Texas connection may 2016

In This Issue

Does Your Agency Perform the Mirror

Test?

What to Know About Boat Insurance

Planning a Tradeshow Booth

the

TEXAS CONNECTION TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL MAY 2016

BRONZE PARTNERS

GOLD PARTNERS

PLATINUM PARTNERS

http://www.alliedtrustins.com/

http://www.aspenmga.com/

http://www.connectinsurance.com/

http://www.ifps.com/

http://www.mhi-mga.com/

http://www.useo.com/

http://www.windhaveninsurance.com/

http://www.anchorgeneral.com/

http://www.amwins.com/

http://www.aggressiveusa.com/

http://www.empowerins.com/

http://www.lightspeedvoice.com/

Our Partners ……..……………....……..… Page 2

Presidents Corner …………………....….… Page 3

Performing the Mirror Test ………………... Page 5

By The Numbers ….….…………...…….… Page 8 What to Know About Boat Insurance ….… Page 9

Planning a Tradeshow Booth ……………….... Page 15

Word Scramble ……...…….…………..….… Page 18 Classifieds ………………………..……….… Page 26

TDI Enforcement Actions …….……..….…. Page 27

The Last Word …………………………….… Page 28

Texas PIA’s Annual

Convention & Trade Show

May 19-21, 2016

The Hotel Contessa

On the Riverwalk

San Antonio

Go to www.piatx.org

For more information

and to Register

Shirley Almany

Shirley

Hotel Contessa, site of the

2016 PIA Annual Convention.

This 4 star all-suites hotel is

right on the Riverwalk. It’s a

10 minute walk to the Alamo

and 1 block from the Briscoe

Western Art Museum. With

it’s rooftop pool and hot tub,

full service spa, and the deli-

cious Las Ramblas restaurant,

you may choose to never

leave the hotel.

THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Page 3


(continued on page 6)

Ask virtually any agents’ errors-and-omissions carrier what it sees as its biggest issue/cause for concern and “replacement of coverage” will likely be in the top 3. After all, how often does an agency replace coverage for a client, moving the coverage from Company A to Company B? It occurs many times in a week, or possibly in any given day, at most agencies. Many insurance clients carefully watch their insurance costs. At some point, they will ex-press concern about the cost or, at a minimum, advise your agency that they believe they are paying too much for their insurance, adding that they might get coverage cheaper else-where. Fearful of losing the account, your agency might remarket the account to several of your other carriers. When you present the “new” proposals to your client reflecting the lower premium, it is possible he or she will focus strictly on the opportunity to save money. However, there’s an important question to answer: Is the premium lower because the cov-erage is less?

Note the Differences The key issue as you look to move the account from Company A to Company B is the possi-bility that the coverage with Company B is not as broad as Company A. If so, are the differ-ences – more so the reductions – being brought to the client’s attention and his or her


signoff secured? The courts often refer to this as the “Mirror Test.” Attorneys could argue that failure to advise the client of the differences would lead the client to believe the cover-ages were at least the same. Think back over the last several years. Chances are your agency had some clients, personal and commercial, who were adamant in wanting some premium relief. Ask most agency staff when was the last time they moved an account and they will probably say “yesterday” or “this morning.” It definitely happens with some frequency. In addition, from time to time your agency may need to move an account from the standard to the E&S market. What could happen? Presume you move the account to another carrier where the coverage is not as broad in some areas. The client subsequently suffers a loss that would have been covered by Company A, but is not covered or not fully covered by Company B. If this hap-pens, in all likelihood the client will question your agency about why the coverage was moved. The client will probably say that he or she wanted to save money, but was not look-ing to give up coverage. Bottom line, the client may take the position that he or she never would have approved you moving the account if he or she was aware coverage was being given up. There are several areas of possible difference. The more common include sub-limits, the ac-tual coverage grant, specific endorsements, definitions for areas such as “who is an in-sured,” what is excluded on one policy compared to another, and the carrier’s financial rating. In E&O policies, the scope of the covered professional services can vary greatly from one carrier to another. There have been E&O claims where the “retro-date” on the claims-made form was advanced, resulting in no prior-acts coverage.

The Best Approach The best approach is to take all the carriers you are considering and put the details on a spreadsheet, noting the various pertinent issues. This will take time, but it will be time well spent. On the spreadsheet, it is crucial to note the differences because simply moving the account and not advising the client of the differences could cause a problem down the road. Some agencies share this spreadsheet with the client and bring to his or her attention the detail the client needs to know. Most importantly, the client sees the differences and can make an educated decision. At a minimum, the reductions between the expiring policy and the other carriers you are considering should be brought to the client’s attention. When the client has made his or her final decision, secure the client’s signature noting which decision was made. This documentation will be vital if a claim occurs and your client


Luxury Suites on the Riverwalk

http://www.piatx.org/

http://www.piatx.org/


The Takata airbag recall has dominated the headlines lately. Given the shear volume of vehicles in the United States that are affected, it will take years to replace all of the defective airbags. I’m not sure how this will play out, but injuries and deaths have occurred and it has the potential to influ-ence insurance rates. You might want to encourage your customers to take it seriously. Let’s look at the numbers.

different automakers are involved, but more could be added.

Vehicles involved include model years from to .

potentially defective air bags need to be recalled worldwide.

of those are in the United States.

Approximately airbags have been replaced to date.

The cost to Takata is substantial. A record civil penalty of up to was as-

sessed against Takata. (Of that, is a cash penalty, with an additional

charge if Takata fails to meet its commitments.)

Takata has estimated recall related costs could exceed .

injuries have been reported across all auto makers.

deaths have occurred to date.

While injuries and fatalities are rare, they do happen. As a service to your customers, use the fol-lowing website to determine whether their vehicles are affected. In addition to airbag recalls, visi-tors can also quickly determine if a specific vehicle has not been repaired as part of a safety recall in the last 15 years.

https://vinrcl.safercar.gov/vin/

https://vinrcl.safercar.gov/vin/



A survey by one insurer found that 29 percent of all boat owners did not have a separate wa-tercraft insurance policy. This could be a mistake. Many boat owners mistakenly think their homeowners or personal auto policy will provide coverage; however, the standard homeowners policy limits property damage coverage for boats to $1,500—far less than the value of most recreational boats. Further, the standard homeowners insurance policy excludes coverage for any liability that may incur arising from “ownership, maintenance, use, loading or unloading” of watercraft. If your customer has a smaller boat, they might be able to obtain the liability coverage they need with an endorsement to their homeowners policy. But if it is a larger craft, they will need a specialized boat insurance policy offers property coverage to protect the investment in their boat, along with the liability coverage needed to protect them from catastrophic lawsuits.

What Watercraft Insurance Covers

Like a homeowners policy, watercraft insurance contains two parts: liability coverage and prop-erty coverage. The liability portion covers the insured for injuries or property damage they or an insured family member cause to another person through boating activities. Liability limits under boat insurance policies usually range from $15,000 to $300,000; yacht policies can pro-vide from $300,000 to $2 million in coverage. To ensure there is enough coverage to protect

their assets in case of a serious lawsuit, you might advise them to insure part of their liabil-ity exposure through a personal liability um-brella.

The property portion covers the insured for property damage to their own boat. Most boating-related claims—and therefore, most of the premium costs—involve property damage to their own boat. Suggest to you customers buying brand-new boats to insure it for its pur-chase price. For older boats, an examination of boating “blue books” or an appraisal by a ma-rine surveyor can help determine its worth.

Where the boat is docked and operated will al-so affect how much coverage will cost. Expect to pay more to keep a boat in hurricane-prone Florida than in California, for example. Oper-ating a boat primarily in saltwater exposes it to more of the elements and makes it more vul-nerable to damage over the long term than a boat operated in fresh water.

The length of the boating season in your area also enters into the equation. A boat on Lake Ontario has a shorter operating season—and lower risk exposures—than one on Lake Mead.

You might explain to your customer that an un-derwriter will look at their your boating experi-ence, the size of the boat and their motor vehi-cle records (because a bad driver will generally be a bad boat captain) to evaluate the risk posed. Taking a boating safety or other boating-related course can reduce the risk of accident and might lower insurance costs.

Be sure the boat policy you are offering your customer covers the trailer and the boat’s mo-tor. Offer endorsements to provide coverage for personal belongings stored on the boat, din-ghies and fishing gear.


Drowning accounts for two-thirds of all boating deaths—even more if deaths with unknown cause are excluded—but does not account for the same fraction of deaths for all types of boats.

Personal watercraft (PWC) accidents are more likely to result in blunt trauma injuries (in part because of speed). But another important reason why PWCs have fewer drownings is because most states require personal watercraft oper-ators and passengers to wear life jack-ets.

Other boaters are less likely to wear their life jackets, however. Coast Guard observational studies have found over-all life jacket wear rates of 17.4 percent for all boaters excluding PWC opera-tors. Among those in power boats, only 3.9 percent wore lifejackets.

Among boating accident victims who drowned, 84 percent were not report-ed as wearing a life jacket. To protect life, ensure everyone in your boat has—and wears!—their lifejacket.

http://www.aspenmga.com/

Quality E&O Insurance Texas PIA offers members exclusive PIA programs

with Utica, Liberty Mutual, & other quality carriers.

Get an analysis of your current coverage.

Members who switch to exclusive PIA programs say

they found better coverage & price.

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aggregators.

For more information go to www.piatx.org

http://www.piatx.org

Continuing Education CE for your entire staff:

4 hours for just being a member

Regular Local Meetings with CE

Big discounts on On-Line CE

Annual Convention: 2 days of CE

Business Building Tools PIA Branding Program: Add the PIA logo on your

business card, website, stationery and signage.

Identify your agency with a national association

of insurance professionals.

Agency websites: Cutting-edge website tailored

specifically for your agency… by the world’s larg-

est insurance agent website provider. Offered at

an incredible rate exclusively to Texas PIA mem-

bers

Consumer Brochures: PIA’s attractive brochures

answer customers’ questions about insurance.

Email: [email protected] Call: Joe Tipton 972.862.3333


the lower price with the lesser coverage, your agency should have a defense should a problem occur if the client’s decision is in writing. Based on market conditions, from time to time agencies will find it necessary to move coverage from the standard market to the excess-and-surplus-lines market. In these situations, the differences can be significant. This issue is further com-pounded by the fact that it is probable the wholesaler is not providing all of the cov-erage that was requested. Therefore, be sure to review the E&S proposal, compar-ing it to the prior policy and to the cover-ages requested. Identifying the differ-ences is up to your agency to uncover. A Great Way Perform the necessary comparison when coverage is switched for a client from one carrier to another. This involves identify-ing the differences, bringing those differ-ences to the client’s attention and getting his or her written sign off. This is a great way to keep this issue from becoming a potential E&O problem in your agency.

by Curtis M. Pearsall,

CPCU, AIAF, CPIA

President – Pearsall Associates, Inc.

and

Special Consultant to the Utica National

E&O Program



A regular feature at our convention is a Mock Errors & Omissions Trial, written and directed by Thomas O’Connell, from Gauntt, Koen, Binney, Woodall & Kidd, LLP, in The Woodlands, Texas.

This year, the mock trial is called: “THE BUGATTI CAPER.” The Bugatti Veyron is one of the fastest and most expensive production sports car ever made, and serves as the background for our Mock Trial. Mr. O’Connell’s firm handled an actual case in which a Bugatti car that was purchased for $1 million and insured for $2 million was driven into Galveston Bay by the owner/insured in 2009, claiming he was startled by a giant bird that caused him to veer off of the I-45 feeder road into the salt water of the adjacent causeway. After it was declared a total loss, he filed suit against the in-surance company and the insurance agency when the claim was denied. What the insured didn’t know was that a group of teenagers driving adjacent to the car on the main I-45 freeway was taking a video on their cell phone at the exact same time as the crash. The video became a You-Tube sensation, and as a result the insurance company and agency were able to stum-ble upon the video. Unfortunately for the insured, no-ticeably absent from the video was the presence of the bird during the crash. Although as referenced the in-sured filed suit against the insurance company and the agency, it was eventually dropped and the insured plead guilty in criminal court of wire fraud.

But what might have happened if the case wasn’t dismissed and it proceeded to a jury trial? In this fictional account of a jury trial showing just that, the Mock Trial includes the shady insured, our he-ro-insurance agent, an ex-con that claimed he was hired by the insured to torch the car before the accident, a chaw-chewing wrecker driver, and a mechanical expert that testifies on the effect the salt water had on the still-running car left by the insured, all played by members of the audience.

This riveting Mock Trial, which includes both the audience themselves as participants and the actu-al video of the car crash, is must-see entertainment. Be sure to include this Mock Trial class (which includes 3 hours of CLE) in your registration. Space is limited… so sign up now!

Thomas F. O'Connell, III

Mr. O'Connell's practice includes defending professionals in errors & omissions claims statewide in Tex-as since 1986. He is also approved Texas panel counsel for numerous insurance carriers. Typical cases involve defending professionals in negligence, fraud, and deceptive trade practice lawsuits. Those cli-ents include real estate agents and brokers, insurance agents, real estate inspectors, appraisers, mort-gage brokers, builders, directors, and other professionals in various types of claims. He also handles numerous types of insurance defense-related cases, including commercial auto/trucking, CGL, EPL, P&C, and D&O related claims.

Wow! How fun is that? And . . . how exactly do you accomplish building a wonderful booth that makes people want to stop and chat for a few minutes? No matter who we are or what our industry, we all use certain steps to plan a booth.

Implement the Plan That takes more forethought that we might imagine. Here are some suggestions that will help: Take advantage of theme specific tradeshows (i.e. MardiGras) Understand the dimensions of the booth. 10x10 sounds bigger than it is. Tap into the creativity of your staff. You might be surprised how many of the insurance pro-

fessionals you work with everyday are talented “closet” artists. Expect the unexpected. Be sure to have plenty of extra batteries, powerstrips, network ca-

bles and anything else that might need to be replaced (or loaned to the booth next to you). Safety First. Booths have been known to fall over and lights to get hot enough to burn. Try

to keep the booth space free of unnecessary obstacles. Always man the booth, always. Plan to have enough staff to cover the booth continuously in

shifts. Standing on your feet for hours is hard on the back. Be sure to build in plenty of breaks.


Adhere to the Budget There are plenty of known costs associated with conventions and tradeshows. Anticipating other less obvious expenses can be difficult. For example, when working in other states, you can’t just duct tape a power cord to the floor. 5 union employees will do it for you and you will pay union scale. In another example, in the months following 9/11, I wasn’t going to have enough time to ship my trade show give-away items through Customs because they were months behind. I had to order them (logoed hockey pucks by the way) in Canada and pick them up after I crossed the border resulting in additional expense.

Assemble the Crew Many hands make the load light. Hopefully you will have enough crew that no one will be overloaded. Here is our team responsible for the booth’s give-aways this year.


Whether you’re a novice or an old hand at this sort of thing remember to have fun putting the booth together. This year’s PIA Trade Show leaves a lot of room for imagination. And we’ve heard a lot of enthusiastic ideas. Hope to see you there having fun.

Bob — Head of Web Based Product Acquisition Joe — Quality Assurance / Taste Tester

Helen and Jeff — Hat Specialists

http://www.windhaveninsurance.com/


Arrange each of the following anagrams to form a single insurance related word.

Keep in mind that the anagram is not a clue. It has nothing to do with the insurance

related word. Send us your answers to be entered in a drawing to win a fabulous

CASH prize! Feel free to call us if you’re stuck.

972.965.2025 Email to: [email protected] or fax to 972. 307.7888

BE IN FEST

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IMP SERUM

BLUR MEAL

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BREW NO OAT

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Here’s the answers to last month’s puzzle. Remember there’s a $50 prize for the first person to

REMEDIES

ENDORSEMENTS

BOATOWNER

PREMISES

WARRANTY

APPLICATIONS

LITIGATION

ARBITRATIONS

FINANCIAL

CANCELABLE

http://www.mhi-mga.com/


Ad Size Monthly Pre-Pay 6 Issues

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Half Page $150.00 $750.00

Third Page $100.00 $500.00

Quarter Page $50.00 $250.00

Check out the rates for the most cost effective method of keeping your

message in front of your customers… professional insurance agents.

Questions? Contact Joe Tipton at [email protected] or (972) 862-3333.

Texas Insurance Professional Services

Ray Reyes or Bob Dixon

(214) 618-2365 (832) 375-0787

[email protected] [email protected]


Texas PIA Offers Members Satisfying E&O Solutions

“Fifteen minutes could save you 15%.... Everyone knows that… but did you know that not all E&O poli-cies are the same? E&O is like other types of insur-ance… you buy it hoping you’ll never need it… but if you do… E&O can be the difference in whether you stay in business or not. How about it? Do you know what your policy covers…. And more importantly, what it doesn’t? Texas PIA offers members, quali-ty E&O markets and coverage. And members say they have saved as much as 40% when they switch to exclusive PIA pro-grams. Call today and get an analysis of your coverage and a competitive quote from multiple markets. Call Texas Insurance Profession-

al Services:

Ray Reyes or Bob Dixon (214) 618-2365 (832) 375-0787 [email protected] [email protected]

This space is dedicated to

all Member Agents or

Companies.

It’s FREE!

Look for employees

buy & sell agencies

Sell your mother-in-law’s

cat

Sell your mother-in-law!

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[email protected]

Contact Us

Need more information on the

benefits of membership?

Have a question about member

services? Give us a call:

Texas PIA & Young Insurance Professionals

3632 Frankford Rd 200B

Dallas, Texas 75287

(972) 862.3333 [email protected]

www.piatx.org

Timing has a lot to do with the outcome of a rain dance.

The Insurance Sage

THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Pa ge 27

TEXAS DEPARTMENT OF INSURANCE ACTIONS

Thomas, Mary Date of Action: 9/15/2015 Location: Center Action Taken: Indicted Violation: Insurance Fraud, State Jail Felony

Reid, James Date of Action: 9/14/2015 Location: Houston Action Taken: Indicted Violation: Misapplication of Fiduciary Property-Elderly, Third Degree Felony

Solis, Leocadia Date of Action: 9/11/2015 Location: Dallas Action Taken: Sentenced to 10 years deferred adjudication, 160 hours community service and ordered to pay $31,041.59 in restitu-tion. Violation: Insurance Fraud, 3rd Degree Felony

Lockett, Michelle Date of Action: 9/9/2015 Location: Houston Action Taken: Sentenced to 5 years deferred adjudication and or-dered to pay $44,800.00 in restitution. Violation: Theft, State Jail Felony

Coronado, Juana M Date of Action: 9/3/2015 Location: Dallas Action Taken: Sentenced to 10 years deferred adjudication, 160 hours community service, fined $2,000.00 and ordered to pay $31,041.59 in restitution. Violation: Insurance Fraud, 3rd Degree Felony

Graves, Kenneth Date of Action: 9/3/2015 Location: Corpus Christi Action Taken: Sentenced to 7 years incarceration and ordered to pay $128,918.46 in restitution. Violation: Misapplication of Fiduciary Property, Second Degree Felo-ny

White, Sara Date of Action: 9/2/2015 Location: El Paso Action Taken: Indicted Violation: Misapplication of Fiduciary Property, State Jail Felony

: https://wwwapps.tdi.state.tx.us/inter/asproot/fraud/indictments/clips.asp

Go to our home page… www.piatx.org and get all the information you

need… You can come to the convention and register there, but on line

registration is half price. Plus, call your company marketing rep and ask

for a discount code that will cut the registration price in half again!

This is going to be our biggest convention ever. Partners and Exhibitors

have taken all the Trade Show booths available… and agent registration

is ahead of last year. The “Meet Me at the Fair” theme will make it fun.

Exhibitors will set up carnival type games with prizes. We’ll have mini

corny dogs with Shiner Bock Mustard and other treats and beverages.

Finally… I’ve told you this before… but it’s worth repeating:

On Saturday, May 21st at 5:15 PM there will be a drawing for a $1,000.00

cash prize. Only agents and their staff will be eligible… so your odds of

winning should be pretty good. To enter the drawing, you will need to

have your entry card validated by having each booth punch it… then

drop it in the hopper at the Young Insurance Professionals booth (#10) or

hand it to any Volunteer with a Red Vest, before 5:00 PM on Saturday.

Oh yes… There’s a Skeet Shoot & Golf Scramble on Thursday, the 19th

with the President’s Welcome Reception that evening.

If you have questions or need help registering, call me: 972.862.3333.

the Last word

This will be my last chance to invite you to join us

at the 2016 Texas PIA Convention and Trade Show

in San Antonio, May 19—21. Everyone that’s any-

one will be there… I hope to see you...

Documents

Texas connection may 2016