In some 76 percent of all cases of identity fraud reported by Travelers customers, burglary, stolen wallets and stolen identifications top the list of the most common known causes, according to a study of Travelers’ 2009 claims data.

The findings mirror last year’s report on Travelers’ 2008 claims data which indicated that the majority of identity fraud cases reported by customers were from burglaries and stolen wallets. The data reveals how thieves still prefer more low-tech means of identity fraud over online-related thefts and data breaches that typically receive significant media attention.

“This study suggests once again that more traditional means of identity fraud are prevalent today and continue to pose significant risks to consumers,” said Joe Reynolds, Identity Fraud Product Manager for Travelers. “Knowing this, it is critical that consumers take steps to protect themselves and their property.”

Travelers identified the following as the top known causes of identity fraud for its customers:

76 percent – burglary and theft of wallet/purse/personal identification/computer
9 percent – online or data breach
9 percent – forgery
6 percent – change of address/postal fraud

The study also found that 74 percent of the time criminals use the stolen personal information to open new credit card accounts or use the existing credit cards to make charges. Of that 74 percent, 26 percent of identity thieves access existing credit/debit cards, 21 percent open new cards and make charges in the victim’s name, and 18 percent access and withdraw funds from existing checking, savings and online retail accounts.

A study by Javelin Strategy & Research showed that the number of identity fraud victims jumped by 12 percent to 11.1 million adults in 2009, the biggest increase since the survey began in 2003.

“Identity fraud is a crime that can happen to anyone, anywhere, and so it’s particularly important for people to exercise diligence in protecting their personal information,” noted Reynolds.

Read more: http://www.insurancejournal.com/news/national/2010/08/24/112692.htm#ixzz0xdXYSKke

The National Insurance Crime Bureau’s first half 2010 questionable claims (QC) report examines six referral reason categories of claims— property, casualty, commercial, workers’ compensation, vehicle and miscellaneous.

Overall there was a 14 percent increase in QCs in four of the six categories in 2010 when compared to the first half of 2009. These are claims that NICB member insurance companies refer to NICB for closer review and investigation based on one or more indicators of possible fraud. A single claim may contain up to seven referral reasons.

Of note were the 107 percent increase in questionable hail damage claims and 527 percent increase in questionable auto glass claims so far this year when compared to the first half of 2009.

“Hail loss claims and QCs are generally concentrated in the central section of the U.S. However, seven of the top 10 states with the highest hail loss QC-to-claim ratio are not in the central section. This suggests that fraudulent hail losses can occur in any part of the country,” the report notes.

“While there have been modest declines within a few categories of referrals, the 14 percent increase in the overall number of questionable claims for 2010 raises concerns,” said Joe Wehrle, NICB’s president and chief executive officer.

Wehrle said NICB, its member insurers and law enforcement have pursued suspected unscrupulous roofing companies that take advantage of storms to fake or deliberately cause damage to roofs in an effort to get insurers to pay for a replacement roof that wasn’t damaged by a storm. They have also been putting pressure on staged accident rings in various regions including Tampa, where this has become a major problem.

“We’re seeing concern from our members about criminal rings that are deliberately damaging vehicle windshields in order to file an insurance claim, and in some cases are not doing satisfactory repairs or replacements,” Wehrle said.

NICB is supported by nearly 1,100 property and casualty insurance companies and self-insured organizations.

Source: National Insurance Crime Bureau

Read more: http://www.insurancejournal.com/news/national/2010/08/02/112084.htm#ixzz0vTYP12p7

The Pending Home Sales Index, released by the National Association of Realtors, dropped 2.6 percent to 75.7 based on contracts signed in June from 77.7 in May, and is 18.6 percent below June 2009 – another sign of the stagnant housing market.

“In many cases, people who have been trying to sell their homes for awhile have moved forward with their plans regardless, leaving a vacant home on the market,” said NAIC President and West Virginia Insurance Commissioner Jane L. Cline. “Having an unoccupied home can create several insurance implications that typically are not covered under a standard homeowners policy.”

The Added Risks of Vacant Homes

Homeowners policies are meant to insure homes that are occupied, so they generally include exclusions for neglect or property abandonment on a home left vacant or unoccupied for a specified number of consecutive days.

In insurance terms, a vacant home is one the resident has moved out of and taken his/her belongings with him/her. An unoccupied home is one where the resident is not staying at the home, but the furniture and other belongings remain.

Because vacant and unoccupied homes pose a higher risk for damage than occupied homes, insurance companies insure these properties differently and usually at a higher price. These risks include:

Break-ins: When a home has been unoccupied for awhile, it can show signs that nobody is around – unkempt lawn, full mailbox, no lights on – that can tip off burglars to an easy target.

No emergency response: Without anyone home to call 911 or respond to emergencies, a manageable problem – such as a small electrical fire –can turn into a much larger, more costly disaster.

Property liability: There is no one present to prevent others from entering the property or to supervise activity, which could increase the likeliness of an accident on the premises or property damage when the owner is not there.

Keeping Vacant Home Properly Insured

The definition of vacancy and unoccupancy can vary from policy to policy. Some insurers may not pay claims if a home is vacant for 60 days or more. Some policies might automatically shift to a different amount of coverage (e.g. liability insurance only) after a specific number of days unoccupied.

Many homeowners policies have a “vacancy clause” that can be triggered if the homeowner is gone for an extended period of time. If this happens, the homeowner could violate the terms of their contract and some or all of their coverage may not apply in the event of a loss.

Cline and the NAIC are advising homeowners to speak with their insurance agent or company before they decide to leave a home unoccupied for a period of time.

“Be honest about your situation, because while an extra policy might cost more, it could save you money down the road should there be an accident or damage to the home,” the advisory from NAIC tells homeowners.

Many insurance companies offer an endorsement that will provide coverage for a dwelling that is unoccupied for an extended period of time. Vacancy policies can also be purchased for different term lengths to cover a few months to a year, depending on the need.

The cost of vacancy coverage depends on the company and state in which the property is located, but costs usually are higher than a typical homeowners policy due to the overall increase in risk.

Read more: http://www.insurancejournal.com/news/national/2010/08/09/112285.htm#ixzz0wDohssrq

Dog bites account for more than one-third of all homeowners insurance liability claims paid out in 2009, says the Insurance Information Institute (I.I.I.).

An analysis of homeowners insurance data by the I.I.I. found that the average cost of dog bite claims was $24,840 in 2009, up slightly from $24,461 in 2008.

Over the six-year period since 2003, the cost of these claims has risen nearly 30 percent. Additionally, the number of claims increased by 4.8 percent to 16,586 in 2009 from 15,823 in 2008.

“The rise in dog bite claims over the last seven years (2003-2009) can be attributed to increased medical costs as well as the size of settlements, judgments and jury awards given to plaintiffs, which have risen well above the rate of inflation in recent years,” said Loretta Worters, vice president at the I.I.I.

With more than 50 percent of bites occurring on the dog owner’s property, the issue is a major source of concern for insurers.

More than 4.7 million people in the United States are bitten by dogs annually, and nearly 900,000 of those, half of them children, require medical care, according to the Centers for Disease Control and Prevention (CDC). Of those injured, 386,000 require treatment in an emergency department and about 16 die.

The rate of dog bite related injuries is highest for children aged five to nine years old; the rate decreases thereafter. Almost two-thirds of these injuries among children ages four years and younger are to the head or neck region. Injury rates in children are significantly higher for boys than for girls.

Dog Owner Liability

There are three kinds of law that impose liability on owners:

1. Dog-bite statute: The dog owner is automatically liable for any injury or property damage the dog causes, even without provocation.

2. “One-bite” rule: In some states, the owner is not held liable for the first bite the dog inflicts. Once an animal has demonstrated vicious behavior, such as biting or otherwise displaying a “vicious propensity,” the owner can be held liable. Some states have moved away from the one-bite rule and hold owners responsible for any injury, regardless of whether the animal has previously bitten someone.

3. Negligence laws: The dog owner is liable if the injury occurred because he or she was unreasonably careless (negligent) in controlling the dog.

In most states, dog owners are not liable for losses incurred by trespassers who are injured by a dog. A dog owner who is legally responsible for an injury to a person or property may be responsible for reimbursing the injured person for medical bills, lost wages, pain and suffering and property damage.

Source: I.I.I.

Read more: http://www.insurancejournal.com/news/national/2010/08/18/112569.htm#ixzz0wzM9uvSO

The study, featured in Mitchell’s quarterly publication Industry Trends Report (ITR), also notes that hybrid drivers are significantly more likely to receive traffic tickets than drivers of gas-powered vehicles.

Regarding claim frequency and the higher number of traffic tickets, Greg Horn, vice president of Industry Relations, Mitchell International, reported in ITR that one reason may be where hybrid drivers live. Most live in urban settings, ITR noted, where tickets and accidents are more frequent.

Additionally, he said the profile of hybrid drivers has changed in recent years. As recently as 2008, hybrid purchasers were mostly concerned with their carbon footrint and impact on the environment. “While their politics may have been liberal, their driving habits were conservative, making them a very good risk to insure,” Mr. Horn said in his story.

Since then, hybrids have caught on with drivers interested in cutting fuel expenses. “This shift changed the hybrid driver profile and brought with it a change in the risk profile,” he said.

Mr. Horn, citing rating integrity solutions provider Quality Planning, said Toyota Prius owners received .38 tickets per 100,000 miles driven compared to .23 tickets per 100,000 miles for non-hybrid drivers. He noted that is a 65 percent difference.

Regarding claim severity, Mr. Horn said the higher hybrid numbers even showed when comparing the same car models. The Honda Civic hybrid model, for example, has a 6.9 percent higher severity than the gas-powered model. The Ford Escape hybrid had a 9 percent higher severity than the non-hybrid.

Mr. Horn said the higher severity is partly because of higher mechanical labor charges for hybrids. More mechanical operations, he said, are sublet back to dealerships for completion.

Alternate parts use is also lower for hybrids, Mr. Horn said. Interestingly, he noted, this is seen even for like car models. He said loyalty accounts for this. Hybrid owners, he said, are “one of the most loyal groups” and are more inclined to bring their vehicles to the dealership for repairs.

NU Online News Service, Aug. 2, 3:36 p.m. EDT
Hybrid vehicles overall have higher collision claim frequencies and a 6.5 percent, or $182, higher average claim severity than gas-powered vehicles, according to a Mitchell International Inc. study.

The study, featured in Mitchell’s quarterly publication Industry Trends Report (ITR), also notes that hybrid drivers are significantly more likely to receive traffic tickets than drivers of gas-powered vehicles.

Regarding claim frequency and the higher number of traffic tickets, Greg Horn, vice president of Industry Relations, Mitchell International, reported in ITR that one reason may be where hybrid drivers live. Most live in urban settings, ITR noted, where tickets and accidents are more frequent.

Additionally, he said the profile of hybrid drivers has changed in recent years. As recently as 2008, hybrid purchasers were mostly concerned with their carbon footrint and impact on the environment. “While their politics may have been liberal, their driving habits were conservative, making them a very good risk to insure,” Mr. Horn said in his story.

Since then, hybrids have caught on with drivers interested in cutting fuel expenses. “This shift changed the hybrid driver profile and brought with it a change in the risk profile,” he said.

Mr. Horn, citing rating integrity solutions provider Quality Planning, said Toyota Prius owners received .38 tickets per 100,000 miles driven compared to .23 tickets per 100,000 miles for non-hybrid drivers. He noted that is a 65 percent difference.

Regarding claim severity, Mr. Horn said the higher hybrid numbers even showed when comparing the same car models. The Honda Civic hybrid model, for example, has a 6.9 percent higher severity than the gas-powered model. The Ford Escape hybrid had a 9 percent higher severity than the non-hybrid.

Mr. Horn said the higher severity is partly because of higher mechanical labor charges for hybrids. More mechanical operations, he said, are sublet back to dealerships for completion.

Alternate parts use is also lower for hybrids, Mr. Horn said. Interestingly, he noted, this is seen even for like car models. He said loyalty accounts for this. Hybrid owners, he said, are “one of the most loyal groups” and are more inclined to bring their vehicles to the dealership for repairs.

Nearly half of the 7,993 cases of suspected fraud reported during the period were connected to vehicles, with cases ranging from deliberately damaged car windows to staged accidents.

According to Joe Wehrle, president of the group, the increase was less than the 20 percent rise during the same period last year, but dubious claims remain a top concern.

Criminals “try to take advantage of the insurance company’s desire to pay claims as quickly and efficiently as possible,” he said.

The increase in suspect claims coincides with a decline in U.S. payrolls, while the jobless rate sits at a 26-year high of 10.1 percent after increasing 8.6 percent during the past two years.

More than five times as many car windows appear to have been smashed on purpose in order to generate insurance payouts, rising from 239 last year to 1,498 in 2010. Meanwhile, suspected bogus vehicle accidents increased 27 percent year-over-year.

The study found that 47 percent of all adults who text have done so while driving, compared with 34 percent of teens (aged 16 to 17) who text.

Additionally, 74 percent of adults who own cell phones have talked while driving, while 52 percent of teens with phones have done so.

To further highlight the distractions presented by cell phones, the study also found that 17 percent of adults said they have physically run into another person or object while talking or texting on the phone.

Currently, 28 states and Washington D.C. prohibit texting while driving, and seven states and Washington D.C. ban cell phone use while driving.

At the same time, the number of claims referred for suspected fraud increased by 136 percent, from 301 in 2006 to 711 in 2009, according to a National Insurance Crime Bureau report that examines both hail loss claims and hail loss questionable claims (QCs) for the period Jan. 1, 2006 through March 31, 2010.

During this period, Texas was the top state in both hail loss claims and hail loss QCs with 298,798 claims and 521 QCs. The top 10 states represented 75 percent of the total number of hail losses and 82 percent of the QCs.

Illinois had the highest ratio of hail loss QCs to claims, with 881 hail loss QCs for every 1,000 hail loss claims. Nearly nine of every 1,000 claims filed for hail loss were deemed suspicious enough to forward to NICB for further investigation.

“These statistics back up what our agents have been experiencing in their field investigations,” said Joe Wehrle, NICB president and CEO. “There are a lot of unscrupulous fly-by-night roofers and repairmen who are what we call ’storm chasers.’ They follow the storms and deliberately try to rip off unsuspecting home owners and their insurers by making unnecessary repairs or deliberately inflicting intentional damage to a roof or siding to try to get insurance money.”

The National Insurance Crime Bureau, headquartered in Des Plaines, Ill., is supported by nearly 1,100 property and casualty insurance companies and self-insurers.

Read more: http://www.insurancejournal.com/news/national/2010/06/03/110366.htm#ixzz0ptzD2UH7

Preliminary 2009 statistics indicate that violent crime in the nation decreased 5.5 percent and property crime declined 4.9 percent when compared with data from 2008. Data in the report came from 13,237 law enforcement agencies that submitted six to 12 months of data in both 2008 and 2009.

Highlights from the report include:

Property Crime

• All property crime offenses—burglary, larceny-theft, and motor vehicle theft—decreased in 2009 when compared with 2008 data. Motor vehicle theft showed the largest drop in volume at 17.2 percent, larceny-thefts declined 4.2 percent, and burglaries decreased 1.7 percent.

• The nation’s largest cities, one million or more inhabitants, reported the greatest decrease, 7.9 percent, in property crime overall. Of the city groupings, this population group also reported the biggest decreases in the offenses that comprise property crime: a 21.1 percent drop in motor vehicle theft, a 5.7 percent decline in burglary, and a 5.5 percent decrease in larceny-theft. In the nation’s nonmetropolitan counties, larceny-thefts fell 9.5 percent; in metropolitan counties, larceny-thefts declined 5.9 percent.

• The only population group to indicate a rise in any type of property crime was in nonmetropolitan counties, where burglary rose 0.5 percent.

• In comparing 2008 data and 2009 data by region, law enforcement agencies in the West reported the biggest decline in property crime, with a decrease of 6.8 percent. Property crime declined 5.6 percent in the Midwest, 5.3 percent in the Northeast, and 3.2 percent in the South.

Arson

• Arson offenses, which are tracked separately from other property crimes, declined 10.4 percent nationwide. All population groups reported decreases in the volume of arson offenses. In addition, arson fell in all four of the nation’s regions: 11.6 percent in the West, 10.6 percent in the South, 9.2 percent in the Midwest, and 8.6 percent in the Northeast.

Violent Crime

• All four violent crime offenses — murder and nonnegligent manslaughter, forcible rape, robbery, and aggravated assault—declined nationwide in 2009 when compared with 2008 data. Robbery dropped 8.1 percent, murder decreased 7.2 percent, aggravated assault declined 4.2 percent, and forcible rape decreased 3.1 percent.

• Violent crime fell in all city groupings. The largest decrease, 7.5 percent, was in cities with populations ranging from 500,000 to 999,999 inhabitants. Violent crime declined 4.0 percent in the nation’s metropolitan counties and 3.0 percent in nonmetropolitan counties.

• Cities with 25,000 to 49,999 inhabitants were the only city population group to report an increase in the number of murders, 5.3 percent. The number of murders in the nation’s nonmetropolitan counties also rose, 1.8 percent.

• Forcible rape trends dropped in all city population groups. The largest decrease was 7.3 percent in cities of less than 10,000 residents. Metropolitan counties reported a 3.7 percent decline in the number of rapes, but the number of rapes reported in nonmetropolitan counties rose slightly, 0.3 percent.

• All population groups reported decreases in the volume of robbery in 2009. Of the city groups, cities with populations of 100,000 to 249,999 had the largest decrease at 10.3 percent. Metropolitan counties reported a 6.7 percent drop in robberies; nonmetropolitan counties reported a 0.7 percent decline.

• The number of aggravated assaults declined in all population groups, with cities of 500,000 to 999,999 inhabitants reporting a 6.3 percent decrease. Aggravated assaults declined 3.7 percent in nonmetropolitan counties and 3.0 percent in metropolitan counties.

• All four regions in the nation showed decreases in violent crime in 2009 when compared with data from 2008. Violent crime decreased 6.6 percent in the South, 5.6 percent in the West, 4.6 percent in the Midwest, and 3.5 percent in the Northeast.

Source: FBI
Read more: http://www.insurancejournal.com/news/national/2010/05/25/110166.htm#ixzz0p305rcFX

Crash tests by the Insurance Institute for Highway Safety show that the mix of low-speed vehicles (LSVs) or minitrucks and regular traffic is a deadly combination.

LSVs are designed for tooling around residential neighborhoods, and minitrucks are for hauling cargo off-road. While these vehicles have a lot of appeal as a way to reduce emissions and cut fuel use, they don’t have to meet the basic safety standards that cars and pickups do, and they aren’t designed to protect their occupants in crashes, researchers note.

“By allowing LSVs and minitrucks on more and more kinds of roads, states are carving out exceptions to 40 years of auto safety regulations that save lives,” says David Zuby, the Institute’s chief research officer. “It’s a troubling trend that flies in the face of the work insurers, automakers, and the federal government have done to reduce crash risk.”

Practically every state allows LSVs, also called neighborhood electric vehicles, on certain roads, mostly with 35 mph or lower speed limits. Eight years ago just over a dozen states permitted them but now 46 do.

The National Highway Traffic Safety Administration (NHTSA) defines appropriate performance and safety standards but has no say in where LSVs are driven. The same goes for minitrucks, which are legal to operate on some roads in 16 states, even though they weren’t designed to meet U.S. safety or emission standards. The trend to grant minitrucks access to regular roads began in 2007 and is growing at a quick pace.

“On one hand you have NHTSA saying these vehicles were meant for low-risk, controlled environments or farm use, and on the other hand states are pushing them out onto the highways,” Zuby points out.

LSVs were envisioned as a low-cost, eco-friendly way to tool around gated communities in the Sun Belt where they would have little interaction with larger vehicles. NHTSA doesn’t require LSVs to have airbags or other safety features beyond belts since they’re intended for low-risk driving. Most minitrucks in the United States are used right-hand-drive vehicles imported from Japan, where they can operate on roads as long as they pass inspection every 2 years. Vehicles that fail often end up exported to North America. Also known as Kei-class vehicles, minitrucks are smaller than conventional pickups and weigh about 1,500 pounds. They must be imported with governors to limit speeds to 25 mph or less to be exempt from Clean Air Act provisions but can go much faster.

NHTSA in 1998 established safety standards for LSVs to be used on “short trips for shopping, social, and recreational purposes primarily within retirement or other planned communities with golf courses.” They must be able to go at least 20 mph but no faster than 25 mph. Basic features are required: headlights, taillights, stoplights, turn signals, reflectors, parking brakes, rearview mirrors, windshields, safety belts, and vehicle identification numbers.

Minitrucks weren’t an issue when NHTSA wrote LSV rules. The agency in 2006 amended the standards to include vehicles with gross vehicle weight ratings up to 3,000 pounds, and now 4 states require minitrucks to meet LSV standards. Still, NHTSA believes minitrucks should keep off the road. In a July 2009 letter of interpretation, the agency said that because “these vehicles are not manufactured to meet U.S. safety standards, NHTSA cannot endorse their use on public highways.”

The Energy Department estimates there are 45,000 LSVs on U.S. roads. New LSVs qualify for up to a $2,500 tax credit under the American Recovery and Reinvestment Act of 2009. Many states also offer tax incentives.

“Lost amid the talk about so-called sustainable transportation is any regard for the safety of people who ride in LSVs and minitrucks,” Zuby says. “We’re all for green vehicles that don’t trade safety for fuel efficiency.”

For eco-minded consumers, a better choice for regular traffic is a crashworthy hybrid like the Toyota Prius or another fuel-efficient car. Also worth a look are the Nissan Leaf and Chevrolet Volt, two battery-powered cars slated for delivery later this year, researchers say.

Crash Tests
To show that LSVs and minitrucks are no match for even the smallest of regular cars and pickups, Institute researchers tested two GEM e2 electric vehicles and a Changan Tiger Star minitruck. The GEMs were in side tests, one using a moving deformable barrier and the other using a Smart Fortwo as the striking vehicle. The Smart is the smallest passenger vehicle on US roads that meets crashworthiness standards. The Tiger struck a Ford Ranger XL regular cab pickup in a frontal offset test. The Ranger is one of the least pricey small pickups on the market. It earns an acceptable rating in the Institute’s frontal crashworthiness test, the lowest rating in its vehicle class.

The test dummies in the GEMs and the Tiger recorded indications of seriously debilitating or fatal injury to drivers in real-world crashes. In contrast, the Smart performed well and the Ranger reasonably so in similar crash tests.

“There’s a world of difference between vehicles that meet crashworthiness standards and those that don’t,” Zuby says. “It may be time for Congress to step in to extend federal passenger vehicle safety standards to LSVs or else restrict them to the low-risk traffic environments they were designed to navigate.”

Read more: http://www.insurancejournal.com/news/national/2010/05/20/110034.htm#ixzz0oVAahTGf