Category Archives: Auto Insurance

Auto Insurance

Study: One third of Americans lie on auto insurance applications

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Most people agree that honesty is the best policy, but when it comes to filling out insurance applications, many consumers are willing to fudge the truth to get a better rate. According to a study from finder.com, an estimated 35 million Americans have lied on an insurance application.

Almost one in three (29 percent) of the people who have lied on an insurance application have done so for car insurance. That amounts to 10.2 million Americans who were willing to lie to get the best coverage for the road.

Following car insurance, false information is most likely to appear on applications for health insurance (22 percent), life insurance (21 percent), income protection insurance (8 percent), travel insurance (7 percent), home and contents insurance (7 percent) and pet insurance (5 percent).

More men lie than women, but women are more likely than men to lie on an application in five of seven categories: health insurance, income protection insurance, travel insurance, home and contents insurance and pet insurance. Men lead women when it comes to lying on car insurance and life insurance applications.

“Taking creative liberties on your insurance application may seem like an innocent white lie, but it’s actually considered fraud, and the repercussions can be serious. If found out you may be charged a higher premium, denied a policy or even charged with fraud, requiring you to pay a fine or even do jail time,” said Finder’s consumer advocate Rachel Dix- Kessler.

There are numerous ways to save money on car insurance. The Insurance Information Institute has these tips for shopping around for the best policy.

For more information on insurance fraud click here.

Auto Insurance, Technology

Latest Driverless Vehicle Roadblock: Bicycles

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I hope he’s wearing a helmet.

As someone who (perhaps unwisely), likes to bike around New York, I’ve long looked forward to driverless cars. They can’t drive drunk. They won’t drive like reckless teenagers. They won’t threaten to beat me up for ringing my bell (true story).

Even better: they’ll be able to see and avoid me even on a dark and stormy night.

Or so I thought.

As it turns out, bicycles could slow driverless vehicle deployment. Case in point: Holland, land of bicycles.

According to a recent KPMG report, the Netherlands is the country most prepared for autonomous vehicles. The country is actively working to begin autonomous truck platooning on highways; a legal framework has been developed for testing AVs on public roads without a driver; and the country is even preparing a drivers license for AVs.

But whether AVs will ever operate in Holland’s cities is an open question. Because, as an executive quoted in the report put it, “We have a lot of bicycles.” That’s an understatement. According to The Guardian, there are an estimated 22.5 million bicycles for a population of 17 million people.

And unfortunately, as the article notes, bicyclists are unpredictable: “the varying sizes and agility of cyclists, with their sudden changes in speed and loose adherence to the rules of the road, present a major challenge to the [AV] existing technology.”

Such a major challenge, in fact, that KPMG suggests forgetting about ever integrating AVs into a bicycle-heavy environment: just keep AVs and bicyclists separated entirely.

We don’t have as many bicyclists in New York. The city estimates somewhere in the ballpark of 1.5 million casual riders.  But that’s probably enough cycling on our already-crowded, dilapidated streets to put a hold on my dream of a safe, driverless vehicle future. (AVs in Phoenix, meanwhile, have an entirely different problem…)

In the meantime, you would do well to wear a helmet and stop texting!

Auto Insurance, Homeowners Insurance

The dog ate my couch: animal damage and insurance

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always scheming

You may have read the recent story featured in the I.I.I. Daily about raccoon damage and homeowners insurance. The gist: raccoons got into a house and caused $80,000 worth of damage. The homeowners were surprised to learn that their insurance wouldn’t cover any of it.

So what’s the deal with animal damage and insurance?

Homeowners insurance

Let’s start with the easy stuff. If your dog Fido rips through your couch or pees all over the wall, you’re out of luck. Standard homeowners policies won’t cover any damage to your house or personal property caused by a pet. And”pet” is a pretty broad term. Doesn’t matter if it’s a Shih Tzu or a Clydesdale horse, pets are any animal you own.

What about animals that aren’t pets, like deer or birds or – God forbid – rats? That’s where things get interesting.

Building damage: You probably aren’t covered for any damage to the building caused by birds, rodents, insects, or vermin. There also probably won’t be coverage for any nesting or infestation. Insurance policies can vary widely, however, so make sure you ask your agent what is and isn’t considered a rodent or vermin (some insurers will say raccoons are vermin, some will say they’re not). The specific details of your policy will determine your coverage.

Damage to the building from other wild animals could be covered, though. If a moose runs through the sliding door to your deck, the damaged door would be covered.

Personal property damage: Unfortunately, your personal property is probably not covered no matter what kind of animal does the damaging. If a moose runs through your sliding door and wreaks havoc on grandma’s china, then you’re covered for damage to the door, but not the china.

Liability: You go to your friend’s house and bring Fido for a dog playdate. Fido then rips through your friend’s couch. Are you covered? Yes. Homeowners liability protection will cover the damage to other people’s property caused by your pets. Just not your property. Friendship saved.

Personal auto insurance

A squirrel chews through the wiring in your car. Fido dents your door chasing after a squirrel. A moose rams your car in a fit of rage, smashing the windshield. (Why do I keep thinking of moose scenarios?)

Does personal auto insurance cover animal damage? Yes, if you have optional comprehensive coverage. If you only have collision coverage, then you’re not covered.

Collision only covers damage when a car overturns or hits another car or object. Comprehensive covers…more or less everything else: damage from falling objects, fire, explosions – and birds and animals.

So if you paid the extra premium for comprehensive coverage (like most Americans do), then you’re covered for damage from chewing squirrels, incautious Fidos, and rampaging moose (meese?).

Auto Insurance, Homeowners Insurance

Florida’s assignment of benefits crisis: PowerPoint slides now available

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On December 11, 2018 the Insurance Information Institute (I.I.I.) published a report documenting Florida’s assignment of benefits crisis – what the crisis is, how it’s spreading and how it’s costing Florida consumers billions of dollars.

You can download and read the full report, “Florida’s assignment of benefits crisis: runaway litigation is spreading, and consumers are paying the price,” here.

Today we also published PowerPoint slides accompanying the report. We hope the slides will help illustrate the depth and breadth of the abuse. You can download the slides via this link.

An assignment of benefits (AOB) is a contract that allows a third party – a contractor, a medical provider, an auto repair shop – to bill an insurance company directly for repairs or other services done for the policyholder.

The process is innocuous and common throughout the country. But as our report notes, Florida’s unique legal systems richly rewards plaintiff’s attorneys and vendors when they submit inflated bills to insurance companies and then file lawsuits when those bills are disputed.

Not just a few lawsuits. Lots of lawsuits. The numbers are staggering. There were roughly 1,300 AOB lawsuits statewide in 2000.  There were more than 79,000 in 2013, and nearly 135,000 through November 9, 2018, a 70 percent increase in just five years.

Inflated claims and massive volumes of lawsuits have the predictable result of driving up insurance companies’ legal costs. Insurers are forced to then pass those costs on to consumers. In the study, we estimate that Florida’s auto and homeowners policyholders have paid about $2.5 billion more for insurance over the past dozen years to cover the increase in legal costs.

That doesn’t even count the billions more in excess claim settlements that are at the heart of the problem.

Many of these inflated bills and lawsuits are driven by a select number of contractors and their attorneys. Florida insurance customers can protect themselves – and their fellow citizens – by being very cautious when signing away their benefits under an AOB.