Friday, June 19, 2009

American Family Increases Home Rates

I was watching Fox 6 news last night while getting ready for bed and they had their Business Journal Minute that gave some details on a rumor I have been hearing for the last few weeks. American Family Insurance is increasing their Home rates by about 10% this year. This comes after an increase of about 11% last year. The Business Journal has the short article here.

While almost every insurance companies makes adjustments on an annual basis, these increases are quite high. Most of the companies we represent are still only adjusting their rates by 1 or 2 percentage points and many of them are midwest based companies too.

Oddly enough the midwest has always been a better place for insurance companies to operate simply because we don't have the hurricanes, mud slides, wild fires, etc that the coasts get hit with on a regular basis. However, the last few years the midwest has gotten hammered with hail storms, heavy rains and bad snow storms.

These types of increases by insurance companies are one of the main reasons we are an independent agency. If one of our companies increases rates by too much we have many other companies that are willing to accept the business at better rates. At least then you as the client just have to get used to a new company, not a new agent and a new company at the same time.

As always, quotes are free and we love referrals give us a call or tell your friends. Every referral earns you a $10 gas card just for sending your friends and family to YOUR FRIEND IN INSURANCE!

Thursday, June 11, 2009

Buying/Starting a new business.

So I just learned a friend of mine is expanding his business and while he was talking about the details it got me thinking of all the people I talk with who have decided to buy or start their own business. Sooner or later the topic of insurance comes up(hopefully before they start the business!) and most of these people have never had to deal with all of the insurance issues a business owner faces. So I thought I would do a quick post on some of the very basics any new business owner might need to consider.

I could go on for hours with all of the details depending on the type of business but lets keep it simple and go over the basic coverages your business would need, liability, property, auto, and worker's compensation. There are lots more coverages to consider but these are the four that are almost always needed in some way shape or form. Lets start with liability coverage.

Liability coverage protects you and everything you own. If you have a business you need to have liability coverage, period. Even if you run a business out of your home like my wife, who is a Creative Memories consultant, there is still liability. If you have a home business you can probably have the business liability extended from your homeowners insurance, but if you have an office or some other type of business you will probably need a General Liability policy. So what does Liability cover? Without getting real technical and putting you to sleep it covers you (meaning the business and employees) and your business location. Lets go one more step. Your location is covered if some gets injured and decides to sue you for their injuries which is pretty easy to understand. But the first part can get very complicated, the business and the employees are covered for operations, finished products, personal injury, advertising injury and completed operations. Basically this means if you get sued because of your products or actions or you cause injury or property damage you should have coverage. I say should because there are millions of situations and I can't cover them all.

The second line of coverage is Property. Now when we talk about property we are talking about property owned by you and the business. A building, office furniture, computers, tools, equipment, etc. Depending on the policy you will usually get the standard coverages for things like fire, theft, vandalism, wind, hail, etc. A big item which most people forget is your income. Many business policies will automatically give you 12 months of lost income coverage if you have a covered loss. So for example, a restaurant has a fire and is out of business for 6 months the insurance policy will pay the owner the lost profit, the additional costs that have not gone away even though the restaurant has, and maybe even the payroll for key employees. This is huge if your business is your only source of income!

The third coverage is Auto. Now many people will say "I don't have a company car so I don't need Business Auto insurance." Not true. Anytime you take your personal car to an appointment or to run an errand for the business you have a liability exposure. If you get into a serious accident on the way to an appointment the other driver may get an attorney who decides to sue you and your business. I always included the coverage for non business owned vehicles on every policy I sell because it is cheap and covers a gap. While it may not be the biggest exposure to your business, it can definitely put you out of business in a hurry if you don't have coverage.

The last line of coverage is Worker's Compensation. Work Comp is required by the State of Wisconsin for any employer that has an employee making more than $500 in any calendar quarter. If you have an employee earning less than $40 per week you are probably running a sweat shop and have other problems. The nice thing in Wisconsin is that the State determines the rates business pay for their Work Comp and also all of the benefits and coverages the insurance companies provide to the employees. The only thing that will change rates is what type of business you do. A clerical employee will cost a lot less than a roofing contractor, for obvious reasons. There are some secrets to saving money on Work Comp that I share with my clients....but you have to talk to me to get those!

So there you have it a very brief summary of what you might want to think about when you venture in the world of business ownership. This is really only the tip of the iceberg and depending on your business things get very complicated which is why my friends and clients trust me to help them navigate the many companies and coverages to find what fits them.

Friday, June 5, 2009

Don't raise my insurance premiums!

Recently the Joint Finance Committee approved a final version of Governor Doyle's budget which contains a number of mandates that are going to have a major affect on everyone's insurance premiums. Did I mention they did this in the middle of the night? That doesn't seem sneaky at all!

Here is a summary of the issues:

1. A return to joint and several liability, in which you can be forced to pay any millions of dollars even if you were only minimally at fault. Currently, state law mandates that a defendant must be found at least 51% at fault to be found liable. Doyle wanted to reduce that to 1%. The committee will tell you that they listened to the people and compromised by changing Doyle's proposal to 20%. So now, an individual who is 80% innocent can still be held liable for 100% of all damages.

2. Requiring the highest auto limits in the nation. As a compromise, the Democrats agreed to phase in the increases. However, to make matters worse, they added an annual inflationary index that would eventually require the minimums to be raised to odd numbers like $103,624.

3. Allowing stacking of limits for Uninsured and Underinsured Motorist. This is a particular concern for commercial auto. For example, under current law if a customer purchases a limit of $1 million, then that customer is protected up to that limit for any one loss. Under the new proposal, the limit would be determined based upon the number of vehicles that are insured. So, the person who owns a fleet of 100 vehicles, would be able to "stack" all of the limits together and would be covered for, not the $1 million he paid for, but $100 million.

4. Allowing judges and attorneys to give a jury instructions which will unduly influence them and introduce a sympathy factor. A jury is supposed to decide cases on fact, not sympathy.

5. The budget also calls for numerous tax increases as well as fee increases on such everyday items as your cell phone.

I know people don't like thinking about insurance but we all have to pay for it and our Governor is trying to make you pay more by adding in these changes to the budget. If you have a second click on the link, and fill out the form to let them know you do not want to pay more for your insurance premiums.