three times more likely to have BAC levels of 0.08 percent or higher (42 percent) than those killed during the day (13 percent).

The reported helmet use rate for motorcycle riders with BACs at or over 0.08 percent who were killed in traffic crashes was 51 percent in 2015, compared with 65 percent for those who did not have any measurable blood alcohol.

Speeding: In 2015, 33 percent of all motorcycle riders involved in fatal crashes were speeding, compared with 19 percent for drivers of passenger cars, 15 percent for light truck drivers and 7 percent for large truck drivers, according to NHTSA.

Licensing: Twenty-seven percent of motorcycle riders who were involved in fatal crashes in 2015 were riding without a valid license, compared with 13 percent of passenger car drivers.

By Type of Motorcycle: According to a 2007 report from the Insurance Institute for Highway Safety (IIHS), riders of “super sports” motorcycles have driver death rates per 10,000 registered vehicles nearly four times higher than those for drivers of other types of motorcycles. Super sports can reach speeds of up to 190 mph. The light-weight bikes, built for racing, are modified for street use and are popular with riders under the age of 30. In 2005 these bikes registered 22.5 driver deaths per 10,000 registered vehicles, compared with 10.7 deaths for other sport models. Standards and cruisers, and touring bikes (with upright handlebars) have rates of 5.7 and 6.5, respectively, per 10,000 vehicles. In 2005 super sports accounted for 9 percent of registrations, and standards and cruisers made up 51 percent of registrations. Among fatally injured drivers, the IIHS says that drivers of super sports were the youngest?with an average age of 27. Touring motorcycle drivers were the oldest, 51 years old. Fatally injured drivers of other sports models were 34, on average; standard and cruiser drivers were 44 years old. Speeding and driver error were bigger factors in super sport and sport fatal crashes. Speed was cited in 57 percent of super sport fatal crashes in 2005 and in 46 percent for sport model riders. Speed was a factor in 27 percent of fatal crashes of cruisers and standards and 22 percent of touring models.

Hurricane Checklist for Renters

Courtesy of iii.org

RENTERS INSURANCE

If you rent, rather than own, your home, have you bought renters insurance?

While your landlord may provide insurance coverage for the structure of your home, as a renter you are responsible for your own belongings. Renters insurance covers the loss or destruction of your possessions if they are damaged by a hurricane or other disaster listed in the policy. A standard renters insurance policy also includes ALE coverage if you are unable to live in your house or apartment due to damage caused by a hurricane.

Flood insurance is also available for renters. However, as for homeowners, the NFIP flood insurance policies for renters do not include ALE coverage.

Don’t wait to review and update your insurance until after you have a loss?here are few things worse than finding out you did not have the right kind of coverage when you are already filing a claim. So before hurricane season kicks off, make sure you’ve reviewed home or renters insurance policy with this Hurricane Season Insurance Checklist. Call your Insurance Professional if you have any questions. They can provide guidance on how to get the insurance protection that’s best for your needs and budget.

For information on how to make your home more disaster resistant, go to the Insurance Institute for Business & Home Safety (IBHS). For information on evacuation, go to the Federal Alliance for Safe Homes (FLASH).

Water Damage Claims & Insurance

Courtesy of iii.org

The Wall Street Journal frequently appears fascinated by some of the goings on in Florida. The publication has often written about anomalies that seem unique (or some other not-so-favorable adjective) to the Sunshine State. We have “issues” here that just don’t seem to occur in many other places. Living here, in the midst of it all, can cause a loss of perspective. So, without any editorializing in this space, you might find this editorial on the demise of a bill to stop insurance claim abuse interesting reading. Click the link and read it through.

The challenges with assignment of benefits and water damage claims has been documented on this blog several times. Insurers have been calling attention to this problem for at least three years. The reality of allowing the abuse to continue became ever more apparent last week when Citizens Property Insurance announced its first net loss since 2005 ? of $27.1 million. Assignment of benefits is the clear cause. The clear solution now that there won’t be a legislative fix? Higher insurance premiums for Citizens’ customers, particularly in South Florida. That’s where assignment of benefits became a “unique” practice, allowing lawyers and contractors to take over a homeowner’s insurance claim and inflate the costs.

Ah, the high costs of being unique.

Tax Time & Insurance

Courtesy of iii.org

At tax time people are looking to find every possible deduction they can?so what about writing off your home or auto insurance premiums? The answer mostly comes down to one easy question: personal or business?

If you’re buying personal coverage for your home, car or another purpose, the Internal Revenue Service considers it a regular living expense, which isn’t any more deductible than buying toothpaste or kitty litter.

If you’re in business for yourself?even if it’s just moonlighting?the answer may be different. And if you participate in the “gig economy” (e.g. renting your home on Airbnb or driving for Uber) you also can deduct some part of those costs against your business income?as long as you’re also willing to declare the money you’re earning as income.

Deducting Your Premiums

It takes some extra effort to directly deduct either your auto or home insurance payments on your taxes. First, you’ll have to itemize and fill out an entire Form 1040, not the abbreviated 1040 A or the quickie 1040 EZ. If you typically only take the standard deduction on your taxes, you may not have enough other items to write off in order to make this worthwhile. You’ll also have to file Schedule C Profit or Loss From Business. Second, to maximize your deductions you’ll need to calculate how you’re going to claim your insurance premiums?for both auto and home deductions you have the option of using a simplified method or calculating your actual insurance expenditure.

Auto

The IRS allows for a simplified method of deducting the business use of your car or other vehicles, at 54 cents per mile. That’s designed to cover payments, fuel, repairs, depreciation, maintenance and insurance costs. To take your actual expenses, you must calculate the percentage of total car costs for the year based on the number of total miles driven vs. miles driven for business.

Home

For homeowners, the simplified home office deduction is $5 per square foot for the space that’s dedicated only to office use, up to a maximum of 300 square feet, or $1,500.

The more complicated method is to add up all your home-related expenses?mortgage payments, maintenance, property tax, insurance, utilities and so on?and then deduct the percentage of total space in the home occupied by the home office space. So, if all your home expenses for the year totaled $8,000, that 96-square-foot office in a 2,000-square-foot home would allow you to deduct $384. Of course, you’ll need to have good records of all the expenses.

Are Insurance Payments Taxable?

Insurance payouts you receive after damage to your home or an accident involving your car are generally not taxable unless you’ve come out way ahead financially. Generally, a payment to reimburse you for repairs or replacement isn’t going to be taxable unless the payment exceeds what you originally paid for the property, an unlikely situation since most things lose value over time rather than gaining it. And, if you receive dividends from a mutual insurance company, those aren’t taxable unless they total more than the insurance premiums you paid to that company during the year.

On the other hand, if there is a really big gap between what your insurer paid out and your actual financial damage, you might be able to take a deduction for the loss. Deductions on the Casualties and Thefts schedule can be written off only to the extent that they exceed 10 percent of your adjusted gross income, minus $100 and any insurance payments. Your adjusted gross income, or AGI, is your taxable income after tax credits, exemptions and deductions?the amount of money you actually pay tax on. If your household made $80,000 in 2016, and your AGI was $60,000, you’d need a loss of more than $6,100 before you could deduct a single dime. Even then, the amount is limited to the part of the loss that’s more than $6,100 so you would need to have a significant loss to be able to write anything off..

These are both fairly rare and complex situations that should be reviewed with a financial professional.

Insurance Fraud and You

Courtesy of iii.org

The cost of insurance fraud is a cost all policyholders wind up paying. Consider that fraud adds about $34 billion each year to the property/casualty insurance sector?s incurred losses in the U.S. That equates to about 10 percent of the cost of insurance. The victims of this fraud are?..everyone.

Florida CFO Jeff Atwater heads the state?s Bureau of Insurance Fraud, which consists of 117 sworn officers plus support staff. He?s been championing fraud awareness and recently published a newsletter with a story about an Orange County man who paid someone to torch his car. This person filed an insurance claim, got paid, got found out ? and got jail time. The newsletter said the arson claim cost the insurance company $10,000, and it may cost the perpetrator up to 20 years in jail.

The state has a fraud tip line: 1-800-378-0445. There is also an online form for reporting fraud. We?re in this fight against fraud together.