Jerry Falwell Insurance Advices

Archive for October, 2009

Putting out a shingle and getting customers is not the only thing you need to know about doing business. In fact, some of the easiest things to overlook are some of the most crucial elements of a business. A business owner may think business insurance is only necessary for the big guys, but anyone that deals with the public needs to understand the importance of protecting their business operations and assets. If you think it is a unneeded expense, you’ll regret it when your company gets sued, or you find out you could have recovered some of your losses from a business interruption, if you’d just taken the time to get insured. Financing it isn’t hard for a business that has a proven track record, as you can use many forms of credit, even a merchant cash advance, to include this expense in your budget.

Types of Business Insurance
Every business needs a thorough review of their risks to decide what insurance they need to get to cover them completely. For the majority, they will need property insurance on their business assets and location, liability insurance, and business interruption insurance.

• Property Insurance – Even if you are a sole proprietor, you will need some form of insurance to cover you against loss or damage of your business equipment. You will have to decide what events you want to be covered for: a fire, theft, flood, and so on. It can cover your business location, if that is owned by the business. However, even if you only rent your business property, you can still get property insurance for specific losses associated to property and assets within your business location.

• Liability Insurance – This type of insurance protects your business when someone sues it for negligence. It covers you and your employees, regardless of whose fault caused the injury.

• Business Interruption Insurance – If you suffer some interruption to your business that keeps you from operating normally, your losses may be recoverable with this insurance.

When You Have Employees
The need for insurance increases with the addition of employees and a motor fleet for those employees. You will need additional coverage, in terms of automobile policies for commercial purposes (even if you’re the only one using it that way) and worker’s compensation insurance. In addition, health insurance may be added to the roster of costs that need to be budgeted to keep the business operating smoothly and reduce the risk of loss.

New research released confirmed that black and Hispanic drivers pay more for their auto insurance because insurers use credit scores to determine insurance premiums. The use of credit scores in insurance has been a controversial practice by the discriminatory impact it has on minority families with low incomes. It’s not fair to the consumer with a perfect driving record will be penalized with a higher premium because of your credit rating. Premiums should be based on risk to accidents, not the story of how consumers pay their bills on other goods and services. The report concluded that blacks and Hispanics are represented in exaggerated form among consumers with lower credit ratings. The report also found that “more than half of blacks have credit scores in the lowest quarter of the distribution of total scores, and half of Hispanics have credit scores in the lowest third distribution of total scores. Consequently, African Americans and Hispanics pay more on average for the coverage of his insurance than whites (not Hispanic) and Asians. While it is true that insurance companies may not intend to discriminate against anyone, the result is the same. Basing insurance premiums on the credit means that low-income minority consumers are forced to pay higher rates than others with the same driving record or claims.

The insurance industry has advanced the argument that drivers who have low credit scores are more likely to be involved in accidents but there is no evidence to support this claim. The FTC did not investigate whether drivers with lower credit ratings were more likely to crash, but found that there is a correlation between low credit scores and increased the likelihood of putting a claim for compensation in the future. In other words, drivers who have low credit ratings were more likely to file suit in the case of being involved in an accident. Consumers Union believes that this does not justify the use of credit ratings for insurance purposes by the discriminatory impact that has. It’s very unfair of insurance companies charge more to consumers to start simply because there is the possibility to use their policy sometime in the future. Credit ratings should not be a factor when it comes to insurance pricing. Insurance companies have kept secret the formulas used to calculate its ratings, not allowing it to make a public study of the actuarial soundness of their qualified models. The FTC report confirmed that there is no single mathematical model to see how insurers use credit information to influence decisions about insurance or to report how they come to these grades using credit information. It is very difficult for consumers to assess what can be done differently to get your credit score, and not even know the different factors that insurers regard as most favorable. Even those consumers with good credit may be forced to pay higher premiums for the peculiar way that insurance companies have to weigh the credit data. Using credit scores to price insurance is also problematic for consumers because the rating comes from credit reports that may be inaccurate.

A 2002 study conducted by the Consumer Federation of America estimated that tens of millions of Americans have been unfairly penalized for incorrect information in your credit reports. More recently, a study in 2004 by the Research Group Public Interest (U.S. Public Interest Research Group) found that one in four credit reports contained errors serious enough that they had refused to consumer loans, mortgages and to work. “Insurance companies insist that credit scores are reliable predictors of future claims even though they have no idea whether the credit information being used is accurate. Too many credit reports contain serious errors. This can result in a lower insurance rating and a higher premium. Even those consumers who have good credit with a score may be low for the insurance by the peculiar manner in which insurance companies gauge the behavior of credit. The use of credit ratings for insurance is not necessary because insurers have a variety of remedies available to protect consumers who have too many claims. Insurance companies can raise premiums for those who put too many demands or even cancel insurance consumers more prone to complaints. These measures are not yet at the same unfair results for consumers when credit information is used to extend and endorse a policy. Unlike a credit rating, such a move may be based on a risk verifiable information and not without risk or causal relationship to specific loss

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