PIANJ holds special session to discuss Sandy situation

Agencies in Sandy-affected areas face continued crisis as they struggle to maintain their livelihood and take care of insureds, many of whom are becoming increasingly frustrated navigating the claims process after the storm. Recently, PIANJ participated in a conference call with representatives from PIA of Louisiana to discuss the challenges agents can continue to expect in the aftermath of Sandy. The group shared similarities in experiences to date, such as: a lack of communication, based on sheer volume, between carriers and insureds; challenges that come with an increased need for adjusters and inconsistencies among them that led to frustrations for insureds; and the benefit of a central source for information such as PIANJ’s Storm Info Central. If you have concerns or suggestions, please send them to your PIA Industry Resource Center, or call (800) 424-4244. For a full write-up of the conference call see the next issue of the PIANJ Reporter.   

Tri-state PIA presidents issue open letter to carriers about post-storm concerns

PIANJ President Anthony Bavaro, CIC, CRM, PIANY President Michael Skeele, CIC, CPIA, and PIACT President Timothy Russell, CPCU, issued an open letter to industry carriers, citing agent concerns and efficient issuance of claims checks to policyholders for claims caused by Sandy. According to the letter, "For two months now, agents in Sandy-affected areas have focused almost exclusively on helping their customers with their claims from the storm. They have been working 24-hours-a-day, seven-days-a-week; truly empathizing with their clients’ losses, helping them recover with their own hands and resources to mitigate damage, reassuring them that their insurance purchase was everything they were promised. Your agents—those with boots on the ground—are your best source of goodwill with the insurance-buying public in this time of need. But we need your help—quickly, before our industry gets more battered in the public eye than it already has. As FEMA rushed to help those whose homes were destroyed by Sandy’s waters, they quickly distributed checks to those who needed them—to those homeowners who didn’t have the foresight—or the legal requirement—to purchase flood insurance. Likewise, many direct writer companies were quick to adjust claims and provide checks to their policyholders, while many of our insureds—our mutual customers—continue to wait to receive an advance claim check as companies work to adjust their losses. Without these advances, repairs can’t be made; homes can’t be restored; families can’t begin to rebuild their lives." The full letter can be read here.   

Professional, independent agents demonstrate extraordinary service in the face of Sandy

Not surprisingly, PIA members continue to extend extraordinary service to help their clients after Sandy, and we’d like to share that. Do you have customers who can report how they benefited from working with a professional, independent agency? Please share your photos and stories with your PIA Communication Department by emailing them to mchristiano@pia.org.  

Christie administration reminds public adjusters to keep fees reasonable and in line with services rendered

Department of Banking and Insurance Commissioner Ken Kobylowski issued a bulletin to all public adjusters reminding them that the fees they charge consumers must be reasonably related to services performed and informing them the department will monitor their fees closely, particularly any that seem excessive. "We do not believe that public adjusters should need to increase their fees due to Superstorm Sandy," said Kobylowski. "New Jersey residents have suffered severe damage to their homes and other property as a result of the storm and should not be victimized by any excessive or unreasonable fees from public adjusters."   More…

FEMA updates: Disaster assistance registration extended to Jan. 30, 2013, guidance on contents claims

People affected by Sandy in New Jersey now have until Jan. 30, 2013, to register for disaster assistance through the Federal Emergency Management Agency. People with storm losses in all counties can register online at www.disasterassistance.gov or via smartphone or tablet at m.fema.gov. They also can register by phone or 711/VRS by calling (800) 621-3362, TTY (800) 462-7585. The toll-free telephone numbers operate 24 hours a day, seven days a week until further notice. At the request of the state, FEMA extended the registration deadline beyond the original 60-day window due to the magnitude of the Sandy disaster. … According to FEMA Memorandum No. W-12115, the numbers, severity and complexities presented by Sandy-flood losses, both logistically and in terms of claim handling itself, have not been encountered in several years in the National Flood Insurance Program. The situation requires the NFIP to implement innovative claims-handling techniques that will assist policyholders to recover from these losses, while maintaining necessary controls over NFIP funds held in the U.S. Treasury. Authorized procedures are detailed in the memorandum.

House adjourns without voting on Sandy aid

House leaders wrapped up this session of Congress Tuesday night without voting on a package that would have provided billions of dollars in aid to victims of Sandy. The Senate passed the $60.4 billion measure last week. Because the House failed to act and a new Congress will be sworn in Thursday, the entire legislative process will have to start over—delaying the package from disbursing money to affected states. Read a joint statement from Gov. Christie and New York Gov. Andrew Cuomo here.   More…

Lawsuit filed over definition of ’basement’

A lawsuit filed last month in the Federal District Court of New Jersey focuses on the definition of a "basement." Nine insurance companies, including Fidelity, Travelers and State Farm are named and accused of wrongfully denying claims related to Irene and Sandy and misinterpreting the term "basement." The insurance companies named in the suit participate in the federal Write-Your-Own program.   More…

Report: Lawsuits roll in after Sandy

Natural disasters often leave in their wake a jumble of court cases debating insurers’ obligations to pay for losses. Sandy’s path through a region that includes major centers of commerce means more of those claims—and lawsuits—will come from businesses. Sandy-related filings are expected to be heaviest in New Jersey and New York, but lawyers predict litigation far beyond those boundaries, thanks to disruptions in businesses’ supply chains that had links in the hardest-hit states. Many lawsuits will argue over the size of the claims payment and whether exclusions exist to entirely negate a payment. Some business policies exclude flooding, in line with exclusions in standard homeowners policies.   More…

Fireman’s Fund issues article on E&O lessons learned from Sandy

A recent article from Fireman’s Fund "After the Storm Insurance Agents E&O Lessons Learned," focuses on the types of errors-and-omissions claims that may occur in the aftermath of Sandy. Addressing issues such as: wind and flood coverage problems; inadequate limits; coverage bound outside carrier guidelines; and commercial claims, the article outlines ways agents can prepare for current claims and protect themselves against future claims.   

Kobylowski named commissioner by Senate

On Dec. 20, 2012, the state Senate confirmed Kenneth E. Kobylowski as commissioner of the DOBI. Kobylowski was nominated to the position by Gov. Chris Christie on Jan. 30, 2012, and has served as acting commissioner since Feb. 11, 2012.   More…

AG convicts premium evader

Attorney General Jeffrey S. Chiesa announced that a Burlington County company was sentenced for under-reporting the number of its employees and wages to evade the full payment of workers’ compensation insurance premiums. Techdan LLC, was ordered to pay $75,000 in restitution to Liberty Mutual Insurance Co.   

Congress agrees not to require insurance booklet for car dealers

The U.S. Senate approved the bipartisan bill, H.R.5859, to eliminate an unnecessary mandate that requires new-car dealerships to keep an insurance booklet on hand or face a hefty fine. The legislation passed the House in late July and now goes to President Obama for his signature. Dealers have been hopeful for presidential approval since the White House proposed eliminating the booklet in 2011, saying it was of little use to consumers.   More…

ISO/PCI release nine-months 2012 p/c profits

ISO and the Property Casualty Insurers Association of America released a joint statement regarding property/casualty insurers’ profits and profitability through nine months of 2012. Prior to Sandy, private U.S. p/c insurers’ net income after taxes grew to $27 billion in nine-months 2012 from $8.4 billion in nine-months 2011, with insurers’ overall profitability as measured by their annualized rate of return on average policyholders’ surplus climbing to 6.3 percent from 2 percent. The improvement in underwriting results is largely attributable to a drop in net losses and loss adjustment expenses from catastrophes, but was partially offset by a drop in net investment gains and higher taxes.   

NCCI updates its study on WC claims from auto accidents

Traffic accidents are a leading cause of high-severity workers’ compensation injuries. Moreover, they are pervasive; indeed, a study by the National Council on Compensation Insurance published in December 2006, noted that even the clerical classification has surprisingly high exposure to traffic accidents. Driver-related factors that are linked to traffic accidents include speeding, distraction and impairment. There are differences between accidents for large trucks and for passenger vehicles, as well as impacts due to recessions. In this update, NCCI extends its analysis to add several years of data, allowing it to observe the reduction in traffic-related injuries during recessions and, thus, to confirm the cyclical characteristics of traffic accidents during the Great Recession.   

A.M. Best news

A.M. Best Co. has upgraded the financial strength rating to "A" (Excellent) from "A-" (Excellent) and issuer credit ratings to "a" from "a-" of Medical Professional Mutual Insurance Co., ProSelect Insurance Co. (both of Boston, Mass.) and Coverys RRG Inc. (District of Columbia), all members of Coverys Cos. The outlook for all ratings has been revised to stable from positive. According to A.M. Best, "The rating upgrades reflect Coverys Cos. members’ excellent capitalization, strong underwriting results and favorable historical investment income. Additional factors supporting the upgrades include the organization’s history of favorable reserve development and its dedication to loss prevention. The ratings also consider the group’s geographic diversification and its leading market position in several jurisdictions. Additional factors supporting the ratings include the breadth and depth of the organization’s enterprise risk-management program. The revised outlook is based on A.M. Best’s expectation of continued excellent operating performance across multiple facets of the organization."   More…

PIA’s Market Transition Tool Kit updated for 2013

PIANJ has updated its Market Transition Tool Kit for 2013. Designed specifically for members, the updated tool kit includes resources to help PIA members educate their clients and agency staff on the changing market. The tool kit features a sample client letter and support materials about the changing market, designed to be shared with agency clients in advance of their renewal, as well as a compendium of industry information on market trends. It also includes state-specific resources on policyholder protection laws; agency termination laws; surplus-lines requirements; and more. This PIA-member benefit is available here.   

Ask PIA: Business interruption from power outage

Q. Because of a storm, my client is without power and is unable to operate his business until it is restored. Will the Business Income Coverage be applicable to this loss? A. According to the language of most BOP and Commercial Property policies, the failure of power (or any other utility service) being supplied to the insured premises is excluded if the failure occurs off the premises, regardless of cause. For a comprehensive answer to this question, click here. To access our entire Ask PIA library of frequently asked questions and expert answers by PIA’s technical staff, click here.   

PIANJ Webinar: Real Life Claims Examples to focus on Sandy-related issues

Join PIANJ for a three-hour Webinar Real Life Claims Examples that will discuss both personal- and commercial-lines claim examples and their coverage outcomes. In the aftermath of Superstorm Sandy, this Webinar will help with the prevention of E&O claims through a better understanding of policy coverages and shortcomings. Coverage topics will include, but not be limited to: business income (including utility services and civil authority); NFIP and excess flood insurance; 2011 homeowner changes; a review of client contracts; claim-reporting responsibilities; blanket additional insured endorsements; insurance to value including ordinance and law coverage; defense of indemnities; damage to premises rented; legal liability coverage; and other scenarios to identify areas of weakness and coverage gaps in your clients insurance program. For more information, or to register, click here.   

Updated PIP notification company address list

To comply with New Jersey’s 21-day PIP notification of medical treatment requirements, New Jersey identification cards are required to have company addresses on the back. Periodically, the DOBI will issue updates to this list. For the most recent version, log on to the PIANJ website, and type QS29074 in the Google-facilitated search box, or fax a request to PIANJ’s Industry Resource Center at (888) 225-6935.  

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