Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
As Florida insurers focus on addressing mounting losses in the state’s property insurance market with legislative reforms, rising rates and coverage restrictions, other stakeholders are working to educate consumers about one issue that is perpetuating the markets problems – contractor fraud.
Florida’s Insurance Consumer Advocate Tasha Carter wants to close what she says is a consumer knowledge gap with a new program offering tips, services and resources on this issue, and she’s looking to insurance agents to help her spread the word.
“I don’t think that most homeowners understand what’s happening in the marketplace,” Carter said. “Of course, they’re receiving their renewal notices with the increased premium rates [and] most of them mistakenly think that that maybe due in part to recent hurricanes or claims that have been filed across the board.”
Carter hears frequently from consumers who are unhappy with the large premium increase’s carriers are implementing to offset their deteriorating financial conditions. The Florida Office of Insurance Regulation said recently it had approved 105 rate changes, 90 of which were for rate increases, over the last year, with 55 of those for rate increases of more than 10%.
Excessive litigation from first party lawsuits and unscrupulous contractors promising homeowners a new roof or kitchen if they sign over their insurance policy rights is partly to blame. These contractors, who in some cases work with attorneys or public adjusters, inflate repair costs and sue the insurer if they refuse to pay or dispute the amount. In some cases, homeowners have been left with unfinished work and little recourse.
Years of this abuse has led to billions in losses for the Florida insurance industry, with more than $1.5 billion occurring last year alone.
“Most oftentimes as I am speaking with consumers, they’re not aware of some of the fraudulent schemes that are taking place that are costing the industry and are not aware how these factors truly impact them and their insurance rates,” Carter told
Insurance Journal in an interview with the Florida Association of Insurance Agents’s (FAIA) Kyle Ulrich on her new Demolish Contractor Fraud initiative.
Carter launched the program last month to educate homeowners on how they can avoid becoming victims of such schemes. The program provides an overview of what contractor fraud is, what to look for when hiring a contractor, and what actions a contractor can legally take on behalf of the policyholder.
“What I do think homeowners are concerned about … is wanting to ensure that when they enter into that agreement or that contract with the contractor, ensuring that that contractor is going to provide the services that they are expecting,” Carter said. “And that they’re going to perform quality work, they’re going to do it in a timely manner, and they’re not going to simply use the situation to take advantage of homeowners.”
Also on the website is contact information for state departments that can assist consumers if they have questions, suspect they are being scammed or are seeking information on the state’s construction recovery fund if they have sued a contractor.
“We are trying to be as comprehensive as possible to ensure that consumers are informed and they’re educated so that they can simply protect themselves from falling victim,” she said. “One of the primary reasons that I created the program is as Florida’s insurance consumer advocate, one of my primary concerns is the availability and affordability of homeowners insurance for Florida’s homeowners.”
FAIA is helping the ICA spread the word about contractor fraud and the new awareness campaign. The association has an active membership of 21,000 agents
FAIA President and CEO Ulrich said the partnership with ICA Carter made sense given the two share similar priorities of protecting homeowners from being targets of contractor schemes and wanting a healthy insurance market.
“I think that consumers, generally speaking, are concerned about fraud and they want to make sure that they’re hiring a reputable contractor, but I don’t think that they understand the nexus between contractor fraud and what’s happening in the insurance marketplace,” Ulrich said.
To help spread awareness of contractor fraud and the new initiative, FAIA has developed talking points for agents and a form letter they can send to their customer list about what’s happening and what to watch out for.
“We have a tremendous number of our members who have really committed to knowing and understanding and being willing to be a part of the solution,” he said. “We have a unique perspective and the ability to talk directly to consumers, unlike most other groups, especially companies.”
FAIA has heard from its members for about the last 10 years that there’s been a shift in consumer perception of insurance and the claims process that the association believes is driven by the involvement of third parties, Ulrich said.
“There has been a proliferation of people who are out there literally mining claims and trying to solicit consumers to file claims that they otherwise were unaware that they may have had,” Ulrich said. “We felt like there was an awful lot of nexus between some of the things that the ICA is talking about here and what we’re hearing from our members, and any way to better inform the consumer about that nexus is a role that we want to play.”
“Pretty much every carrier in the marketplace has some sort of restrictions now, whether it be by geographic region or age of the home, age of the roof, other underwriting factors,” Ulrich said.
Customers who can’t afford a 30%-plus rate increase are looking to their agents for help, but Ulrich says agents hands are tied.
“They just don’t have very many options to provide the consumer,” he said, which is leading to a flood of new policies for Citizens Property Insurance Corp., the state’s insurer of last resort.
“That’s not a good situation for the consumer,” he said. “It’s good that they have some option, that the state is there to fill that void, but it’s not providing the comprehensive
coverage that many homeowners need at this point in time.”
Carter said awareness is growing among most lawmakers. She met with several before the current legislative session began in March and shared some specific consumer examples of “exactly what’s happening and how homeowners are being directly impacted by the level of fraud that’s taking place.”
And while Carter is in support of certain reforms the industry backs, such as reducing the claims filing deadline from three years to two for new claims, she is not in support of the roof reimbursement provision in Senate Bill 76 that would allow insurers to limit how much they will cover for roof replacements.
“I think that can absolutely be harmful for consumers. They can also be blindsided by that,” she said. “I would much rather see the focus being placed more on the front end, not the back end after a claim is filed … can we prevent the solicitation from the unscrupulous contractors and the intentional deceptive practices that are occurring? Let’s address those so that we prevent the claim from even being filed and thus we prevent any type of subsequent litigation that may occur as well.”
As the insurance consumer advocate, Carter said there will be times when her advocacy work on behalf of policyholders may not align with what insurance companies think is in their best interest. But when it comes this issue, she says they are on the same page because a healthy insurance market is in everyone’s best interest.
“I’m going to continue to identify ways that I can assist and advocate on behalf of
consumers to ensure that coverage is available for them, and it is affordable for them, and that we are addressing the factors that are not only impacting individual policyholders, but also impacting the insurance industry as a whole,” Carter said.
Watch video below for more on Florida’s insurance market, contractor fraud, and the push for legislative reforms:
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
If given the green light, the bill would repeal the “no fault law” and change Florida’s auto insurance coverage requirements by 2022.
TALLAHASSEE, Fla. — Florida lawmakers are on the road to potentially passing legislation that would cement one of the largest overhauls of the state’s auto insurance laws since 1972.
SB54, co-introduced by Republican Sen. Danny Burgess and Democratic Sen. Darryl Rouson who both represent the Tampa Bay area, looks to expand the insurance coverage you’re required to carry in Florida.
Bill would increase the car insurance coverage you need in Florida
If given the green light, the bill would repeal the “no fault law” and change Florida’s auto insurance coverage requirements by 2022.
Credit: WTSPAuthor: Jillian OlsenPublished: 2:43 PM EDT April 27, 2021Updated: 2:57 PM EDT April 27, 2021
TALLAHASSEE, Fla. — Florida lawmakers are on the road to potentially passing legislation that would cement one of the largest overhauls of the state’s auto insurance laws since 1972.
Currently, Florida is considered a “no-fault” state and only mandates that drivers must show proof of personal injury protection and property damage liability.
But if the bill gets the green light, come January 2022, the no-fault law would be repealed and anyone behind the wheel of a car will need to start showing proof of “garage liability insurance.”
So what does that mean? According to the bill’s text, you’ll need to carry combined single-limit liability coverage that consists of at least $60,000 in property damage and bodily injury insurance.
Here is a breakdown of what the looks like:
$25,000 for bodily injury to, or the death of, one person in any one crash.
$50,000 for bodily injury to, or death of, two or more persons in any one crash.
$10,000 for damage to, or destruction of property of others in any one crash.
If the above requirements are not presented at the time you go to register your car, the bill would require the agent you are working with to not issue your registration.
The current version, which was amended earlier this month, passed the House with 99 yeas and one nay. It now moves to the Senate for one final vote.
“Florida is one of only two states in the country that does not currently require drivers to carry liability coverage that would immediately kick in if they cause harm to another person while operating a motor vehicle,” said Senate President Wilton Simpson (R-Trilby).
“For everyone’s protection, drivers must be insured at sufficient levels. PIP coverage levels are clearly insufficient. It’s the right time for Florida to move to mandatory coverage for bodily injury liability,” he added.
MONEY Bill would increase the car insurance coverage you need in Florida If given the green light, the bill would repeal the “no fault law” and change Florida’s auto insurance coverage requirements by 2022.
Credit: WTSP Author: Jillian Olsen Published: 2:43 PM EDT April 27, 2021 Updated: 2:57 PM EDT April 27, 2021 Facebook Twitter TALLAHASSEE, Fla. — Florida lawmakers are on the road to potentially passing legislation that would cement one of the largest overhauls of the state’s auto insurance laws since 1972.
SB54, co-introduced by Republican Sen. Danny Burgess and Democratic Sen. Darryl Rouson who both represent the Tampa Bay area, looks to expand the insurance coverage you’re required to carry in Florida.
Currently, Florida is considered a “no-fault” state and only mandates that drivers must show proof of personal injury protection and property damage liability.
But if the bill gets the green light, come January 2022, the no-fault law would be repealed and anyone behind the wheel of a car will need to start showing proof of “garage liability insurance.”
So what does that mean? According to the bill’s text, you’ll need to carry combined single-limit liability coverage that consists of at least $60,000 in property damage and bodily injury insurance.
Here is a breakdown of what the looks like:
$25,000 for bodily injury to, or the death of, one person in any one crash. $50,000 for bodily injury to, or death of, two or more persons in any one crash. $10,000 for damage to, or destruction of property of others in any one crash. If the above requirements are not presented at the time you go to register your car, the bill would require the agent you are working with to not issue your registration.
The current version, which was amended earlier this month, passed the House with 99 yeas and one nay. It now moves to the Senate for one final vote.
“Florida is one of only two states in the country that does not currently require drivers to carry liability coverage that would immediately kick in if they cause harm to another person while operating a motor vehicle,” said Senate President Wilton Simpson (R-Trilby).
“For everyone’s protection, drivers must be insured at sufficient levels. PIP coverage levels are clearly insufficient. It’s the right time for Florida to move to mandatory coverage for bodily injury liability,” he added.
Sen. Burgess says he believes that the legislation will help transform Florida’s “outdated” insurance system and provide relief from the number of uninsured drivers on the road.
“The goal of this legislation is to lower the number of uninsured and underinsured drivers and provide a greater safety net in the event of an accident. Replacing our current no-fault system with a bodily injury liability system more appropriately places liability where it should be – with the party that caused the accident,” Burgess said.
And according to the Insurance Research Council’s calculations, he’s right.
In a recent report, the council determined that one in eight drivers on the road are driving without insurance. Out of our nation’s 50 states, Florida was ranked the 6th worst state for people driving unprotected at 20.4- percent.
The report’s data was based on the latest accessible information from 2019.
“Uninsured drivers increase the cost of insurance for those who comply with their state’s insurance requirements and that’s not fair,” David Corum, vice president of the IRC, said. “Keeping auto insurance affordable is more difficult when a significant number of drivers refuse to carry their fair share of the costs.”
SB54 would also require each policyholder to include medical payment coverage benefits at a limit between $5,000-$10,000 depending on if a deductible is included.
While there are champions of the legislation, others are looking to Colorado as a warning sign for what also could become a rapid increase in insurance premiums.
According to Florida Politics, Colorado abandoned its “no-fault” system in 2003 and at first saw premiums go down, but the outlet says it wasn’t long before premiums began to soar.
The backfiring of the state’s overhaul led it to be ranked 9th in the nation for car insurance rates in 2021, according to zebra.com. The auto insurance comparison website says its data is based on insight into 83 million rates.
Florida currently sits in the second slot for the highest annual rates at $2,324 which the website states is $841 more than the estimated average cost of car insurance in the U.S.
Should the bill make it to Gov. Ron DeSantis desk and be signed, Floridians would have roughly eight months to get their insurance coverage up to speed.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
1. RESIDENTIAL PROPERTY INSURANCE/CONTINGENCY RISK MULTIPLIER SB 76/HB 305SB 76 by Senator Boyd passed off the full Senate floor this April 7th. The bill revises the statutes that govern property insurance policies including attorney fees, roof coverage provisions, notice periods for bringing claims, alternative dispute resolution, lawsuits involving property insurance policies, consolidation of legal actions, and assignment agreements. Additionally, the bill establishes a third-degree felony for knowingly aiding or abetting an unlicensed person who transacts or engages in insurance activities without a license. The bill eliminates the attorney fee multiplier unless it is a rare and exceptional case. The bill amends the roof coverage provisions through the use of a roof surface reimbursement schedule to limit coverage in a personal lines residential property insurance policy. The roof surface reimbursement schedule must provide for full replacement coverage for any roof surfaces type less than 10 years old. For roofs 10 years old or older the reimbursement schedule is as follows:· 70 percent for a metal roof type;· 40 percent for a concrete tile and clay tile roof type;· 40 percent for a wood shake and wood shingle roof type;· 25 percent for all other roof types. Additionally, the bill allows an insurer to offer a state value sublimit on roof coverage. The bill also amends current law to require that a claim, supplemental claim, or reopened claim under a property insurance policy must be provided to the insurer within 2 years of the date of loss. Other provisions in the bill include:· Allowing an insurer to require mediation as a 1st party claimant or a 3rd party assignee.· Creating a “Texas” style 1st party attorney fee reform.· Requiring the consolidation of multiple residential actions involving the same property.· Modifying the AOB law to conform with the new “Texas” attorney fee model.· Requesting the Florida Supreme Court to require plaintiff and defense lawyers to disclose their attorneys fees. The House version of this bill, HB 305 by Representative Rommel, passed its second of three committees, the House Civil Justice and Property Rights committee this week. The bill makes several changes including the following: · Residential Property Insurance Claims for Roof Damage – The bill establishes that a contractor or unlicensed person acting on behalf of the contractor may not solicit or incentivize the filing of a roof damage insurance claim by a residential property owner or interpret policy provisions. It also establishes that a public adjuster, a public adjuster apprentice, or unlicensed persons acting on their behalf may not incentivize the filing of a roof damage insurance claim by a residential property insurance owner.· Clarifies that OIR has the authority to examine MGAs, including affiliates of insurers, as it examines insurers, even if the MGA represents a single domestic insurer. It requires that each insurer paying an affiliate produce information about fees paid to the affiliate upon request by OIR. It also requires that all MGAs execute contracts with the insurers they do business with even if they are affiliates of the insurers.· Establishes that each insurer or insurer group doing business in Florida shall file specific data regarding litigation of personal and commercial residential property insurance claims on a quarterly basis.· The bill makes several changes to the operations of, and requirements for, Citizens, the state-run property insurer:
Revising the eligibility for residential property owners to obtain coverage from Citizens so that they are not eligible for Citizens’ coverage if they can obtain coverage from private insurers that is less than 20 percent greater than the premium for comparable coverage from Citizens
Establishing that if Citizens does not buy reinsurance to cover its projected 100-year probable maximum loss, it must still include the cost of such reinsurance in its rate calculations.
Establishing that no employees of Citizens may receive salaries in excess of 150 percent of the salary received by the head of OIR, with certain exceptions.
· The bill changes the notice of claim deadlines in the Insurance Code so that notice of any property insurance claim must be provided to a property insurer within two years of the date of loss.· The bill creates new statutory requirements for residential or commercial property suits that are not brought by an assignee, including a ten-day presuit notice and demand, after a determination of coverage, before bringing suit against an insurer. An insurer served with this notice must respond in writing within ten days by either making a settlement offer or requiring participation in an appraisal or alternative dispute resolution proceeding as provided for in the policy. HB 305 passed the Commerce Committee on April 23rd and heads to the House floor next. The bill was weakened by committee amendments and needs work to match up to the Senate bill.
4. CITIZENS PROPERTY INSURANCE SB 1574SB 1574 by Senator Brandes passed its third and final committee on April 19th with amendments and will be up next on the Senate floor. The revised bill makes several changes to the statutes governing Citizens including:· Requiring reasonable agent commission for policies placed in Citizens not to exceed the average of commissions paid in the preceding year by the 20 admitted insurers writing the greatest market share of property insurance in Florida. Given the recent Citizens Property Insurance Board discussion regarding the concept of removing all agent commissions to advance depopulation goals, Senator Brandes developed this language in response.· Providing that eligible surplus lines insurers may participate in depopulation, take-out, or keep-out programs; and· Authorizing information from underwriting files and confidential claims files to be released by Citizens to entities considering writing or underwriting risks insured by Citizens.· Revising the method for determining the amounts of potential surcharges to be levied against policyholders;· Removes all new business, 2nd homes, and any homes with dwelling values over 700,000 from the Citizens (glide path) premium cap. It has been a long-held belief by agent groups that commission levels should not be inserted into the statute in any context for various reasons, including the fact that what goes up can also go down. These groups are lobbying Citizens to not take any action to reduce agent commissions. There is no House companion for this bill. AUTO1. PIP REPEAL SB 54/HB 719 SB 54 by Senator Burgess was taken up by the Senate on April 14th and passed the full Senate with amendments and now goes over to the House. The House has placed the bill on the special order calendar for April 23rd. They have filed two amendments on the bill, the first ensures no additional liability for agents who sell motor vehicle insurance. The second excludes individuals failure to comply does not invalidate property executed exclusions. Before being sent to the house, the Senate had amendments that added $5,000 in mandatory Medical Payments (MedPay) coverage to the bill. The biggest change was adoption an amendment to the amendment by Senator Famer which changed the damages part of the bad faith reform to change “claimant” to “the party bringing the bad faith claim” removed the enforcement provision of the bad faith reform, and removed the limitation on multiple remedies provision from the bad faith reform. The amended bill is now closer to the House position and makes the following changes to the prior version of the bill:· Removes the reduced limits of 15/30 for low income or full time students.· Removes the auto glass/windshield part of the bill. Specifically, the prohibition on auto repair shops from coercing, paying for deductibles or offering rebates/gift cards for referrals or to induce windshield claims is removed by the amendment. The $200 glass deductible is also removed. This is the House position. Changes the bad faith part of the bill (the House version does not include bad faith reform). Important changes to this part of the bill include:· Removes an insurer’s “fiduciary” duty to its insured to handle claims in good faith and replaces it with a “duty.”· Changes duty of good faith.· Adds some best practices. Triggers best practices on the insurer’s receipt of actual notice of the incident or loss. Puts the burden on the party bringing the bad faith claim to prove the insurer had actual notice and when the notice was received.· Removes the EUO. Adds a duty to cooperate. Adds a disclosure of assets.· Removes the condition precedent that a claimant must serve a demand for settlement before filing a third party action for bad faith failure to settle.· Reduces the safe harbor from 60 days to 45 days. Conditions safe harbor on insurer compliance with the best practices set out in the bill. The amended bill also makes other changes including:
Adds mandatory MedPay coverage of $5,000 with a mandatory offer of $10,000. An auto policy is deemed to have MedPay coverage of $10,000 unless the insurer obtains a written refusal of the coverage. The House does not have mandatory MedPay.
Adds a weakened “no-pay, no play” provision which requires a $10,000 setoff of noneconomic damages for injuries caused by an uninsured driver except when at fault driver is driving under the influence, acted intentionally, recklessly, or with gross negligence, fled from the accident scene, or acting if furtherance of a felony. This is not in the House bill.
Retains named driver exclusion.
The bill repeals the Florida Motor Vehicle No-Fault Law, which requires every owner and registrant of a motor vehicle in this state to maintain Personal Injury Protection coverage. Beginning January 1, 2022, the bill enacts financial responsibility requirements for liability for motor vehicle ownership or operation, as follows:· For bodily injury (BI) or death of one person in any one crash, $25,000, and, subject to that limit for one person, $50,000 for BI or death of two or more people in any one crash.· The existing $10,000 financial responsibility requirement for property damage (PD) is retained. The bill increases required coverage amounts for garage liability and commercial motor vehicle insurance. It increases the cash deposit amount required for a certificate of self-insurance establishing financial responsibility for owners and operators of motor vehicles that are not for hire vehicles. HB 719 by Representative Grall passed its final committee on April 19th and will likely be substituted for the Senate bill on April 23rd where the bill is on Special Order in the House. The bill is similar to the Senate version but does not contain the same bad faith reform provisions. Several amendments are pending.2. NAMED DRIVER EXCLUSION SB 420/HB 273 SB 420 by Senator Hooper passed the full Senate on April 21st and now awaits a hearing in the House. The bill authorizes private passenger motor vehicle policyholders to exclude identified individuals from the following coverages under their policy:· Personal injury protection (PIP) coverage applicable to the identified individual’s injuries, lost wages, and death benefits;· Property damage liability coverage;· Bodily injury liability coverage, when required by law;· Uninsured motorist coverage for any damages sustained by the excluded individual; and· Any coverage the policyholder is not required by law to purchase. However, a private passenger motor vehicle policy may not exclude coverage when:· The identified excluded individual is injured while not operating a motor vehicle;· The exclusion is unfairly discriminatory under the Florida Insurance Code; or· The exclusion is inconsistent with the underwriting rules filed by the insurer. The exclusion of an identified named driver is invalid unless the named policyholder consents in writing to the exclusion of a named driver and the excluded named drivers are listed on the policy’s declarations page or policy endorsement. An individual excluded by name in an insurance policy would not be covered for damages that occur while operating a motor vehicle that is insured under the policy. An excluded driver must separately comply with financial responsibility laws. The House version of the bill, HB 273 by Representative Plakon, passed all its three committees and has been placed on the House calendar. Note this language is also included in SB 54 regarding PIP. 3. PEER-TO-PEER CAR SHARING SB 708/HB 785 SB 708 by Senator Brandes has yet to be heard in its first committee, the Senate Banking and Insurance Committee. The bill does the following:· Creates definitions for peer-to-peer car sharing;· Creates insurance coverage requirements for peer-to-peer;· Names the liabilities and insurance exclusions;· Provides a notification process for implications of a lien being on the vehicle; and· Lists the required recordkeeping for a peer-to-peer program. HB 785 by Representative Busatta Cabrera has yet to be heard in its first of two committees and will be up first in House Tourism, Infrastructure and Energy. These bills are unlikely to pass but see SB 566/HB 365 regarding peer-to-peer provisions contained in those bills. 4. MOTOR VEHICLE RENTALS SB 566/HB 365SB 566 by Senator Perry passed the Senate floor on April 22nd. The bill seeks to specify the applicable sales tax rate on motor vehicle leases and rentals by motor vehicle companies and peer-to-peer car sharing programs. The bill also specifies the applicable rental surcharge on these same leases, rentals and car sharing programs. Additionally, the bill names the insurance requirements for peer-to-peer car sharing programs. Providing an exemption from vicarious liability for peer-to-peer and shared vehicle owners. The House version HB 365 by Representative Caruso has also passed all three of its committees and has been placed on the House calendar. The House could decide to take up the Senate bill next week.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
Many people avoid buying — and even talking about — life insurance because it brings up uncomfortable and rather sad scenarios that many rather not think about. But one expert says don’t ignore it because you could pay dearly down the road.
“I would say life insurance — if we take away the stigma that life insurance is all about death — I promise you all will be just as excited as I am to learn about life insurance and incorporate it into your family and your business financial plan,” said Ebony Ruffin, founder of Ruffin Consulting Services, a business consulting firm providing effective life insurance solutions to families and businesses.
Janna Herron connected with Ruffin to break down life insurance as part of Cashay’s Ask the Expert series that seeks advice from experts on vexing personal finance topics surrounding all of life’s milestones: Education, marriage, parenthood
What is life insurance?
Life insurance is a contract between the insured and the life insurance company that will provide a payout to the beneficiary in the event the insured passes away. So the best way to think about this is we all function through daily living activities. We rely on someone, someone may rely on us throughout daily living activities. We incur debt, we acquire assets, we build wealth. And with that, you think about what happens when you pass away and life insurance provides typically a lump sum payout in your name to beneficiaries, to provide not just a proper burial service, but to also be able to maintain your assets or be able to sell them to continue generational wealth in your family, and to go above and beyond the income that will be needed to bury you once you pass away.
When should someone consider getting life insurance?
I always say, as long as you’re living and breathing, you should have life insurance. Life insurance is providing protection for your life. And we all know with life, death isn’t based on an age. So death can happen to anyone at any time and without life insurance, it presents a financial hardship.
In addition to the emotional distress when you lose a loved one, I have families as clients that have insured the younger family members within their household. But most importantly, the mother and the father or the parents in the household are definitely insured, specifically when they have dependents that rely upon them for food, clothing, shelter, and daily living activities.
(Credit: Ebony Ruffin)
So the biggest, the most important way to think about life insurance is what happens when you pass away, will someone be responsible for your burial expenses? Will someone be responsible for managing your wealth portfolio? Will someone be responsible for your debt? Life insurance tends to be a solution for those responsibilities.
How should you figure out how much life insurance you need?
How much insurance you need is typically defined. I would say, let’s look at three different ways to determine how much life insurance you need.
There is the dime approach, which is debt, income, mortgage, and education. This approach primarily works for those parties that have someone that relies upon them financially, and also those who have taken on a mortgage. So the dime method — debt, income, mortgage, and education — says if something happens to me today or in the future, how much debt must be satisfied? How many years of income will my dependents need to continue their daily living? What is the mortgage balance and who will rely on me for education? So that is the dime approach.
I also think that while we may look at the dime approach to determine how much life insurance we might need, sometimes it’s not necessarily how much we need, but also how much can we actually afford. Because, honestly speaking, life insurance is another bill in the household.
(Photo: Getty)
So, it means that you’ll have to look at what is your household budget and how much of that can you allocate to life insurance. So that’s more of a reverse engineering approach where it says I can afford a monthly premium between $75 and $100. What’s the max amount of coverage I may receive with my budget?
Another approach can be for someone that is, let’s say, young, healthy, and maybe does not have dependents. That person may say, well, I have time in life to get life insurance. No one is relying on me. Why should I get life insurance? That is actually a very important time in a person’s life to acquire life insurance, because the cost of insurance is very inexpensive, purely based on age and superior health. That means that the life insurance company has looked at the mortality tables, and they know that someone that is young and healthily healthy is least likely to be in a higher risk class. And therefore a payout will not occur in the near, near future.
So I would say for those that maybe you’re off into your first job, or you started your first business, you do not have dependents and you’re single definitely, make it a priority to incorporate life insurance into your financial planning early on in life.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
f you plan on leaving your home for an extended period of time – to go travelling, say, or while you wait for it to sell – you will want the peace of mind of knowing it’s protected.
But while you may have home insurance in place, policies typically won’t cover you if your property is going to be vacant for a lengthy stint.
With this in mind, you may want to consider ‘unoccupied home insurance’ instead. This covers your property against damage and burglary when there’s nobody living there.
Why do I need unoccupied home insurance?
With standard home policies, insurers will usually provide cover only if the policyholder can guarantee that a property will not remain empty for more than 30 or 60 days.
If you do leave the property vacant for longer than the stipulated number of days, this will void your cover. So if anything happens, this means you won’t be covered. (Similarly, if you have home emergency cover, this is also likely to become void if you leave your home unoccupied for a long period of time.)
Scenarios where you may need cover
There are a number of reasons why your home may be temporarily unoccupied. These include:
Travelling for a lengthy period of time – for work or pleasure
Visiting family abroad
Having to move out of your home while you have building work carried out
Not being able to live in your home because you’ve been taken into hospital or long-term care
You are selling the property but have already moved into a new home
You’ve just bought the property but don’t plan on moving in just yet
You’ve recently inherited the home
Waiting for a new tenant to move in
Why is an unoccupied property an issue?
Insurers view premises which are left empty for lengthy periods of time as being at a greater risk of structural damage caused by events such as burst pipes. With no-one there to spot issues and get them sorted, minor issues can quickly escalate.
Vacant premises are also more attractive to burglars, and more likely to get broken into.
Given that a standard home policy won’t offer the cover you need, this is where unoccupied home insurance comes into play. This type of policy is likely to be more pricey than regular home insurance (given the increased risks involved with a property being vacant), but it will give the cover – and peace of mind – you need.
What features are included in unoccupied home insurance?
Typically it provides high levels of cover for a range of events, including:
Storm damage
Flood damage
Fire damage
Escape of oil
Escape of water
Burst pipes
Theft – or attempted theft
Vandalism
Legal expenses – if, say, you need to deal with trespassers or get squatters removed
Public liability insurance – if, say, a roof tile comes loose from your property and shatters a neighbour’s car window, or a tree from your garden falls and damage a neighbour’s property
Where can I buy unoccupied home insurance?
If you plan on being away from your home for a while and are looking to buy unoccupied home cover, the best way to see how different deals stack up is by going online and using a price comparison service. So what should you expect?
Generally speaking, policies last for three, six, nine or 12 months. You will need to provide information, such as the value of the property, where it is located, how well-maintained it is, what security measures in place, why it’s going to be empty – and how long for.
Having done this, you will be presented with a list of quotes from different insurers. The various factors listed above could all impact on the price you get quoted. Equally, the higher the level of cover you opt for, the more pricey the policy is likely to be.
Read policy documents carefully
Before signing up to a policy, make sure you read the Ts and Cs and understand exactly what level of cover you are getting, and which features are – and aren’t – included.
Remember to check the level of the excess. This is the amount you have to pay if you want to make a claim. Also try and check out customer reviews to ensure the firm offers a decent level of customer service.
Tempting as it may be, don’t automatically opt for the cheapest policy. Go for the policy that offers the right features and level of cover for your needs – at the right price.
Watch out for exclusions
When comparing policies, be aware of exclusions. With unoccupied home insurance, certain situations may not be covered.about:blankhttps://89749a4fb8a821c43ab3d452b4a33549.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.htmlabout:blank✕
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For example, burglary through unforced entry is unlikely to be covered. This is where a burglar is able to get access to your home because you left a door or window unlocked.
The same applies to damage caused by contractors – though contractors should have their own cover in place.
To find out about exclusions, be sure to read the small print. If in doubt, check with the insurer.
Review your cover
When your unoccupied home insurance policy has expired, don’t automatically renew with the same insurer. You may be able to find a better deal elsewhere – so be prepared to shop around again.
The same applies to your standard home and contents policies too. In order to keep costs down, it’s important to shop around at renewal time.
Tips when leaving your home empty
A large proportion of insurance claims on unoccupied homes come from burst pipes, so it’s worth taking a few precautions when leaving your house vacant. Drain the system completely before you go away for example or, winter, leave the heating on a low setting.
As empty homes are more vulnerable to theft, take steps to make your property more secure:
Get a burglar alarm fitted
Make sure all doors and windows are fitted with approved high-quality locks
Install a timer so the lights come on and go off
Get a neighbour to open and close the curtains
Remove tell-tale signs that the property isn’t lived in by asking a neighbour to collect mail. Alternatively, get post redirected
Can I get unoccupied home cover as a landlord?
If you’re a landlord, you might want to consider unoccupied home insurance, but you could also look into getting dedicated landlord insurance instead. This is specifically designed for rental properties, and will usually permit a home to remain empty for a few months between tenants.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
Every year, you should be reviewing your property and casualty insurance policies.
“P&C (property and casualty) reviews often get overlooked until something catastrophic happens,” said Judson Meinhart, a certified financial planner with Parsec Financial. “They can also be a great opportunity to save some dollars if you’re paying for additional coverage you don’t really need.”
Higher deductibles: “The thing I see most often is a deductible that is too low,” said Matt Stephens, a certified financial planner with AdvicePoint. “As part of our planning process, my clients usually have an emergency fund large enough to cover any deductible so increasing it even from $500 to $1,000 can make a huge difference in the premium.”
Others agree. “Because there are often negative side effects from filing a claim, it usually makes sense to use the highest deductible you can stomach,” said Randall Lee, a certified financial planner with TrustCore.
Full replacement: For homeowners policies, we always want to ensure the policy can cover the expenses of fully replacing your home — not just the current value of the home, said Meinhart.
It is not uncommon that consumers’ homeowner’s policies have insufficient dwelling coverage, said Kevin Gahagan, a certified financial planner with Private Ocean. “It is essential that coverage be sufficient to cover the expected cost of rebuilding on a per-square-foot basis,” he said. “In many cases, consumers believe that the ‘extended replacement cost coverage’ most policies offer will cover them if rebuilding exceeds the stated amount of dwelling coverage. However, extended coverage only applies if the dwelling is insured for fair market rebuilding costs. If this is not the case, it is quite likely that a claim will be paid at less than 100 cents on the dollar — a circumstance we often hear about following catastrophic events.”
Along with basic dwelling coverage, Gahagan said it is important to understand what limitations and coverage the policy does provide. For example, how much extended replacement cost coverage is provided, what level of deductible is being applied, etc.
In addition, you may need to increase your coverage if you’ve made substantial improvements to the property. “They need to be sure that their coverage keeps up with any increases in the value of the property,” said James Shagawat, a certified financial planner with AdvicePeriod.
If you made material improvements or additions since your coverage was last written, it makes sense to have an agent or representative visit your home and ensure they have it right, said Lee.
Another task to consider: Take photos or videos of the contents of your house, said Lee. “In the event of a loss, the insurance company may require an inventory,” he said. “The photos/videos can help jog your memory and can also serve as proof of your possessions. Don’t forget to also document closets, attics, basements, garage, etc. And store the photos/videos off-site or in the cloud.”
Inflation protection: It’s a good idea to have an inflation endorsement for your home coverage, said Patricia Hausknost, a certified financial planner and an instructor at UCLA Extension’s Certificate Program in Personal Financial Planning. “Building codes may require different construction than the original if you need to rebuild,” she said. “If you have a mortgage, the lender may only require an amount equal to your debt; that may be insufficient.”
Consider additional coverage: Know, too, the unique risks associated with your location and consider flood, hurricane, earthquake, sinkhole, and tornado coverage if you live in areas where this type of weather and events are typical, said Hausknost.
For his part, Stephens said some insurance companies will combine the wind and hail coverage with the regular homeowner’s policy for significant savings compared to buying two separate policies. “Many clients don’t know about this strategy, especially if they’re moving (to warmer climes) to retire from somewhere else,” he said. “So, we’re able to help them get lower prices that way as well.”
Got enough umbrella insurance? Personal umbrella liability insurance pays for losses from bodily injury, property damage and personal injury to others beyond the policy limits, according to the National Association of Insurance Commissioners.
“This is some of the best bang-for-the-buck in the insurance world,” said Lee. “This layers on top of the base liability insurance in a homeowners and auto policy.
Most people, however, do not have personal umbrella liability coverage, said Diane Pearson, a certified financial planner with Pearson Financial Planning.
Ideally the amount should be equal to your net worth, said Hausknost. “Many people have a $1 million policy, but this should be reviewed to make sure it is adequate,” she said. “They may need to increase liability coverage limits under homeowner and auto policies to obtain the excess liability coverage.”
Robert Braglia, a certified financial planner with American Financial & Tax Strategies, recommends having a $3 million to $5 million policy, if not more.
Lee also noted that umbrella liability coverage should include uninsured and underinsured motorist protection. “This coverage actually flips the direction of payment for umbrella coverage,” he said. “It actually pays benefits to you if you’re injured, and the other party isn’t adequately insured. Not every company offers this.”
Gahagan said it’s essential that both home and auto maintain the required underlying liability coverage under both the home and auto. “If there is a gap, if there’s less underlying coverage than is required under the umbrella, the gap must be made up by the consumer before the umbrella will pay,” he said. “We also want to know whether the umbrella provides coverage for ‘uninsured/underinsured’ drivers. If not, it will be essential to maximize ‘uninsured/underinsured’ coverage under the auto policy.”
While many property and casualty provisions protect the insured against lawsuits from others when the insured is at fault, one of the most important and often overlooked pieces of your auto insurance policy is uninsured or underinsured motorist, said Clark Randall, a certified financial planner with Financial Enlightenment.
“This provision of the policy protects the insured from his/her injuries and/or property damage due to the negligence of another uninsured or underinsured motorists who is at fault and injures the insured and/or damages his/her property,” he said. “I have seen many clients present auto insurance policies with $25,000 limits on this coverage. That would barely pay for a used car, much less medical injuries from an accident.”
Toys and other expensive items Do you have watercraft, ATVs or other powered “toys”? If so, make sure they have coverage — most importantly liability coverage — and be sure your umbrella policy names each one specifically, said Lee.
Also remember if you have jewelry, furs, artwork, or other collectibles you may need special endorsements for that coverage, said Hausknost. “Ordinary coverage amounts may not be sufficient,” she said, noting that your insurance agent will typically require a receipt or a valuation to support the amount you are requesting.
Auto insurance: For those with an older vehicle that is a low value, Meinhart recommends that you consider dropping your collision insurance “since you would likely buy a new car if your ’93 hatchback gets totaled.”
In addition, if you have children who are driving, make sure they are covered as drivers and that their liability limits are adequate, said Shagawat.
Stick with one agency, if possible. Try to keep all coverage with one agent or agency, said Lee. “This reduces the likelihood of something getting missed or having insufficient coverage,” he said.This article was originally published by TheStreet.
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Americans looking to buy a condominium or co-op this spring should factor in the cost of insurance before signing on the dotted line. And a new analysis shows that where you choose to live will greatly influence how much you can expect to pay to protect yourself.
Residents of condos and co-ops in the Sunshine State pay $964 a year for condo insurance on average. That’s nearly double the national average of $506, and well over three times costlier than the least expensive state, Utah, where condo residents only pay $269 a year on average. AdvisorSmith’s analysis was based on data from the National Association of Insurance Commissioners.
Overall, residents of the South pay far more to insurance their condo and co-op residences than people living in other states. The AdvisorSmith analysis found that 11 of the 15 most expensive states for this form of insurance were located in the South, including the other four states in the top five besides Florida: Texas ($790), Louisiana ($748), Oklahoma ($631) and Mississippi ($600).\Prone to severe weather events
“There are certainly many factors taken into account when determining condo insurance, but the location of these particular states seems to play a major role,” the report noted. In particular, all of these states are highly prone to severe weather events, including hurricanes and tornados. As the report explained, most of the top 10 natural catastrophes, in terms of the cost of damage, were hurricanes that affected Southern states.
Meanwhile, the least expensive states were ones that were less prone to disastrous weather events, as well as less populated regions. Besides Utah, other affordable states for condo insurance were Wisconsin ($280) and Iowa ($295).
Of course, other factors influence the cost of HO-6 insurance, including the size of deductible, features in the condo development and the homeowner’s association’s own insurance policy.
Unlike traditional homeowner’s insurance, an HO-6 policy only covers what’s inside the walls of your unit and not the structure itself. As such, it’s designed to mesh with the development’s own insurance policy, so a condo building with a more protective policy will allow for more affordable individual policies for each of its residents.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com
After many years of trying, Florida is closer than ever to repealing its 50-year-old motor vehicle no-fault law.
However, many industry stakeholders have expressed opposition to the legislation passed by the Florida Senate last week and its companion bill approved by the House Judiciary Committee Monday, saying the proposals will actually raise rates for many Florida drivers and be ineffective at weeding out fraud
Florida’s current no fault law requires drivers to carry personal injury protection coverage of $10,000. If passed, the new law would instead require that drivers carry bodily injury liability coverage with limits starting at $25,000 per person.
Senate Bill 54 and House Bill 719 would also create a new framework to govern motor vehicle claims handling and third-party bad faith failure to settle actions against motor vehicle insurance carriers. The bills also require policies include a medical payments option of $5,000, though under the House version insureds can opt out of purchasing the coverage.
SB 54’s minimum liability requirements for motor vehicle ownership or operation include:
For bodily injury (BI) or death of one person in any one crash, $25,000, and, subject to that limit for one person, $50,000 for BI or death of two or more people in any one crash.
Retaining the existing $10,000 financial responsibility requirement for property damage.
Eliminating the limitations on recovering pain and suffering damages from PIP insurers, which currently require bodily injury that causes death or significant and permanent injury.
Insurers may also offer medical payments coverage with limits of $10,000, without a deductible, to cover medical expenses of the insured. Insurers can offer other policy limits that exceed $5,000 and may offer deductibles of up to $500. SB 54 requires that insurers must reserve the first $5,000 of MedPay benefits for 30 days to pay providers of emergency services or hospital inpatient care.
The exclusion of a specifically named individual from specified insurance coverages under a private passenger motor vehicle policy, with the written consent of the policyholder, is also authorized under the bill.
“Florida is one of only two states in the country that does not currently require drivers to carry liability coverage that would immediately kick in if they cause harm to another person while operating a motor vehicle,” said Senate President Wilton Simpson in a statement. “For everyone’s protection, drivers must be insured at sufficient levels. PIP coverage levels are clearly insufficient. It’s the right time for Florida to move to mandatory coverage for bodily injury liability.”
Included in the Senate version of the bill and added Monday to the House version is the creation of a new framework for motor vehicle insurance bad faith actions. The bill requires insurers to follow claims handling best practices standards based on “long-established good faith duties related to claims handling, claim investigations, defense of the insured and settlement negotiations,” a Senate statement said.
“Meaningful reforms to Florida’s deeply unfair bad faith system should be included to help reduce lawsuits,” said Michael Carlson, president and CEO of the Personal Insurance Federation of Florida. “While the Senate bill includes an attempt at bad faith reform, it has been weakened by the trial bar to the point that it may not help reduce lawsuits.”
The American Property Casualty Insurance Association’s (APCIA) Assistant Vice President of State Government Relations Logan McFaddin said the proposals lack “any meaningful reforms to Florida’s bad faith laws, which will only serve to fuel the current cycle of lawsuit abuse, worsen Florida’s legal environment, and could lead to even higher costs for consumers.”
Specifically, McFaddin said HB 719 is a “considerable step backward and [will] do nothing to alleviate the current abuses of Florida’s bad faith laws.”
PIFF and APCIA said the passage of the proposed PIP repeals would likely raise costs for Florida drivers, particularly those who buy the minimum required insurance or who currently buy bodily injury coverage at amounts below what the proposed law requires.
Florida’s uninsured motorist rate would likely increase from its current 20%, the groups said, as more low-income and underinsured drivers will be unable to purchase higher amounts of coverage. Florida drivers currently pay the highest premiums in the nation, according to MarketWatch data.
“In Florida, approximately 40% of drivers carry minimum limits that are below what would be required under SB 54. Under the current proposal, these drivers could see their auto insurance costs rise by $165 to as much as $876 a year,” said McFaddin.
“Florida cannot afford the higher insurance rates generated by HB 719 and SB 54,” Carlson said.
Senator Jeff Brandes was the lone vote in the Senate against SB 54. Brandes supported a previous version that did not include a mandatory MedPay option, and said there was insufficient time to gather data on if the amended bill would lower rates for Florida drivers. Brandes voiced concern the new version would increase the number of uninsured drivers in the state and harm low-income policyholders.
“We have no basis for making claims that rates will go down,” he said. “Twenty percent of Floridians are driving around without auto insurance and if we raise prices, more Floridians will drive around without insurance – that is a huge problem for me.”
APCIA’s McFaddin said lawmakers are attempting to eliminate the major public policy “through a rushed process without an objective study on the cost impact to consumers.”
However, Senator Danny Burgess, SB 54 sponsor, asserted his bill would eliminate fraud in the system that would lower costs and would offer an overall reduction in rates. The bill, he said, is trying to right a “very broken system.”
“The goal of this legislation is to lower the number of uninsured and underinsured drivers and provide a greater safety net in the event of an accident. Replacing our current no-fault system with a bodily injury liability system more appropriately places liability where it should be – with the party that caused the accident,” said Burgess.
He added the new framework for handling bad faith litigation, “will lead to better outcomes for both insured Floridians and their insurance companies.”
A report from the Office of Insurance Regulation in February noted that overall loss trends for automobile insurance losses in Florida are continuing to increase for the most significant coverages such as BI liability, PIP, and comprehensive coverage. The increases are a result of cost drivers such as a higher rate of fatal crashes in Florida than the rest of the country, higher loss trends for BI and PIP, and the costs of services associated with auto insurance such as medical care, hospital care and motor vehicle body work.
“These trends in auto insurance rates will likely continue, regardless of whether PIP remains or is replaced by BI,” the report stated. “If PIP is repealed and replaced with mandatory BI and MedPay, without addressing bad faith and litigation trends, increased litigation and claims costs associated with the new mandatory coverages could increase premiums dramatically.”
HB 719 now goes to the full House for a vote. If passed and signed by the governor, the new system would take effect Jan. 1, 2022.
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Car insurance pricing typically comes in two price points: minimum and full coverage. The average annual cost of car insurance is $565 for minimum liability coverage and $1,674 for full car insurance.
Full coverage is typically more expensive and for good reason – it builds on basic liability insurance by adding additional coverages. But why would someone choose full coverage vs. liability, especially if the cost can be higher? The difference between liability and full coverage auto insurance is important to understand so you make the right choice – and not one solely based on cheap coverage – when buying car insurance.https://products.gobankingrates.com/r/d9360ea31bf06ea8b9d0ef49288e28fb?subid=
Liability vs full coverage insurance
Take a closer look at the difference between liability insurance vs. full coverage. You already know that full coverage is more expensive. But there is more to the decision-making process when shopping for vehicle insurance than price.
Liability coverage
Liability car insurance is the minimum amount of coverage nearly all states will require you to have. If you are at fault in an accident, liability insurance will pay for damages to third parties. Liability coverage comes in two types: bodily injury and property damage. Bodily injury liability insurance pays for others’ medical expenses and lost wages. Property damage liability insurance pays for repairs or replacement of items you damaged in a crash, such as someone else’s car, a mailbox or a light pole.
The issue with liability insurance is its scope. If you rear-end another vehicle, liability insurance will pay for the other vehicle passenger’s medical bills and the repairs to the car. But the damages to your vehicle are not covered by liability insurance. The money it will cost to replace or repair your front end will have to come out of your pocket.
Full coverage
Full coverage car insurance includes the essential liability insurance you are required to have, plus adds coverage that pays for damages and losses to your vehicle. As mentioned, if you rear-end someone, liability insurance does not help your situation. Full coverage can include comprehensive and collision insurance, both designed to pay for your vehicle’s damages.
Collision insurance steps in to cover your car and property’s damages and losses if you cause a collision or accident. Comprehensive insurance covers your vehicle from other events, such as flooding, striking an animal, a break-in, fire, vandalism and more.
Full coverage is more expensive but provides you with complete coverage against damages and losses you cause to others – and to yourself.
Additional coverage options
To further customize your car insurance, there are other types of coverage you can add. Some of the most common are:
Personal injury protection: PIP pays for medical bills for yourself and any passengers, regardless of who caused the accident. It is also known as no-fault insurance.
Uninsured/underinsured motorist protection: If the party responsible for the accident does not have enough (or any) car insurance, your insurance company will pay for your damages.
Gap insurance: When you buy a new car, it tends to drop in value quickly. You will likely owe more than it is worth initially. Gap insurance will pay the difference between what your insurance company will pay you for the vehicle and what you owe in payments.
Rental reimbursement: The optional coverage will pay for a rental car while your vehicle is unavailable because it is in the shop because of a covered car insurance claim.
Cost of car insurance
One of the biggest factors affecting the cost of car insurance is the amount of coverage you buy. Liability insurance is cheaper than full coverage. But there are other factors that affect car insurance rates.
Cost by gender
Women generally pay less for car insurance, regardless of how much coverage they buy. Refer to Bankrate’s findings on the average cost of car insurance for liability insurance vs. full coverage, based on gender.
GENDER
AVERAGE ANNUAL COST FOR LIABILITY INSURANCE
AVERAGE ANNUAL COST FOR FULL COVERAGE INSURANCE
Female
$522
$1,532
Male
$586
$1,748
Cost by carrier
Choosing the right car insurance company can save you hundreds of dollars every year in car insurance. To find the cheapest insurance, collect car insurance quotes from several carriers to compare. You will likely find that the same type of car insurance could vary greatly in cost from one carrier to another.
CAR INSURANCE COMPANY
AVERAGE ANNUAL COST FOR LIABILITY INSURANCE
AVERAGE ANNUAL COST FOR FULL COVERAGE INSURANCE
Allstate
$696
$1,921
Amica
$405
$1,378
Erie
$409
$1,233
Geico
$433
$1,405
The Hartford
$754
$2,270
MetLife
$821
$2,123
Nationwide
$501
$1,485
Progressive
$582
$1,509
State Farm
$539
$1,457
USAA
$384
$1,225
How much coverage do I need?
Deciding on how much car insurance you need is not easy. First of all, if you plan on financing your car, the lender will probably require you to have full car insurance. Even if you pay cash for your vehicle, you may want to buy more than the state’s minimum liability insurance requirement.
Say you live in California and have minimum coverage. The state requires all drivers to have at least $15,000 per person and $30,000 per accident in bodily injury liability, as well as $5,000 or more in property damage coverage. If you cause an accident and the other car has $8,000 in damages, your insurance company will pay no more than $5,000 towards the repair, leaving you to find an additional $3,000 to pay the difference.
Based on that scenario, it might be smart to buy as much car insurance coverage as you can afford. Many car insurance experts recommend liability coverage of 100/300/100 if you have assets such as a home or business that someone could go after if you cause a costly accident and do not have the coverage to back it up. The 100/300/100 limit is $100,000 per person and $300,000 per accident in bodily injury and $100,000 for property damage.
Frequently asked questions
What does full car insurance include?
Full car insurance consists of liability insurance to pay for others’ damages and injuries, as well as comprehensive and collision insurance to pay for damages to your vehicle.
What does minimum liability insurance mean?
Nearly every state has a minimum amount of car insurance as a requirement. The minimum coverage typically starts with liability insurance, which pays for damages and injuries you cause to others.
Methodology
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
$100,000 bodily injury liability per person
$300,000 bodily injury liability per accident
$50,000 property damage liability per accident
$100,000 uninsured motorist bodily injury per person
$300,000 uninsured motorist bodily injury per accident
$500 collision deductible
$500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
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New information from Florida’s insurance regulator paints a stark picture of the extent of litigation facing the state’s domestic insurers. The information comes as numerous stakeholders push for legislative reforms to address the litigation issue they blame for fueling the current insurance market crisis.
According to National Association of Insurance Commissioners (NAIC) data mined by the Florida Office of Insurance Regulation, while Florida homeowners insurance claims accounted for just over 8% of all homeowners claims opened by U.S. insurers in 2019, homeowners insurance lawsuits in Florida accounted for more than 76% of all litigation against insurers nationwide.
And those results are not an anomaly just for that year, the report says.
Florida Insurance Commissioner David Altmaier alerted Florida House Commerce Committee Chair Blaise Ingoglia to the new data gathered by his office from the NAIC in a letter last week.
“Litigation trends in Florida have been consistently many times higher than any other state,” Altmaier wrote, citing NAIC data that shows Florida lawsuits rose steadily from 64.4% of all nationwide homeowners lawsuits in 2016, to 68% in 2017, to 79.9% in 2018 and 76.4% in 2019 (see chart).
OIR pulled the information from NAIC’s Market Conduct Annual Statement (MCAS) Data Call to further provide information to lawmakers on litigation trends in the Florida insurance market. MCAS is a regulatory tool developed in 2002 by state insurance regulators to collect information from insurers regarding claims and underwriting. In 2019, over 750 homeowners’ insurance companies reported data via MCAS using uniform definitions and reporting requirements across all states.
Altmaier, who also currently serves as NAIC president, said OIR included MCAS data of Florida’s ratio of suits opened to total claims closed and a ratio of suits opened to claims closed without payment as well, to allow OIR to “observe trends in the context of other states.”
For 2019, Florida trended with the national average when comparing the number of claims closed without payment to total claims closed. However, Altmaier noted, Florida’s ratio of suits opened to claims closed without payment was eight times higher at nearly 28% than the next highest state, Connecticut, which had a ratio of 3.4% of suits opened to claims closed without payment.
OIR analyzed the data between Florida and the other states to examine the disparity and validity of its methodology and results with MCAS staff at the NAIC, Altmaier said. It also analyzed the litigation to claims ratio of insurers operating in Florida – because the state’s insurance market is so heavily reliant on domestic companies – and other states to see if there was a pattern of these insurers experiencing litigation higher than their peers in other states, which he said could be an indicator of claims handling issues. But, Atlmaier noted, OIR did not detect any such systemic pattern that would explain the disparity.
“While we continue to explore these and other possibilities to explain the disparity, OIR does not have a readily available explanation for Florida’s outlier status other than to simply state that Florida is experiencing far more claims-related litigation than the other 47 reporting states,” Altmaier wrote.
In light of the new data, he urged the legislature to consider additional reform measures to help the state’s property market challenges, including:
Reforming the state’s one-way attorney’s fee statute in a way that still allows policyholders to still file suit against their insurance company but removes the incentive for attorneys to file illegitimate claims. Altmaier said reforms like what were enacted in the 2019 AOB legislation “preserves important consumer protections, while providing a framework to ensure litigation brought against insurance companies is legitimate.”
Addressing the ramifications of the decision regarding contingency fee multipliers by the Florida Supreme Court in the Joyce vs. FedNat (2017) case, which separates Florida from federal standards. Instead, legislation that codifies the adoption of “rare and exceptional” framework so contingency fee multipliers are only used in such cases could be effective at reducing the filing of meritless cases to receive a large attorney fee payout.
Addressing the ramifications of the Sebo vs. American Home Assurance (2016) Florida Supreme Court decision regarding concurrent causation that OIR says has incentivized roof claim solicitations. Statutory language that specifically excludes “wear and tear” from concurrent causation could provide a disincentive for this behavior, while allowing consumers to keep replacement cost coverage for legitimate roof issues.
Including provisions from legislation enacted in Texas in 2017 that broadens pre-suit notice and inspection requirements for property claims and addresses attorney’s fees.
“These solutions could substantially reduce the litigation associated with claims, bringing more certainty into Florida’s property insurance market,” Altmaier concluded. “Ultimately this will provide more stability in the market and more rate stability for consumers.”
Florida carriers lost more than $1.6 billion in 2020 thanks in part to excessive litigation, reinsurance costs and natural catastrophes. Companies are taking extreme steps to reduce their exposure in areas where there is high litigation rates or high reinsurance costs, including enacting coverage restrictions and increasing rates. OIR approved 105 rate changes, 90 of which were for rate increases, over the last year, with 55 of those for rate increases of more than 10%. Stakeholders have warned that without legislative reforms, rates will continue to increase and consumers may be unable to find coverage in the private market.
Altmaier’s letter to the Florida House Commerce Committee chair came days before the committee’s planned meeting today, April 14, where it will debate House Bill 305. That bill was formerly the companion bill of Senate Bill 76 that passed by the Florida Senate last week. The Senate bill is backed by the industry because they say it tackles many of the issues blamed for the current problems in the market, including excessive litigation and roofing claims.
However, HB 305 has changed drastically since it was introduced at the beginning of the current legislative session and many in the industry and others say it doesn’t go far enough in addressing the property market’s issues. Lawmakers will have to reach a compromise before either bill can become law.
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