Personal Lines Report - February 3_ 2006 - Independent Insurance by yantingting


									Personal Lines Report
                                                                                                       February 3, 2006
Practical Information to Help IIAT Personal Lines Agents

TDI vs Allstate: Advantage Allstate                           Management > Legal Compliance > Miscellaneous Laws
A Travis County district judge decided Jan. 20 to deny        and Regulations > Cancellation and Non-Renewal.
TDI’s request for a permanent injunction that would
prevent Allstate from denying additional living expense       New on InfoCentral: Client
claims to property owners affected by Hurricane Rita. In       Communications
her decision, Judge Lora Livingston said it is apparent       IIAT’s technical staff is pleased to present a new feature
“that the extension of coverage for loss of use [in the       on InfoCentral that will help you answer common
Texas homeowners policy] is not triggered without             questions asked by your customers. We started with
actual physical loss or damage to the property. The           what members report to be the most common question
mere existence of a hurricane which tangentially causes       asked by their customers: Should I purchase the loss
policyholders to be either without power or access to         damage waiver offered by a rental agent when I
their home is not a peril insured against.” It is not known   rent a vehicle? Because the answer to this question
whether TDI will appeal this decision or continue the         now depends on what type of personal auto policy the
original lawsuit to ultimately and definitively decide the     customer has, we separated the communication into
coverage issue.                                               three separate pieces: (1) to answer the question for a
                                                              specific customer who has a Texas PAP or equivalent,
Mexico Coverage No Longer Available in                        where coverage for a rented vehicle is provided in
TAIPA                                                         the liability section; (2) to answer the question for a
TDI approved a new personal auto policy form for              customer who has an ISO PAP or equivalent, where
policies assigned through the Texas Automobile                coverage is provided in the physical damage section;
Insurance Plan Association effective Mar. 1, resulting         and, (3) to answer the question for a group of customers
in two significant changes. The Mexico Coverage and            or an audience that may have either type of PAP. The
Supplementary Death Benefit endorsements will no               combined article can be used for customer newsletters,
longer be attached to any TAIPA-assigned policy. These        web sites, or public interest columns in local newspapers.
changes apply to new and renewal policies, including          The bottom line of our answer to this question is: We
those renewed during the 3-year assignment period. The        recommend that you buy the loss damage waiver
Mexico Coverage endorsement was previously added              from the rental company. Take a look at this new
to many TAIPA-assigned policies at the option of the          feature by going to InfoCentral at and clicking
insurance company and sometimes only if requested by          on Client Communications. We will be adding more
the agent. Even though the assigned insurer should be         articles in the future. If you have an idea for subjects
obligated to notify policyholders of these changes, IIAT      we can cover based on questions your customers ask
recommends that agents notify all TAIPA policyholders         frequently (personal or commercial), please e-mail David
on the policy anniversary date that they no longer have       Surles at
this coverage and will need to obtain a special policy
even for short trips into Mexico. And don’t forget IIAT’s     Scheduled Personal Property Valuation
endorsed market for Mexico Tourist Auto Insurance             As companies convert homeowners policies from Texas
through International Insurance Group – go to                 forms to ISO forms, you need to be mindful of coverage > Market Services > Advantage Markets for more       differences as well as different options that are available
information.                                                  by endorsement. For example, when HO-160 (Scheduled
                                                              Personal Property) is attached to the Texas homeowners
Policy Transfer Within Company Group                          policy, jewelry and fine arts items are covered on an
A new law that was passed during the last legislative         “agreed value” basis. When an insurer converts from
session changed non-renewal rules for personal auto           Texas to ISO and attaches endorsement HO 23 03
and homeowners/dwelling policies. Companies are no            (Scheduled Personal Property – Texas) for jewelry and
longer required to send notices of non-renewal when           fine arts, only the latter is covered on an agreed value
transferring a policyholder from one company to another       basis. If you want to continue providing agreed value
within the same family of companies. For a complete           coverage on jewelry items, you should ask the company
review of all cancellation and non-renewal laws and rules,    to attach endorsement HO 04 60 (Scheduled Personal
go to InfoCentral at and navigate to Agency          Property With Agreed Value Loss Settlement). According
                                                              to the IIAT member who raised this issue, at least one

                      P.O. Box 684487 | Austin, Texas 78768 | 512.476.6281 | Fax 512.469.9512 | |
company charges twice as much premium for this                  For damage to rented property while the insured is
endorsement, but it may very well be worth it to avoid          using it, Section I (property) excludes watercraft,
a hassle when it comes time to adjust a claim. For a            recreational vehicles, and aircraft. Section II (liability)
complete discussion of this and other issues to consider        excludes damage to property the insured rents or uses.
when moving from Texas to ISO, go to InfoCentral at             The Section II extension of coverage for damage to and navigate to Policy Coverages > Homeowners          property of others excludes damage arising out of the
Policy > Technical Reports > From Texas to ISO – Ten            use of aircraft, watercraft, or motor vehicles, other than
Essential Questions.                                            recreational vehicles that are not registered or supposed
                                                                to be registered. Payment under this extension is limited
Spring Break Coverage Issues                                    to $500 on the Texas policy or $1,000 on the ISO policy.
Spring has almost sprung and millions of college students       To be safe, you should advise your customers to purchase
and families will soon be heading to the shores or slopes       any type of damage waiver that might be offered by the
for fun in the sun or snow. It’s safe to assume that            rental company.
insurance problems will be the last thing on their minds
(especially the college students), but maybe someone            NFIP Launches Web Site for Agents
will ask you a question before they leave, like: “Will I be     The National Flood Insurance Program has launched a
covered if I rent a [jet ski] [snowmobile] [golf cart] [boat]   FloodSmart agents web site to provide access to agent
[hang glider] [3-wheeler]?” The safest quick answer is          materials and new content in a password-protected,
“no,” because the answer depends on what type of policy         agents-only section of After
they have (Texas or ISO or other) and whether the focus         registering for a username and password, agents can log
of their inquiry is third-party liability or damage to the      in to access links to education and training programs;
rented vehicle itself.                                          information about map modernization projects in their
If the insured rents a motorized vehicle other than a           area; marketing tips, advertising tools, and additional
“standard automobile,” such as a snowmobile, moped,             resources to distinguish themselves as their community’s
motorcycle, 3-wheeler or 4-wheeler, coverage may not            flood insurance expert; resource materials for customers
be available on the PAP. Liability coverage on the Texas        to help them through the claims filing process; and
PAP applies to the operation of “any auto” used by the          support for sales efforts that include tips, talking points,
named insured or a family member, but the word “auto”           and an opportunity to enroll online for the NFIP Agent
is not defined in the policy. Assuming that “auto” is short      Referral Program and Co-op Program.
for “automobile” and that most dictionary definitions            To register, visit, click on
of “automobile” contain the idea that it’s any vehicle on       “Register Now” and follow the directions to fill out the
wheels, most such rentals could be covered by the liability     online registration form. For more information contact
section of the PAP, except vehicles with fewer than four        FEMA at 202.646.4600.
wheels which are specifically excluded. The ISO PAP, on
the other hand, excludes liability while using a vehicle        IIAT Offers Simplified RLI Umbrella
that is designed mainly for use off public roads, except a       Program
non-owned golf cart.                                            IIAT’s commitment to provide stand-alone personal
How does the homeowners policy respond to claims                umbrella coverage through RLI Insurance Company
related to golfing, boating, jet skiing, biking, snowmobil-      (rated “A+” Excellent IX by A. M. Best) continues to
ing or hang-gliding? Liability coverage applies to third-       be an outstanding service. Offering personal umbrella
party claims arising out of the operation of certain types      coverage with limits up to $5,000,000, the program
of rented watercraft. On the Texas and ISO homeowners           features 12 percent commission, quick policy issuance,
policies, this includes outboard boats of any horsepower,       direct bill at renewal, no excluded vehicles, easy
sailboats smaller than 26 feet in length, and inboard           rating with no manual calculations, self-underwriting
watercraft with 50 horsepower or less. (Most if not all         application and more. Find out how you can start
jet skis have more than 50 horsepower.) In addition, the        offering this valuable service by looking under Market
policies cover third-party liability arising out of the use     Services at or by calling Polly Middlebrook or
of rented recreational vehicles that are not registered or      Bill Wade at 800.880.7428.
supposed to be registered. That could include golf carts,       Program guidelines, a simplified self-underwriting
snowmobiles, mopeds, 3-wheelers, and 4-wheelers. The            application (that you can now complete electronically)
hang glider is subject to the aircraft exclusion, which         and a new QuickQuote rater are available on the web site
defines “aircraft” as any device used or designed for flight.     for you to download to get started today.

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