Car Insurance

As workers’ compensation insurance rates soar in step with medical and health-care costs, many small to moderately sized restaurant companies are self-insuring rather than paying the market’s exorbitant premium hikes.

Once the exclusive preserve of billion-dollar companies with multimillion-dollar payrolls, self-insurance increasingly is becoming an option for substantially reducing — if not eliminating — the high premium costs of workers’ comp for scores of companies.

Whether it’s a growing national chain like Papa John’s International with tens of thousands of workers, a more regionally concentrated brand like Englewood, Colo.-based Red Robin or an upscale operator like fine-dining chef-entrepreneur Jean George Vongerichten in Manhattan, a diverse array of operators are saving money by becoming self-insured.
Experts say the trend comes at a time when the cost of policies for workers’ compensation — required by law in most states to be renewed annually — have been skyrocketing for the past year and a half.

Even for operators with low claims experience and successful employee safety and training programs, double-digit percentage hikes in premium rates, sometimes as high as 50 percent, are not unheard of, according to brokers.

Although the Sept. 11, 2001, terrorist attacks — which generated from $2 billion to $3 billion in workers’ comp death-claim benefits — are one reason premiums are climbing, of greater consequence are the insurance companies’ vanishing investment incomes generated by the low premium dollars collected in the mid-1990s.
In addition, steadily ballooning medical and health-care costs, which were rising long before 9/11, have forced insurers to jack up rates to restore their reserve funds and counter a bearish stock market.

“Insurance companies have got to pay and honor their claims,” says Carolyn Gorman, a spokeswoman for the Insurance Information Institute. “But as much as people may have a hard time believing it, insurance companies live in the same economic marketplace as all of us.

“When the stock market is doing well, they use their premium dollars to invest and use the capital accumulation from those investments to pay claims,” she continues. “When the stock market does poorly and investments do poorly, they have to increase rates to bring in capital. That is the business cycle we find ourselves in currently.”

The III is an independent, Washington, D.C.-based research firm that provides statistical reports and analyses on insurance trends for government and private industry.

Gorman also notes that although there are those who like to discount the impact of 9/11 as some short-term aberration on insurance costs, insurers will be paying claims related to the attacks “for decades to come.”

Tom Thompson, vice president of risk management for Papa John’s and an active member of the National Restaurant Association’s Safety, Security and Risk Management Group, says being self-insured gives a company more control over its destiny.

“In order for us as an employer to be able to mitigate but not insulate ourselves from insurance costs, we entered what is coming to be called the ‘alternative-insurance marketplace’ with workers’ compensation,” Thompson explains. “In essence, we’re self-insured. It’s like going from the backseat of the car to the driver’s seat.

“What it means,” he continues, “is we are responsible for covering a far larger piece of the exposure internally. But on the other hand, the amount of fixed premium costs has gone down substantially, and whatever we do internally to create a measurable loss-control program improves our cost structure even more.”

Broadly speaking, the way self-insurance works at Papa John’s and other companies, brokers and risk managers explain, is that the business owner takes on all the duties of an insurance company up to a certain point and the insurer becomes akin to a reinsurer.

Although self-insurance is practiced in varying permutations across the country, the general principle goes like this: The operator absorbs the financial exposure and pays out claims on hospital-recorded employee accidents and injuries up to a certain maximum annual figure or aggregate.

Like a deductible on medical- or car-insurance policies that consumers pay before their insurers pay off the balance of the claim, the higher the annual aggregate amount of loss, or exposure, companies are willing to assume, the lower their insurance costs.

In some configurations self-insurance is “extra insurance operators buy above a certain amount of deductible.

In yet other permutations a percentage of the average medical cost related to a specific injury is paid until a grand total is breached that ushers in an insurer.

Operators and brokers say self-insurance yields its best results when companies succeed in driving down their claims experience during the year before signing up. That usually is accomplished through safety programs, better training and linking a percentage of the restaurant manager’s annual bonus to the unit’s claims history.

If you are in the market for auto insurance chances are that you are going to want to get the best possible deal. But with that in mind, this is not always the easiest thing to do. Luckily, with a bit of know how you should be able to get the best auto insurance deal without having to spend hours doing so. Listed below are some tips that you should take into consideration when shopping for auto insurance. They may not all apply to you, but chances are that you can make them work in one way or the next.

1. To get the best auto insurance deal you need to shop around. If you only speak with one auto insurance company how will you ever know what the others have to offer? By shopping around you can get a great idea as to who offers the highest level of coverage for the lowest amount of money.

2. When talking with auto insurance companies ask them if you qualify for any discounts. Chances are that you will be able to at least take advantage of a few of them. There are discounts for good drivers, good students, and for simply having certain items in your car such as air bags or a security system.

3. Search for auto insurance online so that you can get a large number of quotes without having to spend hours doing so. It is much quicker to search for auto insurance online, than it is to call around to several different agencies. Not to mention the fact that when you search online you will also be able to find other auto insurance information that can help make your decision easier.

In most states, insurance companies will not extend an insurance coverage offer to anyone before reviewing their DMV record. A driving record, while usually goes back for only a few years, can tell an insurance company two things… it can evaluate whether or not a person meets the minimum standards for insurability, and it can also be used to determine the level of risk a person poses to the insurance company. Insurance companies are businesses, and they must be profitable in order to survive. Therefore, they must evaluate how much money they could lose on a potential client and then determine if it is worth their while to offer insurance coverage to that person. Obviously, a person who has a long history of at-fault accidents, may not be the best risk for an insurance policy, because the likelihood of another at-fault accident is high. In some cases, DMV records will not affect whether or not an insurance company will offer insurance coverage. In fact, some insurance companies advertise that they will extend insurance coverage to anyone, no matter what their driving record.

What is the first thing you do when looking for a new vehicle? Do you just walk into the showroom, wander around for awhile, point at a car and buy the asking price to drive it home? Of course you do not do that.You do research. You find out what the dealer’s cost is compare to the sticker price. Where can you do this research and now possibly do your purchase - online.

Auto dealers are finally smartening up and learning that people like to shop online. Ebay has figured that out and their Ebay Motorssite is a very popular way to purchase a vehicle, especially a vehicle that is not usually available in your area. They have also realized by now that people research vehicles online before purchasing.

The first ones to determine this were the car manufacturers. They have put on their sites ways in which a person could not only look at all the vehicles that they offer for purchase but all the specs as well. You can now “build your own” vehicle on many manufacturer sites. This shows you what your new car would look like with different options or in different colors. Who knows better than the manufacturer what your car should look like?

Next manufacturers have introduced ways in which to have you contacted by the local dealership or better yet ways for you to be guided to a local dealerships site. At the local dealership site begins the next process. You have found the car model you want, the color you want now you just need to find that in stock.

Local dealerships, if they are smart, now have their inventory online. If you are lucky they will have both new and used inventory online. Not a bad way to compare new prices to what previously owned ones are going for. If the used car is certified that usually means it will have a decent warranty included with it.

Now with the inventory checker you can find if the car you want, with your options is actually on a lot in your area to test drive. This is much better than driving from dealership to dealership and walking the car lot yourself. If you want a black truck and the closest dealership only have white and red ones available you know to keep looking.

What is the next step we would take as consumers? That is easy, ways in which to purchase a car through the dealership online. If you have seen what you want enough times in person but just cannot stand to barter with the salesman, wouldn’t itbe nice to do the bartering online?

Online sales by dealerships are possible. Ebay Motors shows that bartering online can be done with success. There are companies that will find the best price for a certain vehicle for you and contact you. This is all done online. Hopefully the dealerships will understand the consumer side of this and it will become the new way to purchase a vehicle in the future.

You have been the victim of a car accident. You have a damaged car and possibly injuries to yourself as well. After the responsible party has alerted their insurance company of the incident you will soon get a call to clarify the details of the crash from your point of view. The next call you receive is from the insurance adjuster assigned to your case. It can be intimidating talking to someone from the insurance company. To help you better in your negotiations with the adjuster it is important to understand the function of the insurance claims adjuster.

The U.S. Department of Labor’s Bureau of Labor Statistics (www.bls.gov) describes in its Occupational Outlook Handbook the function of an insurance adjuster as negotiating settlements and authorizing payments. Part of their job is to investigate insurance claims especially when there is a question of liability or where fraud is suspected. The claims adjuster is called to action after the insurance company they work for has sustained a loss.

A loss to an insurance company is when a policyholder submits a claim or requests compensation for their loss in the form of a payment. The adjuster’s job is to basically negotiate to a payout for the least amount of money possible. They have to authorize the payment to the claimant without violating any Federal or State laws. The more money the adjuster saves their company the more likely it is he or she will get a bonus.

An adjuster wants the facts of the claimant’s case. The facts should allow them to best determine whether the policyholder’s insurance policy covers the loss and if it does how much the payment should be for the loss. Since the adjuster deals with finding out the facts of the incident it is important for you to have all of your factual information documented so that you can show it to the adjuster. Having documents showing the cost of fixing the damage to your car, the doctor’s bills and any other expenses caused by the accident are thus a necessity.

Claims adjusters work is scheduled around processing the various claims that they have been assigned to handle. The adjuster investigates the claims by first interviewing the claimant and any witnesses. This is when they will call you and the other person involved in the accident. They want to make sure the stories of what happened match. From my personal experience the adjuster always requests to tape these phone calls. So remember to think things out clearly instead of speaking quickly and maybe incorrectly while being taped.

Next if any witnesses to the accident gave their information, to be listed on the police report, they are called so the adjuster can again get verification of how exactly the accident occurred. The adjuster will next contact the officer listed on the police report if anything on the report needs to be clarified. On down the list the claims adjuster will go. They will see if an ambulance was called to the scene. Then the adjuster will call the hospital or physician the victim went to for treatment to find out more information. The vehicle will be inspected so that the adjuster can determine if it should be totaled out or if it can be repaired.

Besides contacting the claimant’s physician or mechanic the adjuster may also consult with other professionals. Adjusters are normally familiar with certain car repair companies and physicians. The adjuster will then speak to their contact asking questions such as how much a car should be worth or would cost to repair. With the physician they will ask if the victim’s injuries are what should be expected from that specific type of car crash.

Everything that an adjuster finds out is usually written down in some sort of report. The information he or she has gathered will include photographs, written statements, recorded statements and documents the claimant has sent them. The adjuster’s next step is to use all of this information to evaluate the claim.

Evaluating the claim involves deciding if the claim is legitimate and if they have all the information needed to negotiate and settle the claim with the claimant. If you only have damage to your vehicle from the accident if should be easier and quicker to settle your claim with an adjuster. You will most likely get a lower level adjuster. They will try to speedily inspect the damage and try to get the check cut right away. If your claim involves bodily injury you will get bumped up to a senior level adjuster. This adjuster will need to do more fact finding so it will take a longer period of time for the claim to be settled.

The negotiating of the settlement is done by a basic back and forth of numbers between the adjuster and the claimant. The adjuster will probably try to get away with a number that is a little low out of the gate. The claimant needs to prove their number to the adjuster and if it is within the perimeters that the adjuster is allowed to settle for that should complete the negotiations.

The role of the adjuster is to represent the insurance company involved in the claim by finding out the facts and then using them to negotiate a settlement. If you have been in an accident and have filed a claim you will deal with a claims adjuster. It can be intimidating if you do not understand their function but with the understanding of the nature of the adjuster’s work you should feel confident and able to negotiate your claim.