Millhiser Smith Agency

Bond, Surety Bond

2012-02-21T13:10:00.000-08:00

Suretyship is a very specialized type of insurance that is created whenever one party wishes to guarantee the performance of another party. Although many insurance agencies provide bonds to their clients, the process of obtaining a bond is actually much more similar to securing a loan than purchasing an insurance policy.

These similarities are evidenced by what is normally reviewed by a surety/insurance company before they will approve a bond:

· Financial Strength/Stability

· Company History

· Continuation Plans

· Credit History

· Ability to Perform Tasks

The emphasis that’s placed on particular areas will change depending upon the type of bond and the line of work, but you can be assured an underwriter will always look first to the financial health/track record of the company/individual seeking a bond.

Here’s a brief summary of the various types of bonds most common today:

1. Contract Surety Bond

The contract bond provides financial security and construction assurance for building and construction projects by assuring the project owner (obligee) that the contractor (principal) will perform the work and compensate certain subcontractors, laborers and material suppliers, as outlined via their contract. Contract surety bonds include:

· Bid bonds provide financial assurance that the bid has been submitted in good faith and that the contractor intends to enter into the contract at the price bid and provide the required performance and payment bonds.

· Performance bonds protect the owner from financial loss should the contractor fail to perform the contract in accordance with its terms and conditions.

· Payment bonds guarantee that the contractor will pay certain subcontractors, laborers and material suppliers associated with the project.

· Maintenance bonds guarantee against defective workmanship or materials for a specified period.

· Subdivision bonds make guarantees to cities, counties or states that the principal will finance and construct certain improvements such as streets, sidewalks, curbs, gutters, sewers and drainage systems.

2. Commercial Surety Bond

Commercial surety bonds guarantee performance by the principal of the obligation or undertaking described in the bond. Commercial surety bonds include:

· License and permit bonds are required by state law or local regulations in order to obtain a license or permit to engage in a particular business (contractors, motor vehicle dealers, securities dealers, employment agencies, health spas, grain warehouses, liquor and sales tax).

· Public official bonds guarantee the performance of duty by a public official, (treasurers, tax collectors, sheriffs, judges, court clerks and notaries).

· Judicial bonds, also referred to as fiduciary bonds, secure the performance on a fiduciaries' duties and compliance with court orders (administrators, executors, guardians, trustees of a will, liquidators, receivers and masters).

· Federal bonds are required by the federal government (Medicare and Medicaid providers, customs, immigrants, excise and alcoholic beverage).

· Miscellaneous bonds include lost securities, lease, guarantee payment of utility bills, guarantee employer

Millhiser Smith has the ability & expertise to handle your bonding needs. We’re able to guide you through the process, so you are able to focus on managing and growing your business.

To learn more about how Millhiser Smith can assist with your bonding needs, please contact our office and ask to speak with one of our surety advisors.

Flood Protection and Flood Insurance, What You May Not Know...

2012-02-14T13:12:00.000-08:00

Tara Widdel, CIC CISR

Personal lines Manager, Millhiser Smith Agency, Inc

In our community of Cedar Rapids, Iowa, flood protection is a pretty hot topic. Cedar Rapids was devastated by a massive flood on June 13^th, 2008. We are still rebuilding from that flood and with that comes a lot of hard decisions and discussions on how to go about best rebuilding our city and protecting it from this type of disaster in the future.

About three weeks ago a reporter from the Cedar Rapids Gazette called me to get my opinion on flood protection, and asked if I thought that there was merit to the thought that some of our citizens expressed that flood insurance will protect our community, so there isn’t a need for a formal flood protection system, or flood walls, to be installed along the river. First and foremost, I am a true supporter of flood insurance, and what it can do to help our residents. For those that had flood insurance in 2008 versus those that did not would likely tell you how flood insurance tremendously helped them. With that said, flood insurance is not the answer indefinitely for flood protection for our community. When it comes to relying solely on flood insurance for widespread protection for our residents’ properties and businesses, here are some reasons why flood insurance should not be relied upon as the sole protection against potential future flooding risks:

1. For those that are not required by their mortgage lender to purchase flood insurance, even though premiums are very affordable if located outside the 100-year flood plain, many opt not to secure a flood policy. So we have many residents not covered with flood insurance because they are not required to have it.

2. Even when a lender requires coverage for a property, typically they are only requiring that the value of the property that is covered by a loan have flood coverage, and not for the entire value of the property nor do they require contents coverage. If the full value of the home is not required, many times the property is underinsured because the property owner does not opt to fully cover the property for flood loss. This leaves a gap in coverage.

3. If a property continuously floods, in order for a policy to remain in force for future policy renewals, the NFIP may require additional measures to be taken to protect the home, which are usually costly. This includes raising the structure above base flood elevation, relocating the structure, demolishing the structure or flood-proofing (for non-residential properties only). The flood policy may only assist with a small portion of this additional cost if at all.

4. Because the cost of flooding across the US is incredibly expensive, the NFIP can only offer basic coverage under the flood policy. It’s not as comprehensive as a homeowners or business owners policy, so the flooded property will not be fully replaced by coverage from a flood policy. A flood policy is meant to get that property back up to a functioning level, not necessarily to replace it to the state it was prior to the loss.

Even with a flood protection wall/ system in place, flood insurance should still be considered, but as you can see it is not the solution for all flood protection issues nor should it be the only solution considered. With weather patterns out of the ordinary, you never know when we could experience our next flood.

What many people in our area may not realize is that flood insurance can be extremely affordable if you are not in a special flood hazard area. For a residential home with a basement located outside the 100-year flood plain, $100,000 in building coverage, $40,000 contents coverage, the annual premium is $304. That equates to about $25 per month. Also keep in mind, time is of the essence, there is typically a 30 day waiting period before a policy would activate. This 30 day waiting period is only waived if you are required by your lending institution to carry flood insurance.

At Millhiser Smith we are able to write flood insurance policies through the National Flood Insurance Program (NFIP). A flood insurance policy can be written to cover the structure and contents of a home or business. For more information about flood insurance, please contact the insurance professionals at Millhiser Smith. We are licensed to fully address your questions and to get you a flood insurance quote for your residential home, condo, rental unit (contents only), or business.

In June 2008 our city was devastated by flood waters, and to this day we’re rebuilding and will be for many years to come. I drive through the flood devastated areas of Cedar Rapids every day, and see firsthand the rubbish left behind, abandoned homes, structures barely standing up, windows and doors boarded shut, and here and there you find a nicely renovated rebuilt home or business that is striving to survive amongst the devastation surrounding it. When you see the rebuilt properties it’s a sign of hope and perseverance, and there are more and more of these properties each day. The homes and businesses that came back after the flood of 2008 had to fight hard, and their fight is not over. I’m encouraged by the strength of our community and its residents, and am proud to say I’m from Cedar Rapids.

AFLAC- Voluntary and Supplemental Health Benefits

2011-12-19T13:26:00.001-08:00

Wouldn’t you like to get cash if you were sick or hurt?

Many of the benefits are available on an individual or group basis.

Only three policies are needed from an employer group to establish group rates.

Most group coverage is offered on a voluntary basis. This allows the employees to pick and choose what makes sense for their situation. It allows employees to choose a level of coverage at a price they can afford. The employee usually pays the full premium for the chosen benefits, but is able to get the substantial savings of the group rates.

Employers with as few as two employees can offer AFLAC benefits.

66% of all employers in the United States with ten or more employees offer at least one voluntary benefit.

Voluntary benefits can be a way to recruit and retain employees.

Benefits available include:

Cancer

Critical Illness

Accident

Short & Long Term Disability Income

Dental

Vision

Hospital Confinement Sickness Indemnity

An initial 15-minute meeting can be scheduled between the employer’s key decision makers and our AFLAC expert to see if this would be a benefit to your company.

Basics of Commercial Property Insurance

2011-11-21T13:08:00.000-08:00

A few key concepts help anyone better understand how their commercial property insurance works. Reading insurance forms is challenging for all of us but understanding the concepts addressed by the forms make them more manageable. The items below are terms and phrases used frequently in insurance to describe coverage or lack thereof. Hopefully the below will be helpful to your understanding.

1 – Commercial Property Loss Exposures – what can be damaged to cause financial loss

A. Real Property – this is property that is attached to the land or attached to a building that is attached to the land, like an office building or a piece of manufacturing equipment in a shop.

B. Personal Property – this is property that can be moved without damage, like desks, chairs and small equipment.

C. Personal Property of Others – this is property that can be moved without damage but is not owned by the owner of the policy. For whatever reason, possibly repair, the owner of the policy has items that do not belong to him/her but are his/her responsibility.

D. Property Off Premises – this is property that is owned by the owner of the policy but does not reside on the insured location.

2 – Causes of Loss – what happened that caused the damage which caused financial loss

A. Fire

B. Natural Disasters – earthquake, flood, tornado, blizzard, hurricane

C. Weather Conditions – hail, lightning, ice, snow

D. Accidents – explosions, aircraft, falling objects

E. Crime

3 – Consequences of Loss – what makes up the financial loss

A. Reduction in value – property is not worth what it should be due to damage by a cause of loss

B. Cost to repair or replace – property is not usable until it is functional again

C. Loss of income – business loses sales because the property is not functional

4 – Other Terms

A. Insurable Interest – As it pertains to property insurance, insurable interest means that at the time of the damage, the damage must cause me financial loss. For example, a bank that has provided Mr. Smith a loan on his new office building has an insurable interest in the building.

B. Insurance to Value – Simply put, this means insuring property for the correct value. The correct value can depend on the type of coverage provided by the policy. That is why it is important to understand the policy language. The correct value to you may not be seen in the same terms as what the policy lays out.

C. Coinsurance - Coinsurance is displayed as a percentage. It is the percentage the policy requires the policy owner to carry of the insurance to value amount of the property. Failing to meet the coinsurance requirement results in a penalty and can reduce the amount the policy owner may receive in the event of a loss.

D. Replacement Cost – Individual policies may tweak the wording but the generally accepted definition of this term is as follows: Damaged property will be replaced or repaired with materials of like kind and quality.

E. Actual Cash Value – As with replacement cost, the wording can vary a bit but here is the consensus definition: Actual cash value is the amount determined by calculating replacement cost and decreasing that amount by depreciation due to age or usage.

These are just a few key terms and concepts that may better help when reading insurance policies or discussing insurance with an agent. As has been mentioned before, any time a term, concept, coverage, really anything about the policy is confusing, ASK!!! An insurance agent will be able to explain the terms and offer options for coverage.

Personal Umbrella Liability

2011-11-14T12:30:00.000-08:00

We ask clients; "Do you have an umbrella policy?" Some say yes, but some say I don’t know. What is a personal umbrella policy?
Additional umbrella protection is becoming a "must have" for more and more insurance customers. Today, the threat of damaging lawsuits leading to personal financial ruin looms larger than ever. Without proper umbrella coverage, you could lose your home, savings and retirement as well as your future earnings. You can protect yourself and your family from this potential loss.
How do I protect myself and my peace of mind? A million dollar liability policy is the answer. It provides coverage above and over your personal liability coverage on your auto, home, boat and other personal exposures. You may possibly be able to add uninsured and underinsured motorist coverage to your umbrella which will provide you with additional bodily injury protection if you’re injured in an accident with an at-fault uninsured or underinsured motorist.
Personal umbrella gives you valuable coverage against claims or legal actions that aren’t included or aren’t covered under your primary policy, after you satisfy the policy deductible. You can purchase personal umbrella policies at one million, two million or even higher limit levels. This provides liability funds above your primary home and auto policies, which are often at limits of $300,000 or $500,000.
Here are some claims examples to better understand the protection provided to you under the personal umbrella policy.
While golfing, you accidently hit another player in the head with a golf ball, which causes permanent damage to the individual.
You are entertaining guests at your home and a friend falls down a flight of stairs due to a faulty railing. They become paralyzed due to a fall.
Your family dog bites a visitor at your home. A jury awards $400,000 to the victim.
You are traveling in your auto and are involved in an accident with injuries. An award of $750,000 is granted to the injured party.
The personal umbrella provides for certain covered perils not usually included in standard forms of liability insurance. They include:
Activities of an officer or director of not for profit organization
Liquor law liability
Legal defense in addition to the policy’s 1,000,000 of liability coverage
Blanket contractual liability
Worldwide coverage; and
Personal injury
Don’t risk all you’ve worked for! Your chances of being named in a large personal lawsuit are greater than ever before. It stands to reason that the more you own in assets and property, the more you stand to lose.
Do you have proper liability protection? Hopefully you do, but if not, contact Millhiser Smith for more information on personal umbrella coverage.

Business Income

2011-11-02T06:16:00.000-07:00

If there’s a misunderstood coverage in the world of commercial property insurance this may be the one…BUSINESS INCOME INSURANCE. Stay with me over the next few weeks and we’ll get a good handle on this mystifying coverage.

If you don’t feel like a Business income expert, don’t worry. Even as career agents we take refresher classes on business income to continue to understand it.

Topic #1

THE PURPOSE OF BUSINESS INCOME: To repair the profit and loss statement

1. Bus Income pays ongoing operating during a business interruption:

a. Payroll expenses g. Professional fees

b. Property taxes h. Utility expenses

c. Insurance premiums i. Postage & Telephone

d. Temporary rent expenses j. Depreciation expenses

e. Interest expenses k. Franchise fees

f. Advertising expenses l. Maintenance expenses

2. Bus. Income pays for net loss of profit during period of interruption.

3. Bus Income pays extra expenses incurred to minimize the period of interruption.

a. Rental of temporary facilities g. Special advertising expenses

b. Moving to/from temporary facilities h. Cost of additional employees

c. Set up costs at temporary facilities i. Cost of overtime and bonuses

d. Purchase of temporary equipment (less resale) j. Cost to find substitute supplies

e. Utility expenses at temporary facilities k. Cost to find substitute supplies

f. Cost of services performed by others

We’ll add to your understanding of business income over the next few weeks.

Topic #2 Glossary of Business Income Terms.

Topic #3 How much Business Income Limit should I have?

Topic #4 Business Income Worksheets.

Topic #5 Various types of Business Income Insurance.

Topic #6 Consequences of Inadequate limits.

FYI on Certificates

2011-10-25T10:49:00.000-07:00

Certificates of insurance – ahh the joys. If you are in business, more than likely you’ve run into the need to get or provide a certificate of insurance. Certificates are a snapshot of certain liability coverage an entity has in force on the date the certificate is issued. They are not a promise of coverage – they are documentation of it. Certificates can be a very useful, time-saving tool when used properly. It provides documentation to a business that the person they are hiring or who is using their property has the proper coverage in place in the event of a loss. This saves the entity in need of a certificate the hassle of getting a copy of someone else’s insurance policy and wading through it. However, as is often the case, when something is too easy, it can be taken advantage of.

Certificates have been the topic of debate for quite some time. The issue stems from certificate holders, those in need of the certificate, using it in a court of law to sue for coverage. This has forced the courts to rule on whether or not a certificate is a promise of coverage. Although the courts have upheld that a certificate is not a promise of coverage, the use of a certificate with incorrect information on it being distributed has, at times, allowed the courts to rule that although the piece of paper doesn’t promise coverage, the intent behind it did. In a nutshell, someone recorded incorrect information on a certificate. There was a loss that was not covered for the certificate holder. Wording added to the certificate implied the coverage would be provided although the insurance policies the certificate represented did not provide it. Courts ruled that coverage must be provided because the certificate holder had been misled, albeit unintentionally.

So – where does that leave the certificate of insurance? Several states around the country, including Iowa, have decided to take a stricter stand on how insurance companies and agents handle certificates. The Iowa Insurance Division issued a bulletin on 7/13/10 stating that no one should alter or misrepresent coverage on a certificate of insurance. The format of the certificate was modified to allow previous wording to be replaced with check boxes. Furthermore, if a certificate holder needs more than what the format allows, policy documents must be sent. This effort was initiated to clarify the coverage being afforded certificate holders – to lessen confusion, to reduce the number of court cases. Certificate holders run the gamut from acceptance to refusal of the new format and rules. This puts insurance agents in the position to balance what is legal and what is needed to keep their clients in business and happy.

Needless to say, certificates of insurance remain a thorny and, at times, confusing subject. When you need to request your agent to send a certificate of insurance for your project or event, remember your agent is protecting you when they will not give in to the demands of the holder to “have it the way we always used to”. With patience and time, this too shall pass.

Cell Phone/Electronic Device Use Policy

2011-10-18T05:48:00.001-07:00

When discussing safety elements with clients and business owners, one topic that is always popular is “Cell Phone Usage.” There are several elements to consider when thinking about implementing a cell phone policy including:

· How do I best protect my business?

· How to I put restrictions in place that will not affect the efficiency of my company?

· How do I make it fair to my employees?

States are now jumping on board making state laws that prohibit cell phone usage and texting while behind the wheel. Currently, 34 states ban text messaging for all drivers and 9 states prohibit all drivers from using handheld cell phones while driving. In several recent claims our agency has seen, the other party has requested cell phone records to determine if a driver was on the phone at the time of the accident. If you’re considering a cell phone/electronic use device policy, here are some Do’s and Don’ts to writing a policy…

· DO address the current state laws and any local ordinances in place. Make sure that the policy you draft speaks to the local regulations where your employees will be driving.

· DO be reasonable with your policy and understand that employees work long hours. Sometimes cell phone use is needed for communication between employees and their family members. It’s important to recognize this for workplace morale and retention.

· DON’T write a cell phone policy and assume you’re covered. As a business owner, you need to take appropriate steps to enforce the policy and employees need to clearly understand the consequences of not following procedures.

· DO consider having a provision in place regarding cell phone cameras. Do you have intellectual property, trade secrets, personal customer information or other confidential data that could be captured and sent with cell phone camera?

· DON’T forget to have ALL employees sign and date your policy once it’s written and in place.

· DO allow ample time for your employees to review and sign the policy as well as ask any questions.

· DO realize that cell phone policies are not a “one size fits all.” What may work for one employer, may not work for your company.

· DO address that the Company has the rights to monitor usage of company-issued phones for excessive or irregular use.

· DO address what an employee’s expectations are for personal use of a company owned cell phone. Also address the employee’s expectations for protecting the cell phone and returning it upon resignation or termination.

· DO protect yourself. If the cell phone is company-issued as well as the vehicle, you may want to prohibit cell phone use all together while an employee is driving your company vehicle.

· DON’T forget other electronic devices that may fall under this policy. Do you have a production area? Do those employees listen to music on their i-pods or MP3 players? Can the headphone wires be a safety hazard? If you have company issued laptops, think about security requirements for wireless internet.

· DO make sure to have any written policy reviewed by your attorney before handing it out to employees.

Millhiser Smith has several samples of a cell phone/electronic device use policy that we’d be happy to share with you. Please contact me at clamb@millhisersmith.com if you have any questions or if you would like a sample of a cell phone/electronic use device policy.

Personal Auto vs. Commercial Auto

2011-09-20T09:42:00.001-07:00

Auto insurance is auto insurance right? I mean, what’s the big deal if my vehicle is used for work and my home life? Unfortunately, personal and commercial auto insurance are not the same. In fact, it can seem like people speaking 2 different languages when you are new to it. Let’s do a brief overview of each and then we’ll note the similarities and differences.

Personal Auto Insurance is designed for individuals and their family members primarily residing in the same household. Even this first sentence can be tricky when it comes to certain life situations that can impact anyone like divorce, having a roommate, shared custody, children away at college, caring for a parent or grandparent in the home. Since the language used in the personal auto policy is very specific about who is and isn’t covered depending on the situation, it’s best if you review your particular situation with a licensed agent. Moving on from the hot potato of who is covered by the policy we get to what is covered. Personal Auto policies are for insuring private-passenger-type autos owned by individuals. The policy may be structured to provide a combination of liability, personal injury protection, medical payments, uninsured and underinsured motorists, and physical damage coverages. In laymen’s terms, a personal auto policy is designed to provide coverage for the vehicle owner and its operators in the event of injury or damage caused to another person or another’s property as well as damage to the vehicle itself.

Commercial Auto Insurance is designed to meet the various auto insurance needs of any type of commercial entity. This includes coverage for repair shops, car dealers and truckers as well as any business that owns and uses vehicles in running its operations. Some of the coverages are very similar: liability, uninsured/underinsured motorists, medical payments and physical damage. However, a business can have more exposure due to its daily operations which requires more specific or extensive coverage.

So what do these 2 very different types of coverage have in common?

1. Liability coverage is required by law in most states so you will see it on both commercial and personal auto policies.

2. All drivers and household members with access to vehicles are considered when determining premium for an auto policy.

3. No matter if your policy is personal or commercial it is important to let your agent know WHO OWNS THE VEHICLE (what name is listed on the title). If the vehicle is titled to you personally, it should be on a personal auto policy unless it is used solely for business. If it’s titled in the name of a commercial entity, it should be on a commercial policy. Some companies will allow vehicles titled in the name of the owner of the company to be on the commercial policy as well.

4. Both policies give you the opportunity to purchase uninsured/underinsured motorist coverage and physical damage coverage. Uninsured/underinsured motorist coverage provides additional funds if you are involved in an auto accident caused by another who doesn’t have enough insurance to pay for the damages / injuries. Physical damage coverage allows you to purchase coverage that will repair damage to the auto covered under your auto policy.

5. The way a vehicle is used can impact your premium with both types of policies. Do you use your personal vehicle for business (sales calls)? Does your business do a lot of deliveries? How far away from your location do your vehicles travel on a regular basis? Do you drive to work or do you use the vehicle only rarely?

There are other things personal and auto insurance policies have in common but now let’s move on to some major differences.

1. With a personal insurance policy, liability coverage follows the vehicle. For example, if you own a trailer or camper that is insured on a personal policy, more than likely the only coverage you have for it is physical damage coverage. When the trailer or camper is being pulled by a vehicle covered under yours or anyone else’s personal insurance policy, liability extends to the trailer or camper from the vehicle. If Bob borrows Joe’s trailer and there is an auto accident in which the trailer causes damage to a 3^rd party, Bob’s liability coverage that he has on the vehicle that pulls the trailer will pay the claim. This is completely opposite on a commercial insurance policy. Each trailer must have liability coverage for itself. If Business A loans a trailer to Business B and Business B has an auto accident in which that trailer causes damage to a 3^rd party, Business A’s insurance will pay the claim because the liability coverage comes from the policy of the owner of the trailer.

2. Drivers with permits or under the age of 18 are expected on personal auto policies. Personal auto policies also have discounts available to help decrease the higher premium that can be generated by a youthful driver. Not the case for commercial insurance. Most insurance companies will not allow drivers under a certain age to be insured on a business’ policy. Furthermore, if the company can be persuaded to allow a youthful driver it can be under specific restrictions and cost.

3. The definition of a vehicle insured on a personal auto policy is a private-passenger type vehicle as noted above. However, the definition of a vehicle insured on a commercial auto policy can be extremely broad. The coverage can be determined by ownership, usage and type of business. A commercial auto policy has a specific section that outlines what types of vehicles are covered and for what coverage. It will also contain a listing of vehicles like a personal auto policy; however the commercial policy listing can include items like mobile equipment and non-owned autos.

4. A personal auto policy gives all the drivers listed on the policy coverage no matter what vehicle they are driving – even if it is one they borrow one from someone else. A commercial auto policy provides coverage for the drivers listed on the policy only when they are driving vehicles that the policy designates as covered. Doing so protects the business from any fallout caused by an employee’s driving on his/her personal time. However, the owner of the business and his/her family may need to add more coverage to their business policy if they don’t have a personal auto policy to provide them with coverage as drivers in any situation.

5. Commercial auto policies can be designed to provide coverage for test driving vehicles, transporting cargo from Iowa to Washington or pizza delivery in the employee’s own car. In this way it is a far more flexible policy than a personal auto policy.

No matter what kind of policy you think you need, discuss with a licensed agent. They are your best guide to what will protect you the most.

Rating Factors

2011-09-06T11:43:00.001-07:00

Just like anything else, the more advanced technology gets, the more complex rating insurance has become with personal insurance rating (home, auto, motorcycle, umbrella, rentals, etc.). We can no longer collect three or four factors and tell you a rate, instead we must plug in several characteristics into the computer and get a rate. Those that have 10+ years experience in the Insurance Industry quite frequently tell me… “back in the day it was much easier, we could just pull out a manual, plug in a few factors and get an accurate quote.” Those days are long gone. Now-a-days, it’s much more complex. Not only does it take more time, but it’s also hard to foresee future renewal pricing, or what reporting a claim will do to rates.

Actuaries are the folks that work for insurance companies and they analyze data on risk, and determine the key factors that would predict future losses and profitability of an account. Based on their findings they make recommendations to the insurance company advising how they should rate their policies. As a consumer, we should be aware of the factors that drive our insurance rates upward or down.

Like mentioned above, there are many, potentially hundreds of factors playing into the creation of a rate. Below are, in my opinion, the most important factors that play a part in the rating and underwriting of your insurance policies.

Ø “Insurance Score” : From what I’ve been told this is likely the most important indicator of future claims, therefore is heavily considered to influence rates. This is derived primarily from information reported on your personal credit history. It is not a true credit score, but it is heavily based on the characteristics that make up your credit score. The better your insurance score the more preferred pricing you will receive. As an agency we cannot view your credit history or information. However, there is a website which will allow you to order your annual credit report from each of the 3 major credit reporting agencies (TransUnion, Experian, and Equifax), one time per year for free. If you find errors on your report, it’s important to get these corrected.

o The website is: www. AnnualCreditReport.com

Ø Claim History: Each time you report a claim, regardless of whether there was a payout, mandatorily the insurance company must report this claim. It will be recorded on your claim history (similar to how a driving violation shows up on your Motor Vehicle Report). Zero dollar payouts are not going to affect you as much as a claim with a payout, but note that zero payout claims are still recorded.

Insurance companies will look heavily at the frequency and/or severity of claims when underwriting a homeowners or auto policy. The truth is, insurance policies are really meant for the catastrophic claims, and should be used in this manner. Turning in every small claim will likely raise your rates for future renewals or alert an underwriter to review the account and determine if they want to continue offering coverage in the future.

Ø Continuous Coverage without a Lapse: Similar to Claims history and motor vehicle reports, when you take out an insurance policy, continuity of coverage with an insurance company is recorded and is accessible to other insurance companies should you shop for insurance in the future. Actuaries have determined that continuous coverage without a lapse means a better risk; therefore better rates are afforded for these clients. Even better yet is continuous coverage with a single carrier for a number of years without a lapse. As an independent agency we have other markets, and you may find a better rate with another company. However tenure advantages with your current company should be weighed when contemplating changing insurance companies.

Ø Prompt Payment of Insurance Premiums: Making sure that you get your insurance premiums paid on time is very closely monitored. Underwriting has told us this is one of the largest indicators of whether an account will be profitable long-term. If you are on time making your payments the majority of the time, you will get preferred pricing and favorable underwriting consideration. If you ever think you cannot make a scheduled payment on time, please call the agency in advance and we’ll do our best to help you. Contact us in prior the due date, and we will work with the company to come up with a plan so that it’s not viewed as late.

We know that sometimes the above factors may be skewed against you, and that’s why we’re here… to help you however we can.

Disaster Recovery

2011-08-25T06:03:00.001-07:00

Having the right insurance coverage is one important piece in maintaining business continuity.

However, many business owners don’t realize how important a disaster plan is until it’s too late. Ninety percent of businesses fail within a year if they are unable to resume operations within five days of a disaster. Yet only 35% of small to medium size businesses have a comprehensive plan. The best time to get your plan together is well before you ever need it, so that you have ample time to test its components and make necessary modifications.

To get started, determine all the critical components to operation of your business, from computer and phone systems, to electrical, plumbing, suppliers, shipping, mailing and staffing and communication (both within the company and to the outside community). For each area, a detailed guide that describes the steps necessary for a substitute or workaround to the problem and then a permanent solution must be provided. Remember that the person normally responsible for each critical area may not be available at time of need. In that event, the disaster plan must be written so that a lay person can follow the right steps to getting your business back in operation as quickly as possible.

Once you have the critical areas of operation identified, set up a timeline for completion of the plan and stick to it. Assign appropriate “experts” for each area to carefully lay out instructions. Test each portion of the plan along the way. Be sure to appoint a continuity team within your organization—these members will work together on disaster situations of a larger scale to coordinate efforts.

An important component of the disaster plan will be lists, such as employee contact information, inventory, vendors and suppliers, repair persons, customers and insurance information. Be certain that your computer data is being saved and stored off-sight. Prepare ahead of time for the possibility of having to conduct operations at an alternate location.

These guidelines should start you on a path to prepare for the worst and be ready when it happens. That is true peace of mind.

Students at College

2011-08-17T11:13:00.001-07:00

Students at College

Sending your children off to college is both rewarding and scary, for BOTH of you! You have thought of everything- meal plans, roommates, class schedules, etc. Don’t let one last important aspect escape you. Contact your agent to confirm your college student has proper insurance coverage. Consider these important questions to ask before your child leaves for college to be reassured they’re fully protected.

Know your limits: many homeowners’ policies will consider a dorm room an extension of your personal home and therefore extend up to 10% of your personal property to a child away at school, as long as the child is still considered an insured under the policy (meeting requirements outlined by your policy). If your child chooses to live off campus the parent’s homeowners coverage may not automatically extend to them. In some cases, you need to consider a renter’s policy in their name. You’ve spent a lot of money on laptops, cell phones, iPods, Mp3 players and much more- make sure you have them covered properly in case of theft, fire, etc! Don’t forget: liability will also extend from your home policy but there are requirements for this as well. Check your policy: does your child have to be a full time student AND be under a certain age (usually between 24-29)?

Don’t make the mistake of removing your child as a driver to save money on your auto insurance. What would happen if your child came home for the weekend and drove your car? You know – home cooked meals, laundry, cash, we all remember the routine! Or what if your child was struck by a vehicle as a pedestrian? Make sure they still have coverage by leaving them on your policy as a driver; there are other ways you can reduce your auto premiums. For instance, ask your agent about “good student” and “away at school” discounts. Usually a B average or higher will land your son or daughter a nice discount. A child who is attending school 100 miles or more away from home will also give a helpful discount. Be sure to let your agent know if your son or daughter has their vehicle at school with them as well! Depending on where they’re attending school, the garaging zip code might be another way to lower your rates!

A healthy student is a good student! Most students can stay on their parents’ health plan as long as they’re considered a full time student but restrictions vary greatly by state and become a little more complicated if your child is attending school out-of state. Verify coverages and restrictions with your provider.

Plan ahead: though it is something none of us want to consider, it is just as important to have adequate life insurance in place in the event something tragic would happen to you. College students are often dependent on their families to get them through the financial aspect of college; talk to an agent to determine a suitable amount to carry.

Remember to count on us! If you haven’t looked into adjusting your coverage after sending a child off to college contact us for help. You could save money and protect your child from unexpected large expenses.

What Should I Look for in an Agent?

2011-08-11T07:40:00.000-07:00

UGH – insurance can be one of the more frustrating aspects of life – whether for a business or an individual. We want to provide an outlet for it and an opportunity to lessen it. There are so many reasons we buy insurance – someone makes us, like the government or the bank. We want to protect our assets or our employees. We always have and just keep doing so. It’s important to understand what insurance you have and sit down with an agent to discuss if it’s right for what you need. You can be insurance rich or insurance poor. Neither option is ideal - it’s like going on vacation to a tropical climate and returning either sunburned or paler than when you left instead of with a nice even tan. Here are some tips when sitting down with an insurance agent:

1 – Have an idea why you are purchasing insurance. Are you required? Are you protecting something?

2 – Ask questions. If your agent uses a term you don’t know, ASK. Your insurance agent can provide you with an explanation and an example of how it applies to you.

3 – Be prepared to answer questions. One of the “jobs” of an agent is to help you figure out what is important to you, how it can be damaged or lost and what can be done about it.

4 – Take time to think about what you and your agent have discussed before making a decision. Sleep on it if you can. It’s amazing what a few days can do to your perspective on what’s important and what needs to be covered. I may be terrified that a tornado will destroy my house because I grew up in tornado alley. If I live on the West Coast, I need to be more concerned about earthquake than tornado. This is an extreme example but here’s my point . . . Listen to what your agent says is important. Listen to what you think is important. Weigh the costs versus the risks you are willing to take.

Insurance can be scary. You pay money to protect something IN CASE something goes wrong. This is also another reason it can be frustrating. BUT – if something does go wrong, it’s not something you want to be without. Keep that in mind when making your decisions as well.

Why Millhiser Smith?

2011-08-02T08:12:00.001-07:00

We know that people have lots of options when it comes to insurance. We also know that lots of companies tout their discounts and low prices, and while we have lots of discounts and low prices, we know that it comes down to more than that. Millhiser Smith prides itself on commitment, relationships and integrity. We are dedicated to excellence in every area. This means finding you the lowest rates AND providing you with the best claims service. We foster and cultivate strong relationships with our clients and our carriers to provide this service. We strive to exceed ALL of your expectations. Our actions reflect the principles that Millhiser Smith was founded on over 80 years ago. So, to answer the question, why Millhiser Smith? The answer is because we are committed to you. Through our risk management services, discounts and low prices, 24/7 service, claims handling and customer service we focus on your needs. Call or email us today to find out how we can help you with all of your insurance and risk management needs.