Nightmares On Insurance Street
I.
Introduction & Unauthorized Entity Information
A.
B.
C.
II.
Company types
1.
Authorized
2.
Un-authorized
Penalties
1.
Loss of license
2.
Fines
3.
Payment of non-covered claims
Solutions
1.
DFS Web Page – “Find a Company”
2.
DFS Consumer Help Line
Business Auto Policy (BAP) – Temporary Substitutes
A.
B.
Dependant upon coverage symbols
1.
Symbol 1
2.
Symbol 2
3.
Symbol 8
Liability coverage
1.
C.
(10 minutes)
Automatic coverage in form, any symbol
Physical damage
1.
With symbol 2 only
a.
No coverage
b.
Comparison to liability
(20 minutes)
2.
The need for symbol 8
a.
D.
III.
Is there a dollar limit
Case study
1.
Various symbols
2.
Liability compared to physical damage
Kid’s Cars
A.
Statutory issues
1.
B.
(20 minutes)
FS 322.09
a.
Vicarious liability
b.
Age 18 issues
Titling Issues
1.
Parents’ name
a
b.
Advantages
(1)
Coverage
(2)
Price
Disadvantages
(1)
c
2.
Corruption of policy if child has accident
Comparison of options
Kid’s name
a.
Impact of FS 322.09
b.
Advantages
(1)
c.
Insulation of parents assets
Disadvantages
(1)
C.
Coverage Issues
1.
Separate policies
a.
b.
Analysis of gaps in parents policy
(1)
Liability
(2)
Exclusion for use of “family member” auto
Medical payments
(1)
2.
D.
Potential coverage gaps
Same as liability
Recommendations
a.
Same limits
c.
Full disclosure to both carriers
Case studies
1.
Separate policies
2.
One policy
BREAK
IV.
Coverage B Issues – Homeowners Policy
A.
B.
The grant of coverage
1.
Set apart by clear space
2.
On the “residence premises”
3.
10% of Coverage A
Excluded structures
1.
Rented or held for rental
2.
Used to store business property
(10 minutes)
(10 minutes)
3.
C.
D.
From which a business is conducted
Endorsements to fix gaps
1.
HO 04 40
2.
HO 04 42
4.
HO 04 48
Flood insurance issues
1.
Detached garage only
2.
10% of dwelling limit
a.
3.
IV.
Not additional coverage
Separate policy needed
NFIP: RCBAP vs. CPP
A.
RCBAP
1.
B.
Property covered
a.
Building
b.
Personal property
2.
Additions and alterations
3.
Foundations
CPP (Commercial Property Policy)
1.
Property covered
a.
Building
b.
Personal property
2.
FS 781.111(11) exclusions
3.
Property not covered
(20 minutes)
a.
C.
V.
Foundations
Comparison of coverage under both policies
1.
Primary excess issues
2.
Why the limits are different
Drive Other Car (DOC) Coverage
A.
B.
Coverages provided
1.
Liability
2.
Medical payments
3.
Uninsured motorists
4.
Physical damage
Coverages not provided
1.
PIP
a.
C.
Who is an insured
1.
Medical payments and uninsured motorists
a.
2.
3.
E.
Name one person, family covered
Liability and physical damage
b.
D.
Broadened PIP option
Person named and resident spouse
Gaps for family members – liability & physical damage
Comparison with the Personal Auto Policy
1.
Who is an insured
2.
Endorsements available
Case study
(20 minutes)
1.
PAP present
2.
No PAP present
BREAK
VI.
Employees As Insureds – Business Auto Policy – CA 99 33
A.
C.
1.
Person/entity named
2.
Permissive users of covered autos
Exceptions/exclusions
Coverage provided via CA 99 33
1.
Liability
2.
Physical damage
Uses
1.
2.
VII.
Employees driving autos owned by them
a.
Primary/excess issues
b.
PAP/BAB analysis
Traveling employees – rental cars
a.
Liability
b.
Physical damage
Uninsured Motorists (UM) on Motorcycles
A.
B.
(10 minutes)
Who is an insured under the business auto policy
a.
B.
(10 minutes)
Personal auto policy exclusions (FS 627.727)
1.
Owed but not insured autos
2.
Settling without consent of carrier
Stacking vs. non-stacked
(10 minutes)
C.
VIII.
1.
Stacked under PAP relating to motorcycle
2.
Non-stacked under PAP relating to motorcycle
3.
Owned but not insured
Case studies
1.
Stacked
2.
Non-stacked
3.
Analysis of coverage differences
Fair Credit Reporting Act (FCRA)
A.
Supplying Motor Vehicle Reports (MVRs) to Commercial Clients
B.
Considerations
1.
2.
3.
4.
MVR contract supplier
a.
Contract wording
b.
Personal lines compared to commercial lines
FCFA
a.
Reports pulled for insurance underwriting
b.
Reports pulled for employment purposes
Employer responsibilities
a.
Prior permission
b.
Pre-adverse action notice
c.
Adverse action notice
Agency responsibilities
a.
5.
Insure employer complies with FCFRA
Penalties for agency
(10 minutes)
6.
IX.
Case studies and analysis
PEO (Professional Employer Organization) Tricks & Traps
A.
(20 minutes)
Co-employer relationship
1.Primary employer
a.
Pays employees
b.
Pays taxes
c.
Pays SUTA & FUTA
d.
Offer benefits?
(1)
Health
(2)
Section 125
(3)
401K
(4)
Ancillary benefits
2.Worksite employer
a.
Hires / fires
b.
Salary determination
c.
Supervises
d.
Offers benefits
3.Defined by CSA in lieu of policy
B
Client Services Agreements “Gaps”
1.
Newly hired employees
a.
b.
2.
Client must notify PEO
New employee not covered until PEO is notified AND accepted
Uninsured subcontractors
a. CSA does not recognize subs as employees
b. Client is “naked”—no WC coverage
B. Other PEO “Tricks”
1. Can be many hidden costs
a.
Set up and change fees
b.
WC claims fees
c.
Garnishment fees
d.
Other hidden administration fees
2. State Unemployment Tax (SUTA)
a.
Tax cutoffs not honored
b.
Rates increased without notice
3. High Administration Fees
X.
a.
Lead with WC…low pricing for high risk accounts
b.
Increase admin to cover WC loss
c.
Rates for master health plans manipulated
Business Income and Extra Expense
A.
B.
Coverage options
1.
Business income with extra expense
2.
Business income without extra expense
3.
Extra Expense only
Methods to provide coverage
1.
Coinsurance method
a.
Business income worksheet
(10 minutes)
2.
Waiving coinsurance
a.
Maximum period of indemnity
b.
Monthly limit
c.
(1)
1/3 limit
(2)
1/4 limit
(3)
1/6 limit
Agreed value