Let’s consider another type of auto protection that occurs before shopping or buying insurance. What can you do to improve your satisfaction with a new or used car purchase? Of course the simple things are to take time to take a close look at the cars under consideration and ask pointed questions about them including how they handle in turns and emergency braking. Just as important is to be comfortable with the party selling the vehicle, such as a reputable dealer.

Of course, particularly with used cars, vans or trucks, personal inspections and a vehicle Q&A may still be insufficient to get all the details you need. A method that may be more helpful and certainly less expensive than taking a car to a trusted mechanic is to check out the car’s history. But don’t worry, rather than suggesting that you find an automotive private investigator, you only need to start searching with your trusty PC.

A relatively new service available on the ‘Net provides historical information on any vehicle that has a legal identification or a VIN (vehicle identification number). An entity call Carfax is typical of such a service. For a reasonable fee and armed with the VIN, a subscriber may request a search for information and can be alerted to any number of potential headaches such as the vehicle:

• is stolen
• was repaired after a serious accident
• had its odometer reading lowered
• suffered flood or other weather-related damage
• is or was part of a manufacturer recall
• has a history of recurring repairs
• was previously used by emergency personnel
• was used commercially (delivering pizzas, newspapers or as a taxi)

All of these are serious problems that, without a car history service, can be easily hidden from an unwary buyer. Why not take advantage of the ‘Net to find a service that can help you be certain that you find a car that is worth insuring?

If you’re ever in the market for a used vehicle, you probably know that it’s important to find a car that is both affordable and reliable, with affordability often being the higher concern. However, while getting a good price, you need to be sure that your "bargain" isn’t due to it having taking a swimming course.

When serious storms or hurricanes result in flooding, the impact on the car market is felt nationally. Cars that may have been totaled because of serious water damage in one state may end up in another, without a clear indication that it was waterlogged. A person looking at any used car must take steps to avoid buying a car that is nearly guaranteed to needing serious repairs soon.

Flooded cars are often cleaned up by original owners or dishonest dealers and sold to auto auctioneers without information about the water damage. Such vehicles may face a laundry list of problems such as:

• bacteria infestation (due to damp, hidden areas)
• more rapid rusting and corrosion
• engine damage
• electrical system damage
• brake, brake pads damage
• operating parts contamination (with dirt and other particulate matter)

In an ideal world, the fact that a car or truck has been flooded and cleaned or repaired should be told to prospective buyers.

However, since our world falls short of "ideal," you should protect yourself from buying a flood-damaged vehicle. This can be done by asking questions and doing a little detective work. First, ask the seller why the vehicle is available for sale. Sometimes it’s best to be blunt by asking whether the vehicle has ever been in an accident or suffered flood damage. Then take a close look at the car, being careful to spot clues that it’s been water damaged. If you write down the auto’s Vehicle Identification Number (VIN), you can use that information to find out the vehicle’s history. A number of Internet sites offer history reports services including VHR Online and Carfax. Further, either you or a trusted mechanic can inspect the car for the following signs:

• A damp or musty odor in the car’s interior
• Existence of brittle wiring casing
• Debris beneath carpeting floor pads
• Water line marks or silt
• Rusting of any metal bolts, door hinges or other pieces in a car’s interior (including the car seat springs)
• Grass, dirt or debris on a car’s air filter
• Any pooling of water or signs of rust in the trunk, spare tire and/or car jack
• Evidence of moisture in gauges

Be certain to check that all electrical items such as lights, horn, radio/CDs, turn signals and headlights operate properly. Also be on the lookout for signs that a seller is hiding something, such as a used car that has had carpeting or upholstery replaced or a car that was recently painted. Other ways to protect yourself are to insist upon a warranty, refuse to buy any vehicle on an "as is" basis and to take the vehicle out for a test drive.

Remember, besides the cost of the used car, SUV, pick-up or van, you also face the costs of registering and insuring the vehicle. Make sure that the transaction isn’t spoiled by a watery surprise.

In this part, let's talk about making long trips, skidding, actions to take when you're stranded and driving in the right frame of mind. Preparation For Long Trips

Long distance trips by car or truck can be dangerous during the winter, so here are some suggestions for minimizing the chance of the trip becoming a tragedy:

• find out about expected weather conditions at locations along your route
• tune into local stations for information on road conditions
• give persons on either end of your trip a travel itinerary including planned departure and arrival times and call these persons to let them know of your safe arrival
• stop frequently for resting and re-fueling
• travel as much as possible in daylight
• be familiar with your route, carry recent maps and prepare alternate routes
• be prepared for travel delays and be willing to pull over on the road or to stop at road shelters to wait out poor driving conditions

What To Do If You're Stranded

• pull your car over as far off the road as possible to avoid being hit
• put on any additional clothing to keep warn
• use phone or radio to call for help
• it is better to stay with the car and run the engine periodically, not continuously
• conserve your energy; over-exertion by trying to move your vehicle or shoveling too long endangers your health
• melt snow for drinking water
• move your arms and legs to improve your circulation and to keep warmer
• before leaving your vehicle, consider the outside temperature. A person can freeze very quickly, especially if there is much wind
• If you are stranded in an area where there is regular traffic, put on your flashers or raise your car's hood to attract help

Above all, try not to panic. Abrupt or wild steering or braking will make things more dangerous. Skids occur when the car's speed overcomes tire traction. If you do not have anti-lock brakes, gently pump your brakes until the car slows and traction (ability to steer) is regained. If you DO have anti-lock brakes, apply steady pressure until control is regained. If you are able, try to steer your car in the same direction in which you're skidding. In other words, if you're skidding to the right, turn your STEERING WHEEL (not your tires) to the right. This action should counteract the skidding. Drive With A Winter Frame Of Mind

Winter driving often becomes frustrating due to having warm weather driving habits, expectations and behaviors. Cold weather driving becomes easier when you're realistic. Winter travel takes more patience, care and planning. A 30 minute drive during clear, sunny and dry conditions is no longer possible under snowy, slick or icy conditions. Minimize your frustration and increase your chances for safe travel by doing the following:

• allow more distance between you and the car ahead of you as safe braking distances are MUCH longer on slick roads
• slow down
• watch for icy conditions, especially on bridges and overpasses
• keep your headlights on so that your car is more visible to other drivers
• don't start driving until your windows are clear of frost, snow, etc.
• clear snow and ice from your vehicle's lights
• leave for destinations earlier, expecting that travel will take significantly longer
• drive with a higher level of awareness of traffic and road conditions
• clear snow from the top of your car so that it doesn't later obscure the view of other drivers
• use caution when approaching intersections
• avoid sudden braking, turning, accelerating and lane changes
• make it a habit to wash your car, including the underside, regularly to remove harsh chemicals and salts which are corrosive

Winter often does provide a beautiful backdrop in which to drive, but it helps if you're patient, cautious, realistic and prepared.

Be sure to read Driving Though A Winter Wonderland? Part 1.

Driving during a snow laden winter can take your breath away. However, the season's beauty comes with equal peril. The elements that create stunning winter landscapes also bring driving nightmares. Driving safely during the months that include snow, blinding storms, ice and slush takes preparation and the proper mind-set. What considerations do drivers need to make during the coldest of seasons? Well, there are several areas that really need your attention. In part one we'll discuss preparing your car and getting equipped for handling emergencies. Preparing Your Car

Cold weather makes it necessary to make sure that your vehicle is ready to stand up to its rigors. A stalled car may be an irritating inconvenience in warm or moderate weather. However, the same circumstance could literally endanger a driver's life when it occurs in a winter storm or during extremely low temperatures. Your goal should be to minimize the chances of a vehicle breakdown by having a qualified mechanic inspect the following:

• Wipers
• Tires (tread wear, alignment, and traction by maintaining air pressure)
• Brakes
• Radiator and coolant system
• Transmission
• All fluid levels
• Hoses, clamps and belts

It is important that once checked (and any deficiencies corrected), a car owner be sure to periodically certify that these items remain in good order. This is especially crucial prior to long trips. Preparation For Emergencies

Wintertime driving calls for drivers to be ready to deal with the hurdles represented by weather conditions and the likelihood of being stranded. Car owners should consider having the following items available to deal with routine and emergency winter driving situations:

• ice scraper
• first aid kit
• snow brush and small shovel
• heavy blankets
• flares
• flashlight
• matches
• metal cup or small container (in order to melt snow for drinking water)
• small or basic tool kit
• bag of cat litter or sand
• candles
• salt
• extra clothing (coat, boots, gloves)
• jumper cables and drive belts
• extra gallon of antifreeze and windshield wiper fluid
• extra quart or two of motor oil
• car phone, cell phone or citizen's band radio
• non-perishable food
• a dry support for a car jack such as small, sturdy wooden board

It is also helpful to keep plenty of fuel in your car or truck's gas tank to avoid running out during weather related snags in traffic or if you must pull off the road.

Be sure to read Driving Though A Winter Wonderland? Part 2.

Sports Utility Vehicles (SUVs) Gain Popularity

No matter what type of vehicle you drive, if you've spent much time on any road surface in the past couple of years, you must have noticed an explosion. That momentous event is the WILD growth in popularity of larger vehicles called Sports Utility Vehicles, or SUVs. While such vehicles barely registered a blip on the vehicular radar screen when the 90s began, there are now well over sixty million such vehicles on America's roads. The Rulers of Personal Vehicles

SUVs have become popular for several reasons:

• they have a very comfortable ride
• they're heavy and sturdy, making them safer in collisions
• they're capable of handling certain types of inclement weather better than smaller vehicles
• they're more stylish than pickup trucks and large vans, making them more attractive to female drivers.

The combination of power and safety have propelled these vehicles into a position of dominance in sales and, naturally, on the streets and highways.

Early word on SUVs was the substantially increased safety factor. Many insurance and safety experts initially hailed the arrival of such vehicles since they have helped to turn around the previous trend of smaller, lighter cars which were efficient fuel-users, but also very vulnerable to heavy damage in higher-speed collisions. The damage factor was a big contributor to serious driver injuries and fatalities. On the other hand, SUVs heralded the arrival of personal transportation that handled collisions better than the lightweights. Insurance companies originally shrank away from SUVs because of their high cost; but like everyone else, they warmed up to them, primarily because of their higher degree of safety. Manufacturers are still capitalizing on the size feature as they have announced plans to produce even bigger SUVs. Larger versions of these vehicles should spur even greater sales. Sports Utility or Personal Assault Vehicles?

As the number of SUVs have increased, so has the amount of scrutiny from safety experts and the insurance industry. As with anything, SUVs appear to have a negative side. Ironically, one of the biggest issues is that they're - well - BIG! Although SUVs make their occupants safer, it comes with a price.

Construction - SUVs are not only heavier than most private passenger vehicles, they're also stiffer. SUVs react more like jeeps on wet roadways and on turns, having a tendency to rollover instead of experiencing increased rear-end motion (fish-tailing) in smaller vehicles. Further, with their heavier weight and stiffness, SUVs have bodies which don't have as much "give" during impacts with other vehicles.

Collision - This means that smaller, lighter vehicles that collide with SUVs experience a higher level of damage upon impact. Naturally, the occupants of the smaller vehicles which collide with SUVs face a higher chance of serious injury or death. SUVs have front bumpers that are significantly higher than most vehicles and this can cause big problems. Instead of helping to mitigate the impact by making contact with the other vehicle's bumper, it maximizes damage because the SUV's hardest part makes contact with the more vulnerable body of a smaller vehicle. In fact, depending upon its speed, an SUV may actually run over the top of a smaller car.

Increased Liability - the nature of the construction elements of an SUV during accidents with smaller cars results in these types of vehicles inflicting more serious bodily injuries to other operators. This fact increases the likelihood of more lawsuits against SUV owners and operators. More claims increase the cost to insurers and results in higher insurance rates. In fact, a number of insurers have told the public to expect higher rates or perhaps premium surcharges for SUVs in order to make up for their greater exposure to causing serious accidents. So, Is Bigger, Better?

Well, yes, but only up to a point. While SUVs may fit the needs of persons who put a premium on vehicle strength and safety, the positives are balanced by the fact that such vehicles inflict more serious damage on smaller vehicles and their occupants; this fact is going to result in increased claims and insurance costs. Further, as the number of SUVs on the road increases, there will be a diminishing return on their safety. Why? Because instead of colliding with smaller vehicles, the probability will increase that SUVs will crash into other SUVs. In the end, a person interested in buying and driving an SUV will just have to consider the positives and negatives and make a decision….oh, the responsibility of being a king of the road.

An Emotional Start

How likely is it to get enraged while in your car or truck? Well, if you are a veteran driver, you probably know how emotions can affect driving. Long before starting your car, you've had to wake up, deal with home emergencies, perhaps get your kids moving, and worry about the upcoming work day. After all the hassle, you get behind the wheel and hope that you make it to work on time. "Characters" Add To Road Experience

Now that you're stressed out by the way your day may have started, your emotions may be fueled by having to deal with the following characters:

• "Karl Kollision" cruising through the intersection on a brilliant red light
• "Mary Me-First" making a quick left turn in front of oncoming traffic
• "Larry Lane-Change" practicing his art six times in the space of two city blocks
• "Tailgate Tommy" attempting to weld his car onto your rear bumper
• "Mollie Make-Up" ignoring the changing light so she can get her mascara "just right"
• "Charlie Cell-phone" almost sideswiping you because he's trying to make a long distance call.

Such folks turn every day on the road into a test of patience and are a challenge to our civility, but there's another perspective that drivers must consider. The "Character" In Each Of Us

"Road rage" has become a popular way to refer to driving incidents involving aggressive or violent behavior. Various sources have blamed increased traffic accidents and fatalities on road rage. Others debunk the term as a "fad." and say that traffic statistics don't reflect increased violence on the part of drivers.

Chances are, most instances of poor driving are isolated incidents. Every driver is guilty of an act that can be blamed on a momentary lapse in judgment. You or I may make a proper lane change or legally proceed through an intersection 99 out of 100 times. However, the drivers who witness our mistakes may assume that we're hopelessly inept. Take a deep breath from behind your wheel and recognize that "Larry," "Mary," or "Karl" may be making a rare appearance in the guise of a "character," but actually may be someone who normally drives without making mistakes. Why Be A Reasonable Driver?

It makes sense to give other drivers the benefit of the doubt. One reason is because it's earned. Most drivers do a terrific job on the road. Especially when you consider the dangers inherent in driving; such as:

• traffic congestion
• poor weather
• time-pressures
• speed, etc.

A better reason for staying calm behind the wheel, is that cool-headed drivers make better decisions. They have a better chance of avoiding or minimizing accidents. Finally, you may run into serious problems if you cause an accident while acting too aggressive. There's a greater chance of causing serious injury and a higher likelihood of legal consequences. You also increase your chances of being sued. Oh, and let's not forget that insurers aren't seeking to cover drivers who fail to use common sense. Who Needs It?

Driving is tough enough without complicating it with rude or aggressive behavior and car insurance isn't free, so start your car, give other drivers a break, and keep a cool head. It's an attitude that creates the best chance for getting where you need to go....safely.

Does The Insurance Industry Discriminate?

First, let's admit that this article title and question is tricky; but the answer is yes. Not only is discrimination practiced by every insurance company; discrimination is absolutely critical to the industry. The practice is also quite legal and rightfully so! Before going further, let's remember that discrimination can have more than one meaning. How may discrimination be defined? Let's use a very large dictionary, say Webster's Encyclopedic Unabridged Dictionary Of The English Language (Deluxe Edition):

1. the act or an instance of discriminating.(differentiating or noting differences), 2. Not applicable, 3. treatment or consideration of, or making a distinction in favor of or against, a person or thing based on the group class or category to which that person or thing belongs rather than on individual merit. Unfair Discrimination?

The confusion over the desirability or legality of discrimination arises out of unfair discrimination. Unfair discrimination stems from the latter definition mentioned earlier. A choice that is based on a group, class or category. Choices that revolve around a distinction that is irrelevant to offering insurance coverage is unfair discrimination. The best (or worse) example of this is to deny coverage based upon an arbitrary difference such as race or religion. Fair Discrimination

Insurers are constantly involved in discriminating because they are always studying persons and situations to see if they are in a position to offer insurance coverage. In other words; they note differences and make choices among the requests they constantly receive for coverage. The distinctions made among their insurance applicants are important. Insurers design their insurance programs based on assumptions on the type of persons, property and situations they wish to cover. Market Selection and Pricing

When an insurance company does business, it has to make decisions about the type of market it wants to serve. For example, in the car market, does it wish to insure only regular cars and drivers with pristine records or expensive sports cars and drivers with a few blemishes? In the homeowner's market, does the company wish to target very expensive homes, such as those with a value over $300,000 or might it decide to exclusively write mobile homes?

Once their market niche is selected, a company has to implement matching prices. What components must a company consider? Well, an insurer must charge premiums that reflect the:

• dollar amount of losses paid to all parties filing valid claims
• company's costs to investigate and settle claims
• insurer's operating expenses (including compensation to employees and agents)
• premiums charged by their competitors

A company's premiums also consider their ability to invest their income and, of course, they must also consider what rates, particularly changes in rates, are approved by state insurance regulators. Underwriting

In the next step after market selection and pricing, a company has to create and follow rules on selecting and keeping the type of business that matches its market and which is supported by their premiums. The rules and practices that a company follows in selecting and rejecting business is called underwriting. In other words, via underwriting, an insurer must discriminate or choose among persons and kinds of property that fit its insurance program. If a company doesn't apply their selection standards consistently; it will eventually lose the ability to do business. What is a quick method to learn what a company considers to be valid factors to do business? The company's application(s). If the information is important for underwriting, it should show up on the application. This is true no matter the type of insurance or market targeted by the insurer. Discriminating Conclusion

Remember, the decisions made by an insurer in writing and renewing coverage must validly affect their market and prices. When the decisions are not based on these factors...unfair discrimination takes place.

Are You Credit Worthy?

After you fill out an insurance application and it is sent to an insurer, the application is examined. The application is underwritten, meaning it is studied to see if you qualify for coverage. The application answers are to questions used to fit the qualifications set by each insurance company.

Typically an application is only the beginning. Insurance companies usually use other important sources of information. For auto coverage, motor vehicle reports are ordered. For home coverage, physical inspections may be conducted. An additional source of information that is widely used for underwriting is credit scoring. Credit scoring is an automated process where a consumer’s credit worthiness is measured and rated according to a set of standards (such as amount of debt, number of credit cards held, pattern of payments, etc.). The rating or score is used to determine whether the individual qualifies for a loan. This credit evaluation is currently used by insurers as an underwriting tool.

The same information used by lenders (especially for mortgages) has become a popular underwriting tool. If your credit history, such as outstanding losses, bill payment history and type of credit results in a high score, chances are you’re a good bet to have your application for insurance approved. This is because, for some unexplained reason, persons who have high credit scores tend not to cause as many losses. Insurers have not provided details to explain why this strong relationship exists, they only rely on the information to assist in granting or denying coverage. However, if a poor credit score keeps you from getting insurance, you’re entitled to know. You can also get information on how to follow-up to see if your credit information is accurate. The Internet is full of sites that can give you a strategy for improving your credit worthiness and enhance your ability to get insurance.

If you are an American citizen, your attention has been riveted by the events from September 11, 2001. You also likely have several concerns that are also shared by a great many fellow Americans such as:

• How do the events affect my insurance protection?
• Are war and terrorist acts the same?
• Exactly what is excluded by my policies?
• Do I have to buy special coverage to protect my belongings?

It is understandable to be concerned and confused over the above issues, especially since everyone is being inundated with news and other information. Insurance related to personal lines (any coverage that protects personal property rather than business) is more standardized than commercial insurance, so the coverage concept in policies for cars, homes, and personal liability are similar.

Most policies prohibit coverage for causes of loss considered "uninsurable." Not surprisingly, coverage for war is one cause of loss that is excluded. Typically auto and homeowner policy wording not only excludes war, but any military actions similar to war such as rebellions, large-scale civil disturbances, and revolutions. Further, coverage is excluded regardless whether the government has formally declared a state of war.

On the other hand, acts of terrorism are distinct from war and, as we have learned to our sorrow, involve individuals committing acts against other individuals rather than against governments or military personnel. Generally speaking, loss caused by such acts would be covered. However, it is always in your best interest to look at exactly what appears in your policies. It would also be helpful to contact an insurance professional to discuss any of your concerns in enough detail so that you understand your situation and your coverage needs.

This is a brief discussion on mediation and arbitration, alternatives to resolving insurance policy disputes. It's Still A Contract

The insurance policy may cover your home, car, boat, life, airplane, jewelry or business, but one element remains the same, the policy is a contract. This written agreement is, at the core, a promise from the insurance company to pay you if a covered loss occurs. But, even when the promise is fulfilled, there may be a serious dispute over the amount of payment. Quite often the method used to resolve the problem is a courtroom. Need For Alternatives To Lawsuits

In many instances, filing a lawsuit is unavoidable. For instance, when a person seeking coverage has his claim denied, a lawsuit may be the only action that is available. However, looking for satisfaction in court can be its own problem. Court calendars (dockets) are often backed up so it could take months or even years before a hearing can take place. When the trial begins, it can take a long time, possibly involving one or more appeals. The legal costs can be staggering. Depending upon the case's complexity, it will involve court costs, filing fees, attorney costs, research costs, fees for expert witnesses and a host of other expenses. These factors increasingly act as incentives for finding other methods to resolve disputes. Alternative Dispute Resolution

When disagreeing about the amount that should be paid for a loss, there are a couple of popular alternatives to suing your insurance company: mediation and arbitration. Each is a form of Alternative Dispute Resolution (ADR) since they can be tried as an alternative to going to court.

Mediation - This process involves the two parties meeting to discuss their situation with the help of a mediator. The mediator typically has special training and a legal, financial or similar background. As a disinterested party, the mediator studies information from both parties concerning the dispute. Once familiar with the situation, he arranges to meet with the parties. A mediation session often starts with each party having a chance to fully explain their position to the other party and the mediator. The facilitator then takes time to discuss each party's position in private. Afterwards, the mediator shuttles between the parties and, probing and using the information he gains, he tries to reach a point where both parties can agree on a settlement. The most important features of mediation is that the process is voluntary and the disputing parties are actively involved in reaching a solution.

Arbitration - This is a method that is frequently required by a condition of an insurance policy. With arbitration, you and the insurer each select a representative (arbitrator). Once the arbitrators are selected, they agree on another arbitrator who acts as the arbitration judge. The three persons discuss the merits of the situation and, once any two of the three persons agree on a settlement amount, the process ends. Arbitration differs from mediation in two important respects. First, the disputing parties are bystanders, awaiting for a decision to be made. Second, arbitration is binding on both parties.

Is any course of action perfect? No, but sometimes it is good to know that, when a disagreement occurs, you have more than one option to get it settled. If you need more information, an insurance professional is an excellent source.

Two Distinct Obligations

Consumers who have any significant experience with buying insurance protection for their auto, home and other property are likely to understand how coverage is provided for their liability and/or their property. Conversely, few may be aware of the role that an indirect coverage plays in the obligation owed by an insurer to its customers.

A liability insurance policy, either vehicle or personal liability, is designed to protect you against your legal obligation to pay others because you have caused them personal injury, damaged their property, or have done both. Further, such insurance policies also promise to defend you against claims or lawsuits that are filed against a policyholder. In other words, besides paying for claims or suits, a liability policy also pays for the legal costs and fees associated with liability losses. What Is Covered Under Defense Costs?

The defense costs generally include:

• attorney fees (including cost of legal staff and expenses)
• court costs of the applicable jurisdiction
• costs of filing necessary legal papers
• if applicable, costs of expert witnesses
• costs associated with investigation, etc.

Defense Coverage can be offered in two ways. It can be provided as part of the insurance policy's liability limit or as a separate coverage. You must read your policy's insuring agreement(s) carefully because the method has a huge impact on the amount of your insurance protection. Let's say that Policy A and Policy B both provide liability insurance limits of $100,000; Policy A provides defense coverage as part of the insurance limits while Policy B gives separate protection. Now let's see what can happen:

Example: Jay Lowcare is sued by his son's teacher, who came to his home to deliver some homework for Valiant Lowcare (who's suffering from strep throat). When the teacher started down the wooden stairs of the Lowcare's front porch, the second stair broke. The teacher suffered cuts and compound fractures to his left leg. Jay Lowcare knew that the stairs had been weakened by termites, but hadn't bothered to replace the stairs or warn anyone. The damages (medical and rehab costs) totaled $95,000 and the defense costs were $18,000. Here's how each policy would handle the costs:

Expense Policy A Policy B

Defense Cost $18,000 $18,000

Damages $95,000 $95,000

Total Paid $100,000 $113,000

If Jay Lowcare's protection worked like Policy A, Jay would be personally responsible for paying the remainder of the damages because the defense costs ate into his insurance limits. Policy B's method of providing coverage offers the most protection.

If you're not sure how your policy handles the cost of your legal defense, talk to an insurance professional and make sure you get the coverage you need.

Today, communication can be performed faster, more efficiently and more conveniently than ever before…but we all still struggle with communicating effectively. In many respects our true accomplishment has been to spread confusion at cyber speed. One thing that remains the same, regardless of technology, is the need to be sure that the people who receive our message understand it as well. However, when people get together, the speaker often takes it for granted that the listener understands, even when the topic is complex. Fortunately there is a technique that we can borrow from early mankind to aid our communication efforts…storytelling.

While it's common to see short stories or examples used in training, schools and textbooks; examples are rarely used in important business discussions; particularly insurance discussions. Any person who wants to understand their policy needs, coverages and exclusions, should just ask for examples. Insurance policies are contracts and, like other legal documents, can be complex and confusing. Often an illustration is more useful than an overly detailed discussion of policy language. Instead of trying to dissect how one clause modifies or makes exception to another, ask the speaker if they can demonstrate their point.

A person who can create a good example is someone who has a thorough understanding of his subject and that understanding can be passed along to the listener. The listener often appreciates the work it takes to create examples and this can ease future communication. So take an active role whenever you communicate with an insurance professional and ask: Can you give me an example?

What do those letters behind my agent's name mean?

Are you confused by seeing an insurance agent's name towing a long string of letters? Well, that's understandable. The public is familiar with the abbreviations used by lawyers, professors, scientists and doctors. Although not as well-known as M.D. or PhD, Insurance Land has its share of such abbreviations, called professional designations. These designations indicate that the individual has completed different courses or programs. The insurance business is complex and full of changes, so it's very important that agents try to keep up to date on subjects that affect their business and their customers. Driven To Learn

The need to keep current is so important that an agent's pursuit of knowledge is mandatory. Most states require that an agent be licensed in order to sell insurance policies or even to give insurance advice. Different states also require that its licensed agents maintain a long-term commitment to learning. In such states, agents must complete a number of hours of training or education in order to have their licenses renewed.

Another incentive for continued learning is provided by certain insurance programs. Once a participant qualifies for a designation, he or she may also be required to pursue continuing education in order to remain in good standing. Finally, many agents are personally motivated to keep current in their insurance knowledge. Naturally, these factors result in agents who have completed programs which award designations. Common Insurance Designations

The following is a short reference of the more common insurance designations. We won't attempt to describe them here in order to give you and your agent something else to talk about:

ACSR Accredited Customer Service Representative

AIC Associate In Claims

AIM Associate In Management

ARM Associate in Risk Management

AU Associate in Underwriting

CFP Chartered Financial Planner

ChFC Chartered Financial Consultant

CIC Certified Insurance Consultant

CLU Chartered Life Underwriter

CPCU Chartered Property Casualty Underwriter

CPIW Certified Professional Insurance Woman

FLMI Fellow Life Management Institute What If I Don't See Any Designations?

This brief article is just to share a tidbit on designations, not to distract you from what is important. There are persons with designations who, for various reasons, decide not to use them. Further, while a designation MAY indicate a greater level of expertise, the bottom line is experience. A trail of letters behind a person's name is not nearly as important as whether that person helps you with your insurance needs. So talk to your agent, ask plenty of questions and listen to the responses. If the agent has helped you understand something about insurance or has helped you get affordable protection against losses....then you have had contact with an insurance professional.

What's A Waiver?

Webster's Encyclopedic Unabridged Dictionary defines "waiver" as 1. an intentional relinquishment of some right, interest, or the like; 2. an express or written statement of such relinquishment. Actually it is appropriate that waive rhymes with wave, because whether you're waiving or waving, you're saying goodbye. In the case of a waiver, you may be "saying" farewell to a right to holdanother party accountable for their acts.

Today waivers are being used with increasing frequency. The use of a waiver is for the primary benefit of the party requesting it. A common rationale for using a waiver is that the possible legal consequences of sponsoring an activity or event would be too great to pursue without either special protection (such as insurance) or a waiver.

Here are some examples:

• playing school sports
• playing community league sports
• church related sports groups
• intramural sports
• sports clinics
• taking sky-diving classes
• giving permission for your child to go on an out-of-state trip
• joining an aerobics class.

What Happened to Permission Slips?

Permission slips are still around, but they're generally just used when the consequences are quite low. Example: "Please sign this form to indicate your permission for your son/daughter to walk from their classroom to the library." The use of permission slips has decreased along with the willingness to assume responsibility for a given activity. Of course, the reduced willingness is, at least partially, due to waivers. Waivers do make sense when the threat of being sued exists alongside a valid reason for not assuming the risk of a lawsuit. As permission slips were found to be inadequate in the face of an increased likelihood of lawsuits, such slips began to follow a type of evolutionary path:

1. Permission slips allowing participation in an activity or event

2. Permission slips including authority to act in emergencies (but the party may still be accountable for their action)

3. Permission slips waiving any right to sue for actions occurring during an emergency

4. Waiving any action arising from both the routine and emergency aspects of an activity

6. Waiving any action arising from both the routine and emergency aspects of an activity AND

agreeing to assume the liability for the actions of another party. Better Waived Than Sorry?

Under certain circumstances, waivers are very similar to advertising . . .they're sometimes only effective when you believe in them. For instance, the person signing the waiver may add a comment that he or she has only signed the waiver as a formality, or under duress or protest. Often there are flaws connected with the waiver, such as the wording being incorrect or even illegal. An example of the latter is having a parent sign a waiver concerning injuries to his or her child, when that state's law doesn't permit a parent to waive a minor's rights. Another example is when state law may hold one party strictly liable for certain acts, regardless of any attempt to waive their responsibility. Further, there are other elements that affect the enforceability of waivers such as:

• who is sponsoring the activity (profit or non-profit organization)
• the age of the persons being required to waive their rights (minors, adults, seniors)
• the nature of the activity (short trip to museum or horseback riding)
• the ability of the person waiving their rights to understand their actions
• the details of any injury (is the injury connected directly to the activity?; is some degree of carelessness involved?)
• whether the parties affected by the waiver benefit equally from its use (for instance, a dangerous team-building exercise where an employee is required to participate or face termination)
• the qualifications of the staff holding the event

Proceed With Caution

Waivers are sometimes unavoidable, unless you choose to skip the event or activity. And, sometimes, waivers are inconsequential, being used under circumstances where they are unnecessary. The problem is in that wide, murky, middle-ground. It's in such instances that you should take the time to read and understand a waiver before agreeing to its conditions. Perhaps you can't avoid assuming some risk or giving up your rights, but at the minimum, read before you sign so that you understand what could happen. So look before you waive.

Insurance regulation is dominated by state laws due to insurance not considered to be a tangible good. If it were, it would be commerce which is regulated by the federal government. Since insurance was defined as an intangible good, its regulation fell to the individual states. Following are some key events that helped create the regulatory status of the insurance industry.

In the 1860s, a New York insurance agent extended his dealings to Virginia. Legal action was filed against the agent for failing to comply with Virginia law. The case made it to the U.S. Supreme Court, which had to address whether individual states maintained the right to regulate insurance. The court preserved the assumption that insurance was not interstate commerce and should stay under each state's jurisdiction.

In 1943, the Department of Justice sued a group of insurers known as the SouthEastern Underwriters Association (SEUA) for violating the Sherman Anti-trust Act. The SEUA members' agreement to use uniform insurance rates amounted to price fixing, a violation of federal law. The association’s defense contended that insurance was not commerce, so it was not subject to federal law. The case was appealed to the U.S. Supreme Court and in June of 1944, the Court reversed itself and ruled that insurance was commerce and, therefore, subject to federal regulation.

This act was passed In 1945. Through this law, Congress reaffirmed the power of individual states by permitting the states to continue to regulate insurance. However, in order to maintain regulatory control after July 1, 1948, each state had to enact the same type of anti-trust laws used by the federal. All of the states eventually passed their own anti-trust laws, keeping insurance regulation at the state level.

A recent law’s impact on insurance regulation is currently evolving. In late 1999, President Clinton signed the Gramm-Leach-Bliley Financial Services Modernization Act. This law removed long-standing distinctions that existed between insurance companies, banks, and investment services. The law was in response to marketplace and technological developments that blurred the traditional roles of different financial service providers. The law’s primary goal is to allow players in the financial services market to offer more complete services to consumers more efficiently and at less cost. The act also has created serious obligations on the use of information gathered on financial service consumers. The impact of this important act will likely be more insurance regulation at the federal level.

What Is Fraud?

Every person who assumes the responsibility of carrying insurance to protect against their liability to other and to protect their property is affected by insurance fraud. While you and your insurer may disagree about a number of issues; when it comes to fraud; you are both victims. But you are not helpless victims. As an insurance consumer, it is important for you to know some basic information that may protect you from becoming a victim of insurance fraud.

The American Heritage College dictionary defines fraud as:

a deception deliberately practiced to secure unlawful gain.

In common terms, insurance fraud is lying to or deceiving an insurer in order to make money or to become insured. Some common fraud schemes include:

• "padding" (inflating the true amount of) a claim
• lying or hiding (concealing) important information when applying for insurance
• submitting false claims
• "staging" accidents
• faking theft claims
• engaging in arson for profit

As a consumer, fraud should concern you since the cost is passed directly on to you in the form of higher insurance rates. You can play an important role in reducing fraud. Fighting Auto Insurance Fraud

Persons attempting to commit insurance fraud often do so by deceiving innocent drivers during actual accidents or by involving innocent drivers in "staged" accidents.

Do the following in order to minimize this risk:

• Drive defensively, keeping space between you and surrounding cars,
• When traffic slows, begin braking before the car in front of you does,
• Be careful when turning into a lane that allows two or more autos to turn left at the same time. Victims of insurance fraud are often people who float across the line when turning and then are intentionally sideswiped by a person who is "staging" an accident.
• If you are in an accident, write down license numbers of all cars involved in the accident, get the names and contact information of all persons involved and their insurers. Count the number of passengers in the other cars and get their names, addresses and any other pertinent information.
• Call the police and get a police report even if the damage is minimal. DO NOT let another driver talk you out of calling the police.
• Carry a disposable camera in your glove compartment and take pictures of the damage to the vehicles and of all drivers and passengers in the cars.

It is far more difficult to involve an innocent party in homeowner fraud. However a homeowner can help himself and help deter fraudulent claims by properly maintaining their home; removing or repairing items that could present trip hazards to outside parties. Also, if someone is hurt in your home or premises, be certain that you get full information and make certain that a person gets any needed treatment. Carefully document any incident, including all impressions about likely injury. Have a healthy skepticism over any information on medical bills or claims.

Report suspicious actions such as a friend who asks you to store valuable property and you then find that the person has reported a theft to his insurer or a fire has occured at their home.

Think of insurance fraud as money out of your pocket-because it is. According to the US Chamber of Commerce, fraud adds 25% to property and casualty insurance rates.

If you are involved in an accident and you are suspicious that fraud may be involved, call the National Insurance Crime Bureau at 1-800-835-6423.