Ask Tim

Check Out This New Home Inventory Tool

I recently learned about a service that might save homeowners some trouble if they have insurance claims. It's called Lockboxer, and it appears to be a pretty slick piece of technology. If it works as advertised (and I haven't tried it out yet myself,) a subscriber can create a home inventory by taking four digital photos of each room in the house or apartment and two of each closet. The subscriber uploads the photos to the site, and the software prepares a detailed inventory based on the photos.

As insurance professionals, we always encourage our clients to inventory their belongings before a loss happens. Until now, that has seemed like a daunting task (show of hands — how many of you have actually done it?). This service appears to make it a lot less daunting. The service is free for storage of information about 50 items or less; unlimited storage is available for $1.99 per month. Users can also simply do a search on the site for free to determine the value of a particular item.

The site states that user data is protected by Secure Sockets Layer encryption, which should provide subscribers with some peace of mind. I suggest that anyone interested take it for a test spin and see how it works. If you like what you see, you may want to suggest it to your clients. Hopefully, they'll never need to use a home inventory for insurance claim purposes, but it's always good to have it handy.

I've embedded a couple of videos about the service below. Full disclosure: I have absolutely no financial interest in this site, and neither does IIABNY. I just think it's a cool service that will help people if it works as advertised. I'll leave it up to you to decide whether it does or not.

Lockboxer Intro Video from Lockboxer on Vimeo.

Lockboxer's home inventory solution proves there is a better way to manage your stuff from Lockboxer on Vimeo.

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Sign of the Times: Home Depreciation Insurance

Protection for Nosedive in Property Values

New Insurance to Help Homeowners Avoid Financial Catastrophe

   

September 29, 2011 | Subscribe Now By Christina Bramlet, PropertyCasualty360.com

The U.S. housing market has endured many dark days in the past few years. The first quarter of 2011 saw a precipitous decline in home values. Since then, the number of homeowners reportedly “under water”—owing more on a mortgage than the dwelling is worth—has continued to climb.

Exacerbating real estate woes are rampant foreclosures, high unemployment rates, and mounting consumer debt, making the likelihood of home values stabilizing by the end of this year unlikely.

To address this reality, Home Value Insurance Co. is offering a new type of homeowners’ coverage, one intended to safeguard families against a decline in property value. The San Francisco, Calif.-based business announced this week that Ohioans will be the first parties eligible for such a policy. For several years, various financial companies have provided similar coverage for which a homeowner would pay a one-time fee.

Home Value’s pricing model differs in that homeowners pay a monthly premium, which is based on the home’s value and its current location. In the event the policyholder sells the home for less than he or she initially paid, a claim could be filed to recoup a portion of the loss.

“A typical Ohio homeowner would pay $35 to $45 a month,” the company reported to The Columbus Dispatch. “A

via www.propertycasualty360.com

This is a case of excellent post-housing bubble market timing. One would hope that the housing market is at or near the bottom, making this the perfect time for an insurance company to launch a product like this. After all, if prices are bottoming out, it's less likely that the company will have to pay any claims. Also, the implosion of the housing market is still fresh in peoples' minds, making them more likely to consider buying this coverage.

What do you think of this product? A long-overdue great idea that you wish you'd thought of first, or a cynical attempt to capitalize on the pain and fear of others? And do you think this will ever become available in New York? Answer away in the comments.

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Health Care Reform Primer: Small Business Tax Credit

I suspect that many of the readers of this blog are small business owners or employees of small businesses, so this section of the federal Patient Protection and Affordable Care Act may be of special interest. These provisions actually took effect with the 2010 tax year, so qualifying businesses should already have seen some of these tax benefits. Small business tax credits for health insurance apply to employers that:

• Have no more than 25 full-time equivalent employees (FTE's) for the tax year
• Have average annual wages of no more than $50,000 for tax years 2010 through 2013 or $50,000 plus a cost-of-living adjustment for tax years 2014 and later
• Have arrangements that require the employer to make contributions (at least 50 percent of the premium) on behalf of employees who enroll in the employer's sponsored health plan offered through an exchange.

The law provides formulas for determining the number of FTE's and average annual wages. The formula for calculating FTE's exempts a single employee's hours in excess of 2,080 and the hours worked by seasonal workers who are on the job for 120 days or less during the tax year.

The credit for a for-profit business is 35 percent (50 percent after 2013) of:

• The total amount of the employer's contributions during the tax year for employee health coverage obtainted through an exchange, or
• The total amount of contributions the employer would have made during the tax year if each employee had enrolled in a health plan that had a premium equal to the average for the small group market in the local rating area

Whichever is less. The amount of the credit is reduced if the employer has FTE's greater than 10 and annual average wages that exceed $25,000 in 2010 through 2013 and $25,000 plus cost-of-living for years after 2013.

Tax-exempt small employers (essentially, 501(c) employers) are also eligible for credits. They get 25 percent (35 percent after 2013) of the lesser of:

• The total amount of the employer's contributions during the tax year for employee health coverage obtainted through an exchange, or
• The total amount of contributions the employer would have made during the tax year if each employee had enrolled in a health plan that had a premium equal to the average for the small group market in the local rating area

or the amount of the employer's payroll taxes for the tax year, again whichever is less.

For all employers, the health insurance credit is part of the general business credit, and it can be taken against the alternative minimum tax. If an employer takes the credit, it cannot also deduct health insurance expenses from its taxable income. 

The next post will look at the source of much litigation and controversy: The individual mandate.

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A Moment of Shameless Begging: Please Support This Blog With 'LexisNexis'

As some of you may recall (especially since I have the LexisNexis logo in the upper left-hand corner of the screen,) last year the LexisNexis Insurance Law Community named this blog as one of the Top 50 insurance blogs of 2009. Well, it seems that it has been nominated again for 2011. I received the following email from the ILC on Wednesday:

Each year, LexisNexis honors a select group of blogs that set the online standard for a given industry.  I’m pleased to notify you that your blog is one of the nominated candidates for the LexisNexis Top 50 Insurance Law Blogs of 2011, featured on the LexisNexis Insurance Law Community.

We are inviting Insurance law practitioners to comment on our list of nominees. If you’d like to request that readers support your nomination, please ask them to comment on the announcement post on our LexisNexis Insurance Law Community. 

To submit a comment, visitors need to log on to their free LexisNexis Communities account.  If you haven’t previously registered, you can do so on the Insurance Law Community for free. The comment box is at the very bottom of the  blog nomination page. The comment period for nominations ends on October 7, 2011.  Our Matthew Bender Insurance editors and our Insurance Law Advisory Board will then give strong consideration to the comments received when they review all of the nominees and select the Top 50 Insurance Law Blogs of 2011 next month.

Congratulations on your nomination, and good luck!

Very truly yours, 

So, I'm posting this to beg grovel plead offer human sacrifice ask for your support. If you like what you read on this blog and can spare a minute, I'd really appreciate it if you would post a comment on the ILC's Web page. You don't have to wax eloquent or sing my praises to the highest heavens (though, to be clear, I'm not discouraging that.) Just a line or two describing what you like about the blog will be enough. 

Thank you for your support and for continuing to read my blog!

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Webinar Follow-Up: Answers To Your Questions

Yesterday morning, I presented a webinar titled 10 Things You Didn't Know About New York No-Fault (check the Education section of the IIABNY Web site occasionally to see when the archived recording will be available). More than 80 people attended the session online, and several of them asked a lot of good questions. Among those questions were a couple that I didn't feel comfortable answering without doing a little research. My memory is a dangerous thing, and if I rely on it, my risk of spreading misinformation rises dramatically. Having taken some time now to research these questions, I'm prepared to give you accurate answers, so here goes:

Q: if there is a NY out of state endorsement on the policy, then does it not EXTEND the NY coverage to anyone in your car out of State?

A: I'm not familiar with a New York "out of state" endorsement. However, the Additional Personal Injury Protection Coverage — New York endorsement (ISO form number PP 05 88 01 11 for personal auto; CA 22 33 01 11 for commercial auto) changes the definition of  "eligible injured person." The basic PIP endorsement defines the term in part as including:

(A)ny ... person (other than the named insured or relative) who sustains personal injury arising out of the use or operation of the insured motor vehicle in the State of New York while not occupying another motor vehicle...

This was the basis for my statement that my friend in North Carolina would be covered under my No-Fault insurance if he was riding in my car in New York but would not be if he was riding in my car in North Carolina. The additional PIP endorsement changes this to state:

(A)ny ... person (other than the named insured or relative) who sustains personal injury arising out of the use or operation of the insured motor vehicle while occupying the insured motor vehicle...

Further, it adds this to the definition:

(A)ny ... person (other than the named insured or relative) who sustains personal injury arising out of the use or operation of any other motor vehicle (other than a public or livery conveyance) while occupying such other motor vehicle, if such other motor vehicle is being operated by the named insured or any relative.

Therefore, the Additional PIP endorsement removes any requirement for the accident to occur in New York State. If I have this endorsement on my policy (incidentally, I do,) then my friend P.G. has New York No-Fault coverage while he's riding in my car anywhere in the U.S. and Canada, and he has coverage while he's riding in any car I'm driving in the U.S. and Canada. Whether that makes him any more likely to get in a car with me is an open question...

This one relates to one of my areas of interest — health insurance (by the way, the Health Care Reform Primer will return when I get some blocks of time to do a good job of analysis.) Here's the question:

Q: is there any medical coverages for injuries sustained in an auto accident from health insurance plans, especially if someone exceeds basic PIP and Additional PIP?

A: Both PIP endorsements define "first-party benefits" as payments equal to "basic economic loss", reduced by:

• 20 percent of the eligible injured person's loss of earnings from work
• Social Security disability, Workers' Compensation, and/or New York State disability benefits
• Any applicable deductible

This implies that No-Fault is primary over any other benefits. Consequently, if an injured person has health insurance, the medical expense portion of No-Fault will pay first, up to the limit of insurance, then health insurance might apply. I say "might" because New York Insurance Regulation 62 permits a health insurer to exclude coverage when No-Fault benefits are recoverable. If such an exclusion is on the policy, the injured person's sole source of recovery will be No-Fault.

If anyone has additional questions from the webinar, post 'em in the comments and I'll answer them as soon as I can. Thanks again for attending!

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Ask Tim, Episode #24 -- Flood Exclusion/Flood Insurance

Water, water everywhere...or at least, that's what it's felt like in New York State for the last month or so. Hurricane/Tropical Storm Irene put a hurt on New York City, Long Island, the Hudson Valley and the area around Schoharie, New York. Not to be outdone, Tropical Storm Lee dumped excessive rainfuall on the Southern Tier, leaving parts of Binghamton and the rural counties around it flooded. Unfortunately, a lot of businesses in these areas have found out that their insurance policies will not reimburse them for flood damage.

This episode of the Ask Tim podcast looks at the water exclusion in the ISO Causes of Loss — Special Form, the coverage that the National Flood Insurance Program's General Property Policy provides, some potential remaining coverage gaps, and an option for clients who need to close the gaps.

If you need help from IIABNY because of the flooding, email or call 1-800-851-8853 extension 212.

Web sites I mention in the show:

• FloodSmart.gov, the official site of the NFIP
• Federal Emergency Management Agency: NFIP Information for Insurance Professionals

 

 

Download Ask Tim Episode #24

 

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