April 25th, 2009 by DieWolf

There’s a dark side to worldwide travel insurance – the fraud. The trouble is, it’s notoriously hard to disprove fraudulent claims – especially in the travel sector and hundreds of people get away with it every year. Indeed, it’s estimated to cost companies millions of pounds every year, and the extent of the problem is evidenced by this fact: there have been more worldwide travel insurance claims for Rolex watches, than have ever been manufactured. It’s amusing on one level, but financially crippling on another – and damaging for all the honest types, who suffer higher premiums as a result.

Of course, there are far more risky instances of insurance fraud that have been taken – and often they’ve gone wrong in spectacular fashion. Here are 5 of the most memorable…

5. Mr Derek Nicholson

Derek Nicholson and his partner Jottie Nagle were accused of faking a drowning for a $1,000,000 insurance scam. Having taken out the life insurance policy just four days before the incident, it instantly seemed suspicious. After Nagle was told that she could not claim the life insurance policy for 12 years without a body, Mr Nicholson placed a call to the police claiming to have seen one matching his description, but this all unravelled when he was later found alive and well in New York. Despite pleading “not guilty” and claiming past confessions were not valid, they were convicted in 2004, and face a maximum 5 years imprisonment on the conspiracy charge and a maximum 6 years on the false distress charge.

4. Gaylan Sweet

This insurance scam is different from the others, as it actually is an inside job! Gaylan Sweet was a claims adjuster for Allstate insurance who concocted a scheme to share to defraud his company and pocket the money. Over 10 years, he pulled the same insurance scam twice, roping in two people to pose as parents of an imaginary child killed by an equally imaginary drunk driver and pocketing over $700,000 in the process. The case was a mixture of real and imaginary people: real deputy sheriffs’ names were on police forms (though had never actually been involved in the case), real doctors had treated the fake children and there were various invented witnesses confirming the ‘facts’. Sweet and his accomplices were eventually arrested in 2002 and jailed for five years for insurance fraud.

3. Mr John Magno

John Magno is currently awaiting trial for arson in relation to insurance fraud. In 2001, there was the biggest fire in Toronto’s history at Woodbine Building Supply – due to its almost residential location, more than 50 families were forced to evacuate their homes on Christmas morning. Of the two individuals assumed to have committed the arson – Tony Jarcevic and Sam Paskalis – the former died and the latter was severely burned and left in a coma. Paskalis later admitted his involvement in the alleged scheme. Magno himself had increased his insurance two months before the incident and tried to cash in the $3,500,000 insurance policy shortly after the “accident”.

2. Mr John Darwin

The most recent case in this list took the British media by storm when the full details were revealed. John Darwin went missing, assumed dead, after going canoeing in 2000. After a search turned up nothing, his wife claimed the insurance. Everything was quiet until December last year when the ‘dead man’ turned up in a London police station claiming memory loss and the belief that he was a missing person. This unravelled when a photo of the couple grinning together in Panama was revealed in the papers. Suffice it to say, the court found the couple to have lied to their children, their neighbours and police in aid of an insurance scam, and were both jailed for over six years for their scheme as their trial concluded last month.

1. Mr John Stonehouse, MP

But the most memorable instance of insurance fraud has to be the former Labour MP John Stonehouse. On November 20th 1974, he faked his *******. Leaving behind only a pile of clothes on Miami beach, he was presumed dead – but actually heading to Australia to start a new life with his secretary Sheila Buckley. In an unlikely turn, he was found a month later by police who mistook him for the still illusive Lord Lucan! While awaiting trial in Brixton prison, he still remained a Labour MP, eventually resigning 3 weeks before his trial. This left the Labour party in a bind, as they were suddenly a minority government. They ended up forming a Liberal-Labour pact to stay in power until Thatcher’s election victory 3 years later.

As for Stonehouse, he was tried on 18 charges of theft, forgery and conspiracy to commit insurance fraud. He was sentenced to 7 years in prison, serving 3 of them before being released early due to his poor health.

Quite a lot of “Johns” in the list – perhaps that’s a clue for us, when looking at fraudulent worldwide travel insurance claims!

Of course, not everyone fakes their own death as part of an insurance scam – in 2007, Bosnian Amir Vehabovic staged his death to find out who his true friends were! After bribing undertakers to bury an empty coffin, he hid in the cemetery bushes to see how many of the 45 people invited appeared to show their respects. When only his mother showed up, Vehabovic was left sending angry letters to the missing parties!

As worldwide travel insurance scams are harder to prove, it’s no surprise there have been fewer high profile cases. It’s easier to explain the sudden appearance of a ’stolen ipod’ than a man who died 5 years previously!

April 24th, 2009 by DieWolf

Co-Insurance is a clause imposed on most commercial property insurance policies that requires you to insure your property up to a certain limit of insurance (usually 80%-90%, sometimes 100%). This means that if you you fail to insure your property to full value, you have become a “Co-Insurer” on your property & in the event of a claim you could be looking at a penalty.

Now we understand that if we under-insure our property, in the event of a total loss, we are short the difference. Take that same concept & apply it to a smaller loss:

Example: Actual Building Value $500,000
Building Insured for $300,000
Co-Insurance Clause 90%
Fire Loss $60,000

In this example the insurance policy states that you must be insured up to 90% of the value of the property (building) ($500,000 x 90% = $450,000). You only have the building insured for $300,000 thus leaving you under-insured by 33 1/2%.

You have a fire loss totaling $60,000. Because you were under-insured, the insurance company will reduce the amount paid on the loss by the same ratio that you are under-insured. In this case, the insurer would reduce the payment by 33 1/2% and pay you $40,000. As the “Co-Insurer” you are responsible for the remaining $20,000.

So always be aware of the co-insurance clause on your policy. My suggestion is that you pay to get appraisals done on your property every few years and ask your broker to move you to “Stated Amount Co-Insurance”. Most insurers will move you to this stated amount co-insurance in return for a copy of the appraisal and a signed Statement of Values. This binds the company to agree that there will be no penalty for under-insurance on partial losses as it proves to them that you have done your best to ensure your values are adequate.

The most important point is to remember that the onus is on you to ensure that your values are adequate. Even if you have had help from your broker or another outside source in determining the value of your property, in the event of a covered loss, the insurers are really only just taking your word for it at the end of the day. It means nothing to them if you under-insure your property, that’s why they have this clause to protect them. Who’s protecting you?

April 23rd, 2009 by DieWolf

Homeowners insurance is the ideal way to protect one of your lifetime investments, your house and also the pricey things kept in it. By purchasing this policy you insure your house and possessions against several threats such as natural disasters, theft etc.

While purchasing a homeowners insurance the first issue of extreme concern is the amount of coverage you want. A recent survey conducted by the Insurance Information Institute revealed that two-thirds of all homes in America were underinsured by an average of 27%. Thus it is important to opt for a right amount of coverage.

If you are finding it difficult to calculate the extent of coverage you want, there are several ways to do it. For instance if you want coverage for reconstruction of your house then multiply the square foot of your home by the local building cost per square foot. To know the cost of rebuilding your house, also known as dwelling coverage, you can take the help of any local insurance or real estate agent.

For instance in Nevada an average of 1268 square foot home that was built in 1997 has a current dwelling coverage of $81000. However if the homeowners feel that they are underinsured by 27% and increased their coverage to $110,000, the monthly payment will increase by $7.50 per month.

Since most often the homeowners insurance also compensates for personal liability, you should also keep in mind how much coverage you require for certain legal expenses, medical expenditure or injury to any member of the house.

Though a standard homeowners policy comes with liability coverage of worth $100,000, insurance professionals usually advise to get of coverage of around $300,000 to $500,000 as liability coverage. To have this extra amount added to your standard homeowners policy, purchasing an endorsement is a wise idea.

You can also go for personal umbrella coverage in case the worth of your assets is more than $300,000 to $500,000. The umbrella cover is extremely useful once you are through with your homeowners or automobiles coverage. For instance if your colleague is injured at your house and revengefully sues you for $500,000, your homeowners insurance will cover for $300,000 and get exhausted but the amount left will be easily covered by the umbrella coverage.

For insuring your household things there are three ways. First is the actual cash value in which the policy pays for replacing your personal property using the method that is based on replacement cost of the thing minus the depreciation?

Second is the replacement cost strategy where you receive current amount for the thing you lost in any of the covered dangers. Though this way requires you to pay an additional premium but it can prove extremely beneficial in the long run.

The third option is the guaranteed replacement cost. This coverage means that there is no maximum payout applied to coverage of your insured personal possessions. You need to pay an extra premium but on the same hand increase your deductible to make the coverage somewhat cost-effective. Similarly the structure of our house is also to be insured in these three ways but with slight variation.

According to current facts and statistics presented by National Association of Insurance Commissioners in 2002 the average expenditure on homeowners insurance increased by 12% from $593 to $668 in 2003. Expenditure varies with the state. For example in 2003 Texas witnessed the highest average expenditure of $1328, in Oregon it was $461, Delaware $442 and Maine $462.

April 15th, 2009 by DieWolf

The insurance total loss process is simply a racket! I am sick of reading emails from just about every corner of the country from people seeking some kind of consumer protection. It also seems that every insurance company is guilty as charged. Look, I make my living by dealing with insurance companies, and I truly believe in the societal need for insurance. However, when it comes to total loss claims, the consumer is getting the short end of the stick. Let me explain and I will let you form your own opinion.

The process is designed in such a way that the insurance carrier can make you take what they believe your car is worth. They decide this by finding comparable values in your area. These comparables are often assessed by independent third party companies. Insurance companies argue that they do not have any “control” over this information. However, I argued that this is not the case. The insurance total loss process is controlled and paid by the insurance company.

Who are these companies suppose to advocate for, the ultimate consumer or the person that pays them? Many people argue these companies are paid to act objectively, but in reality, they have few costumers
(big insurance carriers). If the insurance carrier believes that this companies total loss values are high, guess what? They will stop dealing with that specific company.

These third party companies are in business only because of insurance carriers. The consumer has no say regarding which third party company should look at their car. The result is simple. These companies must satisfy their client (the insurance carrier), and what is the best to do that? Low comparable values so the insurance company can settle you for less. Don’t believe me? Simply Google “total loss class action”.

You will see the amount of litigation for unfair vehicle values. There are ways to protect yourself when
disputing comparables and getting a fair settlement.
To learn how to dispute unfair total loss values, click here.

Offering less than the fair market value of your car is illegal. Insurance companies must be fair, but somehow they get away with very low total loss values. There are other insurance practices that are not illegal per se, but they are unfair an unethical. There are ways to fight those too!

The pressure of the total loss adjuster will be incredible; they want you to settle in the first call. Your car maintenance records will not be even considered. In many states, no new equipment will be looked at in
assessing the value. If you have rental coverage, most states allow the total loss adjuster to cut off your rental three days after the vehicle damage is deemed a total loss. Some states (like Texas) allow the insurance carrier to cut off your rental car the day they decide that there is a total loss. Note: not the day they pay. You are supposed to negotiate the value of your car while you either pay for a rental car out of your own pocket or you take the bus to work.

Cutting the rental car is in compliance with state legislation. Most states allow insurance companies to do this. Next time that insurance commissioner elections and/or your state legislators want initiatives, it is a good time to try to change this. Think about it, even if you settle your insurance total loss the day they call you, it will take at least three business days to get the check on the mail. You will not be compensated for any expenses while you go car shopping (it can take a long time).

Although the technique outline above is legal. I believe it is unfair. This gives unequal footing in a negotiation. Most people cannot afford to be paying for rental cars until they get to a settlement with an
insurance company. They need to get to work.

Insurance adjusters have a duty to act in good faith and fair dealing. It is implied in every insurance policy in the United States. However, this duty is “enhanced” when you are dealing with your own insurance
company. Insurance adjusters must “help you” and “explain” the process to you. They are supposed to explain how you can argue your claim, and how you can document the value of your car. Most will not. They will tell you “this is my last offer, let me know when you want to send me the title of your car, and I
will send you this amount.” That is about it.

There is no question that we need insurance and that there is social benefit on having it. However, when it comes to the total loss process, some adjustments must be made to protect the ultimate consumer. Check you state regulations and see what this process entails. If you don’t like it, then call your state legislator.

April 12th, 2009 by DieWolf

The fact is that in near future iPhone will be considered as a groundbreaking product that many other manufacturers would like to copy. It is highly advanced than any other phone or hand held gadget for communication available in the world. Highly advanced iPhone technology means it is quite an expensive item.

And because they are expensive:

iPhone owners will be careful of their valuable possession People who do not have one will envy your iPhone Robers will target the iPhone

In this context, you may think that many iPhone insurance policies should be available. Unfortunately it is not so. One of the options is; to add to the household insurance. It may work but has 3 drawbacks as follows:

Household insurance policies have a higher excess, up to £150 or more. In case you make a claim for your iPhone on your house insurance, the premium can cost more the next year. How long can you go without your iPhone? The claim process takes a long time for your house insurance. People cannot wait for weeks for replacement of their iPhones. Therefore is would be practical to consult an insurance specialist to insure your iPhone.

This brings us to the question – What iPhone insurance companies are there, that protects your iPhone with a reasonable cover yet proves economical?

Let’s find out what ‘economical’ is:

You can get an official iPhone is only on the network of O2. An unofficial one too can be bought, which is unlocked, to make it work on other networks, but let’s see the official scenario. The costs are £250 for the handset, plus there is a 2 year contract at £40 to £60 per month.

If your iPhone is lost after 6 months from buying it, then as per contract you still have to pay every month for the next 1.5 year. So, 18 months at the rate of £35 per month comes to £630 irrespective of whether you got the handset replaced or not. Besides, there is replacement cost involved too which can be about £600. Therefore, an insurance that gets you a replacement for an amount less than £600 is economical.

iPhone robbery is an obvious possibility, but how to protect yourself if you just lose it? Or gets damaged? Will you require a cover while traveling abroad? Do you want extended warranty? Consider all these before buying this expensive gadget.

Whatever you may consider one thing is quite apparent – once own an iPhone and begin to realize what a great product it is, you will definitely protect it with an insurance that will protect you and your iPhone economically. Find out the economical solution from an instant online iPhone insurance company.