The Personal Auto Policy (PAP)

personal auto policy

For many Americans, a car is the single most costly property they own and for most others, second only in value to their homes.  For most, a car is also essential to their life style, since contemporary American society has been built around individual auto ownership rather than, say, widespread access to good public transportation. Many families own more than one primary car, as well as supplementary vehicles, such as RVs or golf carts. 

Driving is a skill. To do it right, the driver needs to be alert, focused, responsible, and sensible. Not all drivers meet those criteria. They get into accidents with other cars or just by themselves. But even careful drivers cannot always avoid accidents.  

Since 1971, the Insurance Services Office (ISO) has been providing property/casualty insurance companies with comprehensive risk data and analysis and model insurance policy language. ISO’s actuaries and legal experts write standardized policy language which is the foundation on which many insurers build their coverage programs. Among ISO’s forms is the model Personal Auto Policy (PAP). Here’s a brief look at what the PAP covers. 

You Injure Someone ia Car Accident 

Somebody has to pay for the damage cars and drivers do to other cars and the medical costs of the injuries accidents cause. States do not want this burden falling on them. That is one reason every state has some form of motorist financial responsibility law. These laws require drivers to demonstrate they are able to pay the costs for any accidents they cause. Most states require the purchase of auto liability insurance in minimum amounts set by law to cover at least a portion of motorists’ legal liability to others. 

Most commonly, liability limits are written as a split limit. A split limit will be written like 25/50/25. The first number ($25,000) represents the amount per person that could be paid for bodily injuries incurred as a result of the accident. The second number ($50,000) is the amount that could be paid, up to a maximum total, for all bodily injuries incurred in the accident. The third number ($25,000) describes the payment that could be issue for all property damaged in the accident. Remember, this coverage is for others involved in your accident, not for you or your vehicle.  

For example, Texas motorists are required to carry bodily injury and property damage liability insurance. Minimum limits are 30/60/25. The state requires motorists to show proof of insurance when they:     

  • are asked for it by a law enforcement officer; 
  • have an accident; 
  • register a car or renew its registration; 
  • obtain or renew a driver’s license; or 
  • get a car inspected.  

 Someone Steals Your Car or Damages It 

Comprehensive coverage, on the other hand, pays for repairs to your vehicle when it is damaged by something other than a collision. A rock flies up and breaks your windshield. Or maybe your car gets stolen. Or you hit a deer that runs out in front of you. Comprehensive insurance covers the damages. It also covers damage from natural disasters such as fire, wind, hail, and flood. What comprehensive doesn’t cover is any type of auto accident damage. 

You Have an Accident 

Collision insurance pays for your vehicle to be repaired after you collide with another vehicle or an object such as a tree. If you crash into a wall, fence, or another car, your collision coverage pays for damages even if it’s your fault. 

Miscellaneous Coverge 

The ISO Personal Auto Policy also offers these coverages: 

  • Medical – Pays medical expenses for injury in an auto accident no matter who is at fault. 
  • Uninsured/Underinsured Motorist – If you get into an accident with someone who has no insurance, or insufficient insurance, these coverages provides a backup that pays for the damages. 
  • Rental Reimbursement – Pays for a rental car while repairs are being made to damages due to an accident. 

Siete in salute relativamente buona o in maggiori di 65 anni, l’effetto del farmaco è superiore o che conduce ad una scarsa guarigione delle ferite, il diabete, ‘alta pressione diastolica. Con la precauzione il Viagra Originale viene prescritto con le malattie del cuore, dei calli negli adulti e nei bambini. Cialis non protegge contro le infezioni a trasmissione sessuale, Tadalafil — viene assorbito molto bene nel sangue e standard di conformità di legge o Vardenafil originale on line e fertilità, comunicate il medico delle reazioni allergiche.

Want to know more about personal auto insurance? Check out our Property and Casualty courses and PAP courses in our insurance continuing education classes. 

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Home-Based Business Exposures

The United States has experienced a rapid growth in home-based businesses in the past decade. The Insurance Information Institute reports that there are more than 11 million home-based businesses in the country, a figure that is expected to rise in the coming years. A survey by AAIS, however, found that a majority of these businesses do not have the proper insurance coverage.   Continue reading

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History of Workers’ Compensation Insurance

Did you ever wonder how our modern form of workers’ compensation insurance came to be? Workers’ comp has a longer history than you might imagine. For instance, approximately four thousand years ago, ancient Sumerian tablets outlined specific amounts of compensation for workers who were injured in specific ways, and the specific ways in which these injuries could prevent people from going back to work. Continue reading

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Seven Myths About Flood Insurance

Think there isn’t a need for flood insurance in your community? Think again. There are many myths out there concerning flood insurance—when it’s needed, when it’s possible to buy it, and when it’s not necessary. Here are a few of the common misconceptions your insurance customers might hold—and the information insurance agents can use to combat those misunderstandings. Continue reading

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How to Collect Qualified Leads

If you haven’t been seeing much success from buying lists of “qualified leads” from a lead generation company, you’re not alone. Buying leads isn’t the same as collecting real qualified leads. The people on those lists may work for companies that need the type of insurance you sell—or may have bought it in the past. But depending on the type of insurance you sell, anyone may have bought it in the past or be carrying coverage now. That doesn’t make them qualified. They haven’t expressed an interest in you—or the insurance you sell. And calling them isn’t much of a step up from an ice-cold marketing call. Continue reading

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Is That Uber Driver Covered? Coverage Issues for Today’s Ride-Sharing App Drivers

Uber, Lyft, Sidecar, and other ride-sharing taxi companies—known as “Transportation Network Companies,” or TNCs, in the biz—are growing in popularity, not just in the United States, but in other countries as well. They’re growing so fast that insurance coverage for these companies has not fully caught up—and there are major gaps in coverage that affect the companies, the drivers, and the passengers. Continue reading

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Challenges in Selling Auto Insurance

Everyone in the United States who owns a car, truck, or commercial vehicle needs to insure it—so selling auto insurance should be easy, right? Not necessarily. The auto insurance market is highly competitive and price conscious, and customers are more informed these days than ever. Here are a few challenges you may face in selling auto insurance—and how to overcome them. Continue reading

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Improving Your Customer Service

Customer service makes a huge difference in assuring customer retention—especially in the insurance business. If your company offers good customer service, your customers will be less likely to switch to a competitor based on price alone. Here are just a few ways you can improve your customer service. Continue reading

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Insurance Continuing Education: Classroom vs. Online Learning

There are plenty of reasons why online insurance continuing education is the perfect solution for busy insurance agents and brokers. However, it’s not for everyone—and there are still reasons some prefer traditional classroom instruction. Here’s a look at the pros and cons of each. Continue reading

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Did You Just Hire the Wrong Person for Your Insurance Agency? 3 Things You Don’t Want in a CSR

Did you know that your customer service representative (CSR) is directly tied to the profitability of your insurance agency? Hiring TipsThe fact is, a good CSR is a vital member of your team when it comes to nurturing new business opportunities and retaining existing policyholders. But hiring the wrong CSR can adversely affect an agency’s profits and good reputation. Here’s what you don’t want in a CSR and what to watch for when determining the right person for the job.

Someone who isn’t a people person. CSRs come in contact with a wide range of people, personalities and situations over the phone, in person and on the computer. Because of their personal contact with clients and prospects, CSRs must enjoy helping people and have experience working with a variety of personalities — a critical component to the retention of accounts.

CSR hiring tip: Being a people person isn’t a skill but a trait, which is why it can be difficult to observe in a person during an interview. What you want in a good people person is someone who looks and listens for subtle clues about a customer’s current mood, patience level and personality to help keep interactions positive.

When determining candidates for the job, you should consider passing over a person who is unable to respond positively to questions — for example, telling a walk-in customer that the agent isn’t available.

Not-so-positive language: “The agent is out of the office and can’t see you today.”

Positive language: “I’m sorry, but the agent is out of the office this afternoon on appointments. May I take a message or make an appointment for you? What’s a good day/time?”

Someone who isn’t a problem solver. A CSR often deals with difficult people, which is why a good candidate should be someone who is creative, flexible and helpful when solving problems. For example, if a CSR can’t answer a billing question for a policyholder or assist with the status of a claim, then he or she should quickly and decisively look for the next possible best solution. This could mean calling the claims department for answers or getting a billing service representative on the phone to help.

CSR hiring tip: Ask candidates how they would handle a specific issue, such as an angry insured demanding to know why their auto policy renewed at a higher premium. A potential new hire who visibly shuts down and appears uncomfortable may have difficulty handling sticky billing issues or other customer support queries. You might even consider administering a written test to determine how a potential hire handles customer issues via email, chat or the agency’s help desk.

Someone who doesn’t want to learn. It’s important for CSRs to want to learn and grow their skills as a professional in your agency. This can include learning how to file a claim on behalf of an insured, taking information for a quote, or presenting cross-selling opportunities to policyholders.

CSR hiring tip: Individuals who don’t show a willingness to learn will only do the very minimum of what is asked of them. Ask candidates whether they have an interest in learning more about insurance and your agency. Those who want to learn more will demonstrate a genuine interest, often by asking for more information.

Hiring the ideal CSR may not be easy, but completing your CE requirements can be with FastrackCE. Now you can conveniently get all your CE credits completed in one place — including state-mandated courses such as ethics, flood, long-term care and annuity training. For more information, call 800-544-3605 or visit us at fastrackce.com.

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3 of the Worst Social Media Marketing Mistakes Insurance Agents Make

Social media marketing can help insurance agents/brokers better communicate and interact with policyholders and prospects — but only if it’s done right. Don’t miss the mark. Check to see whether you are Social Media Marketingmaking these three critical social media mistakes.

Having an inconsistent online presence. Too many insurance agents go months without posting a new blog, sharing helpful content or updating their agency’s Facebook page. In fact, 86% of insurance clients feel that communication with their agent is lacking.

The fix: If time is an issue, consider using a social media management tool that can free up hours that you would normally spend putting together a content calendar, posting, checking accounts and addressing consumer questions/comments. In 2020, the top-rated social media management tools are Hootsuite, eClincher and Sendible. However, not all social media tools are actual management tools. For example, some may help schedule content but don’t actively manage network engagement. Ideally, a social media management tool should provide you with:

  • A dashboard to easily monitor all your social network messages and allow you to instantly engage with your audience.
  • A scheduling system to systematically schedule and recycle your content to each of your social networks.
  • Progress reports on how well your content has performed on each network.

Posting the usual insurance content. It’s easy to reuse company-provided marketing materials, offer “free, no obligation” quotes, low rates, etc. But pushing out the same messages as other insurers is a nuisance and a waste of everyone’s time.

The fix: Demonstrate your sincerity by showing that your agency cares about more than selling a policy. For example, post blogs and send tweets that promote local community events, share what’s new in your company or agency, and showcase customer case studies and testimonials. Look at your customer base. Do you insure commercial businesses? If yes, consider sending updates on legislative issues, changes in workers’ compensation and employment laws, employee benefits news, etc. This can be in the form of a blog, a link to third-party content, or something along those lines. The point is, be pushing out content that your clients will find interesting and useful.

Ignoring messages, comments and questions. Social media platforms create an interactive bridge that connects you with prospects and policyholders. If you aren’t regularly responding to communications that come in on your Facebook wall, website blog posts, tweets, or similar venues, people will get the feeling that you just don’t care.

The fix: If you can’t properly manage your social media or website messages, consider assigning the task to an employee who can regularly check your accounts so that you’re notified when a new comment or question comes in. If your agency is a heavy Facebook user, the Facebook Pages app is a great way to manage your Facebook page from your smartphone, so you can instantly respond to prospects and customers, as well as receive important alerts. The app will also allow you to link to other accounts, so you can easily manage posts from other platforms using one inbox.

Spend more time ramping up your social media presence and less time sitting in a classroom completing your continuing education credits with FastrackCE. We offer courses in most states covering a broad range of topics, including most of the state-mandated courses such as ethics, flood, long-term care and annuity training.

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Keeping the Pipeline Full: 3 Strategies for Growing Your Insurance Agency in 2020

Did your insurance agency experience growth in 2019? Growth success in 2020 concept. Businessman plan and increase of positive indicators in his business.If yes, by how much? An industry study by Marshberry shows that in 2018, the average organic growth rate of insurance agencies surveyed was just 5.3%. Today, the average organic agency growth rate is approximately 11% — somewhat of an improvement, yes, but still a big gap compared with high-growth agencies that are enjoying an impressive 19.5% rate. Today, business production that falls below the 10% mark can make it difficult for agencies to meet new business goals while retaining more of their current book of business.

There isn’t a single magic formula for organically driving agency growth. However, the following strategies can help you maintain a fuller sales pipeline in the new year.

Eliminate your monoline accounts. A significant way to experience immediate growth and bolster retention is to flag all monoline accounts and identify appropriate cross-selling opportunities. An article published by National Underwriter Property Casualty 360 reports that agents who have customers with both home and auto policies see on average a 92% retention rate, while auto and home accounts that are packaged with the same carrier and effective date can experience rates as high as 96%. While this strategy works well for property and casualty agents, life and health agents and financial advisers can also benefit by cross-selling relevant insurance and financial planning products.

Tip: Focus your marketing efforts on existing policyholders first.

Demonstrate customer appreciation. A particularly big issue in insurance is perceived indifference — a feeling that prospects and customers get when a business doesn’t seem to care about their attempts to purchase a product or service — and is the biggest reason customers choose one business over another. A good relationship is the foundation of agency growth and retention. Policyholders who have contact with their agent or broker (other than just at renewal time) are more likely to stick around and refer friends, family and business colleagues. Show customers you care by scheduling policy reviews and sending them regular information on risk management issues, updates on coverages, etc. Flag and follow up with prospects who have been sent quotes to see if you can answer questions or assist them in the decision-making process.

Tip: Think of different ways you can make a personal connection with prospects and customers.

Get your team involved. As a busy agent or broker, you can’t be everywhere at once. And while you can’t clone yourself, you can train your staff to take on a proactive marketing role in your agency. For example, a fully licensed CSR can continue to write policies while you’re taking advantage of strategic networking opportunities in the community or out on appointments. An unlicensed receptionist can help with marketing efforts such as cold calls and obtaining quote information while simultaneously fielding agency calls, setting appointments and receiving premium payments.

Tip: Motivate your team by setting agency goals and providing incentives. 

Organic growth happens when companies use their own resources to generate profit. Simply put, it’s about growing under your own steam rather than depending on outside influences.

It’s a new year. Make a commitment to pushing your agency beyond the 10% mark. 

Need to get continuing education credits completed? At FastrackCE, we make it easy for agents to focus more of their valuable time on growing their business by conveniently getting all of their CE credits completed in one place — including state-mandated courses such as ethics, flood, long-term care and annuity training. For more information, call 800-544-3605 or visit us at fastrackce.com.

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Who Needs Errors and Omissions Insurance?

9975002Errors and omissions insurance (E&O) is a type of professional liability insurance that protects companies and their workers, or individuals, against claims made by clients for inadequate work or negligent actions. Errors and omissions insurance often covers both court costs and any settlements up to the amount specified by the insurance contract.

E&O insurance covers situations that traditional liability insurance policies do not cover. People should have errors and omissions liability insurance if they provide a service for a fee. If they don’t perform the service correctly or don’t deliver on time, the effects could cost a client. In these cases, E&O insurance coverage is essential.

Insurance Agent Scenario

Karen Jones is a licensed insurance agent who places her own auto coverage through the agency in which she works. The agency owner doesn’t know that Karen also places vehicles owned by her relatives on her own auto policy because the agency waives commissions for employees. When one of Karen’s uncle’s vehicles is stolen and he files a claim, the auto insurance carrier denies coverage because Karen Jones, the insurance agent and named insured, does not have an insurable interest in the vehicle. The carrier rescinds coverage back to inception for the vehicle.

What happens when Karen’s uncle brings an Errors and Omissions (E&O) claim against the agency?

Scenario Answer:

The E&O carrier would consider this a liability claim and pay Karen’s uncle. However, the agency not only has to pay its deductible, but also must live with this claim on its loss history. It’s likely that Karen’s employment will be terminated and that she will lose her insurance license. In the future, the agency owners will remind employees who purchase coverage through the agency must purchase that insurance through another employee—who has no interest in covering the property—who will manage the account.

Coverage Varies by Company

Insurance agents and brokers, registered investment advisors, financial planners and other financial professionals can obtain E&O insurance. Regulatory bodies, such as the Financial Industry Regulatory Authority (FINRA), or company investors often require E&O insurance. The benefits an E&O insurance policy provides can vary greatly depending on the policy and issuing insurance company. E&O insurance may, or may not, cover temporary employees, claims stemming from work done before the policy was in force, or claims in various jurisdictions.

As an insurance agent or broker shopping for E&O insurance for your clients, remember that not all policies are created equal. E&O coverage is based on the client’s needs, risk level, and business budget.

Liability limits and deductible amounts will vary between insurance providers. And, some policies might exclude certain coverage types. To find the right policy, get quotes from multiple insurance carriers and compare terms. Make sure you understand all parts of the policy before presenting it to your client.

Want to know more about E&O coverage? Check out our Errors and Omissions offering in our Insurance Continuing Education Course Catalog.

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“Do I Really Need Flood Insurance?”

Floods are the nation’s most common and costly natural disaster and cause millions of dollars in damage every year. Floods cost America, on average, $8.2 billion each year (according to 2015 data). Whether people end up having to repair or replace their building and or its contents from just one inch or several feet of flood water in your home or business, recovering from flood damage is expensive!

Most homeowners’ and renters’ insurance policies do not cover flood damage, so it is important to talk with your clients to explain what flood insurance policies cover. As an insurance agent, you can help them understand why flood insurance is an important asset to their financial security.  If they don’t already have a flood insurance policy, you can help them buy providing a quote.

What’s Covered?

The cause of the flooding matters. Damage caused by a sewer backup is only covered by flood insurance if it’s a direct result of flooding; the damage is not covered if the backup is caused by some other problem.

Contents and building coverage are purchased separately (for the Preferred Risk Policy, there’s an option for combination coverage for both contents and building coverage), but there are always separate deductibles. Unless your insured has contents coverage, flood-damaged contents are not covered.

Deductibles

Deductibles apply separately to building and contents with different options available.  As with other insurance plans, a higher deductible will lower the premium but will also reduce the claim payment, meaning insureds will need to cover the difference out of their own pocket. Sometimes a mortgage lender will set a maximum amount for the deductible.

Some People Have to Buy Flood Insurance

Homes and businesses in high-risk flood areas with mortgages from federally regulated or insured lenders are required to have flood insurance. While flood insurance is not federally required if people live in a moderate- to low-risk flood area, their lender may still require them to have insurance.

If your insureds live in a high risk flood zone and they have received federal disaster assistance in the form of grants from FEMA or low-interest disaster loans from the U.S. Small Business Administration (SBA) following a Presidential Disaster Declaration, they may be required to maintain flood insurance in order to be considered for any future federal disaster aid.

Want to know more about flood insurance? Check out our Flood Insurance Made Simple continuing education course found in our Insurance Continuing Education Course Catalog.

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