Insurance Consultants Of Maine Newsletter

Insurance Consultants of Maine Newsletter
Scott Simmonds, CPCU
April, 2005

Unbiased Insurance Info & Advice For You
www.endwimpyinsurance.com

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Please feel free to forward this newsletter to your colleagues. Comments, questions and suggestions are always welcome. Email: scott@icofmaine.com.

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Thanks
You're getting this newsletter because you asked me to send it to you. A few weeks ago my email distribution company required that I re-verify all my subscribers to be sure nobody is on the list who doesn’t want to be. The response was phenomenal. It’s nice to know that my comments and advice is of interest. Please be sure to let me know how I can make this newsletter even more useful.

Aggregate Limits of Liability
You may be using up your insurance as you submit claims. Most general liability and professional liability insurance policies have limits as to the total amount that will be paid in a policy year. Called an aggregate limit, the protection is used up as claims are paid. In most cases the aggregate is a limit per year even if you have a three year policy. Some policies include the defense costs in the limit of coverage. So, lawyer’s bills also eat up the policy limits.

Commercial Auto Symbols
Commercial auto policies specify the extent of coverage by using symbols to indicate what vehicles are included in the coverage. The declarations page of your auto policy outlines coverage areas (liability, uninsured motorist, medical payments, etc.) with coverage symbols that apply to the type of insurance. The applicable symbols are numbers 1 through 9.

Symbol "1" is the broadest - "any auto". Symbol "9" provides coverage for non-owned vehicles only. Using symbol "7" reduces the coverage to claims from vehicles listed on the policy only. Insurers sometimes use combination of symbols - 8 and 9, for example, to provide coverage for hired and non-owned autos.

Symbol 1 in the liability section would provide coverage for any auto liability claim brought against an insured. Symbol 7 in the liability section would limit liability coverage to claims that come from a vehicle listed on the policy - significantly restricting the coverage.

Here are all the symbols and their meanings:

1 = Any "Auto".
This is the broadest symbol designation and covers any "auto" including borrowed, hired, owned, leased.

2 = Owned "Autos" Only.
This symbol covers any "auto" owned by an insured. Coverage also applies to any "trailer" while it is towed by an owned vehicle.

3 = Owned Private Passenger "Autos" Only. This symbol covers only private passenger type "autos" owned by the insured, including any private passenger type that may be acquired after the policy begins.

4 = Owned "Autos" Other Than Private Passenger "Autos" Only.
This symbol covers all "autos" other than private passenger type "autos" (vans, trucks, motorized equipment) owned by an insured, including such vehicles that may be acquired after the policy begins. The symbol also applies to any "trailer" while it is towed by an owned vehicle.

5 = Owned "Autos" Subject To No-Fault.
Any "auto" owned by an insured that is garaged or licensed in a state where no-fault benefit laws exists. This symbol also applies to any "auto" acquired after the policy begins.

6 = Owned "Autos" Subject To A Compulsory Uninsured Motorist Law.
Any "auto" owned by an insured that is garaged or licensed in a state where drivers are required to carry uninsured motorist coverage. This symbol also applies to any "auto" acquired after the policy begins.

7 = Specifically Described "Autos".
Only those "autos" that are specifically listed on the policy are covered. The symbol also applies to any "trailer" while it is towed by a listed vehicle.

8 = Hired "Autos" Only.
This symbol covers only those "autos" that an insured leases, hires, rents, or borrows. However, it does not include "autos" leased, hired, rented, or borrowed from an employee, partner, or member of an insured’s household.

9 = Nonowned "Autos" Only.
This symbol covers only those "autos" an insured does not own, lease, hire, rent, or borrow that are used in the insured’s business, including "autos" owned by employees, partners, or members of an insured’s household, but only while those non-owned "autos" are used in the insured’s business.

Who Works For You In The Insurance Transaction?
Most Americans buy insurance from an agent. The incoming President of the National Association of Insurance Commissioners, Maine’s current Superintendent of Insurance, Alessandro A. Iuppa, commented on the insurance buyer / producer relationship at a recent meeting of insurance agents, "The reality is that producers' duty goes to the (insurance) companies they represent." He cited a nearly universal habit of insurance consumers who incorrectly refer to "my agent" while the producer is actually an agent of the insurer.

Most agents are professionals who understand the importance of service to their clients. However, almost all insurance transactions include compensation to the agent based on commissions, bonuses and fees paid by insurance companies. Bigger premiums mean larger compensation.

As an insurance consultant I never accept fees or commissions from insurance agents or insurance companies. I'm unbiased. I'm ready to help you with your insurance problems.

Commercial Auto Coverage and Pollution
The business auto policy does not provide coverage for pollution from your cargo - paint, solvents, bulk chemicals or other hazardous materials. Spilling these chemicals, even in an auto accident, is not covered. Most policies will only pay pollution cleanup expense for chemicals and fluids that are used as part of the vehicles engine – the oil in the crankcase, gas in your tank, transmission fluid, etc. Separate pollution liability policies are available.

Homeowners Coverage Gap
You live in an older home. A fire destroys most of the house. While you are planning the reconstruction you find that your home violated several zoning and construction codes. As long as the house was standing you were “grand-fathered” and not required to meet the current code. Now that the house was destroyed the revised codes must be followed. Without special endorsements most homeowner policies will not pay the increased cost of construction caused by laws or ordinances. The policy will pay to rebuild the house you had, not the house you must build. Talk to your insurance advisor.

By the way, a similar provision is in most commercial property insurance policies. The basic policy will not pay for increased cost of construction due to new regulations or laws.

Life In Maine
I'm asked regularly by my readers and clients outside of New England about Maine and the weather here. Spring is coming! The last of the snow in my backyard melted yesterday. Sunday the deer were in my yard and this morning we had wild turkeys roaming about. Ah, life in Maine!

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Biggest Business Insurance Mistakes White Paper - Get my "20 Biggest Business Insurance Mistakes" ebook in printer friendly form. Send a blank email to bizmistakes@icofmaine.com to receive your no obligation copy. What was on 40 pages of e-text is now available on 10 printer-friendly pages.

"The 20 Biggest Personal Insurance Mistakes" White Paper Now Available! - Readers have been asking for my personal insurance hints. It's here, hot off the ether! Just send a blank email to personal@icofmaine.com. Your copy will be sent to you immediately, at no cost of course.

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Your Privacy - I will never sell or distribute your email address to any other person or organization.

Do You Have The Right Insurance? Contact me to discuss an unbiased review of your insurance program. Do you have the right coverage? Can your policies be fine-tuned to improve the protection? Can changes be made to ease the administrative burden insurance causes? Are you getting the service you should from your broker? I can help. Call 207.284.0085 or email me at scott@icofmaine.com. Remember, I don't sell insurance so I'm unbiased.

Need A Speaker? I'm pleased to speak to trade, business or service associations about insurance topics. Call 207.284.0085 or email me at scott@icofmaine.com. Also check out my speaker's page at www.icofmaine.com/ispeaker.html. Associated Builders and Contractors members, come see my presentation at the April 21st meeting.

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Scott Simmonds, CPCU
Insurance Consultants of Maine, Inc.
20 Sofia Road
Saco, ME 04072-9017
Phone 207 284-0085
Fax 801 991-4027
scott@icofmaine.com
http://www.endwimpyinsurance.com

Unbiased Insurance Solutions

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Insurance Consultants of Maine, Inc. is an unbiased, fee-only insurance and risk management advisory firm. We don't sell insurance and never accept fees or commissions from insurance companies or agents.

Comments regarding insurance policies or products in this newsletter are for information purposes only and do not constitute an endorsement. I accept no fees or payments of any kind from any insurance organization or any company mentioned in this newsletter.