Barely four out of every 10 Missouri homeowners carry earthquake insurance, a cause of concern cited Friday as Gov. Matt Blunt heard briefings on the state's earthquake preparations.
Blunt held a closed-door Cabinet meeting at the State Emergency Management Agency to hear summaries of the earthquake plans at each of the state's agencies. Of particular concern is what would happen if a major earthquake occurs along the New Madrid Fault, which extends from northeast Arkansas through southeast Missouri into southern Illinois.
The governor asked agencies to update their earthquake plans after Hurricane Katrina hit the Gulf Coast earlier this year, swamping not only homes but also the emergency relief efforts.
Blunt said he was pleased with the plans made by state agencies. The focus is on providing immediate care to people's physical and emotional needs, then restoring services and rebuilding homes, businesses and communities, he said.
Yet that could prove difficult for homeowners who don't pay the extra premium for earthquake coverage and cannot afford to rebuild on their own.
"A significant number are without earthquake insurance, including many Missourians within southeast Missouri,'' Blunt said.
Statewide, fewer than 41 percent of home, farm and mobile home insurance policies have earthquake coverage, according to Department of Insurance records. In the city of St. Louis and the 47 counties most prone to earthquake damage, 62 percent have earthquake insurance.
But that percentage appears that high only because 72 percent carry earthquake insurance in heavily populated St. Louis County. Earthquake coverage hovers around 50 percent in New Madrid, Mississippi and Pemiscot counties, where damage is expected to be the heaviest.
Department of Insurance officials said they are trying to draw attention to the need for earthquake insurance.
An earthquake centered near the Missouri Bootheel town of New Madrid produced the largest earthquakes ever in North America between December 1811 and January 1812. U.S. Geological Survey scientists have said there is a 25 percent to 40 percent chance of a magnitude 6.0 earthquake along the New Madrid Fault in roughly the next 50 years.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Thursday, May 31, 2007
Saturday, May 12, 2007
AUTO INSURANCE PREMIUMS EXPECTED TO DROP IN 2007 FOR FIRST TIME SINCE 1999
AUTO INSURANCE PREMIUMS EXPECTED TO DROP IN 2007 FOR FIRST TIME SINCE 1999
Competitive Marketplace, Safer Cars, Fraud-Fighting Gains Contribute to Savings, I.I.I. Reports
December 5, 2006
The typical U.S. driver will pay less for auto insurance in 2007 than in 2006, with the average premium expenditure expected to drop by 0.5 percent, reported the Insurance Information Institute (I.I.I.)
The average annual cost for auto insurance premiums nationwide for 2007 is estimated at $847 per policy, the first decrease since 1999. This translates into a $4 per policy savings as compared to the $851 the typical U.S. driver paid in 2006. And while $4 may not sound like much for an individual policy, it translates into hundreds of millions of dollars in total consumer savings when spread across the U.S. The trend in the auto market stands in stark contrast to the health insurance industry, where premium rates for employer-sponsored policies has risen 87 percent over the past six years (2000-2006), according to a survey by the Kaiser Family Foundation and the Health Research and Educational Trust
“Competitive marketplaces, safer cars, aggressive fraud-fighting and innovative underwriting are joining forces in 2007 to drive down the price of an essential financial product,” said Robert Hartwig, exectutive vice president and chief economist of the I.I.I. “This is great news for drivers who were battered this year by higher fuel prices and rising auto repair costs.”
Hartwig said that savings would vary by driver, depending on his or her accident experience, and by state, with the greatest savings in states with the most competitive markets and lower savings in states where stringent regulations can counteract market forces.
Drivers pay more for auto insurance in states with significant urban populations, greater traffic density and a higher cost-of-living. Tort liability and other auto laws as well as each state’s auto body repair labor costs, liability coverage requirements and theft rates also have an impact on auto insurance prices.
The I.I.I. attributed the auto insurance price reductions to declining claim frequency (down anywhere from 3 to 5 percent in 2006 as compared to 2005), coupled with very modest increases in claims severity, with the average cost per claim, a figure that includes the price of medical care and property damage, rising only 2 to 4 percent in 2006 as compared to 2005.
In addition to fewer accidents, many industry analysts believe that fraud-fighting successes have contributed to a decrease in bogus bodily injury claims.
Safer vehicles and roads, as well as graduated licensing programs for teens, are other factors driving the downward trend in auto insurance premium costs. The changing demographics of the U.S. population, with millions of baby boomers born between 1946 and 1964 now all in what insurers calculate to be their safest driving years, are also contributing to these cost reductions.
“The I.I.I. is finding that the nation’s overall insurance rating system—how a company assesses the risk a particular driver represents—has on the whole become much fairer and more equitable through innovations in underwriting technology,” Dr. Hartwig said. By looking at a potential policyholder’s credit score, in conjunction with criteria such as their driving record and driving habits, insurers are able to match with greater precision than ever before the premium they charge in the context of the potential claims they may have to pay a policyholder, he noted.
Moreover, drivers’ auto insurance premiums are also affected by the amount of coverage they purchase. Every state insists on some level of coverage for its registered drivers. Yet the National Association of Insurance Commissioners (NAIC) estimated in 2004, for instance, that 23 percent of insured drivers did not purchase comprehensive coverage, and 28 percent opted against buying collision coverage. Drivers who buy neither comprehensive nor collision coverage have lower auto insurance premium rates while choosing to self-insure themselves for theft and other losses.
With an auto insurance market that is favorable to consumers, there are additional ways to save money, according to the I.I.I.
Raise your deductible. Higher deductibles on your car could produce savings of 15 to 30 percent or more.
Compare insurance costs before buying a car. Your premium is based in part on the car’s sticker price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injury or theft. These include air bags, anti-lock breaks, daytime running lights and anti-theft devices. Cars that are favorite targets for thieves cost more to insure. Information that can help you decide what car to buy is available from the Insurance Institute for Highway Safety ( http://www.iihs.org ).
Reduce coverage on older cars. Consider dropping collision and/or comprehensive coverage on older cars. It may not be cost-effective to continue to buy these coverages on cars worth less than 10 times the amount you would pay for the coverage.
Maintain good credit. Increasingly, insurers are using credit-based insurance scores to determine auto coverage premiums. This is because people with good credit tend to file fewer claims. All else being equal, a person with a good insurance score—credit information used by an insurer to predict claims—may pay much less for insurance than someone with a poor score.
Shop around. Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers.
For additional information on auto insurance, go to the I.I.I.’s Web site at http://www.iii.org .
The I.I.I. is a nonprofit, communications organization supported by the insurance industry.
Competitive Marketplace, Safer Cars, Fraud-Fighting Gains Contribute to Savings, I.I.I. Reports
December 5, 2006
The typical U.S. driver will pay less for auto insurance in 2007 than in 2006, with the average premium expenditure expected to drop by 0.5 percent, reported the Insurance Information Institute (I.I.I.)
The average annual cost for auto insurance premiums nationwide for 2007 is estimated at $847 per policy, the first decrease since 1999. This translates into a $4 per policy savings as compared to the $851 the typical U.S. driver paid in 2006. And while $4 may not sound like much for an individual policy, it translates into hundreds of millions of dollars in total consumer savings when spread across the U.S. The trend in the auto market stands in stark contrast to the health insurance industry, where premium rates for employer-sponsored policies has risen 87 percent over the past six years (2000-2006), according to a survey by the Kaiser Family Foundation and the Health Research and Educational Trust
“Competitive marketplaces, safer cars, aggressive fraud-fighting and innovative underwriting are joining forces in 2007 to drive down the price of an essential financial product,” said Robert Hartwig, exectutive vice president and chief economist of the I.I.I. “This is great news for drivers who were battered this year by higher fuel prices and rising auto repair costs.”
Hartwig said that savings would vary by driver, depending on his or her accident experience, and by state, with the greatest savings in states with the most competitive markets and lower savings in states where stringent regulations can counteract market forces.
Drivers pay more for auto insurance in states with significant urban populations, greater traffic density and a higher cost-of-living. Tort liability and other auto laws as well as each state’s auto body repair labor costs, liability coverage requirements and theft rates also have an impact on auto insurance prices.
The I.I.I. attributed the auto insurance price reductions to declining claim frequency (down anywhere from 3 to 5 percent in 2006 as compared to 2005), coupled with very modest increases in claims severity, with the average cost per claim, a figure that includes the price of medical care and property damage, rising only 2 to 4 percent in 2006 as compared to 2005.
In addition to fewer accidents, many industry analysts believe that fraud-fighting successes have contributed to a decrease in bogus bodily injury claims.
Safer vehicles and roads, as well as graduated licensing programs for teens, are other factors driving the downward trend in auto insurance premium costs. The changing demographics of the U.S. population, with millions of baby boomers born between 1946 and 1964 now all in what insurers calculate to be their safest driving years, are also contributing to these cost reductions.
“The I.I.I. is finding that the nation’s overall insurance rating system—how a company assesses the risk a particular driver represents—has on the whole become much fairer and more equitable through innovations in underwriting technology,” Dr. Hartwig said. By looking at a potential policyholder’s credit score, in conjunction with criteria such as their driving record and driving habits, insurers are able to match with greater precision than ever before the premium they charge in the context of the potential claims they may have to pay a policyholder, he noted.
Moreover, drivers’ auto insurance premiums are also affected by the amount of coverage they purchase. Every state insists on some level of coverage for its registered drivers. Yet the National Association of Insurance Commissioners (NAIC) estimated in 2004, for instance, that 23 percent of insured drivers did not purchase comprehensive coverage, and 28 percent opted against buying collision coverage. Drivers who buy neither comprehensive nor collision coverage have lower auto insurance premium rates while choosing to self-insure themselves for theft and other losses.
With an auto insurance market that is favorable to consumers, there are additional ways to save money, according to the I.I.I.
Raise your deductible. Higher deductibles on your car could produce savings of 15 to 30 percent or more.
Compare insurance costs before buying a car. Your premium is based in part on the car’s sticker price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injury or theft. These include air bags, anti-lock breaks, daytime running lights and anti-theft devices. Cars that are favorite targets for thieves cost more to insure. Information that can help you decide what car to buy is available from the Insurance Institute for Highway Safety ( http://www.iihs.org ).
Reduce coverage on older cars. Consider dropping collision and/or comprehensive coverage on older cars. It may not be cost-effective to continue to buy these coverages on cars worth less than 10 times the amount you would pay for the coverage.
Maintain good credit. Increasingly, insurers are using credit-based insurance scores to determine auto coverage premiums. This is because people with good credit tend to file fewer claims. All else being equal, a person with a good insurance score—credit information used by an insurer to predict claims—may pay much less for insurance than someone with a poor score.
Shop around. Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers.
For additional information on auto insurance, go to the I.I.I.’s Web site at http://www.iii.org .
The I.I.I. is a nonprofit, communications organization supported by the insurance industry.
Tuesday, March 27, 2007
Missouri Insurance Credit Scoring
Credit Scoring
The goal of every insurance company is to correlate rates for insurance policies as closely as possible with the actual cost of claims. If insurers set rates too high they will lose market share to competitors who have more accurately matched rates to expected costs. If they set rates too low they will lose money.
This continuous search for accuracy is good for consumers as well as insurance companies. The majority of consumers benefit because they are not subsidizing people who are worse insurance risks — people who are more likely to file claims than they are.
The computerization of data has brought more accuracy, speed and efficiency to businesses of all kinds. In the insurance arena, credit information has been used for decades to help underwriters decide whether to accept or reject applications for insurance. Now advances in information technology have led to the development of insurance scores, which enable insurers to better assess the risk of future claims.
An insurance score is a numerical ranking based on a person’s credit history. Actuarial studies show that how a person manages his or her financial affairs, which is what an insurance score indicates, is a good predictor of insurance claims. Insurance scores are used to help insurers differentiate between lower and higher insurance risks and thus charge a premium equal to the risk they are assuming.
Statistically, people who have a poor insurance score are more likely to file a claim. Insurance scores do not include data on race or income because insurers do not collect this information from applicants for insurance.
The goal of every insurance company is to correlate rates for insurance policies as closely as possible with the actual cost of claims. If insurers set rates too high they will lose market share to competitors who have more accurately matched rates to expected costs. If they set rates too low they will lose money.
This continuous search for accuracy is good for consumers as well as insurance companies. The majority of consumers benefit because they are not subsidizing people who are worse insurance risks — people who are more likely to file claims than they are.
The computerization of data has brought more accuracy, speed and efficiency to businesses of all kinds. In the insurance arena, credit information has been used for decades to help underwriters decide whether to accept or reject applications for insurance. Now advances in information technology have led to the development of insurance scores, which enable insurers to better assess the risk of future claims.
An insurance score is a numerical ranking based on a person’s credit history. Actuarial studies show that how a person manages his or her financial affairs, which is what an insurance score indicates, is a good predictor of insurance claims. Insurance scores are used to help insurers differentiate between lower and higher insurance risks and thus charge a premium equal to the risk they are assuming.
Statistically, people who have a poor insurance score are more likely to file a claim. Insurance scores do not include data on race or income because insurers do not collect this information from applicants for insurance.
Saturday, March 24, 2007
Did You Have Substantial Property Damage in 2006?
You May Be Able to Deduct a Portion of Uninsured Losses from Your Taxes; Document Unreimbursed Losses, Including Deductibles, Recommends the I.I.I.
NEW YORK, March 26, 2007 — With less than a month until tax day, taxpayers are sifting through their files to assess last year's gains and losses. If you suffered a loss of personal property not entirely covered by insurance, a portion of the unreimbursed loss may be an allowable deduction on your federal income tax return, according to the Insurance Information Institute (I.I.I.).
“If your home, car or boat was damaged or destroyed by a windstorm, fire, flood, vandalism or other sudden and unexpected disaster, you may be able to deduct a portion of the loss from your taxes,” said Jeanne M. Salvatore, I.I.I.'s senior vice president, public affairs.To qualify for the deduction, these losses usually need to be substantial, said the I.I.I.
If you were significantly underinsured or had a large catastrophe deductible, you may have a sizable unreimbursed casualty loss. “Generally, you can deduct the loss to the extent it exceeds 10 percent of your adjusted gross income, less one hundred dollars," said Anthony Orlando, of the New York based accounting firm Feuer and Orlando LLP. “A special provision, however, was recently enacted for the victims of Hurricanes Katrina, Wilma and Rita. Losses incurred during those storms do not have to exceed 10 percent of adjusted gross income to be deductible. You would have to file amended tax returns for those years in order to take advantage of this.”
"If the property is used in a trade or business, slightly different rules apply, so it is important to ask your tax preparer for assistance,” Orlando noted.“Be sure to collect all receipts, insurance statements, police reports (if appropriate) and other documentation and present it to your tax preparer to see if you qualify,” said Salvatore. And, according to Orlando, medical expenses exceeding 7.5 percent of your adjusted gross income may also qualify for a deduction.
If you prepare your own tax returns, be sure to review the "Nonbusiness Casualty and Theft Losses" and Publication 502 on Medical and Dental Expenses for 2004, available on the Internal Revenue Service Web site ( http://www.irs.gov ). You can also contact your state income tax bureau to learn more about both the federal and state guidelines for this deduction. For more information about insurance, visit the I.I.I. Web site, www.iii.org.
The I.I.I. also has free, downloadable software for creating a home inventory, available at http://www.knowyourstuff.org . This can help consumers keep track of the value of their personal possessions when filing claims and substantiate losses if they suffered an unreimbursed insurance loss.
NEW YORK, March 26, 2007 — With less than a month until tax day, taxpayers are sifting through their files to assess last year's gains and losses. If you suffered a loss of personal property not entirely covered by insurance, a portion of the unreimbursed loss may be an allowable deduction on your federal income tax return, according to the Insurance Information Institute (I.I.I.).
“If your home, car or boat was damaged or destroyed by a windstorm, fire, flood, vandalism or other sudden and unexpected disaster, you may be able to deduct a portion of the loss from your taxes,” said Jeanne M. Salvatore, I.I.I.'s senior vice president, public affairs.To qualify for the deduction, these losses usually need to be substantial, said the I.I.I.
If you were significantly underinsured or had a large catastrophe deductible, you may have a sizable unreimbursed casualty loss. “Generally, you can deduct the loss to the extent it exceeds 10 percent of your adjusted gross income, less one hundred dollars," said Anthony Orlando, of the New York based accounting firm Feuer and Orlando LLP. “A special provision, however, was recently enacted for the victims of Hurricanes Katrina, Wilma and Rita. Losses incurred during those storms do not have to exceed 10 percent of adjusted gross income to be deductible. You would have to file amended tax returns for those years in order to take advantage of this.”
"If the property is used in a trade or business, slightly different rules apply, so it is important to ask your tax preparer for assistance,” Orlando noted.“Be sure to collect all receipts, insurance statements, police reports (if appropriate) and other documentation and present it to your tax preparer to see if you qualify,” said Salvatore. And, according to Orlando, medical expenses exceeding 7.5 percent of your adjusted gross income may also qualify for a deduction.
If you prepare your own tax returns, be sure to review the "Nonbusiness Casualty and Theft Losses" and Publication 502 on Medical and Dental Expenses for 2004, available on the Internal Revenue Service Web site ( http://www.irs.gov ). You can also contact your state income tax bureau to learn more about both the federal and state guidelines for this deduction. For more information about insurance, visit the I.I.I. Web site, www.iii.org.
The I.I.I. also has free, downloadable software for creating a home inventory, available at http://www.knowyourstuff.org . This can help consumers keep track of the value of their personal possessions when filing claims and substantiate losses if they suffered an unreimbursed insurance loss.
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