Disability Insurance What You Need to Know

Disability Insurance or sometimes called DI, disability income insurance, or Disability Income protects the insurers earned income against the risk of disability. It would pay a portion of your salary, creating a safety in case of illness, disability or accidents that render the individual unable to work.

For instance an employee may suffer from an inability to maintain composure in the case of psychological disorders or an injury, illness or condition that causes physical impairment or incapacity to work. It encompasses paid sick leave, short-term disability benefits (STD), and long-term disability benefits (LTD). If you suddenly become ill or disabled the Disability Insurance can help you pay your bills, make your monthly rent or mortgage loan payments, buy your groceries, make your car payments, pay for your children's education, etc.

According to Council of Disability Awareness the average length of a long-term disability claim is three years. So, what you need to do is to target above three years to give you more protection.

Yes, workers compensation is a Disability Insurance, however it's only for  work-related disabling illness, and it only covers about 2/3 of your pre-disability income. Most long-term disabilities doesn't come from work-related illness or injuries it comes from cancer, heart disease, and other illnesses.

Having a disability insurance is really important since no one knows what happens in the future. Protecting part of your income would be better than having no protection at all.

If you want to protect your future and get additional Disability Insurance you can get quotes from these online brokers:
DisabilityQuotes.com
Disability Insurance Resource Center
PolicyGenius

Investing Money in Your Retirement: The Secret Way that the Super Wealthy Use Life Insurance as a Tax Free Retirement Fund

The Ultimate How-To Guide on Deciding What Insurance Is Right for You (Insurance, Insurance policies, AIG story, Risk Management, Coverage, Life insurance, Book 1)

Best Practical Guide for Risk Management, Property, Liability , Life and Health with Concepts and Coverage

THE ROAD AHEAD Book Release

Will The New Ontario Fleet Definition Work?

As I reported previously, the Ontario government amended the fleet definition in Regulation 664 in early July.  The amended definition reads as follows:

“fleet” means a group of not fewer than five automobiles that meets the following requirements:

1. At least five of the automobiles in the group are commercial vehicles, public vehicles or vehicles used for business purposes.

2. The automobiles in the group are,

i. under common ownership or management, and any automobiles in the group that are subject to a lease agreement for a period in excess of 30 days are leased to the same insured person, or

ii. available for hire through a common online-enabled application or system for the pre-arrangement of transportation, and insured under a contract of automobile insurance in which the automobile owner or lessee, as the case may be, has coverage as an insured named in the contract

From my perspective, this is not an ideal resolution. However, it does fill in the insurance gap that has existed since Uber began providing its services in Toronto in 2012. One of the most important elements in the fleet definition has always been the requirement that there be common management. Common management is an element that is required in order for a group of vehicles to be considered a fleet, if they are not commonly owned or where they are owned by a leasing company. It refers to the fact that the owner or manager has a measure of control over the vehicles. A fleet is typically a discrete risk exposure whose experience and characteristics can be monitored and rated, and is affected by the actions of the owner or manager. The vehicles in a fleet are not individually rated as this is inconsistent with a key principle in fleet rating to establish a rate specific to the experience of the fleet. Usually, the manager of a fleet will implement rigorous risk management programs to monitor and improve experience and rating.

None of these circumstance remotely exist when it comes to Uber drivers and their vehicles. They are network of drivers connected to customers through an app provided by Uber. Their is no common ownership or management. It suggest that once an Uber driver turns on the app on his phone, he or she becomes part of a fleet. That decision isn't even made by Uber.

Is this such a bad thing? It could be if it leads to further erosion of the fleet definition. The regulator has for years denied fleet policies because they failed to meet the test of common ownership or management. Will they be able to continue to push back against synthetic fleets? It would have been better, if the government had created a provision in the Insurance Act to deal specifically with transportation network companies. I expect it will take some time to determine whether the government and the insurance industry will regret the newly amended fleet definition.

Aetna Backs out on Obamacare Health Insurance Plans in 2017

Like a sinking ship, health insurer are jumping out of the Obamacare titanic. Aetna Inc, 3rd biggest health insurer in the U.S., announced Monday that because of continuous financial losses on Obamacare plans, they will limit their market on individual insurance on the government-run online marketplaces in only (4) four states next year, instead of their current 15 states. This is the latest blow to Obamacare. The will stop offering policies on the exchanges in 11 states. They will keep selling Obamacare products in Delaware, Iowa, Nebraska and Virginia.

Aetna said that they lost $430 million in its individual policies unit since the exchanges opened in January 2014. They had 838,000 exchange customers at the end of June and they complained that those policyholders are mostly sick and costly to maintain. They criticized the federal program that should have mitigate those risks.

"Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool," said Aetna CEO Mark Bertolini.

Aetna will still offer individual policies outside of the Obamacare exchanges in the vast majority of markets where it now does business. However, those Off-exchange products are not qualified for federal subsidies.

Like Aetna, most insurers complains about the loses they incur because of Obamacare exchanges. They said  premiums were too low and it can't cover the cost of care because their consumers are far sicker than anticipated.

UnitedHealthcare (UNH), the largest insurer in the U.S. is expecting to lose about $1 billion on Obamacare policies in 2015 and 2016, they will also pull out most Obamacare exchanges in 2017. Humana (HUM) announced last month that it was withdrawing nearly 1,200 counties in 8 states in 2017. Afterward, it will only be selling insurance on the exchanges in 156 counties in 11 states. Others, including several Blue Cross Blue Shield companies, are also scaling back.

Consumers should be wary of short-term health plans

Consumers looking for health insurance outside of the annual open enrollment period should be wary of short term health plans. These plans may be marketed as alternatives to Affordable Care Act (ACA) health insurance, but they could leave you without adequate coverage and facing financial penalties at tax time. 

Originally, short-term health plans were sold as a stop-gap measure until you could get real major medical coverage. After the ACA kicked in, people had many other options for coverage, but these limited plans were still being marketed to consumers as a viable alternative. However, short-term  plans do not count as 'minimum essential coverage' under the ACA - meaning you'll have to pay a tax penalty. They also do not cover the 10 essential health benefits, can limit your annual benefits to $100,000 or less, and deny you coverage for any pre-existing conditions. 

These policies are sold year-round, unlike ACA-plans that must be purchased during the annual open enrollment period, unless you qualify for a special enrollment. Some states allow for coverage to last up to a year and policies can be renewed. This effectively takes people out of the insurance pool that the ACA was designed to expand, leading to increased costs for everyone. 

In an effort to bring the limited short-term health plans back to their original purpose and to protect consumers, the federal government is proposing a regulation to limit the duration of these policies to three months and increase consumer awareness of their limitations.

Insurance Commissioner Kreidler agrees with this effort and sent a letter yesterday in support of the new regulation.

Learn more about Medicare at free event Aug. 6 in Kent

Are you new to Medicare? The Office of the Insurance Commissioner’s Statewide Health Insurance Benefits Advisors (SHIBA) will be at the Kent Senior Activity Center from 10 a.m. to 2 p.m. on Saturday, Aug. 6

You will learn about:

• Medicare parts A, B, C and D
• Your Medicare benefits and options
• How to get help paying for Medicare if you qualify

Find registration and parking information for this event.

Other resources:

• Find out more events on the SHIBA calendar. 

• Read more about SHIBA and how it can help you. 

Do you have Medicare questions? Call 1-800-562-6900.

Top 20 Insurance Brokers in the U.S.

The Business Insurance magazine have listed the top 100 brokers in the country they are ranked based on the 2015 brokerage revenue generated by U.S.-based clients.

There are four Western New York brokers that made the list First Niagara Risk Management Inc. – now owned by KeyCorp (NYSE: KEY) based in Buffalo  got the number 54 spot with $65.3 million. Lawley a privately-held insurance broker is at number 57 with $62 million. Meanwhile, M&T Insurance Agency Inc. dropped to number 79 from number 74 last year. Tompkins Insurance Agencies Inc., the sister company of Tompkins Bank of Castile in Batavia, were able to grow it secured the number 94 spot from 97 last year.

Here's the Top 20:

1 Marsh & McLennan Cos. Inc.1 $6,326,880,000 8.4%
2 Aon P.L.C. $6,052,059,000 4.1%
3 Willis Towers Watson P.L.C.1,2 $3,980,760,000 129.7%
4 Arthur J. Gallagher & Co.1 $2,713,336,000 13.0%
5 BB&T Insurance Holdings Inc.1 $1,676,025,000 (2.2%)
6 Brown & Brown Inc.1 $1,656,951,014 5.7%
7 Wells Fargo Insurance Services USA Inc. $1,316,335,000 1.3%
8 Hub International Ltd.1 $1,146,972,060 26.4%
9 USI Insurance Services L.L.C.1 $1,027,846,835 12.6%
10 Lockton Cos. L.L.C.1,3 $996,426,750 6.5%**
11 NFP Corp.4 $880,611,794 10.6%
12 Alliant Insurance Services Inc.1 $826,567,635 33.5%
13 AssuredPartners Inc.1 $555,938,953 23.8%
14 Acrisure L.L.C.1 $410,654,072 114.7%
15 BroadStreet Partners Inc. $336,550,000 36.6%
16 Jardine Lloyd Thompson Group P.L.C.5 $261,469,584 11.2%**
17 Integro Group Holdings L.P.1 $221,395,200 30.3%
18 CBIZ Benefits & Insurance Services Inc.1 $220,400,000 6.9%
19 Leavitt Group Enterprises1 $216,058,000 (2.9%)
20 Edgewood Partners Insurance Center, dba EPIC Insurance Brokers & Consultants $195,558,100 28.9%

The full list can be accessed on businessinsurance.com, however subscription may be required.

Breastfeeding and insurance: learn your rights

This week is World Breastfeeding Week, when people from all over the world celebrate breastfeeding. It may surprise you to hear that there’s a connection between breastfeeding and insurance.

The Affordable Care Act requires most health insurance plans to provide breastfeeding and lactation support, equipment and counseling to women during and after pregnancy as long as they are breastfeeding.

• While insurers must cover breast pumps, plan vary by what type of pump they cover, if they help pay for a rental or purchased pump, and if the pump needs to be pre-authorized. Contact your insurance company to find out what your plan covers. 
• Insurance plans must also cover lactation support for mothers and babies who are having trouble with breastfeeding or pumping. 

According to womenshealth.gov, babies who are breastfed have lower risks of many health conditions including asthma, ear infections, SIDS, type 2 diabetes and respiratory infections. Breastfeeding also benefits mothers’ health, promotes infant-mother bonding and is more economical than buying formula.

Find more information:

• Breastfeeding benefits: – Healthcare.gov 
• Breast Pumps and Insurance Coverage: what you need to know – U.S. Department of Health & Human Services 
• Breastfeeding a sustainable solution – The Olympian 

Read more about women’s health insurance rights on our website. Questions? You can contact our consumer advocates online or at 1-800-562-6900.

Insurance News - Sunday, July 31, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Sunday, July 31, 2016:

• Tesla and Google are taking different approaches to developing self-driving cars.
• Uber drivers in Ontario are now automotically insured,
• Auto insurance rates still rising, despite province's pledge to lower them.
• Uber plans to collect street-view photos in Mexico to further lays the groundwork for a fleet of autonomous vehicles.
• Canada tops the list of wealthy countries in the percentage of road fatalities related to alcohol impairment.
• Customers sour on insurers' UBI discount model.

Car Insurance Rates Shoot Up Because of Pokemon Go Popularity

Pokémon Go is a free-mium location-based mobile game developed by Niantic for iOS and Android devices, it contains some but not all aspects of an augmented reality game. It uses the  GPS and the camera of compatible devices. Players can capture, battle, and train virtual creatures, called Pokémon, who appear on device screens as though in the real world and that's where the problem lies this can harm the player specially if they are on the road or driving.

People who are too engage in the game while they are walking or driving can cause serious accident. A lot of people fear that car insurance rates will go up because of Pokemon go popularity. Let’s look at this issue more closely.

The National Highway Institute is one of the many organizations that have released warning about the dangers of driving they have also warn that by not paying attention to the road it dramatically increases the chance of an accident. 

We all know the dangers of being distracted while driving is and Pokémon Go can be worst than texting-while-driving it is a distraction that can cause serious accidents.  In fact, in the short time since its release, there have been reported accidents in every place where it has been released. 

In playing Pokemon Go using your device (smartphone, tablet etc.) the place around you will be filled with Pokémon monster that you can capture, battle, and train. You will need to look in your device to see them, and you need to go to places to capture this Pokemon or hatch an egg which can be dangerous specially if the players main focus is the game and not what going on around the player since the game requires that the player go out into the world around you to collect Pokémon. A crucial part of the game is finding these Pokémon hiding in the real world and catching them.  This is the reason why car insurance rates shoot up with Pokemon go release.  Not paying attention to the road will of course dramatically increase the risk of accidents and injury.  Similar to talking on the phone or texting, Pokémon Go takes your attention away from being a responsible driver or pedestrian.

Insurance News - Friday, July 22, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, July 22, 2016:

• A prominent Toronto lawyer who pursued a frivolous action on behalf of a client was found personally liable Tuesday for the legal costs.
• What will your car have to do for the police to pull you over when you’re in an autonomous car?
• In the U.S., being on the lower end of the wage scale can mean paying much more for auto insurance, even for good drivers.
• As self-driving cars change transportation, how will infrastructure adapt?
• Details on the first self-driving car death involving Tesla S using autopilot.
• Ontario’s program to allow testing of self-driving cars on public roads has not received any applications since it launched January 1,

Ontario Auto Insurance Rates Remain Chronically High

FSCO's latest quarterly rate approval numbers have been released and suggest that consumers will see very few savings the statutory accident benefit cuts that became effective on June 1.

FSCO approved 14 private passenger automobile insurance rate filings during the second quarter of 2016. These 14 insurers represent 30.06% of the market based on premium volume. Approved rates increased on average by 0.33% when applied across the total market. This follows the modest 3.07% reduction in approved rate filings in the first quarter of 2016.

The end of lower rate filing approvals indicate that the any savings derived from the recent reform package are small. A portion of the savings could be wiped out before the end of the calendar year if companies continue to file for increases. The government has abandoned the the 15% rate reduction promise made in August 2016. However, if you aggregate all the rate changes since the 2013 announcement, the total rate reduction is 9.84% when applied across the total market.

Product reforms have proven to be an ineffective tool for controling auto insurance premiums in Ontario. As long as transactional costs within the system remain high, Ontario drivers will continue to pay high rates. A new delivery system is needed to bring Ontario's costs in line with other jurisdictions. For a discussion on how to address the systemic problems in Ontario, see my article entitled Ontario's 25-Year No-Fault Journey.

Hillary Clinton's Plan Against Ballooning Student Debt with $16 a month

Hillary Clinton's "debt-free college plan" include the imposition of a 3 months moratorium on federal student loan payments through executive action.

"With dedicated assistance from the Department of Education during this moratorium, borrowers will be able to consolidate their loans, sign up quickly and easily for income-based repayment plans, and take direct advantage of opportunities to reduce monthly interest payments and fees," she said.

Implied though not plainly expressed in those "opportunities" are other elements of her college plan, that will cover the ability for borrowers to refinance their student loans at current rates and interest-free loan deferrals for aspiring entrepreneurs. Borrowers who are behind on debt would also get help during the hiatus to rehabilitate their loans.

Financial planner Evelyn Zohlen president of Inspired Financial in Huntington Beach, California said that the 3-month moratorium has a better possibility of coming into fruition than the "tuition-free education at in-state public colleges for families earning as much as $125,000 or less" because it does not need the cooperation of Congress or a major funding initiative.

"It's allowing people to take advantage of programs already in place. The only people quote, unquote hurt are lenders, who may not see as much profit if people refinance to lower rates."

People who are unable to pay their student loan are growing more than 33% of the borrowers have been late on a payment at least once in the past year, and 25% were late more than once based on the report of the Financial Industry Regulatory Authority Investor Education Foundation's 2015 Financial Capability in the United States.

Even though they are struggling to pay, a lot of millennials don't care about their loan management options. Based on a survey released by Citizens Bank, millennials do not have an idea on what they owe on their student loans, the interest rate they are paying, when will they be able pay it or whether college was worth it. On average, graduates owed about $41,000 in student loans.  A shocking 60% millennials of the surveyed said they have no idea when their loans will be paid off and more than a third don't even know the interest rate they are paying, the report said.

Mark Kantrowitz, vice president of strategy for Cappex.com said that "You don't need Clinton's 3 months moratorium to switch repayment plans into income-based repayment. It takes just a few minutes."

Troubled borrowers may be entitled for one or more of the 7 alternative repayment options:

1. Standard Repayment Plan - it requires that you make fixed monthly payments of at least $50 for up to 10 years.
2. Graduated Repayment Plan - Your payments start low, and increase every two years. It will still be paid off within 10 years.
3. Extended Repayment Plan - repayment window for this plan is up to 25 years. You have the option of setting fixed monthly payments, like with the Standard Plan, or increasing them over time.
4. Income-Based Repayment (IBR) - Monthly payments are capped at 15% of your discretionary income, and readjusted each year based on your income and family size for up to 25 years.
5. Pay As You Earn Repayment (PAYE) -      Monthly payments are capped at 10% of your discretionary income, and readjusted each year based on your income and family size.
6. Income-Contingent Repayment Plan - Payments, made for up to 25 years, are based on your adjusted gross income, family size and the amount of your loans. Your payments change as your income changes.
7. Income-Sensitive Repayment Plan - Your monthly payments are based on your annual income.
  
Each of the plan has pros and cons. Just remember a longer repayment term not only lengthens your payment commitment, it also means you'll pay more overall. If you refinance your federal student loans into a new, private loan. I will come at the price of losing federal protections to postpone payments in times of financial hardship.

Also if you cut your loan rate it may not lessen your monthly payment that much. In Clinton's proposal, for instance, estimates that borrowers refinancing into new loans at current rates would save the typical borrower $2,000 over the life of their loan.

"Divided by 120 payments, and that's $16 a month," Kantrowitz said. So She's proposing puny "A free pizza a month."

New Ontario Towing and Storage Regulations Are Now In Effect

New regulations are now in effect if you repair, tow or store vehicles in Ontario. The new regulations under the Repair and Storage Liens Act took effect on July 1, 2016. Further regulations will come into force starting January 1, 2017.

 The following new rules come into effect on July 1, 2016:

• If a vehicle being stored is subject to a lien and is received from someone other than its owner or a person having the owner's authority, then the storer must give notice to the owner and other interested parties of the lien in writing (e.g. secured parties who have registered their interest, such as lease and finance companies). 
• For vehicles registered in Ontario, the notice period is reduced from 60 days to 15 days after the day after the vehicle is received. If notice is not provided within 15 days, a storer's lien is limited to the unpaid amount owing for that period. The 60-day notice period remains unchanged for out-of-province vehicles. 
• If no amount has been agreed upon for repair and storage costs, fair value may be determined by a court. There is a new list of discretionary factors a judge will be required to consider (such as fixed costs, variable costs, direct costs, indirect costs, profit and any other relevant factors).

Ontario Regulation 427/15 can be found here.

Consider your options when you lose your employer-sponsored insurance

Finding out you are being laid off is stressful, and in addition to that, you have to make important decisions about health insurance that can save you—or cost you—thousands of dollars at a critical time. It’s important to consider all your options when deciding between COBRA or buying your own plan.

What is COBRA? COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, which is a federal law that allows you and any of your immediate family members to stay on your employer’s health plan under certain circumstances :

• You lose or quit your job 
• You get a divorce 
• The employee dies 
• You are no longer covered as a dependent due to your age

Only employers with 20 or more workers in the previous year are required to offer COBRA coverage. State and local governments fall under COBRA, but the federal government and certain religious organizations do not.

COBRA can be expensive. People who choose COBRA coverage must pay the entire premium, including the portion previously paid by the employer, plus a 2 percent administrative fee. Be warned, if you enroll in COBRA and later on want to switch to a health plan directly to an insurance company or through the Washington Healthplanfinder, you will have to wait until the next open enrollment period if you don’t qualify for a special enrollment.

Options other than COBRA
Before you decide to go with COBRA, find out if you can buy a health plan through the Washington Healthplanfinder and receive a subsidy to help pay your insurance premiums. You can also purchase coverage directly from an insurance company, broker or agent if you don’t qualify for any subsidies.

If you choose a health insurance plan, you likely will be responsible for a full yearly deductible. Generally, health insurance deductibles are not prorated for partial-year enrollees, no matter how few months are left in the plan year. Individual or family qualified health plans operate on a calendar year, from January through December. There is no way to transfer the money you spent toward another plan’s deductible when you switch plans mid-year.

Read more about losing your health insurance on our website. Questions? Contact our consumer advocates online or at 1-800-562-6900.

For COBRA- specific laws and questions, contact:

U.S. Dept. of Labor, Employee Benefits Security Administration

Seattle District Office

300 Fifth Ave., Ste. 1110

Seattle, WA 98104

206-757-6781

Ontario Changes Fleet Definition To Accommodate Ride-Sharing

This week, the Ontario amended Regulation 664 to expand the definition of a fleet to accommodate ride-sharing services. The change opens the door for insurers to offer policies to drivers of vehicles for hire using an online app such as Uber.

The regulation amendment expands the fleet definition to include vehicles available for hire through a common online-enabled application or system for  pre-arranged transportation. The vehicle owner or lessee is to be a named insured under an auto insurance contract. The regulation change will make it easier for Ontario businesses to insure a group of privately owned vehicles under one insurance policy as a “fleet” when they are available for hire using an online app.

FSCO has already approved a fleet policy proposed by Intact Insurance Company. The Intact policy provides blanket fleet coverage under a standard automobile owner’s policy (OAP 1) for private passenger automobiles used in the transportation of paying passengers who utilize Uber. The Intact fleet policy only provides coverage when the driver is logged onto the Uber online app. In other situations, coverage under the personal owner’s policy for the automobile is applicable.

FSCO has also approved the use of an electronic insurance card for use in connection with ride-sharing. The electronic insurance card will permit ride-sharing drivers, who are covered under the Intact policy the option, to provide evidence of insurance electronically using an online-enabled app (e.g., to law enforcement officials).

Insurance News - Thursday, June 30, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, June 30, 2016:

• The Ontario government is being urged to make a $65 million investment in the development of driverless car technology to help the province’s auto industry compete on a global scale.
• Ten different strategies shaping the transition to the self-driving car.
• Global sales of autonomous vehicles will reach nearly 21 million vehicles by 2035, a substantial increase from previous estimates.
• The US-based National Highway Traffic Safety Administration will implement federal regulations, but will have no say when it comes to the regulations made by the individual states.
• The self-driving car generation gap: older people see driving as representing personal freedom younger people do not.
• Study asks people if self-driving cars should make moral choices.

Toyota Recalls 3.37 million Vehicles for Defects

Toyota announced on Wednesday that they will be recalling 3.37 million vehicles worldwide to fix defects, this is the latest troubles for a Japanese auto industry hit by fuel-efficiency scandals and an exploding airbag crisis.

The affected models in the latest recall includes Prius hybrid, Corolla sedan, and luxury Lexus brand, those vehicles were mostly sold in Japan, North America and Europe.

Vehicles that were manufactured between 2008 and 2012 has been found that most have problem with passenger and driver-side air bags that could see the safety device partially deploy and risk injury, the company said. They also said that it is not part of the massive recalls of Takata air bags, which is involve in an airbag defect scandal linked to at least 13 deaths and scores of injuries globally.

Toyota Motor Corp. said it does not know of any fatalities or injuries related to the latest recalls.

Another defect besides the airbags is with the vehicle's fuel emission control unit that could lead to cracks developing in the unit. They said that because of this the cracks could expand over time and, eventually, fuel may leak from these cracks when the vehicle has a full tank of gas. No accidents or injuries have been reported in this defect.

About 2.87 million Toyota and Lexus brand cars are being recalled over the fuel tank defect, Toyota said, noting that some vehicles are subject to both recalls.

If you want to know if your vehicle is included in the recall go to, you'll need to Enter a 17-digit Vehicle Identification Number (VIN):
http://www.toyota.com/recall

Millennials Prefer to Rent but Pass on Renters Insurance

According to a survey published on insuranceQuotes, Millennials prefer to rent homes, and most of them don't like to get renters insurance. Even though that coverage is not expensive, and having non could cause a huge financial hardship.

Based on the April 2016 survey for insuranceQuotes.com done by Princeton Survey Research Associates International, 66% of 18 to 29 years old are renting their home, compared with just 37% of consumers overall. What is alarming is that less than 33% of Millennial renters have renters insurance.

When questioned about not having renters policy, 59% of renters in the 18 to 29 age group said that cost is not the primary reason. Instead, they believe it’s unnecessary because they live in a very secure property (61%), or they don’t own enough personal property to insure (43%). And 41% of them said they’re avoiding renters insurance because they don’t understand how the product works.

A lot of the consumers are foregoing the benefits of renters insurance because they underestimate the benefits and overestimate its cost. The average annual premium is $188 (or $15.67 per month); however, 25% of 18- to 29-year-old respondents believe they’d have to pay $1,000 or more. People need to be educated since it is an affordable financial safety net that every renter should have.

Other report highlights include:

    Renters who don’t have renters insurance because they don’t understand the product increased from 27% in 2015 to 33% this year.
    Renters who don’t have insurance because they don’t know where to get it also increased from 20% in 2015 to 26% this year.
    College graduates are more likely to have renters insurance compared to high school graduates or those with a lesser education – 64% to 24% respectively.
    35% of respondents mistakenly said a renters policy does not cover personal property damaged in a natural disaster or property stolen from you outside of your rental home (60%).

The full report is available here: http://www.insurancequotes.com/home/millennials-and-renters-insurance-051916.

The survey was done by Princeton Survey Research Associates International (PSRAI) through telephone interviews with a nationally representative sample of 1,000 adults living in the continental United States.


Here is why Renters Insurance is important for me personally:

1. If my stuff is stolen like my iPhone, iPad or laptop, furniture or bicycles could cost thousands of dollars. Renters insurance covers more than just theft it also covers fire, water problems and vandalism.

2. If you burned your dinner and it resulted to smoke damage. Your landlord will bill you for that damage even if none of your property was damaged since his property has been.

3. Renters insurance is about $12 to $30 a month for $30,000 worth of coverage a small cost with big pay off.

FSCO Mandate Review Recommends Changes to Auto Insurance Regulation

The Ontario government should establish a new organization that would perform the functions currently performed by the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corporation of Ontario (DICO), an expert advisory panel said in a report released Monday.

The panel recommends that a new Financial Services Regulatory Authority (FSRA) be established, and it should exercise both prudential and market conduct functions.  The panel – comprised of George Cooke, James Daw and Lawrence Ritchie – made its recommendation to create FSRA in an interim report released in November, 2015. The final report, dated March 31, was made public Monday and contains 44 recommendations.

The mandate review was partly made necessary with the transfer of responsibility for operating an auto insurance dispute resolution system from FSCO to Ministry of the Attorney General’s Licence Appeal Tribunal on April 1, 2016.

Governance

The report suggests that FSRA should consolidate functions, but it should have separate divisions for the regulation of market conduct; prudential oversight; and pension administration. These divisions of the regulator should operate in a coordinated manner, but each division should be insulated from the routine regulatory activities, pressures and resource demands of other divisions.

FSRA should be a self-funded corporation without share capital, operationally independent of government, yet accountable to the Legislature through the Minister of Finance. The FSRA should be outside of the Ontario Public Service and be empowered to hire its personnel from outside of the Ontario Public Service’s collective agreements, compensation restraints, and other hiring restraints to support its ability to recruit professionals and industry expertise as it deems necessary.

FSRA should have a skills-based Board of Directors appointed by the Lieutenant Governor in Council. The Board would oversee FSRA’s operations and the Board should have the authority to appoint a Chief Executive Officer (CEO). The Board Chair should report directly to the Minister of Finance.

FSRA’s Board should be given authority to make rules that would be enforceable pursuant to the statute, having a similar authority as Cabinet Regulations.

Auto Insurance Rate Regulation

The panel did not make any recommendations with respect to the prior approval of auto insurance. However, it did recommend that FSRA’s Board should be obliged and empowered to decide how auto insurance rates are to be regulated and make use of its rule-making authority to scope out a rate approval process.

The view of the panel is that when it comes to the regulation of automobile insurance rates, FSCO is not ultimately protecting the public interest or enhancing confidence in the sector.


Motor Vehicle Accident Claims Fund

The panel recommends that responsibility for operating the Motor Vehicle Accident Claims Fund (MVACF) be transferred to the Facility Association (FA), a non-profit organization funded by automobile insurers in the provinces and territories that operate private insurance systems. This responsibility would fit well with the FA’s original purpose, which is to act as the ‘insurer of last resort’ for high-risk drivers. The FA already operates uninsured motorist funds similar to the MVACF in the Atlantic Provinces.

Fraud Prevention

The panel indicated that the new mandate should require FSRA to utilize its statutory authorities to adequately, firmly and consistently discourage fraudulent activities or behaviours that mislead or harm consumers and pension plan beneficiaries.

FSRA should be directed to identify and seek to eliminate gaps in protection for consumers who might be defrauded by licensed sales agents, brokers and corporations. FSRA should also  have the authority to establish a fraud compensation fund such as exists in Quebec if or where enhancements to mandatory insurance coverage would not fully close current gaps.

There is no word from the government on implementing the panel's recommendations.

Insurance News - Saturday, June 18, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, June 18, 2016:

• A recent FSCO survey revealed that 90% Ontarians do not know much about their auto insurance coverage.
• New York legislators want to make self-driving cars accessible, but must first fix a 1971 law that requires at least one hand on steering wheel.
• Three threats to incumbent car companies are converging into a tidal wave of disruption.
• Almost half of marijuana-smoking Canadian drivers say that they can safely operate a vehicle while stoned.
• How data analytics will change the insurance sector as never before.

Homeowners Needs to Take Another Look At their Insurance Coverage As Hurricane Season Starts

Homeowners needs to reexamine their insurance coverage annually, specially those who live in places that are heavily affected by tropical storms. They need to know if the cost of their premiums are shooting up, or if their deductibles have changed, or if they are entitled to new discounts.

This year it's really important to do that because it is expected that hurricane will be most active this year since 2012, according to forecasts released by The Weather Company.
These storms are already affecting the southeast United States. Tropical storm Bonnie battered the Carolinas over Memorial Day weekend, and Colin, which made landfall Monday and resulted in state of emergency declared.

Colin which packed a 50 mile-per-hour winds produces heavy rain, tornadoes and hail that battered residents along Florida's Gulf and Atlantic Coasts. The residents protect their property using sandbags. Officials distributed 13,000 sandbags to residents of Tampa, which has a history of flooding. Some residents have evacuated the area.

This why it is important to reevaluate their homeowners insurance policy. Let's assume that the replacement cost value of the property is correct, a homeowners policy will cover any wind damage caused by a hurricane. However, it will not cover damage due to flooding and homeowners need to be aware of whether they have a hurricane deductible.

Insurance companies sell policies with a hurricane deductible to limit their exposure to devastating storms. Usually, these hurricane deductible is much higher than the standard one for homeowners insurance policies. A total of 19 states have hurricane deductibles, and most of them don't have a set dollar amount but a percentage of the replacement cost value of a home. That can be huge depending on the damage incurred. 

Insurers don't choose to have a hurricane deductible. This deductibles are incorporated in homeowners insurance at the discretion of the insurance company and are activated under the terms of the policy, usually when the National Hurricane Center issues a warning or names a tropical storm.

The Insurance Information Institute issue this different hurricane deductibles across the 19 states that have and it is posted on their website, or consumers can refer to their respective state's department of insurance for details on them.

The states with special storm deductibles include: Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas and Virginia.

Insurance News - Wednesday, June 8, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, June 8, 2016:

• Ontario consumers satisfied with auto insurance despite government failures to reduce rates according to a J.D. Power survey.
• A CCIR paper confirms that no legislative changes are needed to introduce electronic pink slips.  See my recent post on electronic insurance cards.
• Florida officials are calling for a $125,000 study to consider dropping state’s system of no-fault Personal Injury Protection auto insurance.
• Google has registered a patent for a glue would stick pedestrian to a self-driving car after a collision in order to reduce injuries.
• Will the convenience and accessibility provided by self-driving cars increase auto usage, and congestion?
• With reduced SABs coverage, brokers who fail to offer their customers sound advice run the risk of an E&O lawsuit.

Insurance News - Monday, May 30, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, May 30, 2016:

• Auto insurance is a sore spot for many Canadians. Many believe they are paying too much for premiums while receiving too little in return. Although customer satisfaction is improving.
• It's almost June 1 and mandatory accident benefit coverage in Ontario will be shrinking.
• Speakers at the U.S. National Highway Traffic Safety Administration's first forum on the topic offered mixed opinions about whether the arrival of self-driving cars should be slowed or sped up.
• GM and Lyft will be using Chevy Bolts as autonomous taxis in selected U.S. cities in 2017.
• An Ontario woman blindly followed her car's GPS straight into Lake Huron. Self-driving cars got to be better than this.
• The owner of a Tesla Model S says that his semi-autonomous car crashed into the back of a trailer while he thought it was parked. Tesla Motors isn't so sure that's what happened.

LAT Have Mercy

On April, 1, 2016, Ontario's Licence Appeal Tribunal's (LAT) Automobile Accident Benefits Service (AABS) was officially open for business. After 26 years, the Financial Services Commission of Ontario (FSCO)'s Dispute Resolution Group stopped accepted new applications. The transfer of responsibility has created considerable apprehension among its users. FSCO was flooded with new applications in the weeks leading up to April 1st. For many, it's a matter of 'better the devil you know.' What will this change mean for stakeholders? Will it really be different?

How did we get here?

The establishment of the AABS at LAT brings to a conclusion a process that began with the appointment of the Honourable J. Douglas Cunningham in August, 2013. Justice Cunningham was asked to review the auto insurance dispute resolution system. He was asked to make recommendations to the government to address a significant backlog, in disputed autoinsurance claims pending mediation and arbitration, that existed at the time - and to propose system improvements. His report - delivered in February 2014 - included 28 recommendations. As a result, Bill 15, the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 included a provision transferring responsibility for resolving disputes over statutory accident benefits from FSCO to LAT. Regulation changes filed by the government on March 7, 2016 - which came into effect on April 1 - was the final step in implementing the new dispute resolution system.

What are the changes?

• The only dispute resolution process available to parties is an arbitration through LAT.
• Mandatory mediation is no longer part of the dispute resolution process.
• No court action can be commenced for statutory accident benefits disputes, even where there is a companion tort action.
• There is no right of appeal, other than a reconsideration option with the Executive Chair of the Safety, Licensing Appeals and Standards Tribunals of Ontario (SLATSTO) for exceptional circumstances and the Divisional Court on a question of law.
• A total of 22 new full-time and part-time LAT adjudicators have been appointed to date. Auto insurance stakeholders will be interacting with a largely unknown group of adjudicators as only three have had experience resolving disputes at FSCO.
• LAT is committed to resolving most (90%) disputes within six months.

What happens to FSCO?

Applications for mediation, neutral evaluation and arbitration have not been accepted since March 31, 2016. A mediation, arbitration, court proceeding, appeal, variation or revocation that was commenced before April 1, 2016 may be continued at FSCO after that date. If a mediation fails before April 1, 2016 , an application for arbitration can only be made to the LAT on or after April 1, 2016. Applications to the Director of Arbitrations - for appeals, variation or revocation - may only be made where the application for arbitration was received by FSCO before April 1, 2016.

How does LAT work?

Since there is no longer mandatory mediation, an applicant will be able to apply for arbitration following the denial or termination of statutory accident benefits. The applicant (an insured or insurer) files an Application for Arbitration with LAT. The other party files a response.

It is intended that all procedural issues, lack of production, or failures to attend insurer examinations are to be dealt with upfront by the Registrar. LAT may dismiss an application without a hearing if (1) the claim is an abuse of process, (2) the matter is outside the Tribunal's jurisdiction, (3) the statutory requirements for bringing the application have not been met, or (4) the party filing the application has abandoned the process. This is a significant departure from the FSCO process which included preliminary hearings. However, if LAT is reluctant to dismiss these applications, then the gatekeeper function, envisioned by Justice Cunningham, will not be put into practice.

The first step in the arbitration process is a case conference. This is the settlement meeting described in Justice Cunningham's report. It must take place within 45 days of the date LAT receives an application. The case conference is analogous to a FSCO pre-arbitration meeting except most will take place over the phone instead of in-person. Prior to the case conference, the parties are required to outline the documents to used at a hearing, any production issues, the preference for the type of hearing (written, video/telephone or in-person), a list of witnesses and details of the most recent settlement offer.

Should the dispute not be resolved at a case conference, then a hearing will take place within 60 days. The type of hearing will be decided by the adjudicator at the case conference. Decisions will be issued within 30 days for written hearings, within 45 days for video/telephone hearings and 60-90 days for in-person hearings.

Lingering concerns

There is no LAT appeal process other than the possibility of a reconsideration by the Executive Chair of SLATSTO if there is a clear error that was made by the adjudicator. Appeals based on merit are not available. A party can apply for judicial review where there is a question of law.

Is this a significant departure from the FSCO process?

 The simple answer is yes. But how much different can only be determined over time. The forms and practice rules are simpler. In an attempt to create a different culture, very few FSCO arbitrators have been appointed to LAT. Some see this as a good thing while others are concerned. But it does add an element of uncertainty for an initial period. 

There are other elements of the new process to be concerned about. Justice Cunningham recommended the creation of statutory timelines and sanctions regarding settlement meetings (case conferences), arbitration hearings and the release of arbitration decisions. He felt that there need to be strict adherence to timelines and that creating statutory obligations was the most effective way of accomplishing this. However, no statutory timelines have been created and instead LAT will manage timeline requirements. This is essentially how things existed at FSCO. What will happen if the parties are not ready for a quick hearing? Will adjournments become common occurrences? Stakeholders will be waiting to see if the promised timelines will be met or erode over time.  

In response to criticism of FSCO practices in conducting mediations, Justice Cunningham recommended that settlement meetings (case conferences) be conducted in-person or by video conferencing. He rejected telephone meetings.  LAT will predominantly be conducting case conferences over the phone. Considering that FSCO pre-arbitration meetings are in-person, this is really a step backwards.

Justice Cunningham wanted hearings to follow three streams: paper reviews, expedited in-person hearings and full in-person hearings. He recommended criteria be adopted to determine which stream a case falls under. Those criteria have not been adopted. Instead, the LAT adjudicator will exercise his or her discretion to determine the format of a hearing. At FSCO, similar discretion existed but all hearings were in-person.  Although LAT has suggested that many hearing will be paper reviews, will stakeholders pressure adjudicators to provide more in-person hearings? 

A number of other recommendations by Justice Cunningham seemed to have been abandoned. The settlement of future medical and rehabilitation benefits were to have been prohibited until two years after the date of the accident. The SABS have not been amended and settlements will still be permitted one year after the date of the accident. In addition, every insurer was to establish an internal review process as the first step in the new dispute resolution process. It does not appear that all companies have established an internal review process.

Conclusion

A lot of time and effort has gone into creating the AABS at LAT to replace the dispute resolution process at FSCO. One of the problems identified by Justice Cunningham has been the culture surrounding the previous system.  LAT has made a considerable effort to create a new culture. However, the new adjudicators will be dealing with the same clientele and will need to interpret the same complex and frustrating statutory accident benefits. It will take some time to determine how much different the new system is.

Insurance Companies Join the Fight Against Opioid Epidemic

Health insurance companies are now joining the fight against Opioid addiction. Cigna, a health insurance firm that insures about 14 million Americans, is the newest major health insurance provider to fight the staggering opioid addiction numbers and deaths. The company is targeting what experts are saying the number one cause of the addiction, over-prescribing of prescription painkillers like oxycodone, hydrocodone and morphine.

Other insurance companies like Aetna and Blue Cross Blue Shield have also taken similar steps over the past several years to prevent deaths and pull down the numbers of people who get addicted to this drugs. It doesn't just save a lot of people, it also makes good business sense. According to research, it cost public and private insurance companies about $72.5 billion annually to deal with prescription painkiller abuse, treatment and “diversion” (when patients sell the medication instead of taking it).

Big health insurance companies do have access to prescription information for its customers. The have records every-time their customer fill a prescription using their insurance. Cigna’s new measure will be to flag customers who are deemed high-risk — either for getting large amounts of opioid medicines, for getting narcotics from different doctors or for being on the medicines for a long time and they will contact with those customers’ doctors.

The doctor can give their patients other treatment options if addiction is an issue. If the doctor feels the patient still needs to be prescribed long-term narcotics, Cigna can limit where the patient is able to pick the medicine up and which doctors are able to prescribe narcotics to them, so that the doctor is able to closely monitor whether that patient seems to be needing more and more painkillers.

Cigna is targeting to lessen the number of opioid prescriptions written to its customers by 25%, back to the number of prescriptions that were being written in 2006, which the insurer calls “pre-crisis.”

Insurance News - Monday, May 16, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, May 16, 2016:

• Uber, Google and Ford form self-driving car coalition to urge government action on self-driving car tech.
• Regulatory change demands insurers show regulators using telematics data for claims management would help consumers.
• There is a lot of speculation around what the world will look like when there are self-driving cars on the road. For example, one in four drivers (the person behind the wheel) are expected to sleep while in self-driving car.
• An expert from the Canadian Automated Vehicles Centre of Excellence warns that there will be a lot of sex behind the wheel.
• Then there is the NATO security expert who warns that Islamic State technicians are working to produce driverless car bombs.

Insurance News - Saturday, May 14, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, May 14, 2016:

• Is an outdated loyalty system the only thing keeping brokers from oblivion?
• Canadians can now rent their personal vehicle to others through a U.S. company that has just launched in this country. It's like AirBnB for car owners. But should you do it?
• A new ride-hailing app made exclusively for women will now launch in the U.S. nationwide this fall after being met with overwhelming demand from users.
• Auto insurance rates in Ontario have dropped about 10 per cent on average in the past few years, putting the Liberal government two-thirds of the way to a goal that passed eight months ago.
• Who's responsible when a self-driving car crashes? In short term it will be drivers but in long term it will likely be manufacturers.
• Classifying the different levels of vehicle autonomy. Most cars will not be at the top level for many years.

Insurance News - Friday, April 29, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, April 29, 2016:

• The driverless car revolution is taking the world by storm, but Canada has been slow to join. Only one Canadian province, Ontario, has allowed autonomous cars to be tested on its roads.
• Self-driving cars are at the mercy of crappy roads where it is common to see faded lane markers, missing signs and other side effects of our aging roadways.
• It looks like Toronto will have separate rules for taxis and ride-sharing companies.
• The next step in autonomous vehicles:  Toyota's ‘guardian angel’ self-driving vehicles allows drivers to control vehicles until they mess up.  Then the vehicle takes control from the driver to prevent a crash.
• There are rumours circulating that the Tesla 3, which will be available beginning March 2018, will be the first truly self-driving car.
• Uber, who has largely introduced the ability to measure usage in miles not months, has led to the creation of new models.

No business is too small for cyber criminals

Cincinnati Insurance Company Blog Post (3/31/16) - Kate Miller

Data breaches make the news when big retail chains get hit with a cyber attack. You may even be notified of the breach by the retailer if they have reason to believe your data was compromised. Or, you may read about data breaches when you receive a new credit card or are offered identity theft protection.
What you might not hear about are the cases where a business owner goes bankrupt after a data breach. A 2012 study by the National Cyber Security Alliance found that 60 percent of small to midsize businesses that suffered a breach went out of business within six months.

FIRST LINE OF DEFENSE

Your first line of defense as a business owner is to educate yourself on how to prevent or mitigate a breach. Follow news reports, and take advantage of online materials available to help you prepare for and respond to cyber attacks.

SECOND LINE OF DEFENSE

Your local independent insurance agent could be your second line of defense, providing information about Internet exposures and insurance products. Any business that handles private information is at risk of breach and subject to cyber exposures. Private information includes personal identifiers (Social Security numbers, birth dates, driver’s license numbers, etc.), financial information (bank or investment accounts, credit cards, etc.), medical or medical claim history, employee personal data or student records.
Companies that use third parties to process their transactions or record keeping, such as payroll, employee benefits or billing, also have the potential for a cyber loss. Consider the possibility of that third party experiencing a data breach where you might be ultimately responsible for the breached records.

WHY BUY CYBER INSURANCE?

Cyber insurance can reimburse for expenses incurred such as:

-Breach notification law compliance – 47 states have data breach notification laws that include an obligation to notify those whose information has been breached and certain federal laws, such as HIPAA, may also require similar notifications.

-Breach response costs – for example, notifying and providing services to affected individuals

-Opportunity costs and out-of-pocket expenses involved in resolving identity theft problems for business owners and customers

-Damage to the business computer systems and data due to unauthorized access, hacking, malware or denial of service attacks.

Remember, data comes in all forms, paper and electronic, and business owners need to protect data to manage risk.

Benefit Cuts Lead To Modest Rate Reductions

FSCO's latest quarterly rate approval numbers have been released and suggest that some savings have been accrued from the statutory accident benefit cuts that become effective on June 1.

FSCO approved 50 private passenger automobile insurance rate filings during the first quarter of 2016. All 50 filings were automobile insurance reform filings. These 50 insurers represent 83.36% of the market based on premium volume. Approved rates decreased on average by 3.07% when applied across the total market.  This is the largest drop in rates since the fourth quarter of 2013 when approved rates decreased on average by 3.98% when applied across the total market.

Although the government has begun to distance itself from the 15% rate reduction promise made in August 2016 (likely an admission that it can't be achieved), most people are, at least, curious how close the latest round of cuts got us to 15%.  If you aggregate all the rate changes since the 2013 announcement, the total rate reduction is 10.17% when applied across then total market.  There may be further reductions in the next quarter but it's safe to say that this is about it.    

Insurance News - Tuesday, April 5, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, April 5, 2016:

• Self-driving vehicles will learn everything about you—and influence your behavior in ways you might not even realize.
• Telematics will revolutionize insurance by transforming it from a fixed-cost operation into a variable-cost one.
• Zoox is the latest entrant in the self-driving-car derby wanting to develop Uber-like driverless service.
• MIT suggests interconnected roads and self driving cars will not need traffic lights or road signs (although pedestrians still will).
• UberX car is collateral damage in high-speed police chase of an SUV leaving three people with very serious injuries. Is Uber's "auto insurance policy" going to cover these possibly catastrophic claims?

Insurance News - Monday, March 21, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, March 21, 2016:

• Nova Scotia will allow drivers to voluntarily pay back their insurer for minor damage and have the accident registered as not at-fault.
• Existing U.S. laws pose few barriers to adoption of autonomous vehicles so long as they allow humans to take control.
• Undercover investigators hired by Aviva capture alleged car insurance fraud on video.
• Uber to begin replacing drivers with 100,000 Mercedes-Benz S-Class self-driving cars starting in 2020.
• Google wants U.S. Congress to create new federal powers that would let the technology giant receive special, expedited permission to bring to market a self-driving car that has no steering wheel or pedals.