Posted by Benji Riggins on August 28, 2009 under Insurance News | 
North Carolina Governor Bev Perdue has signed into law legislation to shore-up the state’s backup coastal insurer and reduce the liability of private insurers should a major catastrophe strike the state.
House Bill 1305 also sets limits on the coverage that can be sold by the North Carolina Insurance Underwriting Association, known as the the Beach Plan, and requires insurers to offer discounts for storm mitigation efforts by policyholders.
The signing came more than two weeks after House and Senate lawmakers reached agreement on the bill, which was sponsored by Rep. Hugh Holliman in the House and led by Sen. Tony Rand in the Senate.
The bill (HB 1305) that is now law is intended to reduce the exposure and prevent a funding shortfall in the Beach Plan, which insures 170,000 properties valued at nearly $74 billion in 18 coastal counties.
The measure was supported by lobbyists for the property/casualty insurers who said it was necessary to provide certainty and stability in the private marketplace.
Momentum for the reform was helped by an actuarial report, commissioned by the Property Casualty Insurers Association of America (PCI), that showed the Beach Plan was seriously underfunded. According to that report, the Beach Plan has no more than $1.5 billion available to pay for hurricane losses. However, a large storm could cost more than $7 billion, leaving a $6.2 billion deficit and affecting the plan’s ability to pay claims.
The bill addresses this concern by capping private insurers’ liability at $1 billion if the state insurer’s funds fall short and providing for surcharges on all policyholders in the unlikely event that there is such a devastating storm that even more funds are needed
Private insurers say the certainty the $1 billion liability cap provides them is important to their ability to properly price policies. Several insurers have stopped writing business in the state out of concern over the uncapped liability.
Any surcharges on policyholders statewide would be limited to no more than 10 percent annually and could begin only after the Beach Plan exhausts its surplus, about $2.4 billion in reinsurance and the $1 billion private insurer non-recoupable amount.
The law also requires the Beach Plan to limit the coverage it offers on residential properties to $750,000 and on commercial properties to $3 million. It now offers limits twice those amounts. Contents of habitational property could be insured only up to 40 percent of the home or building value under the bill.
If the value of the property exceeds the new maximum coverage limits available from the Beach Plan, the property owner must arrange to purchcase the excess coverage in the private market before the Beach Plan can issue its policy.
The Beach Plan’s rates for standalone wind and hail coverage must be 5 percent more than those of private insurers, and rates for full homeowners policies that include wind and hail coverage must be 15 percent higher. The industry had preferred that Beach Plan rates be even higher to further encourage policyholders to buy policies from the private market rather than the more expensive state insurer.
The new law requires the private market, as well as the Beach Plan, to file rating plans including mitigation discounts.
“Governor Perdue has taken an important step today in securing the financial stability of North Carolina following a hurricane or major storm,” said David Sampson, president and CEO of the insurer lobby PCI. “HB 1305 will reform the Beach Plan, protect consumers across the state and improve the property insurance market.”
The law has already convinced one insurer to begin writing in the state. A subsidiary of AAA Carolinas said its decision was in response to the passage of HB 1305.
Posted by Benji Riggins on August 21, 2009 under Safety |
Federal law enforcement officials say they have busted a home burglary gang that operated for several years in North Carolina and South Carolina.
The ring is believed responsible for hundreds of home burglaries and hundreds of thousands of dollars in stolen personal property, including more than 125 firearms.
The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives said at least nine people have been indicted for particpation in the ring.
The ATF said the ring consisted of mostly multi-convicted felons who targeted homes in the North Carolina counties of Stanly, Cabarrus, Anson, Rowan, Montgomery, Moore, Randolph, Davidson, Mecklenburg and Union, and the counties of York and Marlboro in South Carolina.
ATF said the members of this crime ring utilized sophisticated fixed and mobile surveillance and operated in organized teams with team leaders to identify and burglarize their targeted homes.
More than 10 law enforcement agencies along with ATF conducted a joint investigation covering multiple jurisdictions.
Posted by Benji Riggins on under Safety |
At an event today kicking off a nationwide anti-drunk driving enforcement campaign, U.S. Transportation Secretary Ray LaHood released a new study by the National Highway Traffic Safety Administration (NHTSA) that shows an increasing trend among women driving under the influence of alcohol.
The new analysis is based on an increase in the number of alcohol-impaired female drivers involved in fatal crashes in 2008 compared to the 2007 statistics.
“Impaired driving is an issue that cuts across all segments of society and, sadly, the number of arrests of women driving under the influence is on the rise,” said Transportation Secretary Ray LaHood. “This is clearly a very disturbing trend.”
He pointed to statistics from the FBI showing that arrests for women driving under the influence increased by nearly 30 percent (28.8%) over the 10-year period from 1998 to 2007. Over that same decade, DUI arrests for men decreased by 7.5 percent, although the total number of men arrested during the period outstripped women by about four to one.
The NHTSA study confirmed the FBI statistics showing that impaired driving by women is becoming a national safety issue. According to the NHTSA analysis, the number of impaired women drivers involved in fatal crashes increased in 10 states, and remained flat in five states—despite an overall decline of 9 percent in all drunk driver crashes in 2008 from 2007.
Overall, about 2,000 fatalities a year involve an impaired female driver.
The 10 states with increases in the number of drunk female drivers involved in fatal crashes are: Ohio, New Hampshire, Montana, Nevada, Wyoming, West Virginia, Indiana, Washington, Kansas and Tennessee. The five states where the number of alcohol-impaired female drivers remained unchanged in 2008 were Iowa, Maine, Maryland, Oklahoma and Utah.
The nationwide anti-drunk driving enforcement campaign targets drivers in the final weeks of summer before and during the Labor Day holiday weekend. The annual crackdown is intended to reduce the tragic toll caused by impaired drivers, nearly 12,000 fatalities in 2008.
The campaign is known as Drunk Driving. Over the Limit. Under Arrest. It will involve 11,000 police departments and other law enforcement agencies across the nation. The enforcement runs from August 21 through the Labor Day weekend. Police will be redoubling their efforts during this high-risk travel period to ensure that impaired drivers are detected and arrested. Over the Labor Day weekend last year, 40 percent of all fatal crashes involved a drunk driver.
Posted by Benji Riggins on August 18, 2009 under Safety |
Many drivers over age 70 realize that their reaction time is slower so they naturally compensate by driving more carefully, says Matthew Romoser, who studies age-related physical and cognitive function and driving skills at the University of Massachusetts Amherst. The problem, according to his latest research, is that many older drivers don’t realize that danger is coming at them sideways, not from head-on as they assumed.
For his recent doctoral dissertation, Romoser’s study at the university’s Human Performance Laboratory found that drivers 70 to 89 years old can best learn to use more side-to-side glances when executing turns at intersections when they practice adding more side glances in a hands-on driving simulator, compared to hearing a lecture.
As people age, Romoser explains, they begin to process information more slowly, including visual information. This in turn makes it harder to process moving objects in the visual periphery. “The statistics reflect this,” he adds. “Rear-end, head-on, single-car and car-pedestrian accidents actually decrease among older drivers in this age group, probably because they do self-regulate. But side-impact crashes increase markedly over age 70, and findings from our head-movement studies suggest a reason: older drivers fail to compensate for the loss of peripheral processing. They don’t use enough side-to-side glances at intersections so they’re having accidents.”
“The problem is that, for some older drivers, once they cross the threshold into the intersection while making a turn, side-to-side scanning stops altogether. This is worrisome because without an additional quick glance over the shoulder at the beginning of a turn, older drivers are likely to miss the sudden emergence of a previously unseen car. Compared to younger drivers, older drivers tend to focus only in the direction of the turn once they commit themselves to an intersection,” he adds.
Romoser and colleagues tested three groups of 18 subjects each, ages 70 to 89, who either received:
classroom lectures on using more side glances at intersections (passive group)
active behind-the-wheel training in a driving simulator (active group)
no training (control group)
When comparing the results of a field drive before and after training, the active training group significantly increased side-to-side scanning from 44 percent of opportunities before active training to 83 percent after training, nearly doubling their use of additional side-to-side scanning in intersections (the target behavior). Meanwhile, both the passive training and control groups demonstrated no significant change in side-to-side scanning.
An unexpected and refreshing outcome of this study, says Romoser, is that he and colleagues did not meet the resistance or skepticism they had expected from drivers who, in essence, had to face up to significant driving mistakes. With only a single exception, the researcher says, “People were very receptive to learning more and doing better.”
Romoser said this willingness to receive instruction encourages him and colleagues as they develop a driving instruction course specifically geared toward older drivers. Expecting that as the population ages and states consider additional screening programs for testing older drivers, Romoser and colleagues plan to have a “training refresher” option available.
Romoser favors a tiered approach in which motor vehicle licensing agencies could screen drivers first on relevant variables such as response-time, peripheral information processing and cognitive workload capacity, for example, before re-licensing. The vast majority will pass without incident, but some drivers might be diverted for further instruction in a “safe driving after 70″ course to improve their performance and keep their operators’ licenses, for example, while others might be referred to a physician for further testing.
“We’re now designing a training program for older adults that is deployable to a driving instruction school,” says Romoser. As for the driver performance study, a one-year follow-up with the drivers in the active study group is just starting at UMass Amherst’s Human Performance Lab to see if these drivers are still using the new skills a full year or more after learning them.
Posted by Benji Riggins on August 13, 2009 under Safety |
Most older drivers are not aware of the potential dangers of driving while medicated, according to a report by the AAA Foundation for Traffic Safety.
The study found that 78 percent of respondents used at least one medication, yet only a little more than one quarter were aware of the potential dangers of driving while medicated.
The study was based on interviews with 630 drivers aged 56 to 93, and was conducted at the University of Alabama at Birmingham.
Just 18 percent of respondents said they had been warned about medications that could impair their ability to drive, such as ACE inhibitors, sedatives and beta blockers.
Finally, in early 2010, the AAA Foundation will release Roadwise RX, a free Web-based tool that will help raise awareness regarding the risks associated with driving and medication. Specifically, the resource will allow older drivers to enter medication information through a search function, which will then calculate risks based on age, gender and weight.
Posted by Benji Riggins on August 10, 2009 under Safety |
A new report has found that there is little or no evidence that North Carolina’s auto safety inspection program is effective and it’s difficult to gauge whether the auto emissions program does any good for the environment.
The report by the state’s Program Evaluation Division suggests that given improvements in seat belts, air bags and other safety features and the fact that only a small percentage of cars fail the tests, a safety inspection may no longer make sense. It recommends that lawmakers reevaluate both programs and either repeal the safety inspection program or at least exempt newer vehicles.
The report also criticizes state oversight of the programs.
The Joint Legislative Program Evaluation Oversight Committee asked the Program Evaluation Division to study the programs.
North Carolinians face two types of inspections: a safety inspection of various mechanical systems required by state law in all 100 counties for vehicles less than 35 years old; and a diagnostic emissions inspection to ensure proper functioning of pollution controls for all 1996 and newer model year vehicles. Only vehicles registered in 48 counties are subject to the emissions inspection.
North Carolinians spend $141 million annually on inspections. It costs the Division of Motor Vehicles (DMV) and the Division of Air Quality $40.8 million to administer both inspection programs.
Out of the state’s total 6.3 million inspections, 1.9 million are safety-only and 4.4 million are emissions inspections.
Failed inspections accounted for only 5 percent of all inspections overall. Vehicles failing the safety inspection were most likely to have defective tires (26%), stoplights (20%), windshield wipers (20%), license plate lights (15%) or steering mechanisms (14%), according to the report.
Among the 33 states with an emissions inspection program, 21 states exempt at least current model year vehicles from inspection; 10 states exempt at least vehicles from the three newest model years. North Carolina only exempts current model year vehicles from its inspection programs.
The researchers looked at whether the safety and emissions inspection programs are identifying mechanical defects and requiring their repair to keep unsafe cars from operating on North Carolina roadways, thereby reducing loss of life and property damage; and controlling the pollutants from mobile source emissions.
North Carolina’s crash data from the Division of Motor Vehicles (DMV) shows the number of cases in which a vehicle’s mechanical condition may have contributed to an accident was only 1 percent of all crashes statewide.
“Furthermore, because law enforcement personnel are not mechanics and receive a minimal amount of training in compiling and reporting accident data, it is unlikely a true assessment of how many accidents result from mechanical defects is possible,” the report says.
As for the emissions program, the researchers did find that in 2007—a year marked by severe drought and record-breaking heat— North Carolina violated ozone level on 66 days, compared to 101 “bad ozone” days a decade ago. However, the report says it is “not clear how much of the improvement can be attributed to the mobile emissions inspection program.”
The report criticizes a lack of thoroughness and uniformity in current auto inspections from inspection state to inspection station. While a complete inspection should take between 15 and 30 minutes, the researchers found, on average, inspections fail to meet this standard and there is “a wide fluctuation in inspection duration.”
“Given the average inspection lasted between five and six minutes, it is questionable how thorough an inspection the average consumer is receiving,” the report says.
The auditors found that technicians cheated on the inspections, sometimes omitting several required steps. During one of the observations, the technician told the customer that even if there was something wrong with the customer’s vehicle, he would still pass it because this customer is a “regular.”
Older vehicles are more likely to fail safety and emissions inspections. For safety inspections, vehicles from model year 1981 to 2001 had a higher failure rate than the overall safety failure rate (3.3%), whereas vehicles from model year 2002 and newer had lower failure rates.3
Similar results were found for emissions inspections. Vehicles from model year 1996 to 2001 had a higher failure rate than the overall emissions failure rate (2.6%), whereas failure rates for vehicles from model year 2002 to 2007 were lower.
“These findings indicate greater emphasis should be placed on monitoring the safety components and emissions functioning of older vehicles,” the report says.
The report recommends that because newer vehicles (model years 2002-2007) were found to be less likely to fail inspection, “it may be unnecessary to require them to undergo annual safety and emissions inspections.”
If the state repealed the safety inspection program, it would lose $2 million in fees. But citizens could save as much as $33 million in inspection related costs a year, according to the report.
Exempting older vehicles (three newest model years) from a safety inspection would affect about 15 percent of the state’s car owners and cost the state only $143,000 in fees. The analysis suggests that this exemption would not reduce the inspection program effectiveness.
It also recommends exempting newer vehicles from the emissions test since they are less likely to fail. If the state limited emissions inspections to older vehicles, there would be a $6.3 million reduction in fees collected.
The report alleges lax oversight of the inspections by the state DMV and urges lawmakers to require DMV to come up with an improvement plan.
Posted by Benji Riggins on August 8, 2009 under Insurance News |
The North Carolina General Assembly has approved a bill to reform the state’s coastal insurance system that caps private insurers’ liability for any funding shortfall in the state-backed Beach Plan, reduces coverage for property owners who get coverage in the Beach Plan and requires insurers to offer discounts for storm mitigation efforts by policyholders.
The bill (HB 1305) is intended to reduce the exposure and prevent a funding shortfall in the North Carolina Insurance Underwriting Association, known as the Beach Plan, which insures 170,000 properties valued at nearly $74 billion in 18 coastal counties.
Yesterday, just before 5 p.m., the House concurred in a 92-19 vote with a Senate version of the bill. The measure now goes to Gov. Bev Perdue, who can sign it, veto it, or let it become law without her signature.
The measure was supported by property/casualty insurers whose lobbyists said it was necessary to provide certainty and stability in the private marketplace.
“Yesterday was good day for all insurance consumers in North Carolina. Elected officials have realized how out of kilter the current Beach Plan is and have taken steps to begin to rectify the situation,” said Liz Reynolds, Southeast state affairs manager for the National Association of Mutual Insurance Companies (NAMIC).
While overall supportive of the reforms, the insurance industry came away slightly disappointed that a key rate differential provision backed by the House was watered down in the final version. The final bill requires that the Beach Plan’s rates for standalone wind and hail coverage be 5 percent more than those of private insurers, and rates for full homeowners policies that include wind and hail coverage be 15 percent higher– which is what current rules say. The industry preferred the House version that had called for different figures: 10 percent higher for wind/hail and 20 percent higher for full homeowners.
The rate differential is meant to reduce the exposure of the Beach Plan by encouraging policyholders to buy policies from the private market rather than the more expensive state insurer.
Reynolds conceded that the lower rate differential “will make it more difficult to quickly return the Beach Plan to the market of last resort.”
But she said the overall measure is the beginning of “many more incremental steps toward strengthening and diversifying not only the coastal insurance market in North Carolina, but the entire market in the state.”
The bill will require the private market, as well as the Beach Plan, to file rating plans including mitigation discounts.
Momentum for the reform was helped by an actuarial report, commissioned by the Property Casualty Insurers Association of America (PCI), that showed the Beach Plan was seriously underfunded. According to that report, the Beach Plan has no more than $1.5 billion available to pay for hurricane losses. However, a large storm could cost more than $7 billion, leaving a $6.2 billion deficit and affecting the plan’s ability to pay claims.
The bill addresses this concern by capping private insurers’ liability at $1 billion if the state insurer’s funds fall short and providing for surcharges on all policyholders in the unlikely event that there is such a devastating storm that more funds are needed.
Private insurers say the certainty this liability cap provides them is important to their ability to properly price policies. Several insurers have stopped writing business in the state out of concern over the uncapped liability.
“Lawmakers recognized that the Beach Plan is not financially stable which could hurt insurance policyholders across the state,” said Lynn Knauf, regional manager for PCI. “The General Assembly has responsibly chosen to solve the property insurance crisis before the storm, instead of after a devastating event, unlike the fate of some other coastal states.”
Any surcharges on policyholders statewide would be limited to no more than 10 percent annually and could begin only after the Beach Plan exhausts its surplus, about $2.4 billion in reinsurance and the $1 billion private insurer non-recoupable amount. This so-called “catastrophe recovery charge” would have to be clearly identified to policyholders on their premium statement, declarations page, or by some other electronic or written method.
As part of an attempt to control the state-backed insurer’s exposure, the measure requires the Beach Plan to limit the coverage it offers on residential properties to $750,000 and on commercial properties to $3 million. It now offers limits twice those amounts. Contents of habitational property could be insured only up to 40 percent of the home or building value under the bill.
If the value of the property exceeds the new maximum coverage limits available from the Beach Plan, the property owner must arrange to purchcase the excess coverage in the private market before the Beach Plan can issue its policy.
“This is a strong reform bill,” said Raymond G. Farmer, assistant vice president for the American Insurance Association’s southeast region. “It meets two key goals: first, putting the Beach Plan on a stronger financial footing, and second, giving private market insurers greater certainty as to their ultimate financial obligations should a major storm hit that depletes the Beach Plan’s claims paying resources.”
HB 1305 was sponsored by Rep. Hugh Holliman in the House and lead by Sen. Tony Rand in the Senate.
Posted by Benji Riggins on August 2, 2009 under Boat Insurance |
Coverage of a watercraft can range from total replacement of the vessel if destroyed, to personal liability coverage, and everything in between. When deciding on what policy is right for you, consider what your needs and risks are, and how much you are willing to spend to protect them.
Full coverage boat insurance is the safest route for the boat owner who wants to insure his valuable property. With full coverage the boat owner can opt to ensure the cost of replacing the vessel if it is totally destroyed. Coverage can also include damages to either the boats structure, or engine. Coverage for loss or damage to personal property while on the vessel may also be included. Other options can include injury protection, salvage or wreck removal, loss of use reimbursement, towing costs, and even investigative services.
Liability insurance covers you in the case of accident responsibility. Generally a boat owner can choose either boat liability, also known as indemnity insurance, which will cover only damages done by the vessel, or personal liability, which will cover damages done by the boat owner, regardless of where or how they occur.
While liability insurance is generally the least expensive, it is important to remember that it will only cover the cost of damages/repairs to third parties. Your own property is not covered under liability insurance. In this way, even though liability insurance often appears to be the most inexpensive option for the boat owner, if the vessel were to be destroyed, the cost of replacement would far out weigh the savings on premiums.
