Understanding Insurance
Personal Or Commercial Car Insurance: Which Is Right For You?
If, like many Americans, your family car is also used for purposes that could be considered commercial use, you may want to steer yourself into a chair and look over your
insurance policy.
You’ll need to consider buying a commercial policy or making sure that your existing personal auto policy covers the vehicle for business use. Whether or not you need a commercial policy depends on how you use your vehicle and what company you have it insured with. Every company has different guidelines and may surcharge for business-use coverage on a personal auto policy.
If you’re not sure whether business use is covered on your personal policy, it’s important to call your insurance company or agent. The Progressive Group of Insurance Companies has put together these four questions you may want to ask:
- How do companies determine commercial use? One definition could include “engaging in transporting goods for compensation or a fee,” which includes pizza or newspaper delivery, catering, door-to-door consulting services, landscaping or snowplowing services, logging business, day care/church van services or farm-to-market delivery. People who do these kinds of work should consider purchasing a commercial vehicle policy.
- Do you need more liability coverage than a personal auto policy provides? Generally, a commercial auto policy offers higher limits of liability, but less or no coverage in areas that are typically not associated with commercial auto risks.
- Do you need special coverage for situations encountered while conducting business?
Commercial auto policies usually offer these coverages, and they’re normally not available with personal auto policies. These include hired and nonowned auto coverage and coverage
for towing a trailer for business use.
- Do you need to list any employees as drivers? Commercial auto policies allow you to list anyone that you employ. You don’t have that option with a personal auto policy. In general, you’ll need commercial auto coverage if the vehicle you use is owned by a corporate partnership or driven by employees, or if it’s used to haul tools or equipment weighing more than 500 pounds, make deliveries or heavy enough to require state or federal filings.
Did You Know?
If, like many Americans, your family car is also used for purposes that could be considered commercial use, you may want to steer yourself into a chair and look over your insurance policy.
About our Agency
Nicholas Schidowka began his work in the insurance and financial services industry in 1997. In 2001 he obtained Ohio licenses in Property and Casualty insurance and Life and Health insurance.
Since then, he has worked hard to provide various insurance services to his customers including auto, business, health, home, and life. His professional and courteous approach to the insurance field has cultivated a diverse and loyal clientele in the Cleveland (Parma), Ohio area.
In 2007, Insurance Cleveland Agency LLC was formed. As an independent agency, Insurance Cleveland Agency has access to several different insurance carriers including Aetna, Encompass (a division of Allstate Insurance Company), Golden Rule (a UnitedHealthcare company), The Hartford, Medical Mutual, Ohio Casualty (Member of Liberty Mutual Group), Progressive, Safeco (Member of Liberty Mutual Group), The Providence Association, Travelers, Victoria
(parent company is Nationwide Mutual Insurance Company), Dairyland/Viking (Member of the Sentry Insurance Group) etc.
In May of 2008 Insurance Cleveland Agency was pleased to announce the addition of Ivan Voytovych to the team! Mr. Voytovych is a highly qualified and valuable addition to the ICA team and helps the agency cater to the company’s English, Ukrainian and Russian speaking customers.
March of 2009 saw the addition of Ms. Iablonskaya as an insurance producer who speaks Polish, Russian, and English while in April of 2009 Mr. Ciszkewycz who speaks English and Ukrainian also joined our team as an insurance producer.
Insurance Cleveland Agency is conveniently located off of Pearl Road and Highway 71 in the Islander Office complex. Office hours are Monday – Friday 9:00 am to 12:30 pm and 1:30 pm to 5:00 pm. Please call ahead for an appointment.
Please give us a call at 440.866.0155 or visit us on the web at insurancecleveland.com, your free quote is waiting for you without any obligations. Many insurance policies are needlessly expensive and often out of date. We will work hard to give you the best service and there is a
very good chance you can save money and improve your insurance at the same time.
Life Agents Building Life Insurance Agencies Working From Home In Bad Economy
Life Insurance agents/ agencies are utilizing technology not only to produce new business but also to grow multi-state insurance agencies. In view of the current changes in the economy as a whole there is a myriad of displaced workers who are looking for new career opportunities as employers downsize in an effort to wait out the greatest job loss recession since the 1974-75 and the 1981-82 recessions hit. Small business owners are struggling to stay afloat as consumers tighten their spending habits. In view of all the businesses and retailers that have been forced to close there doors what better opportunity to consider a creative business concepts. Clearly you have several options when any sales oriented business slows, you can simply wait it out and complain about the lack of business or the loss of employment or you can investigate new ideas and put them into action. Those who think ahead of the curve will certainly be ready when the tide turns.
Insurance Selling Not for Everyone
Selling insurance is not easy and it has not been unscathed by the downward spiraling economy, overall insurance purchases are down by 23% for 2009. On a positive note the term life sales segment dropped only about 3% fairing much better than other forms of life insurance. LIMRA is forecasting a double-digit decline in sales this year followed by a double-digit recovery in 2010. Certainly selling insurance is not for the faint hearted, people scurry off when you tell them you sell insurance but for a few smart marketers the opportunity can still be very ripe. If you already sell insurance then you should definitely be incorporating technology in your current business plan, those who do will gain a viable advantage over those who fail to notice this opportunity. Statistics show that consumers are using the Internet for researching insurance product options and rates. Agents who learn how to harness the power of the internet too grab the interest of those prospects and develop simple systems to establish relationships for cross selling multi-line products across multiple states will have the potential for the most growth.
Building a National Agency with Technology
Sounds complicated and or expensive, but is it? All businesses usually have some cost involved for both start up and ongoing. Traditional agencies would need overhead expenses to cover a lease, equipment, advertising and a support staff. Obviously this can get expensive and may not be the best option in today’s market. The Virtual Agency is a business model built using technology combined with people to reduce investment overhead expense. The agency can still be developed utilizing traditional marketing methods like word of mouth, networking and for the tech savvy, Internet marketing. Unlike captive agents, just about every independent insurance agent is in some sort of hierarchy based on their position within the Agency or Marketing Organization. So do you see where this is going, an opportunity to sell a broad range of products direct to consumers as an independent agent and recruit other agents into your down-line across multiple states using technology and people. This can all be accomplished using a intelligent web-based platform that includes: customer relationship management, multi carrier quoting engine, underwriting guidelines for all carriers, transparent policy case management and electronic policy delivery to the carriers. Add to that the agent recruiting tools, Agent recruit management, web based sales training, automated licensing and appointments for agents, and hierarchy support system that assist you in managing your down line and commission reports you have a fully automated business system.
What does it take to be a Virtual Insurance Agent/ Agency?
Starting a virtual insurance agency will take some work, if it was easy everyone would already be doing it right? You need to have some basic computer skills be wiling to learn and be persistent. Every consumer won’t buy insurance from you on the first call and may require a lot of follow up, as well the recruiting can also be difficult since some licensed agents are eager to get on board but then never put forth the required effort to both sell and recruit however, for diligent agents this can be the most rewarding opportunity for both financial success and the ability to have more control over your career goals and time. Regardless of your aspirations the virtual agent opportunity can provide great income either for the part time agent or for those who want to build a multi-state agency. Building a virtual agency can support the independent agents effort to sell hundreds of policies per month. Top recruiters are currently selling hundreds of polices a month and accumulating over $20,000 in total commissions with a team of agents. Creating a website and utilizing a quote engine is also a important element of the virtual agency and can be essential in generating your own lead program for both your personal sales and agency leads for your down-line agents.
In summary look for a virtual agency program that supports your future growth including the opportunity for recruiting and growing your agency, provide good web based training, top carriers that consumers know and trust, no hidden cost or large deposits to get started, lead programs and lead discounts, affordable agent/agency websites and compensation tiers so that you have the opportunity to earn more as your production increases. The partnership between carriers and marketing organizations and agents is key to a successful virtual agency.
Blue Cross Blue Shield Most Expensive Health Insurance
The Sept. 23 deadline for compliance with several health reform benefit mandates brought negative impacts for several Blue Cross and Blue Shield plans. Most notably, Blue Cross and Blue Shield of North Carolina agreed to refund 5.8 million to members enrolled in individual coverage, citing the health reform law’s grandfathering provisions as the catalyst. And other Blues plans have blamed the reform law for withdrawals from the child-only coverage market and for premium rate hikes in other lines of business, drawing criticism from regulators.
Under an agreement with the state insurance commissioner, BCBSNC said it will issue a one-time refund to 215,000 members. CEO Brad Wilson said at a Sept. 20 press conference that the funds are coming out of the company’s “active life reserves,” which are “portions of the premium that we set aside in the early years of a policy to keep premiums more stable over the life of the policy, as customers’ medical expenses rise.”
Under the health reform law’s grandfathering provision, “policies purchased or substantially modified after March 23 of this year will end in 2014,” Wilson said.
“Therefore, the reserves held for these products will cover a much shorter period of time, which allows for these funds to be released.” He explained that refunds will equal a little more than 1.5 times an individual’s monthly premium. A policyholder who pays 0 a month will receive a check for 0.
Yet BCBSNC also requested an average 7% rate increase for Blue Advantage PPO customers in August. The insurer said when it filed the proposed increase that it was the lowest since 2007, and that 28,000 customers would see decreases in their rates. The insurance commissioner approved a 5.37% increase.
So why the need for increases when the insurer’s pockets are overflowing? Lew Borman, spokesperson for BCBSNC, says the issues were decided in separate discussions. “The rate filing was an annual filing, an annual discussion. The premium issue was separate.” Premium increases, he asserts, “are based primarily on medical trend….The active life reserves come from 2010 and the rate filing is for 2011.”
But one analyst contends the issues are, in fact, linked. The North Carolina Blues plan “apparently has excess statutory capital,” says Brian Wright, an equity analyst at Collins Stewart LLC in New York. “There are two ways to reduce the excess. One way is to price premiums lower than they would be so that capital is degraded away.” The problem with that method is that “consumers would get a false sense of what was actually happening with underlying health care inflation,” he says. BCBSNC chose the second way to reduce excess, which is to give customers refunds on prior years’ premiums. That way, Wright says, “consumers receive the same benefit on a dollar basis, but do not get the false impression that medical inflation is lower than reality.”
There is some precedent for Blues plans returning excess capital to policyholders through premium givebacks. In 2003, a slowdown in the rate of increase in health care spending left many not-for-profit Blues plans with unexpectedly high reserves and brought intense scrutiny from state regulators. The result:
Blue Cross & Blue Shield of Rhode Island said in October 2003 that it would distribute million to customers, hospitals and other providers via premium rebates and increased reimbursements. The insurer decided to use a “rate holiday” to return million to employers. Each employer group would get a 5% discount on one month’s premium payment. Another million would be used to increase physician reimbursement, and the last million was distributed to hospitals in Rhode Island.
BlueCross BlueShield of Tennessee said in October 2003 that it would refund million in premium payments to fully insured group and individual members starting in December 2003. Any enrollees or businesses that had fully insured Tennessee Blues coverage for at least one month during 2003 were eligible to receive about 4.5% of premiums back, in the form of a check mailed in December 2003 or a credit on their statement for January 2004. The Tennessee Blues plan did not include providers in the giveback program.
Horizon Blue Cross Blue Shield of New Jersey said in February 2004 that it would distribute .8 million to small businesses, .9 million to senior Medigap members and .3 million to individual enrollees under age 65. In addition, the insurer said it would commit million to provide computer hardware and software to a number of New Jersey hospitals and physicians.
Meanwhile, some Blues plans and other insurers have withdrawn from child-only coverage, citing issues with reform provisions related to pre-existing condition exclusions. The insurers said they no long would sell such policies as of Sept. 23, when they may no longer reject applicants up to age 19 based on pre-existing conditions. In Colorado, for example, WellPoint, Inc.’s Anthem unit and several other carriers, including Aetna Inc., CIGNA Corp., Humana Inc. and UnitedHealth Group’s Golden Rule Insurance Co. subsidiary, said they would drop new sales of child-only policies while continuing to cover current child-only enrollees and to accept children with pre-existing conditions in new family policies. Insurers in several other states also reported that they would withdraw child-only products.
Under rules issued in June that take effect for plan years beginning on or after Sept. 23, 2010, insurers may no longer exclude pre-existing conditions from coverage for enrollees under the age of 19. In an effort to address concerns regarding adverse selection, HHS issued guidance July 27 authorizing insurers to restrict enrollment of children under age 19 “to specific open-enrollment periods,” if permitted by state law. But the open-enrollment period must apply to healthy as well as sick children, while the insurers — and some state insurance commissioners, preferred to allow acceptance of healthy children year-round. HHS signaled that it would try to adjust open-enrollment periods to address the risk of adverse selection, but no deal had been reached by press time.
Meanwhile, insurers in several states blamed reform for premium rate hikes. The Rhode Island Blues plan, for example, reportedly told customers it would raise premiums by a few percentage points on top of already approved rate hikes to account for additional benefits mandated by the reform law. BCBSRI and other Rhode Island insurers that planned to impose similar rate hikes came under fire from Insurance Commissioner Christopher Koller. In a Sept. 9 letter to chief executives at the state’s three largest insurers, Koller said that any changes to approved premium rates “as a result of PPACA [i.e., the reform law] will be considered material and an exception to the OHIC’s previous decision….They may not to be applied in quotes to customers unless and until approved by this office.” The insurers also must submit “analysis supporting the additional premium rate charge anticipated for each contemplated change and why it should cause average rates to increase by more than the amount approved.”
BCBSRI spokesperson Kimberly Reingold told The AIS Report that “the guidelines under federal health care reform will add cost to employers and we currently are working with them to understand the specific impact to premiums, which will vary based upon benefits selected by each employer. Every time an employer changes their coverage, or we are mandated to cover new services…rates are adjusted.” She added that “those rates could be anywhere from 1.8% to 3% more depending upon plan design.”
HHS reacted strongly to news that insurers were blaming reform for rate hikes and market exits. In a Sept. 9 letter to the trade group America’s Health Insurance Plans, HHS Sec. Kathleen Sebelius warned that there will be zero tolerance for “misinformation and unjustified rate increases” blamed on health reform. In her letter, Sebelius said that several insurers are falsely attributing 2011 premium increases to patient protections in the reform law. According to the administration’s analysis and those of some “industry and academic experts,” any potential premium impact from reform would be no more than 1% or 2%.