Questions & Answers

You Ask, The Hound Answers!

See questions & answers for which type of insurance?

"I’m interested in filing a diminished value claim. Who can I contact to get this process started?"

Insurance Hound had to sniff around quite a bit to answer Mary’s question.
The most direct answer to this questions would be, “your agent”, but the
Hound has been around long enough to know that you need more guidance than
this, so a brief insurance lesson is in order:

First, if you have damage to your auto from a Comprehensive claim, or a
Collision claim that is your fault, there may be no basis for a diminished
value claim. The policy that you purchased will usually provide coverage for
direct and accidental damage to your vehicle, so when the repair has been
completed, the claim is closed. Courts have found dimunition of value to be
an indirect loss, and generally not a coverage that you have purchased for
yourself. There are two states who will allow this claim (Georgia & Kansas;
most states will not.

However, if you have been damaged by another party, you are attempting to
collect an economic damage. If you have already accepted a settlement and
signed a release, there may be no further recourse. To illustrate the issue,
let us assume some facts:
1) Your car is a 2008 vehicle in excellent condition worth $10,000 before
the accident as determined by KBB.
2) Your repair estimate is $2,000
3) The value of your car after repair is deemed to be $6,500 by the same
authority, which would determine a $1500 dimunition of value claim.

To press this claim, the “facts” need to be accepted by the insurance
carrier, or you need to have enough documentation to convince a court of
your loss. In this case, to press for this additional loss you may need to
go to court. Depending on the loss, you may be able to enter a motion for
judgement in small claims court. You may need to consult an attorney, if the
claim adjustor for the liable party will not willingly pay for the economic
loss. Most states will allow this claim to be made. Thus the claim needs to
be made with the adjustor for the insurance carrier who is representing the
liable party.

Please note that the facts in each case are different and the actual
“correct” answer for you will depend on the state where the accident

I hope you agree that the Insurance Hound deserves a dog biscuit.

Category: Auto, Insurance, Virginia

"I just received a bill for over $5,000 for additional premium under a general liability policy that expired in 2011. I paid the $1,200 inception premium on installments, and I never missed a payment. How can this be?"

Many public liability policies are based on estimated sales, payrolls, cost of subcontractors or number of employees, and are subject to audit. At the beginning of the policy term, representations were made to the insurance company regarding the business that you expected to have, and an audit reviews your actual payroll or sales. Before paying an additional premium audit, compare the exposures shown to your own records, and compare the premiums credited to your records.  Even if they match up, have your agent review the audit and confirm that the proper codes have been used in the calculation, as mistakes can happen. Good luck!

Category: All, Public Liability

"I currently have a general liability policy for liability with a local agent. When I recently asked if I had coverage for a claim where I had received a motion for judgment, my agent said coverage did not apply and suggested that I not turn in the claim and pay it out of my pocket. The amount of the claim was for over $3,000 for injuries sustained in a fall. What should I do?"

Make your claim in writing and ask for a coverage determination under your policy. At Brown’s Insurance, even when the agents THINK they know the answer to a coverage question, a claim is turned in for coverage determination since case law constantly evolves. In several ways, the basic policy forms used by companies today have not changed in 20 years, but the court interpretation HAS. I never believe that it is a good idea to pay a claim directly until your carrier has denied coverage, since doing so violates a policy coverage condition – you should not admit liability, as doing so eliminates any ability to defend a claim for which you may not be legally liable.

Category: All, Public Liability

"I have a workers compensation policy for my Virginia based business. I want to be sure my laborers are covered under my policy. I have both direct employees and some casual labor. Are these laborers covered?"

The proper legal answer is to say that each case is different, and coverage is always determined by the workers compensation laws of the Commonwealth of Virginia. Existing case law can always change an interpretation, but as of January 2012 the general answer in VA would be as follows: To be covered, a paid laborer must meet the definition of an employee, since your policy covers employees as defined by statute. Whether you provide the employee a W-2 or a 1099 form does not determine who is an employee, although a W-2 usually indicates that the paid individual does work for you. As respect to a 1099 recipient: 1) Do you exercise control over his/her activities and tell them where and how to perform a job? 2) Does he/she offer their services to others as well, or do they work only for you? In most cases if they work only for you they would meet the employee definition. One of the stickiest situations can involve a situation where you pay one person by 1099, and he/she brings in friends that he/she then pays to “help”. By statute, your policy covers the uninsured employees of an uninsured subcontractor, BUT NOT the subcontractor himself/herself. In this case,  the “friends” would likely have coverage, but the paid  “employee” would not, since they were in fact a subcontractor. The VA Work Comp Commission would make the final call, as each case is different. Contact Brown’s Insurance or your local agent for specific details.

Category: All, Worker's Comp

"My agent has told me for years that there is no difference in pricing between workers compensation carriers. Is this true?"

While the final answer depends on where your business is based, I believe that the correct answer is an emphatic, “NO!”. Rates are based on payroll and apply on a per $100 basis.  For a business buying workers compensation insurance in Virginia, the applicable rates are determined by several factors. For a simple example, if a business has $100,000 payroll for a drywall business, the base rate could range from a high of $5.62 (April 2012 NCCI rate) to a low of $3.29 (April 2012 base loss cost). Costs are further affected by the loss experience of the business (experience modifier may apply) and the discretion of how a given carrier may want to apply credits (up to 15% in VA). In the example shown above, the initial rate difference between the highs and lows is $2,330, which is a big difference on a relatively low payroll.

Category: All, Worker's Comp