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Group Insurance Analysts – February 2014 Newsletter

In this issue we will discuss more on health reform (The ACA), and other insurance issues.

Haystack Help Radio and The Source, 560 KLZ

Tune in every other Thursday from 4-5 pm on 560 KLZ on the AM dial as GIA will join Scott Whatley, the host of Haystack Help radio, for insurance related issues and updates. GIA has been a regular guest on the show for the past 18 months and now will be on for an hour every other Thursday. The next show is 3/6/14, then again on 3/20/14 and 4/3/14, and every other Thursday thereafter. This is also a great way to call in with insurance related questions.

Health Reform (The Affordable Care Act) Updates

Applications for new health insurance policies will be accepted up to March 31, 2014 at which time the initial open enrollment period will end. The lock in period will be from April 1 until December 31, 2014 in which new enrollments will not be accepted unless there is a qualifying event, such as the involuntary loss of coverage.

On November 15, 2014 the 2015 open enrollment will begin for policies with a 1/1/2015 effective date. That enrollment period will be open until 1/15/2015. Due to the new enrollment period guidelines, it is important to understand that people cannot go out and buy a policy just when they need it. All policies must be purchased during an open enrollment period, or if there is a qualifying event.

What About Your Insurance?

The following is what you can expect based on your individual situation:

  1. Grandfathered health policies will not be cancelled due to the requirements of the ACA. However, a consumer with a grandfathered plan may drop that plan in favor of a new, ACA compliant plan up until 3/31/2014, or they will need to wait until the next open enrollment period.
  2. Non grandfathered policies are set to cancel at their 2014 renewal date. Many of these policies early renewed late last year and will be good until the end of 2014. If an existing policy cancels during the lock in period, it is considered a qualifying event to purchase a new policy.
  3. It is possible that an existing non grandfathered policy could be modified to become ACA compliant if that policy is close enough in structure to allow the change by amendment. Most existing policies are too lean to be allowed to be modified by amendment to meet the ACA requirements and won’t be given that option.

A grandfathered plan is one that became effective prior to 3/23/2010.

Help With Premiums

2014 Poverty Guidelines for the 48 Contiguous States and the District of Columbia

Persons in family/household Federal Poverty guideline Medicaid Expansion 138% of FPL Medicaid Expansion 250% of FPL Medicaid Expansion 400% of FPL
100% 138% 250% 400%
1 $11,670 $16,105 $29,175 $46,680
2 $15,730 $21,707 $39,325 $62,920
3 $19,790 $27,310 $49,475 $79,160
4 $23,850 $32,913 $59,625 $95,400
5 $27,910 $38,516 $69,775 $111,640
6 $31,970 $44,119 $79,925 $127,880
7 $36,030 $49,721 $90,075 $144,120
8 $40,090 $55,324 $100,225 $160,360

 

Uninsured rate drops to 16.1%

The percentage of Americans without health insurance fell to 16.1% in January, 1.2 percentage points lower than in December, according to a Gallup-Healthways poll. The uninsured rate for unemployed people dropped 6.7 percentage points, the rate for nonwhites fell 2.6 percentage points and the rate for women was down 1.9 points. There was no substantial change in the 18 to 34-year-old demographic.

Individual Mandate

2014 begins the first individual mandate requirement for health insurance where those without a qualified health plan for more than three months in 2014 will pay a tax penalty. In 2014, the penalty is 1% of income or $95 whichever is greater. The penalty rises in 2015 to 2% of income and in 2015 it is 2.5% of income. People covered under Medicare, Medicaid, and employer group health or retirement plan, or under a qualified individual health plan are exempt from the penalty.

 

How an umbrella policy works

An umbrella policy provides an additional layer of liability protection that can be used with any policy, including boat, motorcycle, all-terrain vehicle and snowmobile. It kicks in when the underlying or primary policy doesn’t provide sufficient liability protection.

A $1 million umbrella policy, in most cases, is less than $200 for an annual policy.

Who could benefit from an umbrella policy?

People who:

  1. Drive a car or let someone else use their car
  2. Host dinner parties or other gatherings
  3. Participate in carpools or other group activities
  4. Own a home, rental properties or multiple residences
  5. Have young drivers in their household

 

What Instances Would You Use an Umbrella Policy?

Nearly 85% of claims payments on umbrella claims are related to auto accidents, and over the past 12 months, 30% of those claims involved a pedestrian, motorcycle or bicycle. Below are a few examples of recent claims, all of which required a payout of more than $1 million. That’s much higher than any auto policy limits, so consider what might be right for your customer as most insurers offers limits up to $5 million.

  1. Customer hit gas instead of brake by mistake and ran through the front of a restaurant, seriously injuring several people.
  2. Customer didn’t see a motorcycle and pulled out, causing the motorcyclist to hit the side of the customer’s car.
  3. Customer’s car went off the road. The driver overcorrected, causing the vehicle to roll multiple times.
  4. Customer’s son was allegedly driving under the influence and hit a bicyclist.
  5. Customer accidentally set a fire in his apartment which spread to other units.

Home Insurance

How a Roof Might be Covered under a Home Insurance Policy

There are several methods to insure your roof under a homeowners insurance policy which requires that you pay attention to that detail otherwise you could be in for a surprise at the time of claim.

  1. Replacement cost coverage will replace the roof in full minus your deductible. Depreciation will not be applied. This would be the best, and most expensive coverage.
  2. Actual Cash Value (ACV) –  this will cover the value of the roof minus any depreciation for age. For example, if a roof rated for 20 years is damaged in year 15, the insurer will depreciate the roof by 75% and cover the balance. The premium for this policy will cost less but will also cover less, especially for an older roof.
  3. Roof schedule – this is similar to ACV but clearly defines in the policy how much will be covered on the roof based on its age. Although this may be an OK option for a house with a newer roof, it may not be as good for a house with an older roof.
  4. Separate wind/hail deductibles – In addition to you deductible for all perils, the insurance contract may contain a separate roof deductible for wind or hail claims. This separate deductible might be a set dollar amount such as $2500, or it might be stated as a percent, i.e. 1%, 2%, etc… If a percent, the 1% is based on the insured value of the home, so a $500,000 home @ 1% wind hail deductible would translate into a separate $5000 deductible for the roof.

When buying or comparing home insurance policies, it is very important to understand how the roof will be covered.

Updates on Auto and Home Insurance

 

GIA Risk Management, LLC is considered to be one of the fastest growing, locally owned, independent P & C insurance agencies in Colorado. We do this by contracting with many different insurance companies so that we can offer our clients the choices and options they seek. Because we are not employed by one insurance company, we can truly represent the needs of our customers.

 

Insurance companies use many different criteria to determine rates, which is why rates can vary dramatically from one insurer to another. Some insurers have very low rates for those with exceptional credit, while other insurers might be better for teenage drivers. This is why it is so important to review and shop insurance coverage’s.

 

As you are probably aware already, the recent weather related events in Colorado and the rest of the United States is causing significant increases in property insurance for the first time in several years. Some large insurers are now refusing to write property insurance on a stand alone basis, but only as part of a package with an auto insurance policy. Other insurers are offering larger discounts for bundled policies, or putting restrictions on roof damage from wind and hail.

 

As weather related claims hit, most homeowners need to be aware that standard homeowner’s policies do not cover damage from flooding. Earthquakes are another standard exclusion. Flood insurance is a separate policy that can be purchased in addition to your homeowners insurance even if you are not in a flood plain. If you don’t have flood insurance and a severe rains storm floods your basement, that damage will not be covered. If you are interested in a quote for flood insurance, please let us know.

 

As independent brokers, we shop the market to help our customers find the right coverage at the best price. This is a value proposition that is difficult for a captive agent to match. We now quote the following insurance companies for our clients though a computer program that compares the rates and coverage:

  • Safeco ( A Liberty Mutual Company )        
  • Progressive                  
  • Travelers                  
  • Hartford and Hartford AARP          
  • Allied ( A Nationwide Insurance Company)  
  • MetLife                        
  • GMAC                            
  • Electric Insurance ( A General Electric Company)
  • Pacific Specialty
  • ASI
  • And more, depending on the risk.

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