Posted on September 12th, 2011 No comments
USA Today posts an article on data compiled by the Department of Health and Human Services (HHS) pursuant to the recently passed health care law, showing the denial rates for health insurance. Using this data a Government Accountability Office study of 459 insurers published earlier this year found an average of 19% of applicants nationally were denied coverage. The study showed a wide range of denial rates. A quarter of insurers had denial rates of 15% or below and a quarter had rates of 40% or higher.
The article noted that a House Energy and Commerce Committee investigation into four large for-profit insurers last year found that the denial rates have steadily increased from 11.9% in 2007 to 15.3% in 2009. The companies reviewed were Aetna, Humana, UnitedHealthcare and WellPoint.
The article quotes Kentucky resident Amanda Hite who says she felt “really healthy” when she applied recently for health insurance. But Anthem Blue Cross and Blue Shield denied her, because she had seen a chiropractor a few months earlier for a sore back and later had visited an emergency room because of back pain. Hite’s case isn’t unusual. Many of the plans offered by Anthem Blue Cross in Kentucky reject about one in five applicants, according to data provided by insurers to the HHS. Rival insurers in the state have even higher denial rates: Humana rejects 26% to 39% of applications in Kentucky, while UnitedHealthcare denies 38% to 43%.
This is yet another example of how insurance companies seek to avoid risk. Health insurance companies only want to insure healthy people who don’t use their benefits. Car insurance companies only want to insure people who don’t get into accidents. The difference? Well, most states require insurance companies to offer minimum car insurance, while also requiring all drivers to have this minimum insurance. Health insurance companies for the most part were not so obligated. However, the recent Health Care Law bans health insurance companies from denying coverage for health reasons starting in 2014.
Insurance companies are in the risk business. The more risk a person has, the more premiums that person will pay to offset the risk the insurance company takes on by insuring that person. Mandatory insurance requirements favor consumers, because they inherently spread the risk among a larger group of people, while denying insurance companies the luxury of cherry picking only those consumers who carry the lowest risk.
Posted on September 7th, 2011 1 comment
By now we’ve all seen the commercials where some catastrophe befalls an insurance customer for a national insurance company. Surprisingly, the customer is not too worried. They sing a little jingle about “good neighbors” and poof! an insurance representative shows up to handle the situation. This representative calls the person by name and tells them not to worry, they will handle whatever problem has presented itself.
The commercial is meant to give the viewer the impression that if you have insurance with this particular insurance company that any problems you might have will be met by a known, friendly, and helpful insurance agent. This scenario couldn’t be farther from the truth.
Consider a typical situation when you first buy car insurance. You go to a local insurance agent and request insurance for your car. You might have had a previous relationship with this agent over many years. He is a representative of the insurance company. The agent’s job is to take down some information, have you fill out the necessary paperwork, and submit your application, along with your first month’s premium to the insurance company. He then receives compensation in the form of commissions based on each application he submits that is later approved by the insurance company. Your interaction with an insurance agent is likely to be very pleasant. Does this commercial show anything remotely similar?
Now consider a typical situation when you file a claim against an insurance company after some type of loss, such as a car crash. This might be your insurance company or somebody else’s. You get a call from the insurance company adjuster who says he will be handling your claim. It is doubtful you have ever met this person before. Unlike the agent who is an independent representative of the insurance company, the adjuster is an employee. He is paid a salary by the insurance company. His job is to get information about your claim, review the damage (called adjusting), and then offer to settle your claim. Your interaction with an insurance adjuster isn’t likely to be as pleasant. But, the commercial comes a lot closer to showing this scenario doesn’t it?
The purpose of the commercial is to make you identify with something about insurance that you like, such as your insurance agent, while giving you the impression that your agent is involved in the claims process. Well, they aren’t. The unknown, potentially adverse, and likely biased insurance adjuster is.
The insurance agent facilitates your purchase of insurance with the insurance company. The adjuster is the insurance company. The insurance adjuster’s job is not to facilitate anything, but to make sure the insurance company doesn’t pay out anything unless it has to, and only then as a little as possible. Insurance companies don’t make money paying out claims.
But what if you disagree with the adjuster about the value of your claim? What if you believe the adjuster is improperly delaying or denying your claim? What if you think the adjuster is being unfair? What if you think the adjuster has undervalued your car, or other property? Do you think the insurance company is acting like a good neighbor then?
Don’t be fooled by commercials or catchy jingles. Insurance companies are in business to make money. They do not make money by paying out more on claims than they take in on premiums. Adjusters know this. The next time you suffer a casualty loss or turn in an insurance claim, remember no amount of catchy singing is going to make your dealing with the insurance company pleasant. When you ask an insurance company to settle your claim remember good neighbors are hard to find.
Posted on August 19th, 2011 No comments
USA Today is reporting that Allstate Insurance Company is suing Goldman Sachs saying more than $122 million in mortgage-backed securities the insurance company bought beginning in 2006 were fraudulent. According to the article; “Allstate says it purchased more than $122 million in mortgage-backed securities from Goldman Sachs and affiliates in 2006 and 2007. The value of those securities plunged as the housing market bubble burst.”
Still think that lawsuits by personal injury lawyers are the reason your auto insurance premiums keep rising. Think again. Think a $122 million dollar hit in a bad investment by Allstate didn’t effect its bottom line? The truth is that insurance companies don’t really make most of their money from premiums. While accidents due play a part in an insurance company’s risk analysis and in the premiums people will pay, their increase year over year is tied more to a company’s investment portfolio then to actual losses.
There is an excellent article over on Weakonomics that discusses how an insurance company’s investment losses in the stock market effect your premiums. So, you can imagine what a $122 million loss did to Allstate and its decision on whether or not to raise premiums for its customers. You can also imagine why it is now moving to recover some of those losses from Goldman Sachs. Of course, none of this is related to the claims Allstate had to pay out on its policies of car insurance.
Remember the next time someone tells you that car insurance rates are going up because of lawsuits, that such a statement simply isn’t true. In fact, such a statement was probably perpetrated by the insurance companies, their lobbyists, or their politicians as part of a campaign to influence public opinion in their favor.
The next time your premiums rise don’t be too surprised to find out that your insurance company took a hit on its investments or the stock market suffered some loss. Don’t blame it on the victim of a car wreck or his lawyer.
Posted on July 29th, 2011 No comments
USA Today News reported on the Insurance Institute for Highway Safety’s (IIHS) report showing that a version of automatic braking found in Volvo SUV’s prevented one in four low-speed crashes. This finding is likely to speed up installation of similar technology in other vehicles and should help persuade regulators to consider rules to require automatic braking, according to the article.
According to the article; “IIHS estimated last year that these crash-avoidance features have the potential to prevent or at least lessen the impact in 1.9 million crashes a year and help prevent one out of three fatal crashes. Systems that warn then help prevent frontal crashes by braking automatically could be the solution for most of those — 1.2 million crashes. That represents 20% of the 5.8 million police-reported crashes each year and as many as 66,000 non-fatal injury crashes and 879 fatalities a year.”
Unfortunately, the article details how these features are only currently in use in some luxury models. Whether or not it would be cost effective to install them in lower end models remains to be seen.
While use of these systems appears to prevent accidents in low speed cases, its use in higher speed collisions appears to only lessen the risk of serious injury or death. It does not appear to prevent it.
You can read the entire article, here. You can also click on the link to view a video of the technology in action.
Posted on February 8th, 2011 No comments
The government investigation into Toyota’s recent recalls failed to find a causal connection between Toyota’s electronic controls and the unintended acceleration problems reported. The investigation revealed that prior issues, including stuck gas pedals and defective floor mats were the likely cause of the complaints. Click the link to read the entire article, including government recommendations to reduce the likelihood of future accidents.
Posted on February 8th, 2011 2 comments
One of the most pressing public safety issues today is the danger of talking on a cell phone while driving. Fortunately, many car manufacturers are aware of this issue and now offer bluetooth hands-free calling on their newer model cars or trucks. This feature allows you to make calls at the press of a button through your car’s radio or stereo system. Making calls this way keeps your eyes on the road and your hands on the wheel. While it doesn’t prevent all accidents, it can reduce them.
I have previously paired my iPhone 3gs with my 2010 Chevrolet Malibu to allow for hands-free calling. I simply turned on the bluetooth function on my iPhone and then pressed the hands-free calling button. The hands-free system recognized my iPhone and gave me a code to enter on my iPhone, which I did. It was a relatively painless process.
However, my 3gs recently broke a speaker and since I was eligible for an upgrade, I went ahead and purchased an iPhone 4. I didn’t think anything about it until I got in the car and realized that my iPhone 4 wasn’t paired with my hands-free system. I tried to go through the same steps I did to pair my 3gs, but my GM system couldn’t or wouldn’t recognize my new phone. After some effort I was finally able to pair my new iPhone 4 with my GM bluetooth hands-free calling system. Here are some important points and steps to take to pair your new iPhone 4 with your GM bluetooth hands-free calling system.
First, understand that you should restore your new iPhone 4 on iTunes before pairing it, otherwise, after you restore your information on iTunes, your GM vehicle will think its a new phone and you’ll have to pair it all over again. Another unfortunate mistake I made.
Second, the pairing process will not work while your driving, so don’t try to to pair your new iPhone unless your parked.
Third, you must delete your old phone or request to add another phone to your system. Since my old phone didn’t work anymore, I simply deleted it. But if your wife uses your car, or vice versa, you might need to add the phone as a secondary and not delete the first phone. I did not have to do this so it may require different steps, so check your manual, if this doesn’t work.
I took the following steps to delete my old phone and pair my new iPhone 4 with my 2010 Chevrolet Malibu.
1. Press your handsfree calling button. When the system says “ready”, say “bluetooth”. At the next prompt say “delete.”
2. The system will ask you which phone you wish to delete. Mine was “Ed’s iPhone”. I told it to delete that phone. It confirmed the delete and then deleted the phone from the system.
3. The system will next prompt back to “ready”. Next say “bluetooth”.
4. The system will then ask for the next prompt. Say “pair”. The system will now search for any bluetooth enabled devices. Make sure your device is enabled. You should see your new iPhone recognize “General Motors” and attempt a connection.
5. At the same time the GM system will give you a four digit code. On the iPhone, you’ll see a box asking for the code. Put in the four digit code and the iPhone should show as “connected”.
6. Once connected the system will ask you to name your new device. I renamed mine “Ed’s iPhone” just like before, but you can give your phone any name you like. The system should confirm your choice.
7. Once your new device name is confirmed, exit your hands-free calling system and your phone will now be paired each time you enter your car. This will allow you to make and receive calls through your hands-free calling system for safer driving.
Understand that any stored information tags, including names and numbers, will not be deleted by removing your old phone from its “pair” with the hands-free calling system. My contacts and phone numbers were still stored, and I’ve since used my iPhone 4 just like my old 3gs.
These instructions allowed me to pair my new iPhone 4 with my 2010 Chevy Malibu. Please review your particular vehicle’s manual to determine if your GM vehicle supports hands-free calling and the new iPhone 4 before attempting to pair. If you GM vehicle supported 3gs, it should support the newer iPhone version.
I have done my best to recount the steps I took to pair my new iPhone 4 with my GM car. The specific words used and the particular steps taken may vary depending on your GM make and model. This is merely meant to be a guide, and if you’re unsuccessful in pairing your iPhone 4 with your GM vehicle, make sure to check your manual or contact your local GM dealer if you think there may be a problem. GM also has a website that shows compatible phones for its system at www.gm.com/handsfree.
If your vehicle does not have a hands-free system, you might think about getting a bluetooth headset or other stand alone bluetooth hands-free system. This will allow you to make calls while keeping your eyes and hands on the important task of driving. Remember, the safest way to drive is to avoid all distractions, including using your cell phone, whether you have a hands-free system or not.
Posted on February 2nd, 2011 No comments
The National Weather Service has issued a strong wind advisory for the Louisville area today. Please be aware.
According to the Weather Service, “IF YOU ARE DRIVING…SLOW DOWN AND KEEP BOTH HANDS ON THE WHEEL. KEEP A SAFE DISTANCE BETWEEN VEHICLES AND FROM CARS IN ADJACENT LANES AS STRONG WINDS COULD PUSH YOUR CAR OUTSIDE ITS LANE OF TRAVEL.”
Posted on January 26th, 2011 No comments
The National Weather Service has issued a Winter Weather Advisory until 1:00 p.m. Snow will begin to taper off, but will leave accumulations causing slick and hazardous roadways. Periods of limited visibility may also occur. A Winter Weather Advisory mean periods of snow will primarily cause travel difficulties including snow-covered roads and limited visibility. Please use caution while driving.
Posted on January 25th, 2011 No comments
The National Weather Service has issued a hazardous weather outlook for Louisville Metro and surrounding counties.1-3 inches possible with most snow falling to the south. Louisville could be missed altogether; http://tinyurl.com/ms8u3c
Posted on October 22nd, 2010 No comments
The Courier Journal reports on another round of recalls, this time 1.5 million cars are being recalled for faulty brakes. This round of recalls comes as the automaker tries to repair its image from prior recalls and fines over its failure to disclose problems with its cars. Read the Courier’s article.