‘Tis the season to avoid scams, or don’t let holiday cheers become holiday tears

‘Tis the season to avoid scams, or don’t let holiday cheers become holiday tears

As we head into the holiday season, it may be a challenge to stay aware of how you can avoid being a victim of various scams and schemes to separate you from your hard-earned money.

While the topics covered may be insurance-focused, you can apply many of these cautions to other kinds of consumer transactions.

Cybersecurity

Headlines this year have been dominated by the saga of computer system hacks, made more harrowing by the Equifax breach. Insurance companies often consider consumer credit reports to determine whether you are insurable for auto and homeowners/renters insurance.

The best monitor money can buy is your own action to check your credit report on a monthly or quarterly basis. There are a number of free “credit check” report services that report on all three credit reporting organizations: Equifax, Experian, and Transunion.

Since most companies accommodate insurance payments on mobile devices, take care where you conduct these transactions.  If you use a public or unsecured Wi-Fi service, you may be unknowingly sharing information with others who will gladly use it to access your information. Use your home Wi-Fi, or a password-protected system that you know has updated security. Avoid using public computers or public Wi-Fi.

Watch your email

One of the easiest ways for your information to be accessed by the “bad guys” is to allow the bad guys into your computer files and past your password-protected firewall. This is called phishing and may occur from what appears to be an innocent and safe email sent to you.

Phishing occurs when “friends” or “companies” that seem familiar to you send email messages but have odd/unfamiliar email addresses, company logos that do not match the email, etc.  As a reminder, neither a respectable company nor a governmental entity will contact you to solicit your personal information without you contacting them first.

Any email that asks or insists that you change your password or personal information through an emailed link should be avoided. If in doubt about an email request, contact the company or governmental agency to confirm that it intended to send you the message.

Too good to be true

These kinds of scams generally deal with special deals or “free” money. Based on a recent search, insurance-related scams have included:

  • Phishing scams related to the recent Anthem insurance cyber attacks and involved “free” credit monitoring if the recipient would provide personal and confidential information.
  • Consumers contacted by contractors who provide “special” discounts to help you navigate insurance claims to recover payment for damage related to recent fire and flood disasters.
  • Fake insurance brokers offering “special” discounted insurance rates. They promise insurance coverage and pocket the premium paid by those deceived into paying.
  • During healthcare insurance open-enrollment periods, a caller or door-to-door salesperson will use the enrollment opportunity to start a conversation that may result in an elder or vulnerable person disclosing credit card or banking information.

If it sounds fantastic, it is probably someone else’s fantasy. Consider some basic steps to protect yourself and your family.

  • Take the time to research. People conducting scams want immediate action to keep you from researching who they are or information about their organization (If it exists). The “special” never existed if you are required to “act immediately.”
  • If you are not sure if a company representative is who they say they are, do your own research to call and confirm that the “offer” is real.  An insurance company offering free credit monitoring because of a breach will have this notice on its website. Operators can also confirm whether the service is available.
  • Confirm the status of any contractor’s license with your local licensing office or your state’s attorney general’s office. Even if the contractor is licensed, ask for references and look at the work if possible. Check with the insurance company handling your claim to see if it has any past dealings with this contractor.
  • Don’t put personal information on public online forums. Information about your birthday, your travel plans, recent purchases (large items) and other personal information provides opportunities for identity theft and phishing.
  • Insurance brokers and agents must be licensed in the states where they do business. If someone is selling insurance, check with your state insurance department or commissioner’s office to confirm that the person is authorized to handle the transaction.
  • Know who you are adding to your social media circle or connection.
  • If you think you are a victim of a scam seek help immediately. There may be a chance to limit the harm or recover money, and you want to discourage others from falling for the same scam.

A word about travel plans

If you plan to travel during the holidays, take a few minutes to secure your residence and its contents. Some travel plans may seem to require travel insurance. You may be interested in this notice from the National Association of Insurance Commissioners (NAIC) before deciding which travel insurance policy to purchase.

The NAIC also has a handy one-page document to address auto rental insurance policies. Even if you have auto insurance coverage, you may find it worthwhile to take a minute to review this information.

By staying diligent and a bit skeptical, we can increase our opportunities for a happy holiday season.

Yvonne R. Hunter is a licensed attorney and the Principal Consultant for YH Strategies, LLC, in Phoenix, Ariz. She serves as a panel member of the American Arbitration Association (AAA) handling consumer arbitration issues and as a mediator for similar matters. After a stint with the Arizona Department of Insurance, she learned that many consumers remain unaware of some of the issues associated with insurance products. This blog reflects her opinion and should not be regarded as legal advice. She encourages consumers interested in learning more about their own insurance experience to contact their state department of insurance or insurance commissioner or seek advice from an attorney. If you would like additional information on matters dealing with consumer insurance products, you can reach Yvonne at yrhunteraz@gmail.com

Don’t overlook coverage requirements or enrollment periods for insurance plans

Don’t overlook coverage requirements or enrollment periods for insurance plans

Last month’s blog addressed the urgent issue of homeowner and renter’s insurance policies and natural disasters. I was reading a recent Wall Street Journal (WSJ) article “Check Your Insurance Policy for Fire Coverage” and appreciated the article’s point that the homeowners’ insurance market has been slowly and substantially changing over the years.

It seems that consumers make a lot of assumptions about their homeowner’s policies and what would be covered in the event of a disaster. The recent hurricane and fire disasters have shown that many homeowners with insurance policies were surprised with the limitations in those policies.

The WSJ article Identified trends in the insurance industry that many consumers would naturally overlook. The point of the article seemed to place the responsibility on insurance policyholders to communicate with our insurance representative or company to make sure that the policies we want, or can afford, are the policies in place. Even if financial resources limit your options for policy coverage, you will know what to expect if a disaster strikes.

The main message in the article addresses the change in the insurance industry in which insurance companies may offer different policies covering the same kind of disaster depending on the state.

For example, if you are in State A with Company X and move to State B with the same insurance company, you cannot assume that the insurance coverage will be the same, even though the price of the premium may seem the same. In addition to addressing the differences in the costs of insurance, the article does a great job of summarizing issues that consumers may not realize will impact their coverage:

  1. Home improvements that add value to the home may not be covered unless the insurance company knows about the improvements.
  2. Extra/added structures such as sheds or gazebos may not be covered unless the insurance knows about their existence and agrees to include the structures in the policy.
  3. Understanding the differences between Actual Cash Value Coverage compared to Replacement Cost Coverage, and whether an extended replacement policy, guaranteed replacement cost policy or inflation protection rider will help you decide what is appropriate coverage for your needs.
  4. Anticipate the impact of a widespread disaster that could cause a shortage of labor and materials, or changes to building codes require the addition of expensive fixtures that were not in the original structure(s), resulting in higher reconstruction costs.

If you would like a quick review of the resources available to help residents in disaster preparedness, read my previous blog: Wading through the flood of information when deciding on natural-disaster insurance.

ACA enrollment begins Nov. 1

The Affordable Care Act (ACA) is alive and well despite rumors to the contrary. Open enrollment starts November 1 until December 15 to ensure health insurance coverage starting January 1, 2018. You can still enroll after December 15, but you will have a delay in coverage.

If you or someone you know needs help in enrollment for healthcare coverage, including those who think that they cannot afford coverage, you may want to start with healthcare.gov. Small business owners, or individual or family members who do not have insurance through employment may also use this website to review options for health insurance policies and identify coverage.

In most states, the departments of insurance or insurance commissioners have consumer resources to answer questions and direct you to volunteer organizations prepared to assist with enrollment.  Retirees and Medicare eligible consumers may also find AARP helpful.

General information on what to expect in 2018 can be found on the Kaiser Family Foundation website. Finally, for my Arizona family and friends, you can learn more about Arizona assistance here.

Health insurance is a vital part of keeping a community healthy and productive. Having access to preventive care (flu shots) and healthcare when we need it plays an important role in each person taking responsibility for our own healthcare and our families, co-workers, and friends.

Yvonne R. Hunter is a licensed attorney and the Principal Consultant for YH Strategies, LLC, in Phoenix, Ariz. After a stint with the Arizona Department of Insurance, she learned that many consumers remain unaware of some of the issues associated with insurance products. This blog reflects her opinion and should not be regarded as legal advice. She encourages consumers interested in learning more about their own insurance experience to contact their state department of insurance or insurance commissioner or seek advice from an attorney. If you would like additional information on matters dealing with consumer insurance products, you can reach Yvonne at yrhunteraz@gmail.com

Wading through the flood of information when deciding on natural-disaster insurance

Wading through the flood of information when deciding on natural-disaster insurance

The recent news on natural disasters has caused many people to think about disaster preparedness.

The impact of weather and other natural disasters will cause life-changing damage to your property. You will want to immediately replace the important lost items to bring normalcy back to your life.

To get through the insurance claim process after a natural disaster, preparation is key. The National Association of Insurance Commissioners has a consumer-friendly link to help. I will be referring to some of the information in this website, along with other resources in addressing common questions relevant to natural disasters.

What is flood insurance?

You can purchase flood insurance from an insurance carrier authorized by the National Flood Insurance Program (NFIP) to sell flood insurance coverage. The Federal Emergency Management Agency (FEMA) administers the NFIP and has a reference number to help you identify an insurance agent authorized to sell flood insurance in your area (1-800-427-4661). You can access more FAQ about flood insurance here.

How do I know whether I need flood insurance?

The need for flood insurance can be triggered by forest fires, weather, and changes to geography in your area caused by new construction, erosion, rivers and streams, and other factors. Your local flood control district may have the most current information identifying flood zones in your community.

Water does not care if you rent or own your property, so it is always good to know whether your home is likely to be impacted by flood waters. Even if you believe your home is outside of a flood zone, flood insurance is a safe move.

Flood insurance becomes a necessity if your mortgage lender requires the insurance to finance your home. Regardless of your mortgage lender’s requirements, your own peace of mind may influence your decision on flood insurance.

Does flood insurance cover the structure and all the items inside?

Flood insurance will not cover your furniture or personal items in your flooded residence unless you purchase flood insurance coverage for the contents of your home or rented property.

Before disaster strikes, you should work with your insurance agent or company to ensure that your homeowners or rental policy cover the contents of your home. You can use this NAIC checklist to create your own inventory and update your insurance company on new personal items that you want covered.

If there is a natural disaster, do I need a public adjuster to help me with my claim?

Depending on a variety of factors, a public adjuster may be of assistance. Please see my prior comments regarding hiring a public adjuster here.

Will flood insurance provide enough money to replace my home? ​​​

This question is best answered by reviewing the information on your flood insurance policy and reviewing the policy provisions on a regular basis. There are generally two kinds of coverage for your homeowners’ insurance: “all risk,” or “named peril” policies.

If you intend to have replacement coverage for your home because of potential flood events, I encourage you to contact your insurance company to confirm what kind of homeowners’ insurance policy you have in place.

You may also want to confirm whether your flood insurance policy is for “replacement cost” or “actual cash value.” This is an important difference to determine whether the funds received for your claim will be enough to replace your home and property.

I encourage you to discuss the difference with your insurance company when analyzing your policy. If the value of your residence has substantially increased, you may find you are underinsured and lack sufficient funds to rebuild or replace the damaged property.

A word about mobile homes; they have insurance policies similar to auto insurance policies. See information about auto policies below.

Does flood insurance help with my auto policy?

Auto policies with casualty coverage should cover the replacement of your car, truck, SUV, or mobile home in a disaster event. This coverage is different from the minimum insurance coverage most states require for you to show financial responsibility when you register your vehicle.

You can also purchase medical coverage for yourself as part of your auto insurance policy. This is helpful in case you are injured during the natural disaster while in your vehicle. Review your policy with your insurance company to confirm whether you should add these provisions to your policy.

If I have flood insurance, what do I need to show evidence of my losses?

This is a tricky question because the time to prepare for evidence of any losses is before the natural disaster event. You need to show what you owned and what was damaged/lost. You can use the resources identified in the NAIC website described above to help you develop the list of household items. The insurance adjuster from your insurance company or your public adjuster will help you document your claim.

Yvonne R. Hunter is a licensed attorney and the Principal Consultant for YH Strategies, LLC, in Phoenix, Ariz. After a stint with the Arizona Department of Insurance, she learned that many consumers remain unaware of some of the issues associated with insurance products. This blog reflects her opinion and should not be regarded as legal advice. She encourages consumers interested in learning more about their own insurance experience to contact their state department of insurance or insurance commissioner or seek advice from an attorney. If you would like additional information on matters dealing with consumer insurance products, you can reach Yvonne at yrhunteraz@gmail.com

 

The fix is in: How to navigate the maze of home warranty service contracts

The fix is in: How to navigate the maze of home warranty service contracts

Oh, the joys of home ownership. The lists of “pros and cons” have numerous authors, but there are ways to manage some of the cons, such as dreaded home repair responsibilities.

If you graduated from the role of tenant to homeowner, you have experienced the dreaded home repair burdens. All homeowners are bombarded with information on the “benefits” of a home warranty service contract to manage the list of home repairs common to home ownership.

This group of contracts is regulated in different ways by each state insurance department or commissioner.  The National Association of Insurance Commissioners has a link to help you identify whether your state regulates these contracts and how to ask for help.

Whether you should invest in a home warranty contract is a personal choice and definitely not an easy decision. Here’s some background information.

A home warranty agreement is not a homeowner insurance policy, which is to manage the risk of loss for sudden and unexpected property damage. Companies selling home warranty services promote their service as similar to the advantage of having a landlord that handles the repairs for a rental property. Unfortunately, the reality of a home warranty agreement falls short of this experience and will test your patience and wallet. Some of the anecdotal stories for poor consumer experience  with home warranty services include:

  • Sample contracts in marketing materials that are substantially different from the contracts consumers are asked to sign.
  • Sample contracts on a web page that are impossible to read without magnification.
  • Contracts that limit coverage on appliances based on their “manufacturer’s life” expectancy.
  • Home warranty services with limited qualified licensed technicians available to address repairs causing the consumer to experience long delays in service calls, or inexperienced technicians sent to complete “repairs” that require multiple visits.
  • In addition to the cost of the home warranty contract, charging multiple service fees for each technician’s visit.
  • Difficult or impossible to cancel a contract.
  • The home warranty company requires maintenance history on appliances/systems/structures that were on previously accepted for coverage
  • Subjective and arbitrary standards used to determine what portion of an appliance/system/structure is covered for service

In addition to contacting your state insurance department/commissioner to confirm whether the company is licensed and in good standing in your state, here are a few other things to do when considering a home warranty service contract:

  1. Read your contract before committing/signing any documents and don’t deal with a company that wants to rush a contract. Any “urgency” should trigger warning alarms.
  2. Check with the Better Business Bureau or other consumer protection networks to see if the company is in good standing.
  3. Even if you have a home warranty contract, continue to conduct regular maintenance on your appliances/systems/structures.
  4. Set aside emergency funds to cover those repair/replace expenses not covered by the home warranty service to manage the costs of the repairs not covered under the home warranty contract.
  5. Most home warranty agreements require a minimal service fee, in addition to the contract costs. If the work requires multiple visits, you may be charged for each visit.
  6. Build your own contact list of licensed and reputable repair technicians based on your list of reliable referrals through family, friends, and networks to help with maintenance and to perform repairs not covered by the home warranty agreement, or if you need immediate help for emergency repairs.
  7. Confirm that the home warranty contract covers any unique appliance/fixture/construction that requires special treatment.
  8. Consider whether you have limited resources available to help with repairs or are new to an area and have limited contacts for licensed and reliable technicians.

Some consumer groups openly discourage consumers from buying a home warranty agreement and encourage paying into your own home repair savings plan. You have more discretion on how to use the money and what technician performs repairs to manage costs.

Finally, if things go wrong with the home warranty company, where do you go for help? Always review the contract as a first step. If there is a mediation or arbitration provision, you may want to pursue that option as the fastest way to get help. Also, check with your Better Business Bureau (“BBB”), department of insurance or commissioner, or state attorney general’s office for assistance.

In researching information about home warranty agreements, you may find the information too overwhelming to make a knowing decision. I recommend the following websites as a humble start for your research to determine whether a home warranty fits your needs.  After you do your homework you may decide a different repair strategy provides you peace of mind when managing home repairs.

http://www.naic.org/documents/consumer_alert_moving.htm

http://www.reviews.com/home-warranty/

https://household-tips.thefuntimesguide.com/home_warranties/

https://www.consumerreports.org/cro/news/2014/09/why-you-should-avoid-home-warranties/index.htm

https://www.angieslist.com/articles/why-home-warranties-are-no-guarantee.htm

Yvonne R. Hunter is a licensed attorney and the Principal Consultant for YH Strategies, LLC, in Phoenix, Ariz. After a stint with the Arizona Department of Insurance, she learned that many consumers remain unaware of some of the issues associated with insurance products. This blog reflects her opinion and should not be regarded as legal advice. She encourages consumers interested in learning more about their own insurance experience to contact their state department of insurance or insurance commissioner or seek advice from an attorney. If you would like additional information on matters dealing with consumer insurance products, you can reach Yvonne at yrhunteraz@gmail.com

Consumer insurance:  You have worn out your welcome, but …

Consumer insurance: You have worn out your welcome, but …

This is Part III of a blog series on consumer insurance policies cancelled or not renewed by an insurance company and addresses your response when you get the notice. In addressing the consequences for the cancellation of an auto policy or homeowner policy, we know that the first steps involve contacting the insurance company directly, or through your agent. Acting immediately may ensure success in staying insured. 

If contacting the insurance company failed to stop the cancellation or convince the insurance company to renew your policy, this commentary provides information about a little-known process available in Arizona and may apply in other states. If you object to the insurance company’s decision, the state insurance department or insurance commissioner may be helpful.

When the insurance company decides to cancel or not renew an insurance policy, this is an “adverse underwriting decision.”  Think of it as a divorce started by your insurance company.  Since you want to keep insurance on your mortgaged residence or want to follow the law by having auto insurance, the news that your insurance company wants to end the relationship is rarely welcome news.

An adverse underwriting decision happens when the insurance company has made a calculated decision based on hopefully “lawful” facts that you and your house or car will not be insured by that company, or that you have to pay a higher premium to stay insured.  This adverse underwriting decision may happen when you are applying for insurance, receive a cancellation notice or a notice to not renew your policy.

Arizona law defines six situations that may be an adverse underwriting decision and includes the cancellation or non-renewal of insurance coverage. ARS § 20-2102.

Typically, a notice of cancellation or non-renewal (“The Notice”) is sent by U.S. Mail, or by email because the notice date becomes important in determining next steps. You should act quickly and focus on protecting your rights using the process called an “Objection.”

Arizona policyholders can have the insurance company’s decision to cancel or not renew your insurance policy reviewed by the Director of the Arizona Department of Insurance.  You will need to contact the Director within 10 days of the notice and let the Director know that you “OBJECT” to the insurance company’s decision and want to preserve your rights under ARS § 20-1633.

Important information to have available includes your policy, claims history, premium payment history or any other documentation about your insurance company to support your position. Make copies of your documents and include them in your request for help from the Director. If you are not in Arizona, you may want to contact your own state’s insurance department or commissioner to determine whether similar rights are available in your home state or the state that issued the policy.

Once you contact the Director regarding your Objection, the Director must take certain steps to notify the insurance company of your appeal, and conduct an examination of the reasons for the cancellation.  The costs for the examination are paid by the insurance company.

If the Director reaches the conclusion that the reasons for the cancellation or non-renewal are “arbitrary, capricious or otherwise in violation of the law”, the Director can order the insurance company to cancel the cancellation as of the date of the notice to you.  ARS § 20-1633.B. Either party may appeal the Director’s decision to superior court.

The Objection process protects you because it places the cancellation or non-renewal on hold until the examination ends. This buys you time to shop for replacement insurance and you remain insured during the period that the Director conducts the examination.

If you miss the appeal deadline, you may still ask the department of insurance or your commissioner for help. In Arizona, you can contact the Arizona Department of Insurance, Consumer Affairs Division.

Remember, if you have a notice from your insurance company canceling or not renewing your policy, you want to act immediately to protect yourself and your property.

Yvonne R. Hunter is a licensed attorney and the Principal Consultant for YH Strategies, LLC, in Phoenix, Ariz. After a stint with the Arizona Department of Insurance, she learned that many consumers remain unaware of some of the issues associated with insurance products. This blog reflects her opinion and should not be regarded as legal advice. She encourages consumers interested in learning more about their own insurance experience to contact their state department of insurance or insurance commissioner or seek advice from an attorney. If you would like additional information on matters dealing with consumer insurance products, you can reach Yvonne at yrhunteraz@gmail.com

 

 

What to do when the rug is pulled out from under your homeowners insurance

What to do when the rug is pulled out from under your homeowners insurance

This is Part II of a three-part blog series on consumer insurance policies canceled or not renewed by an insurance company and deals with homeowner policies. You can review the introduction and the auto policy information to help manage this information.

Homeowner insurance policies cover a variety of residences such as single-family homes, condos, and mobile homes. The insurance helps to defray the costs of repairing or replacing sudden and unexpected major destruction of the insured premises and depending on the policy, your fixtures, and furnishings. Every homeowner insurance policy is different and you should understand each policy’s limits and whether your policy meets your needs.

Like other unexpected news from an insurance company, your notice of cancellation or non-renewal from your insurance company may leave you stressed.

When you receive the notice, you should immediately contact your insurance agent and your insurance company to seek clarification about the reasons for the cancellation or notice of non-renewal. Do not delay in looking for answers. This self-help effort may have a positive result, but if it does not, you may be helped by your state department of insurance or commissioner.

An insurance company may cancel your homeowner insurance policy after it has been in effect for more than 60 days for any one of the following reasons:

  • Your failure to pay the policy premium
  • You are convicted of a crime related to a hazard covered by the insurance (e.g., running a meth lab that creates a house fire)
  • You engage in fraud or a material misrepresentation in obtaining your policy, renewing your policy or submitting a claim under the policy
  • Your gross negligence or your failure to disclose to the insurance company information about the hazard insured against
  • A substantial change in the risk assumed by the insurance company since the policy was issued, unless the insurance company could have reasonably foreseen the change in the
    risk
  • The Director determines that the policy is in violation of the Arizona insurance laws
  • Condition of Premises: you failed to take reasonable steps to eliminate or reduce a condition in or on the premises that contributed to a loss or will increase future losses (Failing to keep a roof maintained.)

Your chance to delay the cancellation or non-renewal depends upon what the notice states. For example, if you receive a notice of non-renewal stating “condition of premises,” you have 30 days to correct the problem. If the notice comes with your renewal invoice, you may have a total of 60 days to correct the problem. ARS 20-1652.B.

A notice of cancellation should include the date of the cancellation.  In Arizona, an insurance company that gives incomplete or no notice canceling a policy risks losing the chance to immediately cancel the policy. ARS § 20-1654. The insurance company may send the notice of cancellation using US Mail and if you have more than one residence, the insurance company is only obligated to send the notice to the address shown on the policy. ARS §  20-1656.

The insurance company must disclose the reasons for the cancellation or non-renewal, and the source of that information: (1) a consumer report;  or (2) a database maintained by an insurance support organization or a consumer reporting agency.

Insurance companies frequently cancel a policy for failure to pay a premium. The cancellation can be stopped when you pay the premium before the cancellation date.

For other reasons that trigger cancellation, check your insurance policy. Your discussions with the insurance company or your insurance agent should focus on what the insurance policy states. Your willingness to fix the problem may encourage the insurance company to extend the cancellation effective date.

If you and the insurance company agree to delay the cancellation, get the agreement in writing. Do not rely on a text or Tweet as confirmation. This process also applies to Condition of Premises reasons for canceling an insurance policy. You may need to provide proof of any repairs or replacements by providing photographs or repair receipts.

In Part III of this series, I will discuss the benefits of quickly responding to a notice of cancellation or non-renewal. Things could work out in your favor.

Yvonne R. Hunter is a licensed attorney and the Principal Consultant for YH Strategies, LLC, in Phoenix, Ariz. After a stint with the Arizona Department of Insurance, she learned that many consumers remain unaware of some of the issues associated with insurance products. This blog reflects her opinion and should not be regarded as legal advice. She encourages consumers interested in learning more about their own insurance experience to contact their state department of insurance or insurance commissioner or seek advice from an attorney. If you would like additional information on matters dealing with consumer insurance products, you can reach Yvonne at yrhunteraz@gmail.com

What to do when the wheels fall off your auto insurance policy

What to do when the wheels fall off your auto insurance policy

Part I

This is the first of a three-part blog dealing with insurance policy cancellations and non-renewal of a policy. I encourage you to review the introductory blog for background information. This discussion deals with auto insurance policies for all manner of wheeled and motorized vehicles.  The information below is for Arizona consumers and if you are in a different state, you may want to consult with your state’s department of insurance or commissioner.

After a long relationship with your insurance company, you receive an unwelcome notice that your policy is canceled or the company refuses to renew the policy.  These types of notices may be a surprise but require a quick response to help you preserve your rights as an insurance consumer.

In most states, your notice of cancellation must be sent by U.S. Postal Service with proof of mailing, at least 10 days prior to the effective date of cancellation, unless it pertains to nonpayment of premium. Nonpayment of premium notices may be sent by mail or email.

If you receive a notice of cancellation or non-renewal, your first self-help steps include contacting your insurance agent or the insurance company.  Insurance companies want you as a customer and will look for ways to keep you. Act quickly because the cancellation notices have an effective date, and if the insurance company will not reverse its decision, the policy ends.

Before contacting the insurance company, review your auto insurance policy. The policy describes the terms and conditions for insuring your vehicle and how the insurance company provides notice of cancellation or nonrenewal of a policy.

For auto policies, any one of the following factors allows an insurance company to cancel or not renew your policy.

  • You fail to pay your policy premium
  • You obtained insurance through fraudulent misrepresentation
  • You or someone in your household who regularly drives your auto has one or more of the following:
    • A suspended or revoked license, or
    • A permanent disability that impairs the person’s ability to operate the auto, or
    • Been convicted of negligent homicide, DUI, reckless driving or leaving the scene of an accident during the operation of an auto, or
    • Made a false statement in an application for a driver license or
    • Been convicted of reckless driving
  • You operate as a driver for hire service (Uber, Lyft) without the appropriate endorsement or with insurance covering the hired service period
  • The Director of Insurance determined that the policy places the insurance company in violation of the laws of Arizona, or the insurance company is in rehabilitation or receivership or had its certificate of authority suspended

In addition to the list above, certain activities may result in voiding your policy resulting in no insurance coverage if you have a loss. For example, if you use your vehicle for “commercial purposes”, i.e., pizza delivery or construction hauling, you put your consumer auto policy at risk for cancellation. There are separate laws governing how auto insurance for commercial purposes operate.  Having the wrong insurance policy could have financially devastating results.

You may also put your insurance policy at risk if you allow an unauthorized person to drive the insured vehicle and your auto policy specifically limits who may operate it.

Regardless of why your policy is canceled, Arizona law requires the insurance company to clearly state the reasons for canceling.  A notice that lacks this information or a policy canceled for improper reasons, results in an invalid notice.

If you receive a notice of cancellation or non-renewal for your auto policy, you may have the decision reviewed by the department of insurance. Again, time is of the essence and you should act immediately to preserve your rights.

Once the cancellation goes into effect, the insurance company must refund any unearned premium paid towards the auto insurance policy.

In Part III of this series, you will learn how the department of insurance can help in your appeal of the insurance company’s decision to cancel or not renew your auto policy. Like most administrative appeals, you will need to act fast and have documentation to support your position.

Yvonne R. Hunter is a licensed attorney and the Principal Consultant for YH Strategies, LLC, in Phoenix, Ariz. After a stint with the Arizona Department of Insurance, she learned that many consumers remain unaware of some of the issues associated with insurance products. This blog reflects her opinion and should not be regarded as legal advice. She encourages consumers interested in learning more about their own insurance experience to contact their state department of insurance or insurance commissioner or seek advice from an attorney. If you would like additional information on matters dealing with consumer insurance products, you can reach Yvonne at yrhunteraz@gmail.com

 

 

It’s you, not me: Understanding your relationship with your insurance company

It’s you, not me: Understanding your relationship with your insurance company

Thank you for your interest in learning more about consumer insurance matters. I hope that you find the information helpful in guiding your discussions with insurance agents or brokers when determining what insurance products provide you the protection you seek.

I started this process because, like everyone, we are inundated with commercials and ads touting the benefits of having insurance. Insurance is one of those adulthood purchases that can overwhelm us when deciding what to include in a policy and how insurance works. And while it looks easy enough to purchase insurance, and may even be easy to file claims, customers find themselves hurt and confused when the relationship sours.

For the next three offerings, I will address your options when you receive a notice of cancellation or non-renewal of your insurance policy. When you receive a notice of cancellation or non-renewal for an insurance policy, it could trigger criminal penalties for not having an auto policy, or a default on a mortgage because your lender requires homeowner’s insurance. By learning about what to do when faced with a notice of cancellation or non-renewal, you will know you have rights as an insurance consumer. The following points may help you as you determine your next steps.

  • There is a difference in terminology for a “cancellation” compared to “non-renewal”:
    • A cancellation of an insurance policy usually happens in the middle of the policy term.  It may be tied to an event such as not paying an insurance premium.
    • The non-renewal of an insurance policy occurs when the insurance company will not renew the policy at the end of its term. A non-renewal of may be tied to too many points on your driver license.
  • Arizona law allows an insurance company to cancel a new auto or homeowner insurance policy for no reason within the first 60 days of the policy.  However, even with this broad authority, most states limit the information that an insurance company can use to make this decision.  If you have questions about the reason for a cancellation within the first 60 days of your policy, you should contact your state insurance department or commissioner to determine that the cancellation was based on lawful reasons.
  • Not all insurance policies are the same. If you have changed any aspect of your insurance policy, you will need to thoroughly review the most recent version to identify any changes. If the insurance company offers a new “plan” or “program”, use a healthy dose of curiosity when you review the proposed policy changes since the new plan may impose new restrictions, a higher insurance deductible, or other changes that may not be a bargain for you.
  • All of my comments on cancellation and non-renewal pertain to consumer insurance policies because most consumer policies will not cover commercial activities.  Commercial insurance policies are governed in most states by different statutes and regulations. If you believe you need insurance for your business operations, you should consult with your legal counsel to identify what kind of insurance policy is best suited for you. For example, if you use your automobile to deliver pizza, or operate a bed and breakfast from your home, you may find that your consumer policy will not cover these activities.

Finally, to those readers located in other states, this information on cancellation and non-renewal of insurance policies pertains to policies regulated by the Arizona Department of Insurance. Insurance is a business regulated state by state. While Arizona laws may not help you, I hope that the information provided encourages you to contact your own state’s insurance department, commissioner, or your legal counsel.

Now to address the question of why your relationship with your insurance company seems destined for failure: “It’s you, not me…”

Yvonne R. Hunter is a licensed attorney and the Principal Consultant for YH Strategies, LLC, in Phoenix, Ariz. After a stint with the Arizona Department of Insurance, she learned that many consumers remain unaware of some of the issues associated with insurance products. This blog reflects her opinion and should not be regarded as legal advice. She encourages consumers interested in learning more about their own insurance experience to contact their state department of insurance or insurance commissioner or seek advice from an attorney. If you would like additional information on matters dealing with consumer insurance products, you can reach Yvonne at yrhunteraz@gmail.com

 

Long Time Policyholders – Price Optimization

Long Time Policyholders – Price Optimization

The best reason to regularly check and compare property and casualty insurance policies is a concept that you have probably experienced in other consumer purchase experiences: price optimization.

How does this work? Consider the price of a Las Vegas hotel room on New Year’s Eve, compared to a Tuesday night in July. Another example is the street price of a sports ticket when the home team is on a winning streak compared to when it’s on a losing streak. In each case, market conditions set the price rather than the cost of the product. You take advantage of the bargain when demand seems low for the product or service.

For insurance policy costs, price optimization causes you to pay a higher price for a policy because of years of loyalty or simply convenience. Over time, the insurance company may seem to “sweeten” the deal by offering a discount on a new product or to bundle home and auto policies. Price optimization makes loyalty a penalty for you when fees or other charges added to the cost of insurance results in higher costs to you. You may be wise to treat the offer to bundle or to pay an additional fee as a good reason to start some comparison shopping.

The National Association of Insurance Commissioners (NAIC) has been studying the issue of price optimization because consumer insurance advocacy groups believe that the use of price optimization in insurance policy prices may be unfairly discriminatory.  For the technical definition, price optimization relies on consumers’ price sensitivity in determining the price paid for an insurance policy or the insurance rate for insurance coverage.

Translation: price optimization means that the insurance company has determined that you as the consumer will stay with the insurance company only if the price is at X, which may be significantly higher than what a similar new insurance policyholder with similar insurance coverage would pay. In simpler terms, your loyalty may not result in a bargain.

Insurance companies have their insurance rates approved by the respective state regulator where the company is doing business and have to use actuary calculations to support the rates.  The rates are traditionally analyzed based on projected costs, i.e., what is being insured and what can happen to cause the insurance company to pay.  Price optimization comes under scrutiny because the traditional calculations should result in all similar customers paying the same rate, rather than long term customers paying a higher rate.

The insurance industry believes that as long as rates meet the state requirements and the actuary models show the rates are sound, the discussion should end. Consumers may innocently believe that they are being rewarded for loyalty when just the opposite may be happening.

Some states have issued bulletins, policy statements and letters to put insurance companies on notice that price optimization practices will be closely monitored to see if consumers are being economically harmed.  These states may seek corrective actions with those insurance companies found to be in violation of the identified practices.

The consumer response in reviewing insurance products should be more proactive and include a “shop around” experience.  Once you have gathered the relevant information on insurance products, you can do some comparative shopping with your own insurance company.  You may want to check with your state Insurance Department or Insurance Commissioner to determine how the insurance company handles claims and complaints, and whether the insurance company meets the state requirements for rates. All insurance consumers should take advantage of any price optimization so that it works to their benefit.

Yvonne R. Hunter is a licensed attorney and the Principal Consultant for YH Strategies, LLC, in Phoenix, Ariz. After a stint with the Arizona Department of Insurance, she learned that many consumers remain unaware of some of the issues associated with insurance products. This blog reflects her opinion and should not be regarded as legal advice. She encourages consumers interested in learning more about their own insurance experience to contact their state department of insurance or insurance commissioner or seek advice from an attorney. If you would like additional information on matters dealing with consumer insurance products, you can reach Yvonne at yrhunteraz@gmail.com

 

 

 

Hiring a Public Adjuster: What is involved?

Hiring a Public Adjuster: What is involved?

This is the second of a two-part blog dealing with public adjusters and insurance claims. The first blog addressed the question of who is a public adjuster. The following identifies questions and issues to raise when deciding to use a public adjuster. Readers are encouraged to present any questions about their own situation to their state department of insurance or insurance commissioner or seek advice from an attorney.

Part 2

The public adjuster represents the person seeking a claim for an insurance loss. The public adjuster is not employed by a governmental entity, nor is the public adjuster allowed to be employed by an insurance company to assist in processing claims. Please note that insurance companies will have employees or contractors that work specifically for that company to help process claims. These individuals are not public adjusters.

The Code of Conduct for public adjusters states that public adjusters shall refrain from improper solicitation.   This is not defined and each state may have its own definition of improper solicitation.  From a general consumer perspective, you may want to consider the following as part of your decision to hire a public adjuster:

  • Avoid the public adjuster who contacts you first, (think ambulance chaser);
  • Avoid the public adjuster reluctant to leave a copy of his/her contract for you to review or have reviewed by the representative of your choice;
  • Avoid the public adjuster who is not licensed in your state (NOTE: Every state does not require a public adjuster to be licensed. Arizona does require licensing);
  • Avoid the public adjuster who offers to “know someone who can do the repair work at a lower price than the market requires” or who offers to do some of the repair work;
  • Avoid the public adjuster who asks that insurance proceeds be paid directly to him/her;
  • Avoid the public adjuster that does not clarify to your satisfaction, how he/she is paid or if the payment terms are not clear;
  • Avoid the public adjuster who gives you legal advice when the public adjuster is not a lawyer or representing you as a lawyer, for example, suggesting that you sue a neighbor or the insurance company.

The public adjuster contract should clearly identify the work or service that the public adjuster will perform. Like all contracts, do not sign it if you do not understand it.  You can take the contract to a lawyer or other representative to review with you before signing.  If you have questions, the public adjuster should be able to clearly explain what he or she will do or not do if you agree to the contract.  The industry has some important questions you may want to ask the public adjuster to help you understand the work involved and how the public adjuster will be paid.

In addition to the basic questions of whether the public adjuster is licensed to do business, additional questions may include confirming whether the public adjuster has a conflict of interest. This is especially important if the insurance claim comes from a situation that affects several property owners in your area. The public adjuster may be representing a neighbor that did or did not do something that contributed to your property loss.   For example, the neighbor may have improperly stored chemicals that added to the spread of fire or changed landscaping that contributed to flood conditions.  It would be difficult for a public adjuster representing both property owners to act in both parties’ best interest.

Finally, there are some little-known realities associated with hiring a public adjuster. In addition to any deductibles described in your insurance policy that may reduce the amount of payment from a claim, the public adjuster’s payment will usually be a percentage of the insurance proceeds paid by your insurance company. Insurance policies rarely if ever, allow for the insurance company to pay for the services of a public adjuster. Another point of clarification pertains to your ability to discuss your insurance claim directly with the insurance company’s own adjuster. Once the insurance company is notified that public adjuster represents your interests, all communications with the insurance company on processing the claim have to be between the public adjuster and the insurance company.

If you choose to terminate the relationship with the public adjuster before the claim process is completed, your contract should clearly state how this may occur. This may be a good time to consult with an attorney to better understand your rights.  You may also seek the assistance of the Arizona Department of Insurance if you believe that the public adjuster is not fulfilling the terms of the contract.

Yvonne R. Hunter is a licensed attorney and the Principal Consultant for YH Strategies, LLC, in Phoenix, Ariz. After a stint with the Arizona Department of Insurance, she learned that many consumers remain unaware of some of the issues associated with insurance products. This blog reflects her opinion and should not be regarded as legal advice. She encourages consumers interested in learning more about their own insurance experience to contact their state department of insurance or insurance commissioner or seek advice from an attorney. If you would like additional information on matters dealing with consumer insurance products, you can reach Yvonne at yrhunteraz@gmail.com