Car Insurance

Kootenai County will pay the same amount for insurance next year even though it had to shell out more than $336,000 to avoid lawsuits by two former employees.

That’s mostly because the insurance company- Idaho Counties Risk Management Program- looks more at the frequency of such losses when calculating premiums and not necessarily the price tag of claims.

Kootenai County has had to pay very few claims in the last five years, meaning these two high-publicity settlements are abnormalities, said John Goedde, the county’s local insurance agent.

“If we had one of those every year you can bet it would be used in the premium calculation,” Goedde said.

The county commission is considering restructuring its human resources and risk management departments to help ensure that these types of employee situations are resolved internally- long before the insurance company gets involved.

The county also is shopping around to see if it can get a better deal from another insurance carrier.

Within two months this spring, the county’s insurer paid $336,550 to two former Kootenai County employees for “employment mistakes.”

Marina Kalani, the administrator of the county’s failed juvenile drug court, received a $69,150 settlement March 23 after she threatened to sue Kootenai County over an allegedly “false and defamatory” memo criticizing her job performance.

Former Kootenai County Sheriff’s Captain Sam Grubbs received a $267,400 settlement in April. The county has never disclosed the details of the settlement.

The county may have more expenses associated with employee claims in the months to come.

Dannie Fast Swanson, a probation officer who also worked for the county’s failed juvenile drug court, filed her intent to sue for $354,000 last month, alleging that she was verbally abused, harassed and intimidated by Prosecutor Bill Douglas. She also filed a separate complaint with the Idaho Human Rights Commission regarding the alleged hostile work environment.

A Kootenai County public defender is deciding whether to sue the county, saying it violated her free speech rights. She was suspended in July for sending the commission a greeting card along with a jar of Vaseline and tube of red lipstick to express her disgust for a mistake made in calculating her pay increase.

Even with this year’s two substantial payouts, the premium will remain at $468,338 for fiscal year 2006. That covers the county for everything from general liability and employee claims to buildings, automobile and personal property.

Shrewd design practices can take the sting out of your customers’ fender benders. Is your company delivering them?

A dirty little secret of car ownership is the big bite insurance takes out of the total-cost pie. Owners fork out more for insurance than they do for fuel. Protecting against damage, theft and liability costs roughly the same as all the oil changes, tire replacements and tune-ups a car will need during its lifetime, In fact, depreciation is the only operating expense that sucks more dollars out of an owner’s wallet than insurance. According to the SAE, depreciation amounts to 27 percent of a vehicle’s total operating cost, versus 22 percent for both insurance and maintenance.

Given the competitive nature of the car business, you’d think some automakers might see the expensive-insurance situation as an opportunity instead of a headache. Actually, they have. But before that day of enlightnment dawned, a healing period was necessary to recover from the historically bitter relationship between insurance firms and car companies. Jay Minotas, a General Motors Corp. veteran of some of these battles, recalls, “In the early 1980s, we were at war with the insurance industry over airbags and passive restraints. We overcame that adversity and, by the mid-1980s, insurance companies and car engineers began cooperating to make vehicles more damage-resistant and easier to insure.”

In 1985, auto engineers and insurance experts put their heads together to issue SAE Recommended Practice J1555, aimed at insurance-cost containment. Consider this document the design engineer’s primer for factoring in damageability, repairability, serviceability and theft deterrence attributes at no sacrifice to crashworthiness, occupant protection and functional essentials.

Minotas, manager of the GM Safe Driving Program, and who helped create J1555, notes, “From the onset, insurance contacts were our best source of repaircost data. (State Farm’s analysis of claim statistics triggered the current Firestone radial recall campaign.) We knew that certain designs and parts were expensive to repair, but the insurance companies — especially State Farm — provided us with the first truly accurate look at average repair costs. With their help, we studied five Saturn competitors and set our repair-cost bogey at an early stage of that car’s development. After sending the Pontiac Fiero into the field with plastic body panels no one knew how to repair, we had no choice but to set higher standards for GM’s 1989 APV minivans. Two years before their introduction, we began working with insurance people to develop suitable repair procedures. Fiero and APV were the learning experiences that greatly benefited Saturn’s 1990 launch.”

That’s why the Brigham City insurance agent signed up a woman he once dated, a man who repaired his car and even a dog named “Missy” for employee group health insurance plans. All fraudulently, according to charges filed in a Brigham City court by the Utah Attorney General’s Office.

“This is kind of an odd one,” said J. Denis Kroll, assistant Utah Attorney General. “It’s something we haven’t run across before, and it certainly was creative.”

After pleading guilty to insurance fraud and forgery, Conlin was sentenced last week to serve 20 days in the Box Elder County Jail and pay a $21,700 fine for writing false insurance policies to get the commissions.

AFLAC investigators told the Utah Attorney General’s Office that Conlin submitted applications for people on employee group health insurance plans.

“He was trying to make more money by writing group policies,” Kroll said. “If he ever found a couple, they needed a third person. So he’d invent somebody.”

One included a couple who applied for an accident policy to cover them both. Instead, prosecutors allege that Conlin wrote two policies. A month later, he submitted an application for a “Missy Clonts” — who turns out to be the family dog.

“On 214 occasions the individual applicants did not actually work for the company specified and did not sign an application for insurance,” investigators wrote in a probable cause statement. Prosecutors claimed that Conlin made $21,053 in commissions.

Confronted about the discrepancies, Conlin told AFLAC investigators he needed the money from the commissions to help in a divorce and child-custody dispute.

You’re late for work. You barrel through an intersection, broad- siding a car. The driver is seriously injured. He spends a month in the hospital and two years in rehabilitation. He loses two years of work.

You were at fault, so you will pay.

How much you’ll pay depends on whom you hit.

If the driver is a teacher, you could owe $460,000 for medical bills, lost wages, and pain and suffering. If a doctor, it could be $620,000. A baseball player? Perhaps $22 million.

Got cash? Probably not.

Got insurance? Yup, but probably not enough.

Got big financial troubles? You bet.

Jack Hungelmann uses that accident scenario in his book, “Insurance for Dummies,” to point out that most drivers are “ridiculously” underinsured.

But is anybody listening? For most people, auto insurance is a big yawn. Mention it at a party and people will flee to the hors d’oeuvres table.

But maybe they should stick around. Carmen Ellingson, assistant education director of the Minnesota Society of Chartered Property and Casualty Underwriters, said many people don’t find out that their policies are inadequate until they’re in a serious accident.

Nancy Eustis considers herself a lucky exception.

Twenty years ago, a woman ran a stop sign in Minneapolis and broad- sided Eustis’ car. Eustis’ neck was broken, her spinal cord severed. She was in the hospital for three months, and in outpatient therapy for six months after that. One year after the crash, she went back to work at the Humphrey Institute of Public Affairs, where she teaches social policy.

Although she’s now a quadriplegic, Eustis considers herself lucky because her husband, an attorney specializing in personal injury and products liability, had reviewed their auto insurance coverage six months before the crash and had increased their uninsured and underinsured motorist coverage to $500,000 each.

“I also was working, so I had health insurance,” Eustis said. “But that car insurance has really made all the difference.” With it, she created an annuity “that pays for a lot of the things that health insurance doesn’t pay for,” including up to three hours of home health care every day, a converted van with hand controls and wheelchair lift, and ramps and a special shower in her home.

Hungelmann, a former claims adjuster, has been an agent and a consultant in the insurance business for 32 years. He talked about the mistakes that people, unlike the Eustises, make when they buy auto insurance:

Winter has arrived across the U.S., and in northern areas that means hazardous driving. Consider your auto insurance coverage and driving habits to stay safe on the road and keep claims down, advises www.AutoInsurancePlanners.com.

If you need to do a lot of winter driving, here are three auto insurance considerations:

1. Add roadside assistance to your policy. Check your carrier’s service to see if towing, jump-starts and other services might be a good value. These are also available through an auto club membership.

2. Check on mobile claims service. Is your insurer on the road, able to come to you after an accident? That may be a valuable service in times of extreme weather.

3. Consider raising your collision deductible. Often, icy conditions cause slow-speed bumps at intersections and in parking lots. If you can afford to pay for smaller repairs on your car, raise your deductible. The premium savings may offset the cost of repairs.

4. Drive defensively to avoid accidents. Here are some common winter driving tips:

–Drive more slowly, but not so slowly that you get hit from behind.

–Leave more space between other cars in case you have to stop on ice, especially on bridges and overpasses, which freeze first.

–Don’t slam on the brakes, which can cause skidding. Apply the brake slowly and firmly. If you don’t have antilock brakes, pump the brake slowly to gain traction.

–If you’re shopping for a new car, consider getting antilock brakes, which provide better stopping power in bad conditions. If your car has antilock brakes, don’t pump the brakes when stopping — the antilock feature does that for you.

–If you drive an SUV, don’t expect it to handle ice any differently than other vehicles.

–Completely clear windows of ice and fog for best visibility.