Car Insurance

HAVE YOU EVER WONDERED WHY sport utility vehicle drivers seem like such assholes? Surely it’s no coincidence that Terry McAuliffe, chairman of the Democratic National Committee, tours Washington in one of the biggest SUVs on the market, the Cadillac Escalade, or that Jesse Ventura loves the Lincoln Navigator. Well, according to New York Times reporter Keith Bradsher’s new book, High and Mighty, the connection between the two isn’t a coincidence. Unlike any other vehicle before it, the SUV is the car of choice for the nation’s most self-centered people; and the bigger the SUV, the more of a jerk its driver is likely to be.

According to market research conducted by the country’s leading automakers, Bradsher reports, SUV buyers tend to be “insecure and vain. They are frequently nervous about their marriages and uncomfortable about parenthood. They often lack confidence in their driving skills. Above all, they are apt to be self-centered and self-absorbed, with little interest in their neighbors and communities. They are more restless, more sybaritic, and less social than most Americans are. They tend to like fine restaurants a lot more than off-road driving, seldom go to church and have limited interest in doing volunteer work to help others.”

He says, too, that SUV drivers generally don’t care about anyone else’s kids but their own, are very concerned with how other people see them rather than with what’s practical, and they tend to want to control or have control over the people around them. David Bostwick, Chrysler’s market research director, tells Bradsher, “If you have a sport utility, you can have the smoked windows, put the children in the back and pretend you’re still single.”

When Jon Dell’Antonia of Oshkosh was notified by his property insurance company that his policy would not be renewed, he got ready for a fight.

He had been a customer with the insurer for more than 40 years. But in a recent three-year period, he received three insurance payouts totaling less than $20,000 all related to separate hail- and rainstorms that had damaged his house and a car. The company no longer considered him a good insurance risk.

“Sure, I know it cost them some money. I’m not arguing that. But that’s why you pay premiums,” Dell’Antonia said.

While badgering the insurance company to rescind its decision, Dell’Antonia, a former Oshkosh mayor, called state Sen. Carol Roessler. He told her there ought to be a law to stop insurance companies from canceling or refusing to renew policies over claims that resulted from acts of nature.

Today, a bipartisan bill sponsored by Roessler calls for exactly what Dell’Antonia suggested. Introduced this spring, the bill, SB 141, would prohibit an insurer from canceling or not renewing an auto or property policy solely because of claims stemming from unpreventable damage caused by tornadoes, hail, wind, rain, lightning or “forces of nature.”

n July 2004, in its ongoing effort to expand coverage of the service sector in the Producer Price Index (PPI), the Bureau of Labor Statistics (BLS) introduced a new price index for the direct health and medical insurance carriers industry. This index, NAICS 524114–Direct Health and Medical Insurance Carriers, appears in table 5 of this publication and is available online via the BLS homepage: www.bls.gov. Data are available for December 2002 to present; prior to December 2003, the index is published as discontinued series SIC 6325.

The primary output of this industry is the contractual transfer of the risk for payment of medical costs and financial intermediation. The policy underwritten by the insurer represents a unique output. The policy lists the conditions for which restitution would be made to the policyholder to cover medical costs. The amount of risk being transferred to the insurer is clearly stated in terms of covered benefits (and benefits not covered), and it obligates the insurer to pay claims for all such occurrences. The indexes for this industry measure the change in the total premium (employee and employer contribution) paid to the insurer plus the return on the invested portion of the premium.

Motor insurance premiums have soared in price by 25 per cent over the past six months, according to price check website Insuresupermarket.com. With the average yearly premium for comprehensive cover standing at pounds 590, the need to find savings by shopping around is greater than ever.

Before hunting down that best deal, be prepared. First, work out a realistic value for your vehicle. Insurers will only pay the market value if the car is stolen or written off, so by providing an over-optimistic price for the vehicle, you might have to pay higher premiums than necessary.

Next, calculate how many miles you will drive. The higher the mileage, the more expensive the premiums. Be realistic about who will drive; by restricting cover to named drivers only, you can cut insurance costs dramatically, rather than needlessly opting for an “any driver” policy. And consider where the vehicle will be parked. Finding an off-road garage where you can park your pride and joy, rather than parking on the roadside, should lower premiums straight away.

Susan Carruthers, 50, has enjoyed accident-free motoring for 30 years. The freelance personal assistant, who lives in Cheltenham, Gloucestershire, pays Direct Line pounds 238 a year for comprehensive motor insurance for her J-reg Honda Civic.

Accountants would never advise clients to go without car insurance. Yet rarely do CPAs recommend their clients purchase long-term-care insurance when, in fact, the probability of needing LTC insurance is much greater than the likelihood of being in a car accident.

The American Council of Life Insurers says less than 10% of the nation’s elderly own an LTC policy. Benefits are tax-free and there’s no imputed income to employees whose companies provide this insurance as a benefit. It’s a good deal for many clients–even better than buying car insurance. Here’s what CPAs need to know to advise clients on their LTC insurance needs.

COMMON MISCONCEPTIONS

Many clients have a number of misconceptions about LTC insurance that makes them resist buying this important coverage:

Existing insurance will pay for LTC. Wrong. Health insurance pays only for restorative care, not chronic care such as that required for a long-term illness. Medicare pays only for the first 100 days in an LTC facility. Medicaid does cover long-term-care needs. However, it’s intended to cover those people with incomes at or near the poverty level–not most CPAs’ typical clients.