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Texas Professional Insurance Agents' Digital Journal.
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In This Issue
Insuring Art and Collectables
Sinkholes—Are You Covered?
Time to “Ban the Box” in Hiring
Practices?
the
TEXAS CONNECTION TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL MARCH 2016
Our Partners ……..……………....…….… Page 2
Presidents Corner ……………………..…… Page 3
Insuring Art and Collectables ….....……… Page 5
By The Numbers …...…….………...…….… Page 8 Sinkholes—Are You Covered? ………….... Page 12
Time to “Ban the Box”? ………………...... Page 15
Word Scramble ……...…….…………..….… Page 17 Classifieds ………………………..……….… Page 24
TDI Enforcement Actions …….……..….…. Page 25
The Last Word …………………………….… Page 26
Every year the Texas PIA presents these awards at our convention:
Company/MGA of the Year
Agent of the Year
CSR of the Year
Company Rep of the Year
Volunteer of the Year
Voting Members will soon receive a ballot to name your candidates for these awards. Please take the time to complete & return these.
It’s your opportunity to reward those you believe are deserving of the honor.
These will be presented at the Awards Luncheon, May 20, 2016 at the Texas PIA Convention and Trade Show in San Antonio.
I hope to see you there!
Shirley Almany
Shirley
Built in 1877 in Aberdeen ,
Scotland, the tall ship Elissa
was purchased by the Gal-
veston Historical Society in
1975. She is one of the old-
est tall ships still in service
and is currently moored at
the Texas Seaport Museum
and can be toured year
round when not out at sea.
THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Page 3
(continued on page 6)
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Although prices for many fine arts and collectibles took a hit during the recession, collections might be worth more than you realize. Do your customers have the proper coverage?
Review their policy limits. Homeowners policies protect the contents of a home, in addition to the building itself. The typical policy limits “contents coverage” to somewhere between 50 and 70 percent of overall limits. Therefore, a policy with $1 million in property limits would pay a maximum of $700,000 to cover contents. In event of a total loss, this might not be enough to replace building and contents, particularly if there are a lot of valuables.
Check policy sub-limits. Although most homeowners policies don’t have separate (lower) sublimit for artworks, many have lower limits for antiques. Policies also typically have lower sub-limits for jewelry; guns; silverware, goldware and pewterware; as well as for other high-value collectibles.
Check the type of coverage your homeowners policy provides. An “actual cash value”
THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Page 6
policy is cheaper but pays only what the property is worth at the time of loss –– cost minus depreciation for age and wear. A “replacement cost value” policy costs more, but will pay to replace lost or dam-aged goods with those of similar kind and quality.
Know what your collection is worth. Un-less you’re an expert yourself, the only way to know for sure is to get an apprais-al. Appraisals for art or antiques can cost $250 or more for a single item; if there are many pieces, a “bulk rate” might be negotiated.
Consider additional coverage. Offer your customers a rider that provides additional coverage for an additional charge. A fine art rider or valuable items rider will cover those items only, so claims against the rider won’t count against contents cover-age. This can help if there is a serious homeowners loss; claims for a few dam-aged high-value items won’t deplete the limits. Valuable items riders cost very little — they can buy a lot of extra peace of mind for about 25 cents per $100 of coverage. However, if your customers is a serious collector or have one or more very high-value items, they might need a separate fine arts or valuable items poli-cy. These policies can provide more com-prehensive coverage than a homeowners policy. For example, some provide “pair and set” coverage , which reimburses for the cost of the whole set if one of the
pair or set is broken, lost or damaged. (The remaining parts of the set are given to the insurer.) Some also provide appreci-ation protection, which will pay up to 150 percent of the insured value of an item, to account for appreciation. Some insurers will also provide risk management ser-vices for items or collections of high value, looking at the pieces on site and giving recommendations to protect them better.
Determine whether you want blanket or itemized coverage. If no single item in a collection is worth more than about $2,500, then blanket coverage, which co-vers a whole class of items for a single lim-it, makes the most sense. If there are high-value items, however, they will be item-ized. An itemized policy will list each item to be covered and its value. At claim time, they will receive the listed value of the lost or damaged property.
THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Page 8
We all know that insurance companies work tirelessly analyzing rates to determine rate adequacy and ensure profitability. What works for one state doesn’t work for all states. State mandated min-imum liability limits as well as rates vary widely from state to state. Let’s look at the numbers.
—AK, ME—50/100/25
—NC, TX—30/60/25
—UT—25/65/15 (no fault)
—AL, AR, GA, MS, NE, NH,
ND, OH, OK, RI, SC, SD—25/50/25 (North Dakota no fault)
—MD—30/60/15
—MN—30/60/10
—IL, MT, OR, VA, WY—
25/50/20
—IA—20/40/15
—CO, ID, TN—25/50/15
—DC, IN, KS, KY, MO, NM, NY, VT, WA, WI—25/50/10 (NY , KY and KS no fault)
—LA—15/30/25
—CT, HI, MI—20/40/10 (HI and MI no fault)
—WV—25/40/10
—MA—20/40/5 (no fault)
—MN—30/30/10 (no fault)
—AZ, DE, NV—15/30/10
—CA, NJ, PA—15/30/5 (NJ and PA no fault)
—FL—10/20/10 (no fault)
The mandatory minimum limits in Texas are a whopping 65% higher than Florida. The real ques-tion is how the rates compare from state to state. Understanding that this is fairly unscientific ab-stract, I obtained quotes from Progressive Insurance for Texas, California and Florida. No claims, no discounts. Here’s the numbers:
monthly—Denton, TX 76209 policy limits $85,000
monthly—Orlando, FL 32811 policy limits $30,000
monthly—San Luis Obispo, CA 93401 policy limits $35,000
It looks like Texas is a pretty good place to be, both as an agent and a consumer. Coverage limits appear to provide reasonable amounts of coverage for the consumers. Premiums aren’t so low that they suppress agent commissions. (Feel free to argue this point with Joe if you disagree.)
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4 hours for just being a member
Regular Local Meetings with CE
Big discounts on On-Line CE
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Identify your agency with a national association
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Email: [email protected] Call: Joe Tipton 972.862.3333
Sinkholes can be serious business. A few years ago, a sinkhole swallowed eight valuable Cor-vettes at a Kentucky museum. And in 2013, Jeffrey Bush died in Florida when a 60-foot-deep sinkhole suddenly opened under his home, destroying his bedroom while he was sleeping. The U.S. Geological survey says, “Sinkholes are most common in what geologists call ‘karst terrain.’ These are regions where the type of rock below the land surface can naturally be dissolved by groundwater circulating through them. Soluble rocks include salt beds and domes, gypsum, and limestone and other carbonate rock. About 20 percent of our country is underlain by ‘karst terrain’ and is susceptible to a sinkhole event. The most damage from sinkholes tends to occur in Florida, Texas, Alabama, Missouri, Kentucky, Tennessee and Penn-sylvania.”
What Is a Sinkhole?
Geologically, a sinkhole is a depression in the ground that has no natural external surface drainage. When it rains, water stays inside the sinkhole and typically drains into the subsur-face. The U.S. Geological Survey explains: “When water from rainfall moves down through the soil, karst terrain begins to dissolve and spaces and caverns develop underground. If there is not enough support for the land above the spaces, then a sudden collapse of the land sur-face can occur. Sinkholes are dramatic because the land usually stays intact for a period of time until the underground spaces just get too big.” The U.S. Geological Service warns that, “…while collapses are more frequent after intense rainstorms, there is some evidence that
THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Page 12
(continued on page 13)
droughts play a role as well. Areas where water levels have lowered suddenly are more prone to collapse formation.” Other factors that contribute to sinkholes are building on un-stable terrain and draining of underground aquifers
Other types of sinkholes form due to human activity. Sinkholes can develop above old mines, old cesspools or sewers or due to groundwater pumping and construction.
Are You Covered for Sinkholes?
Although the likelihood that a sinkhole will occur on your property is pretty small, damage can be extensive. In most states, the standard homeowners policy excludes coverage for damage due to “earth movement.”
However, until 2011 reforms, Florida required all homeowners policies to include coverage for sinkhole damage. Policies defined “sinkhole damage” so broadly that the number of claims surged, tripling between 2006 and 2010, and costing insurers more than $1.6 billion. After the 2011 reforms, homeowners insurers authorized by the state of Florida must cover “catastrophic ground cover collapse,” but your policy might not cover other sinkhole-related damage unless it specifically includes sinkhole coverage.
Tennessee recently amended its laws on sinkhole coverage in homeowners insurance poli-cies. Current law requires homeowners insurers to “make available” coverage for sinkhole losses to dwellings and contents. A new law effective July 1, 2014 clarifies that coverage is optional for policyholders. It also clarifies that new policies must cover “structural damage” to the property, rather than “physical damage,” which would not include land stabilization. The law also outlines inspection requirements for insurers. Insurers sought the changes, say-ing that fraudulent sinkhole claims were driving up the cost of coverage. Consumer advo-cates say the changes will make it more difficult for homeowners to obtain coverage for sink-hole claims.
California also requires homeowners insurers in that state to offer coverage for damage re-sulting from “earth movement.” Since coverage is optional—and expensive—the majority of homeowners opt to go without coverage.
Although some states, such as Florida and Tennessee, map known sinkholes, engineering surveys and other technology goes only so far to detect developing or potential sinkholes.
THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Page 13
Two-thirds of employers include a question on criminal history on their job application forms, report-ed EmployeeScreen, a company that conducts background checks for employers. The EEOC recom-mends against this practice, however.
Should you “ban the box” on your job application forms?
Approximately 70 million Americans have criminal records, many for non-violent offenses or offenses committed while they were young. Proponents of “ban the box” laws say that checking “yes” on a job application’s criminal conviction box can reduce a qualified applicant’s chances of a callback by 50 per-cent.
The EEOC does not regulate employer communications, so it does not prohibit employers from asking questions about an applicant’s arrest/conviction history on job applications. However, it notes that an employer’s use of information requested before employment may have a disparate impact on minori-ties that amounts to unlawful discrimination under Title VII. Title VII of the Civil Rights Act of 1964 pro-hibits employment discrimination based on race, color, religion, sex and national origin. Currently, 11 states plus 60 cities and counties prohibit their own agencies from asking about criminal convictions on job application forms. Four states—Hawaii, Massachusetts, Minnesota and Rhode Is-land—also prohibit private employers from asking about criminal convictions on application forms. To find the best possible job candidates and avoid claims of discrimination, employers might consider eliminating questions about criminal records from application forms. If a criminal record comes up dur-ing a background check or interview, the employer can discuss it with the applicant in person to better determine its relevance to the position. If it is relevant, you can eliminate the candidate from consider-ation. The EEOC says, “…the legal standard is that the criminal conduct is recent enough and sufficiently job related to be predictive of performance in the position sought, given its duties and responsibilities.” Hiring and firing employees has become more complicated. Employment practices liability coverage can protect your organization from the high costs of employment discrimination and other employment-related lawsuits.
THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Page 15
THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Page 17
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
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THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Page 19
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THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Page 21
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Ray Reyes or Bob Dixon
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The Skeet Shoot on May 19th will be at
The National Shooting Complex
The National Shooting Complex is one of the premier shooting
facilities in the world, spanning 671 acres of San Antonio coun-
tryside. As the headquarters for the National Skeet Shooting As-
sociation and National Sporting Clays Association, it hosts elite
tournaments for both sports, including the World Skeet Champi-
onships and National Sporting Clays Championship. In addition,
it is the venue for a wide range of shooting and non-shooting
events for thousands of serious competitors, casual shooters,
and outdoors enthusiasts each year.
Golf legend and award-winning course designer, Arnold Palmer
and The Arnold Palmer Design Company, have created a new
championship course that features a variety of holes touched
with dramatic waterfalls, beautiful views and a majestic land-
scape.
One of the course's Signature Holes, number 4, requires a long
carry over a lake with waterfalls along the front of the
green. Hole 18 is a spectacular finale that plays slightly up and
then to an 80-foot downhill slope, providing incredible views of
the clubhouse and a lake fed by waterfalls.
Rating/Slope:
BLACK (74.2/142); GOLD (72.4/139);
SILVER (70.6/134); COPPER (69.3/128); JADE (65.3/116)
The Golf Scramble on May 19th will be on
The Palmer Course at La Cantera Resort
THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Page 22
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
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(972) 862.3333 [email protected]
www.piatx.org
If you get to thinking
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THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL Pa ge 23
TEXAS DEPARTMENT OF INSURANCE ACTIONS
Vivona, Carmella Date of Action: 8/10/2015 Location: Fort Worth Action Taken: Indicted Violation: Fraud Use/Possession of ID Info, State Jail Felony
Lowe, Leonard P Date of Action: 7/30/2015 Location: Fort Worth Action Taken: Indicted Violation: Misapplication of Fiduciary Property, 3rd Degree Felony
Halsell, James D Date of Action: 7/23/2015 Location: San Antonio Action Taken: Indicted Violation: Count 1-Securing Execution of a Document by Deception, 1st Degree Felony Count 2- 5-Money Laundering Count 6-Forgery
Tarco, Virgilio Date of Action: 7/22/2015 Location: Houston Action Taken: Sentenced to 3 years deferred adjudication. Violation: Securing Execution of a Document by Deception, 3rd De-gree Felony
Current, Clarence J Date of Action: 7/20/2015 Location: Houston Action Taken: Sentenced to 4 years deferred adjudication and or-dered to pay $19,907.89 in restitution. Violation: Unauthorized Insurance, Class A misdemeanor
Ribas, Marissa Date of Action: 7/20/2015 Location: Belton Action Taken: Sentenced to 11 months deferred adjudication and fined $400.00 Violation: Insurance Fraud, Class B Misdemeanor
Ruiz, Melanie Date of Action: 7/16/2015 Location: Mount Pleasant Action Taken: Sentenced to 2 years deferred adjudication, fined $500.00 and ordered to pay $1,914.00 in restitution. Violation: Insurance Fraud, State Jail Felony
: https://wwwapps.tdi.state.tx.us/inter/asproot/fraud/indictments/clips.asp
This year, the Convention & Trade Show will be in May rather than
June… It should be cooler, and exhibitors will not have to work two trade
shows in the same week. The dates: May 19-21, 2016.
This year, the convention will half a day shorter… 3 days vs. 3 1/2 days.
Golf & Skeet on Thursday the 19th, then Friday & Saturday, we will have
CE, Luncheons, Trade Shows, and a party Saturday evening.
This year, the Skeet Shoot will be held at the National Shooting Complex,
one of the nations finest sport shooting facilities.
This year, the Golf Scramble will be a 12:30 PM ‘Shotgun Start” on the
Palmer Course at La Catera Resort. If you want to Shoot & Golf, you will
be able to do both.
This year, we will be at Hotel Contessa which USA Today named as one of
the “Top 10 Hotels in America” in 2015. Every room is a suite… Right on
the Riverwalk… pool & spa on the roof… it’s beautiful.
This year, the Trade Show theme is: “Meet at the Fair” and exhibitors are
planning to include “midway” type carnival games at their booth. We
tried, but no one was willing to ‘guess your age or weight’ so I guess we
have to go with the other type amusements… You can register on-line.
Door Prizes include $1,000 cash and other ‘good stuff.’ See you there!
the Last word
Well, it’s almost convention time again. We’re
back in San Antonio again this year, but just about
everything else will change… new hotel, new golf
course, new skeet range, and new date.
