Monthly Archives: June 2013

Cell Phone Insurance Yes or No?

New technology often gives us new names and it can be a great boon for marketers when their name becomes synonymous with the thing it describes.  For example, upper case Xerox is a company, but lower case xerox is any copier, so too Kleenex; kleenex.  It is not always positive, though, when your brand is associated with a generic term, so we can’t be sure how the folks at Apple feel about the late news in cell phone land – “apple picking” — which seems to be on the rise here in the northwest and across the country.  

A smartphone can easily top $600 these days and if you have to replace one while you are already on a plan, you could be digging deep into your pocketbook.  Cell phone insurance is one way to ease the pain of a lost cell phone and you were probably offered it at the time you purchased your phone.  It is one representative of a class of product insurance that includes extended warranty coverage you can buy on everything from refrigerators to automobiles.  For large items – major appliances or automobiles, the coverage is typically for repairs only but for smaller electronic devices like cell phones or notebook computers it can include theft or breakage as well.  

Almost any time you buy an appliance or an electronic device, you are faced with that Shakespearean choice – to insure or not insure, that is the question?  It is not an easy choice.  An Apple iPhone 4g costs about $550.  Asurion – a major cell phone insurance provider will provide complete coverage for your phone for $120 a year with a $169 deductible.  Coverage that does not include theft can be purchased for less – often much less – yet loss or theft is of these small devices are one of the major reasons to consider purchasing insurance.

Some experts recommend against purchase of this type of coverage.  They note you already have elected to self-insure the first $500 of your home insurance so why would you consider a lower threshold for a single device – particularly when there is a substantial deductible on that coverage.  The jury is still out though and with the costs of each new generation of phone rising and the number of thefts growing, more people are finding reasons to say yes to a comprehensive insurance coverage plan.        

Whether you decide for or against purchasing this type of coverage may well depend on both your risk tolerance and an assessment of your personal situation.  If you are a careful budgeter, you may find a high value in paying the insurance premium and avoiding that potential hit when your cellphone disappears.  As the mother of a toddler with a penchant for throwing small objects and a puppy with a chewing problem, you may consider yourself at high risk for loss.  On the other hand, if you view the odds of losing your cellphone or having it stolen are pretty small, you might opt for less comprehensive coverage that doesn’t include loss or theft. You can even do without coverage altogether, opting to trust the manufacturer’s warranty and your own care to get you through.  If you take this last route, here are a few tips to help you.

Medical Ads; Then and Now

Go ahead, Google a term like “weight loss” and stand by for the marketing onslaught – for days afterward you will get web advertisements for weight loss programs or diet pills.  Even as you read this, your inbox, or your junk mail folder, is likely to have a come-on for some sort of health related issue.  Web searches are notorious for surfacing information of widely varying quality.  Even the health care profession itself has some difficulty in sorting scientific fact from anecdotal experience and judging the quality of each, so perhaps lay people should not be blamed for being a bit confused.  After all, if they put it on the internet, it must be true.  

You may think this is a new phenomenon; a development of the internet age where an unregulated medium has the opportunity to present pretty much anything it wants.  You would be wrong.  When we did a blog several weeks ago on peninsula news a century ago, we couldn’t help but notice that the newspapers of yesteryear seem to be a lot like the internet of today.  That seems particularly true when it comes to health and advertising.  

Just looking through the four pages of a daily paper like the Port Townsend Morning Leader suggests that ads for pharmaceuticals represented a substantial income stream.  Each page has several display ads for products like Chichesters Pills, Santal-Midy and Lydia E. Pinkham’s Vegetable Compound – popularly known as Lydia Pinkham’s Pink Medicine – as well as advertisements disguised as news items.  In the latter category it seems Foley’s Kidney Pills and Chamberlain’s Tablets (“to strengthen the digestion and keep the bowels regular”) were frequent flyers.  

Some of the claims made in these advertisements could put modern day weight loss hucksters to shame.  Lydia Pinkham’s, for example, listed a host of “female ailments” that could be successfully treated.  Santal-Midy was a concoction of sandalwood oil that was supposed to treat a variety of conditions that included gonorrhea, gleet, catarrh of the bladder and suppurative nephritis.  The unrestrained nature of the claims seems to have been contributory in the formation of the Food and Drug Administration and the continuing efforts to curb unsubstantiated advertising in the pharmaceutical arena.  Santal-Midy was an early victim of the FDA which found its claims unsupportable, though other remedies have actually survived till today by moderating their claims.

pinkham.jpg 

drpierce.jpg 

The FDA exists today and can provide some protection from outrageous claims on the World Wide Web but health information is still a chancy commodity on the web where advertisements for legitimate drugs can exist side by side with anecdotal reports of cures.  Some efforts are being made to assure the quality of health information on the web.  The Health on the Net Foundation has worked to set standards for health information on websites and offers badges and tools to evaluate health information and identify sites that conform to good practices. 


It took years for the FDA to weed through the blizzard of claims and begin to make headway against false and misleading advertising of health benefits.  It will take years more to sort through the web based advertising.  As to the emails, your best hope is a good spam filter.  


 

Self-Insuring Your Small Business

In one of our blog articles a few weeks back, we discussed risk retention as a component in the available approaches to risk management.  As we are counting down toward the full implementation of the Affordable Care Act, risk retention – or self-insurance –is getting increasing attention as a strategy for dealing with health care cost.  Risk retention is one of the strategies that large companies have used for years in the health care and worker’s compensation arenas.  Even in Washington State with its Labor and Industries sponsored program, companies can exercise an option to self-insure.  

In self-insurance for health care, the employer takes on the responsibility for paying health care benefits for employees and other covered persons.  The company accepts the risk for providing health care benefits and pays claims out of cash flow or from a reserve specially designed for that purpose.  The employer may fund the insurance completely, or may elect to collect a contribution from employees to help defray the expenses.  

For large businesses, self-insurance has always been an option and in the year 2000 as many as one-third of American Workers who participated in a company sponsored health plan were in a self-insured plan.  Large companies elected to self-insure because it allowed them to create custom health plans to suit their workforce and it allowed them to maintain control over their financial reserves.  

Small businesses tended to steer clear of self-insurance because the unpredictability of expenses was high and the ability to negotiate favorable prices with providers was low.  The Affordable Care Act may be changing the ecology for some small businesses and the New York Times notes that employee benefit consultants are beginning to promote self-insurance as an option for employers with only 10 or 20 employees.  

The Act mandates the inclusion of a larger set of benefits which may increase insurance costs and there may be a reduction in overall costs as there are fewer uninsured people.  For small businesses, being self-insured could let them avoid these new requirements for benefits like mental-health and maternity care. Self-insured companies may also be able to gauge their risk and take advantage of reduced expenses that could accrue to groups of healthy workers.
An article in the Wall Street Journal earlier this year, noted the trend and some of its causes.  It concluded, among other things, that there was likely to be an increase in the rate of self-insurance among small businesses as employers began to test drive the concept.  The article also shared the concerns of regulators that an increase in self-insurance among companies with a young and healthy worker profile could have an adverse effect on the market in general causing premiums to rise for the companies remaining in the risk pool.  

An article in BusinessWeek echoed the same sentiments and noted that some states were considering regulation of the reinsurance, or stop-loss policies that help make self-insurance a viable prospect for small business.  At this point, there is far more speculation than fact in the reporting and while risk retention is always an option for any business, there is an attendant risk that a single large claim could do significant damage to a small business’ bottom line.

Auto Insurance: There’s An App For That!

Do you live on the leading edge of technology?  Do you have a cell phone in one hand, a tablet in the other and pick up on all things digital? Have we got an opportunity for you. 

If you are one of those drivers who leave their insurance card in its pristine white envelope sitting on the kitchen counter, you will no longer have to try to convince the officer that you left your card in your other pants.  Soon you will be able to whip out your smartphone and provide your proof of insurance digitally, just the way Mother Nature intended.  The trickle of states permitting the use of digital proof of insurance is becoming a flood. In 2012 there were seven states that permitted digital cards; now midway through 2013 that number has gone to 25.  

Legislation is pending in three more states according to a map produced by the Property Casualty Insurers Association of America; Washington is one of the states that allow the display of your Washington Auto Insurance  on your electronic device.   

If you want to join the ranks of the digitally prepared, and you have a smartphone, you need to contact your insurer to see if they offer an app to display your current insurance status.  

There are some electronic shortcuts that will not be available to the consumer.  Many of the e-Card bills specify that the digital card be issued by the insurer. You are not going to be able to get away with a jpeg of your paper card as proof.  

Not everyone is enthusiastic about the digitization of insurance cards.  Both consumers and policeman have some reservations about the change that reflects each group’s suspicions about the other. The police reservations relate to the possibility that a “photoshopped” facsimile of a card could be used on a cellphone and to the liability for handling a consumer’s expensive digital gadget with the ever present possibility of the claim it was broken while in the officer’s possession.  For their part, consumer’s – or at least their attorneys – have expressed concern that other information could be extracted from a phone while in an officer’s possession.  Would you want your cellphone with its pictures and records of text messages in the hands of a policeman?   

Washington State has addressed the breakage question by including language in ESSB 5095 - the bill authorizing digital representation as proof of insurance – says police cannot be held liable if they accidentally damage a smartphone while verifying vehicle insurance.    One important thing to remember though is that while the bill was passed in late May, be careful waving that cell phone round just yet, the legislation will not become effective until July 28, 2013. 

Readying the RV for Summer Travel

Summer is on the way and for a lot of folks here on the Peninsula that means vacuuming out the RV and getting ready to head out.  There are plenty of things to do.  First, shake out the cobwebs.  Get any  outside covers off and inspect your water heater and refrigerator.  Make sure to clean and vacuum your stove burner units to clear debris and cobwebs.  Check the caulking around windows, doors, roof vents and seams and open and close any awnings to insure they are working and safe.  Water is your enemy and it can accumulate over the winter or rust out critical parts.  Check all your LP lines by turning on the LP detector inside the RV and then opening the tank valve.  Smell carefully possible leaks but also run a soapy water solution around the valves and look for bubbles.  Make certain any leaks detected are properly fixed.

Check the vehicle’s running condition – brake pad condition, lights and turn signals and pay special attention to the hitch and wires if you tow.  Check your tires for bulges or cracks and check the wheel bearings on each wheel; make sure your tires have adequate tread and tire pressure.  Move on to the sewage system.  Inspect the dump hose for punctures or wear and tear, then connect to a dump station and check your waste tank valves before you head out.  Don’t be surprised if there are issues here.  Dump hoses need periodic replacement and valve seals can dry out.  Clean any corroded battery terminals and connections and check battery fluid levels if the batteries are not sealed.   Fully charge your batteries, then check them; consider a load test – which ought to be done by a qualified mechanic and if batteries need to be replaced don’t combine old and new batteries.

Inside the RV, test smoke detectors and replace the batteries; install a CO detector if you don’t already have one. Drain any antifreeze from your holding tanks, shut off the water heater bypass and refill propane and water tanks according to manufacturer’s instructions.  Make sure to check faucets, plugs and valves for leaks and run water through each faucet to be sure that all RV antifreeze is removed. After getting the gas and water systems up and running, test your appliances.  Be sure the water heater is full before you start it up.  

Finally, check your insurance.  Your RV is your home away from home so there are some differences between RV coverage and simply treating it as though it is a big car.  You need to make sure you are adequately covered for emergency assistance; not just towing but extra coverage in case you need to stay in a hotel while your vehicle is being repaired.  There needs to be adequate coverage for the contents of your RV and that could look more like your house than your car – there may be computers, stereo equipment and other items that cost more than would be considered under an auto policy. 

You may also want to carry higher liability limits and look at how loss replacement is handled — RV’s typically have a steep depreciation so look for total replacement coverage or loan protection coverage  in case of total loss.  Flexibility is important as well, so consider a policy that can be suspended when your RV is not in use.  

Here at Homer Smith Insurance we work with a number of RV insurance providers.  We can help you understand the differences in policies and find one that meets your needs.  

Last Century on the Peninsula

The French have a rather pessimistic saying – ‘plus ça change, plus c’est la même chose, meaning the more things change, the more they remain the same.  Every once in a while we like to take a tour of our past through the eyes of the Port Townsend Morning Leader and its reporters.  It helps to remind us not only of how far we have come, but that we often face the same problems today that our forebears dealt with a century ago.  If you enjoy history, you can browse local, national and international events in the pages of the Leader.  Access is through the Port Townsend Public Library Website .

The headlines in early June of 1913 were primarily of local interest.   The June 4th edition showcased a front page story on the work of the city council which had, the previous evening, passed a record four ordinances and one resolution.  Among the notable items passed was a change to water charges to reduce the months patrons had to pay for sprinkling lawns from 4 to 3.  Patrons would no longer be charged extra in May.  It was only a minor note, but the police department reported only six arrests in May of 1913 with a grand total of $23.50 in fines.  It would hardly seem enough to pay the rent. 

The inside pages provide some insight into life here in 1913.  Mr. William Bishop of Chimacum was appointed a Deputy Sheriff – an uncompensated position he evidently sought out of a deep concern for problems he saw in the community.  Mr. Bishop had recognized that the excellent quality of the road system in and round Chimacum was drawing the interest of motoring enthusiasts who wanted to “advance the spark a little and see what (their) machines were capable of doing.”  Mr. Bishop had earlier been instrumental in the apprehension and fining of a lead footed Seattleite who had “dashed through” Chimacum at fifty miles an hour.   

June 5th continued the local news with the arrests of two servicemen who worked at the army YMCA for theft of goods and embezzlement.  The two had been stealing cigars and pocketing money from the pool table rentals.  The cigars were being sold in saloons throughout town.  The Chief of Police, a Mr. Dobler, was given great credit for bringing the pair to justice.  Remarkably, there was a lot of emphasis in the piece on the supposed good character of the perpetrators.  Another front page article was a bit more macabre running under the headline “Floater Found.”  The article described the recovery of the body of a “Scandinavian” who had evidently fallen into the water somewhere near Port Angeles and washed up on the beach near there.  How the Leader determined the ethnicity of the deceased was not revealed and his identity remained unconfirmed. 

The inside pages again reveal some interesting – and probably long forgotten – elements of our peninsula history.  If you are a regular reader of this blog, you know that Washington was the first state to introduce a state run occupational insurance program.  The Leader reported that in May of 1913, the state industrial insurance commission has 1619 reported cases that included thirty-two fatalities and 3 cases resulting in permanent total disability.  The paper also reported on a long forgotten experiment that reminds us that our ancestors were practical sorts of “take the bull by the horns” people.  The Washington Secretary of Commerce had agreed to a plan to exchange Pacific Salmon for Atlantic Lobsters in an experiment to see if each species could be propagated on the other coast.  A hundred years later we know this could not be accomplished without two universities, the EPA and dozens of picketers being involved on both coasts.   Maybe that’s why the experiment is lost in history.