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Before you Jet Set, are you Covered?

June 30, 2015

Flight is booked, bags are packed, new passport is on the way…you’re all set for your dream vacation, or almost?  Travel insurance is often overlooked by travelers  as an extra expense or because they have the “I won’t get hurt” mentality.

Believe it or not, travel insurance can be a powerful tool for protecting you and your family while abroad.  With so many different types of coverage out there, it’s important to understand how travel insurance works, and how different types of coverage can be used in case of an emergency.

Shop smart with these tips:

Before-you-Jetset,-are-you-covered-

First, check your personal insurance

Check with your Founders agent to see if your health, home, auto, or life insurance policies include any type of coverage for traveling abroad.  You may be surprised to know that some policies offer travel liability coverage.  Bottom line, it is important to fill in any loopholes such as knowing where one policy ends and where buying travel coverage may be beneficial.

Know what can be covered:  

Travel insurance coverage includes the following categories:

  • Trip Cancellation or Interruption: As the name implies, trip cancellation insurance covers you in the event you need to cancel your trip. Purchasing insurance can reimburse you for the pre-paid, non-refundable portions of the trip. Trip interruption insurance covers you after your departure. If a loved one gets sick during vacation and can no longer attend an excursion, interruption insurance has you covered by reimbursing you for pre-paid expenses!
  • Medical: Say a family member falls during the trip and needs medical attention, what are you to do? Medical travel insurance provides coverage for medical expenses incurred during travel including medical emergencies, evacuations (needing emergency transportation) and accidents. Insurance providers often deny out-of-network care, especially abroad; with travel medical insurance you can ensure you will have access to quality treatment should an unfortunate event occur.
  • Baggage: Protect your valuables! Since so many people travel this time of year, it is possible your baggage could be lost or damaged. Baggage insurance can save you lots of money by reimbursing you a portion of the cost.
  • Flight Delay or Cancellation: Say you arrive to your connecting flight and find out it is cancelled, flight coverage reimburses pre-paid expenses and can even provide accommodation meals and new travel arrangements after being delayed a certain amount of time.

Before you book that dream vacation, give us a call  at (800) 351-0873. We’ll help you find the right travel insurance plan that covers all your needs while you are away.

June Russell

Platinum Accounts Manager

jrussell@foundersgrp.com

How is My Workers’ Comp MOD Calculated?

June 24, 2015
Adam Winters

Adam Winters

Today – we are going to get technical! This blog post won’t be for everyone, but for those of you that love math, this one’s for you!  Yes, we are talking about how your Workers’ Compensation Modification factor is calculated.  Understanding HOW it is calculated, will help you keep your premiums in check.

It’s a complicated formula but here are some ways to help you figure it out.

To determine your annual Workers’ Compensation premium, a complex formula known as the Workers’ Compensation MOD is used. This is an adjustment of your annual premium, based on your previous loss experience. The loss experience encompasses three years of losses, skipping the policy year that just ended and focusing on the three years prior. Therefore, your 2015 MOD will ignore any losses in 2014 and instead focus on 2011, 2012 and 2013.

The experience modifiers are calculated by ratings bureaus relying on information from the insurance companies and grouped by industry and then adjusted for such factors as company size, unexpected large losses and the difference between loss frequency and severity. The largest rating bureau is the National Council on Corporation Insurance (NCCI), but some states such as New York have their own services.

How is the MOD Calculated?

The formula generally used by the ratings bureaus is as follows:

A + B + (E x W) + {F x (1 – W)} / D + B + FHow-is-My-Workers’-Comp-MOD-Calculated

A = Actual Primary Losses                  E = Actual Excess Losses (T – A)

B = Ballast Value                                 F = Expected Excess Losses (C – D)

C = Expected Losses                            T = Actual Incurred Losses

D = Expected Primary Losses              W = Weighting Value

To sum this up, the calculation is the ratio of actual losses to expected losses with a stabilizing factor built into both the numerator and denominator.

What is the MOD Rate?

The industry standard is always rated as 1.0 and your rate is then calculated from this.

If your rate is a .8, than you are paying 20% less on your premium than the rest of your industry. If your rate is 1.2, then you are paying 20% surcharge.

Your premium is calculated by taking Rate x Exposure (payroll) x MOD = Premium.

Why is the MOD Important?

There are several reasons why a low MOD is important. The first being that you will be paying a lower premium, therefore saving money.

You also may find yourself being asked what your MOD rate is when you are bidding on a job. A company may reject a business that has a rate over a 1.05 for safety fears.

What Can I Do To Lower My MOD?

You can make sure the annual information submitted to your carrier is accurate and complete. Errors and omissions can cause your rate to rise.

Instill a safe work environment by training and frequent checks of worksites, create loss prevention procedures and a Return to Work program.

Work with your insurance broker to answer any questions you may have or to help you create processes to keep losses at a minimum.

Still have questions on how your Workers’ Compensation MOD is calculated?  Give Founders Insurance Group a call at 860-482-3506

 

Adam Winters

Commercial Lines Account Manager

AWinters@foundersgrp.com

Real estate investments require rigorous risk management

June 16, 2015

“Buying real estate is not only the best way, the quickest way, the safest way, but the only way to become wealthy.”

Real Estate InvestmentsFor the most part, that adage attributed decades ago to Marshall Field, the American investor and founder of the Chicago-based Marshall Field department store, still holds true.

Purchase the right properties and you can find yourself enjoying a steady stream of income from an appreciating asset that also has significant tax advantages.

But owning investment real estate property is not like owning a stock or mutual fund. It’s an active investment, one comes with potential pitfalls. In the case of residential property ownership, the best rewards come from minimizing risk.

At Founders we know the top risks residential property owners and managers face. We’ve listed them below.

Failure to properly screen applicant finances — A property can only generate income if tenants are able to pay the rent — in full and on time. Skimping on credit and reference checks is a classic penny wise, pound foolish approach.

Failure to maintain safe conditions and perform repairs at your property — Broken boards on the back deck, windows with a chunk of loose glass, a shaky handrail…These are all accidents waiting to happen and a top source for litigation and insurance claims. Invest in fixing the little things before they add up to big headaches.

Failure to maintain accurate rental records — Your tenant says he paid you three months ago, and you say he didn’t. Do you keep diligent records that you can rely on to prove your case?

Violating housing discrimination laws —In general, Connecticut is a very tenant-friendly state. The Connecticut Fair Housing Act prohibits discrimination on the basis of a number of categories including race, national origin, gender and gender identity, sexual orientation, religion, children or family status, disabilities, and legal source of income (you can’t refuse to accept Section 8). The law is complex and there are exceptions for certain owner-occupied dwellings.

Wrongful eviction — You must follow specific state and local procedures in order to carry out an eviction. Be careful. Taking the law into your own hands is not wise. Connecticut forbids landlords taking measures like changing the locks or turning off utilities. Such actions can get you sued or even arrested.

Zoning and building department violations — The house may have been configured as a two-family when you bought it, but is it legally a two-family under your town’s zoning code? Did that addition onto the garage get built with the right permits in place?

Failure to disclose the potential for lead paint — If your house was built before 1978, it is presumed to have or have had lead paint inside. Connecticut has specific notice protocol you must follow whenever renting an older unit. It’s not difficult to comply, and definitely and definitely not something you want to overlook.

The Founders Insurance Group can help you manage the risks associated with your real estate investments. Give us a call at 860-482-3506.

Linda Robertson

Platinum Accounts Executive

lrobertson@foundersgrp.com

Here’s why you need business income coverage

June 9, 2015

How would you manage if a fire or natural disaster ravaged your business, forcing you to close your doors for months?

Do you have protection to ensure your employees and loyal customers don’t desert you while your property is being restored?

Business Income Coverage can make the difference between your company’s survival or going out of business during a difficult time.

Standard Coverage

Business income coverage can provide you with an income to keep your business going should there be a fire, flood, earthquake, or other disaster. It can also give you money for payroll and to pay the  bills. But coverage may be limited in some circumstances, as it was for businesses in the World Trade Towers after they came down.

Coverage will also include money to relocate and set up shop elsewhere while your property is being repaired. This includes machines and other equipment that you will need to be in business again. The payment will be made for the net amount, and is not intended to put the business owner in a better condition than before the disaster.

Duration of Payment

Business income coverage will typically be limited in duration. This will often be for 30 consecutive days, but may extend to 90. There is also apt to be a limit as to when the money will be paid, often less than 12 months after the loss.

It Pays for Extra Expenses

When disaster strikes, businesses often encounter extra costs. This may include paying more for shipping, or buying temporary equipment, and other things needed to keep your business running. If necessary, it may even pay for more expensive equipment than what your company had originally.

Utility Services

A business may experience a shutdown if the utility services in the area are malfunctioning and basic services are interrupted. Coverage is available for that problem too if it results in a loss of income. For example, if a civil authority limits access to your business because of a natural disaster, you will be covered.

Dependent Property

Businesses often depend on other ones to maintain their daily operations. The insurance company will also pay if there is another company that you depend on to provide you with customers, and it closes or cannot help you anymore.

Types of Coverage

When a business buys a business interruption coverage policy, the amount to be repaid, and the terms are agreed upon beforehand. These are usually called “valued” or “value” policies. “Open” policies require the business owner to provide proof of the costs before it is reimbursed. It will also be necessary to prove loss of income in either type of policy. This means that a broken machine, no matter how large, will not be covered unless there is an actual loss.

 It’s important to understand the coverage you NEED and what your current policy offers – remember, every insurance carrier is different!

Founders Insurance Group can help you select the right business income coverage to protect your business during a difficult time. Give me a call at 860-482-3506 or drop me an email  mgreco@foundersgrp.com

Mark Greco

Commercial Lines Account Executive

Umbrellas – Because it could rain on your parade!

June 2, 2015

You weren’t expecting that door-to-door salesman in the first place, which is why you didn’t answer his knock. But after he fell walking away on your driveway, the lawsuit he filed against you was more expensive than the vinyl siding he was peddling.

Carrying an umbrella policy can not only protect you against such as a nightmare, it will save you from losing your home and assets.

At Founders, we’re all about protecting your assets. We’ve put together a list of reasons why you should consider purchasing a personal umbrella policy.

Your standard insurance may not cover the cost of a lawsuitAwards for lawsuits are higher today than ever before, and there are more of them. It is not unusual for some awards to surpass one million dollars, especially if there is an injury or a fatality. Medical bills are also much higher today, and if several people are injured, or killed, you can ist2_5763251-umbrellaexpect high costs.

Everything Could Be at Risk

You are only a lawsuit away from losing everything you have worked hard for. Once an accident occurs and a lawsuit is filed, there is no going back to get personal umbrella policy coverage.

You are at greater risk if you earn a high income. When people know you have money and property, they tend to raise the amount of the lawsuit. Owning a swimming pool, watercraft or ATV’s, or rental properties, may also increase your likelihood to have an accident.

Do you throw a lot of parties?  Step back and think about what could happen….yes, we want you to think about worse case scenarios.

You May Need to Pay for Defense Costs

Lawyer’s fees to defend yourself against a lawsuit are expensive. A personal umbrella policy, will cover some of your lawyer fees if you win the case.

Your Personal Savings Are at Risk

You might have more assets than you realize. If you have a second home, or various types of savings, you are also at risk. This may include savings and retirement accounts, investments, as well as money you earn in the future.

Bad things happen to good people – that’s a fact of life.  Liability coverage in the form of a personal umbrella is very inexpensive!  1 million dollars in coverage is typically less than $500 – depending on your assets, risks and the carrier you are with.  You know we can’t give an exact number until we ask you a few questions!

Why not give us a call at Founders Insurance Group 860-482-3506.  We can walk you through the process (it’s quite painless) and get you properly covered right away!

Patty Patrone-Onofrio

Personal Lines Account Manager

ppatrone-onofrio@foundersgrp.com

Yikes – I let someone borrow my car, am I covered?

May 20, 2015

We’ve all been there…A friend or relative asks to borrow your car, and naturally your first reaction is to just toss them the keys, with maybe a passing thought on whether they will be considerate enough to put gas in the tank. You’re a good person, why wouldn’t you let them use your car, they’d do the same for you, right? And then it dawns on you, what happens if they get into an accident, are you still covered?

The good news is that the coverage follows the car and not the driver. As long as you give permission to the person borrowing the car, they will be covered under your policy. The bad news is, it will show up on your policy as a claim.  Some carriers – not all – will raise premiums when a claim occurs.  More often than not that raise in premium is triggered by the loss of the “loss free discount”.

A few other important points to keep in mind are:

Don’t loan out your car to anyone who doesn’t have a license or who has a suspended license. Your policy may deny iStock_000003313784XSmallcoverage in an accident if you knowingly allowed them access to your vehicle and you could be sued or face criminal charges or BOTH.

If someone is going to be a regular driver of your vehicle, like a nanny or roommate, you should contact your insurance company to see if they need to be added to your policy.

Make sure the person you are loaning your vehicle to is responsible, and the vehicle is not being used for illegal or dangerous reasons. If you know someone is a bad driver, think twice or even three times before letting them get behind the wheel.

It’s not just your motor vehicle that you should be careful when lending out, but also any recreational vehicles like boats, snowmobiles, and jet skis.

Loaning your car out is inevitable, especially if you own a fun convertible that everyone is always drooling over, or the always functional 8 person SUV that’s perfect for transporting home the new Big Screen TV. We tend to form an emotional bond with our vehicles even giving them names. So the next time Cousin Jimmy asks to borrow “Bernard” (your beloved, rough and rugged Jeep Wrangler), make sure his license is valid and his reason is legitimate. The only thing left to figure out is, how to get him to put gas in your tank…and maybe a trip through the car wash!

Still have questions regarding your auto policy?  That’s what we are here for – give us a call!  860-482-3506

Laurie Fisher

Personal Lines Account Manager

lfisher@foundersgrp.com

Coinsurance explained – because it is confusing!

May 8, 2015

Insurance is complicated, and often times it is quite confusing!  Insurance policies are long, wordy and have pages and pages of legalese.  Our clients rely on us to interpret that novel and tell you what it all means in layman’s terms.  One question I get asked quite a bit is to define “Coinsurance” and what it really means to the policy holder.

We most often see coinsurance in commercial insurance policies – but sometimes they do exist in personal lines policies.

In a nutshell, coinsurance is the sharing of risk between the insured and the insurer, and it’s also your promise, as a business, to insure your property at an adequate value.

You can find your coinsurance provision on the Policy Declaration Page. It’s the percentage – usually 80, 90 or 100% – listed next to the limits for building, personal property, or business interruption coverage.

Under reporting of your property value can have serious financial consequences. If you purchase a limit that’s less than the defined percentage of the replacement value of your property, the coinsurance provision will act as a penalty if you have a claim.

I know, it’s already getting confusing – so here’s an example:

  • Your business has a building and the replacement cost value is $1,000,000. Your coinsurance requirement is 80% – or $800,000 of building coverage.
  • You only purchase coverage with a limit of $700,000.
  • You suffer a loss of $200,000.
  • You have a $25,000 deductible.

In this scenario the policy would pay a claim of $175,000 less the $25,000 deductible. Your business would be responsible for $50,000 of the loss, and $25,000 of that will be the coinsurance penalty.

If your company had purchased a limit for the full $800,000 required, you would have only been responsible for the $25,000 deductible.

The coinsurance penalty is calculated by taking the purchased coverage divided by the required coverage multiplied by the loss ($700,000/$800,000 x $200,000).

Total Loss Scenario:

It’s important to note that the coinsurance will also come into play as sharing of risk in the event of a total loss. If you have purchased a limit adequate to comply with your coinsurance provision, you won’t be penalized in the event of a total loss, but in most cases you will not receive more than your policy limit less the deductible.

In the scenario above, if you have a building valued at $1,000,000, with an 80% coinsurance provision and a policy limit of $800,000, you will only receive $800,000 less the $25,000 deductible in the event that the property is a total loss.

Change in Value:

If you have had the same policy for a number of years, you should verify that the property values are adequate. These can change due to inflation and other costs, so you may be covered for less than you think.

Additionally, if you purchase expensive equipment during the policy period, you should notify your agent and make sure that cost is added to your coverage. The coinsurance provision applies to personal property, too.

If you don’t keep all your policy limits update, you may find yourself under insured – that is never more important than at the time of a loss.  Insuring your property to value is the best way  – as you will be able to rebuild without significant money out of pocket in the case of a partial or total loss.

Take a few minutes to review your policies – a quick phone call to Founders (860-482-3506) could save you some big headaches down the line!

Sora Garlasco

Commercial Lines Account Manager

sgarlasco@foundersgrp.com

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