Are You Liable? Protect Yourself from Home Worker Lawsuits
Are You Liable? Protect Yourself from Home Worker LawsuitsAs the housekeeper is vacuuming your living room, she trips over one of your daughter's toys and seriously injures her back. While your neighbor's teenage son is mowing your front lawn, he steps in a large hole and sprains his ankle. Will your homeowner's insurance cover you if one of these workers decides to file a lawsuit?
Many homeowners do not realize that they could be held financially liable if a maid, landscaper, nanny or another house worker were to suffer from an injury on their property. Here are some things you should keep in mind before you hire a home worker:
Is that worker an employee or a contractor?
When you hire someone to help out around the house, you should figure out whether he or she is an employee or a contractor. This is one of the factors determines whether or not you are liable for a worker's injury. So, how do you know if the worker is considered your employee or a contractor? It all comes down to how much control you have over the worker.
Let's say you hire a nanny named Lisa to take care of your children and do some light cleaning in your home. Lisa follows your instructions about how to care of your kids and how to complete certain household tasks. You supply Lisa with the supplies and tools she needs to do her job. Because you have control over how Lisa works, she is most likely considered your employee.
On the other hand, let's say you hire a professional landscaper named Bob to fertilize and mow your grass, trim the hedges and plant flowers in your yard. Bob uses his own lawn mower and yard tools and he does yard work for other homeowners, as well. Bob also has a team of workers who help him with his business, and he pays these workers. In this case, Bob would be considered an independent contractor.
Of course, these are two fairly simple examples. If you are uncertain about whether a worker in your home is considered a contractor or an employee, consult a lawyer or tax professional.
Understanding worker's comp insurance
Some states require that homeowners who have house worker "employees" to carry workers' compensation insurance coverage for them. However, even if your state does not require this, you should still consider purchasing this insurance for your employees. Why? Because if one of your employees is injured on your property, you may have to pay for their medical bills and other expenses out of your own pocket. However, with workers' compensation coverage, the insurance company will cover the costs.
Alternatively, if you hire a house contractor, such as a landscaper, carpenter or plumber, they should be covered by their own workers' compensation insurance. If a contractor is injured while doing work on your property, he or she will be covered under that policy. If the contractor doesn't have enough coverage, you may be held financially liable. However, depending on the circumstances, you may be able to file a lawsuit against the contractor as they are required by law to have sufficient workers' compensation coverage.
If you are looking to hire a house contractor, it's important to ensure they are covered for worker injuries, property damage and uninstalled materials. Don't just take their word for it. Ask for written proof that they have a contractor's license, workers' compensation insurance for themselves and any subcontractors and general liability coverage.
Know what your homeowner's insurance covers
When it comes to coverage for home workers, every homeowner's insurance policy is different. Depending on your home state, your policy may include a provision that provides limited coverage for minor workers performing lawn mowing or other tasks that require the use of power tools on your property.
On the other hand, your policy may specifically exclude domestic workers such as nannies or maids. Your policy may cover the injuries of household employees, but only after a lawsuit is filed against you. Because homeowner's policies vary widely, it's important to read through your contract and talk to your insurance agent before you hire a home worker.
Consider an umbrella policy
If you discover that your homeowner's policy offers limited or no liability coverage for workers, you may consider purchasing additional liability insurance. While you may have some personal liability coverage through your homeowner's policy, it's probably not nearly enough to cover a major lawsuit from a home worker. If someone were to file a lawsuit against you, you could end up losing hundreds of thousands of dollars or more-even if you win.
You can further protect yourself with what's known as an umbrella policy. This type of policy offers a higher level of liability coverage and ensures that you and your family will be protected if someone sues you for damages. Umbrella policies are typically sold in million dollar increments, and you can obtain a policy once your home and auto insurance policies meet a minimum "attachment point"-typically a liability limit of $250,000 or $500,000.
Check with the Better Business Bureau
Before you hire a home worker, you should contact the Better Business Bureau for more information. They can tell you if any consumers have filed complaints against the worker. Visit the bureau's website at www.bbb.org.
Any questions about Allstate Homeowners Insurance Policies, please feel free to call Khalid Umerani, Agent, Allstate-NOVA Insurance Group at tel. 703.263.7800
www.south-riding-insurance.comwww.loudoun-insurance.comLabels: Allstate Aldie, Allstate Chantilly, Allstate South Riding, Allstate Stone Ridge, Khalid Umerani
The Many Colors of Insurance Fraud - And How to Prevent It
The Many Colors of Insurance Fraud - And How to Prevent ItAccording to the Coalition Against Insurance Fraud, a division of the Insurance Resource Council, one in five Americans or 45 million people say it is okay to defraud an insurance company in certain circumstances. Furthermore, according to a 2008 Four Faces study by the IRC, consumer tolerance of of specific insurance schemes has increased over the past ten years. To be more specific, the study says there is a decline in the number of Americans who believe it is unethical to:
- misrepresent facts on an insurance application to lower their premiums (82 percent today, down from 91 percent in 1997);
- file a claim for damage that occurred before the damage was covered (85 percent, down from 91 percent);
- inflate a claim to cover the deductible (84 percent, down from 91 percent); and
- misrepresent an incident in order to be paid for an uncovered loss (84 percent, down from 92 percent).
Insurance fraud comes in many different shapes, colors and sizes. The one common denominator is that, regardless of the form it takes, it costs insurers, and ultimately you, the consumer, billions of dollars per year. What are some of the different types of fraud that take place and what can be done to prevent it?
Insurance fraud cuts a broad swath through the insurance industry and can occur anywhere in the insurance transaction from fraudulent applications for coverage to fraudulent filing of claims. Insurance fraud is not only committed by the insurance buyer, but by attorneys, physicians, and other third parties to the insurance transaction. Even insurance company employees have been caught bilking their employers. Following are some sobering statistics:
Fraudulent and abusive auto-injury claims are a costly problem. Fraud and "buildup" added $4.8 billion to $6.8 billion in excess payments to auto injury claims in 2007. That means 13-percent to 18-percent increases in payments under private-passenger auto policies from 2002. (Insurance Research Council, Nov. 2008)
Auto insurers lost $16.1 billion due to premium rating errors in private-passenger premiums in 2007. Premium rating errors account for 10 percent of the $166 billion in personal auto premiums. Fraud accounts for a portion of these losses. Some drivers will seek to lower their premiums by schemes such as deliberately misrepresenting mileage driven, how the vehicle is used and where it's registered. (Quality Planning Corporation, 2008)
More than $2.4 billion in recoveries for fraud, waste and abuse in federal healthcare programs are expected for the first half of FY 2009 (October 2008 through March 2009). Some 1,415 individuals and organizations also were excluded from federal programs for fraud abuse; 293 criminal actions were brought, as were 243 civil actions. (Semiannual Report to Congress, Office of Inspector General, Department of Health and Human Services, Office, 2009)
Medicare and Medicaid lose an estimated $60 billion or more annually to fraud, including $2.5 billion in South Florida. (Miami Herald, August 11, 2008). Medical identity theft comprises about 3 percent (249,000) of 8.3 million overall victims of identity theft. (Federal Trade Commission, Identity Theft Survey Report, 2007)
With the advent of the Internet, an aging population, and other trends making insurance fraud a lucrative business, it will be difficult to completely eradicate the problem. Federal and state authorities, insurers, and consumer watchdog groups are all working diligently to stem the tide of insurance fraud. Here's what you can do:
First, and most obvious is to not commit fraud. The temptation to lie on an insurance application to get a better rate, an example of what is called soft fraud, should be tempered by the fact that it increases the risk of insurers canceling or even rescinding coverage upon evidence of the fraud, not to mention the legal implications.
- Ask for detailed medical and repair bills and examine closely for unusual or suspicious charges.
- If you are involved in or witness an accident that appears to be of a suspicious nature, and you feel that it may have been staged, report the incident to local law enforcement.
- Report fraud when you become aware of it. If your state does not have a hotline, your insurance company probably does. So does the National Insurance Crime Bureau. A hotline exists for Medicare and Medicaid, and you can go on the Coalition Against Insurance Fraud's website for further information on reporting fraud (www.insurancefraud.org).
- As with credit card and social security numbers, guard your insurance identification card numbers and report any theft.
Need help with your insurance policies? Please call Khalid Umerani @ NOVA Insurance Group in Chantilly / South Riding, VA at tel: 703.263.7800
www.south-riding-insurance.comwww.loudoun-insurance.comLabels: Allstate South Riding, Insurance Fraud, South Riding Insurance
Hands-Free Phones Not As Safe As You May Think
Hands-Free Phones Not As Safe As You May ThinkIt seems like everywhere you turn these days, you see drivers chatting away seemingly to no one at all. Of course, by now we usually assume they're talking to someone on their hands-free cell phone headset or their built-in OnStar phone.
Although many drivers believe they're safer using these hands-free options, recent research proves otherwise. A new study shows that drivers are no safer talking on a hands-free phone than if they were using a hand-held one.
Look mom, no hands!
The new study, conducted by Yoko Ishigami, Dalhousie University and Raymond Klein, appeared in the National Safety Council's (NSC) Journal of Safety Research this summer. The study shows that any type of cell phone use distracts the driver from focusing on the road. The human brain simply can't focus on the conversation and safe driving at the same time.
The researchers discovered that hands-free phones are just as dangerous for drivers as hand-held phones. According to the study's findings, talking on any type of cell phone impairs a driver's reaction times and causes them to reduce their vehicle speeds. This leads to more driving errors and car accidents.
Based on the study, there's at least one difference between drivers using hands-free phones and those using hand-held ones. While drivers talking on any type of cell phone tend to slow down, those using hand-held phones typically slow down more.
Don't talk and drive
This new study is not the only research that shows hands-free phones are no safer for drivers. Several other studies have made the same claim.
However, until now, many lawmakers obviously believed hands-free phones were safer. As a matter of fact, five U.S. states and Washington D.C. have passed laws requiring drivers to use hands-free phones instead of hand-held ones. But these new studies claim that it's the conversation-not the act of holding a cell phone-that causes drivers to lose focus.
It's clear that cell phones cause serious problems and lead to countless car accidents on our nation's roads and highways. According to some estimates, more than 636,000 car crashes, 330,000 injuries, 12,000 serious injuries and 2,600 deaths are caused by distracted drivers talking on a cell phone in the U.S. each year.
In January 2009, the NSC called for a complete ban on cell phones for drivers. Other national organizations and lobbyists may follow suit.
In the meantime, drivers may want to take caution. Although no laws have officially been passed, you may want to refrain from taking calls or at least limit your cell phone use when you're behind the wheel. While avoiding cell phone calls when you're driving may be an inconvenience, it could end up saving your life in the long run.
Please call Khalid Umerani, Agent, NOVA Insurance Group (Chantilly, VA) to discuss your car insurance needs at tel: 703.263.7800. We are licensed to do business in Virginia, Maryland and DC.
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Don't Become a Victim of Identity Theft
Don't Become a Victim of Identity Theft
The fastest growing financial crime in America today without question is identity theft. In their most recently yearly study, Javelin Strategy and Research Center estimated that almost 10 million people were victims of identity theft in 2008, a 22% increase over 2007.
So how can you protect yourself? The first step in avoiding this unsettling crime is to gain an understanding of identity theft. But it is also very important to put protective measures in place, just in case you become a victim.
When an individual wrongfully acquires another person's private information, and fraudulently uses the information for economic gain at the victim's expense, a case of identity theft occurs. An identity thief searches for personal data such as bank account information, social security numbers, or credit card data. The thief uses the information to deplete bank accounts, obtain bank loans, or make thousands of dollars of charges on a victim's credit card. The result can be that victims are left with significant debt, blemished reputations, and scarred credit histories for many years to come.
To avoid this pain, first and foremost use good common sense. Guard all of your personal information, including bank and credit card account numbers and your social security number. Never leave bank deposit tickets lying around for someone else to find. Shred credit card receipts and applications before throwing them away. Protect your driver's license, and don't make obvious choices when setting up account PINs and ID numbers.
As an added safeguard, you may want to consider the possibility of setting up identity theft insurance coverage. If you do become a victim of this insidious crime, this coverage reimburses you for costs incurred to restore your identity and repair your personal credit report. Evaluate your homeowner's insurance policy, as some insurance companies include identity theft protection in your policy. Other insurance companies, like Allstate sell identity theft coverage as an endorsement to homeowner's or renter's insurance policies for an additional $40 per year, or may even market the protection as a stand-alone policy.
If you do become a victim of identity theft, call the bank, credit card company, or agency that is affected by the questionable transaction as soon as possible. Make certain they are aware of exactly what is going on, and that they have taken steps to prevent any further unwanted transactions. Finally, report the crime to the appropriate authorities, and file a report with the local police department and the Federal Trade Commission. A copy of the police report will be necessary to file the claim under your insurance policy for both reimbursement of funds and credit repair.
Need information about ID Theft coverage thru Allstate, please call Khalid Umerani, Agent, NOVA Insurance Group, South Riding, VA (Tel: 703.263.7800)
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Men vs. Women Drivers
Men vs. Women Drivers: Does Gender Really Matter on the Road?
For years, insurance companies have regularly charged female drivers less for auto insurance coverage than males. Insurance companies claim it’s because women drivers statistically have fewer car crashes. However, no studies have actually proven that there is a difference between men and women’s driving abilities.
Looking at the stats
Over the past ten years or so, male fatalities have outnumbered female fatalities 2-to-1 in car accidents, according to the National Highway Traffic Safety Administration. Men also have a higher rate of collisions that result in just property damage—also a 2-to-1 ratio.
According to the American Insurance Association, men are involved in 50 percent more fatal crashes per 100 million miles driven than females. This divergence is most prominent in drivers in their late teens and early to mid-20’s.
Examining the male crash phenomena
No one can pinpoint exactly why men have more car crashes than women. Many researchers argue nature versus nurture theories. Some researchers blame natural male biochemicals—one study claims that high testosterone levels in men causes them to take more risks behind the wheel. On the other hand, some researchers say that men are products of their culture. These experts say society has taught males to act more competitively in general, which makes them more aggressive drivers on the road. Other studies point out that women are better multi-taskers, which makes them better drivers.
However, many people simply don’t buy into any of these studies. Skeptics say a person’s gender simply cannot predict whether or not they are a safe driver. The National Organization for Women’s Insurance Project points out that men simply have more crashes than women because they drive more miles each year. Because men are on the road more, they expose themselves to a more risk.
The gap narrows
Recent statistics show that the gap is narrowing between men and women crashes. Between 1975 and 2003, female fatalities in car accidents increased 14 percent, while male fatalities dropped by 11 percent.
Some experts say this is simply because women are on the road more these days. On top of that, an increasing number of women are becoming more aggressive on the road. If this trend continues, experts say insurance companies may soon stop taking gender into account as they calculate drivers’ insurance premiums.
A few states lead the way
Despite the latest research, insurance companies in most states continue to use gender as a factor in calculating premiums. Of course, insurers also take other things into account, including annual mileage, the type of car, the person’s previous driving record and even their Zip code (whether they live in the city, the suburbs or a rural area).
However, a handful of states, including California, Connecticut, North Carolina and Pennsylvania, no longer allow insurance companies to use gender as a factor to assess risk and calculate premiums.
Please call Khalid Umerani, Agent (NOVA Insurance Group) at 703-263-7800 to get competitive car insurance quotes, in the Washington DC metro area.
www.south-riding-insurance.comwww.loudoun-insurance.comLabels: 20152 Auto Insurance, 20152 Car Insurance, Auto Insurance in Chantilly / South Riding, Car Insurance in 20151
In the World of Cars, Is Bigger Always Safer?
In the World of Cars, Is Bigger Always Safer?
When it comes to cars, is it true that bigger is always better...and safer? Based on an April 2009 study by the Insurance Institute for Highway Safety (IIHS), the answer to this longstanding question is a resounding yes. The study shows that larger, heavy-duty vehicles are fundamentally safer than smaller, lightweight cars.
Considering recent announcements, this revelation is more important than ever. This May, President Obama unveiled his massive fuel efficiency plan. Under the new standards, auto makers will be ordered to increase the fuel economy of vehicles sold in the U.S. to 35.5 miles per gallon by 2016. This means manufacturers will have to produce smaller, more lightweight, fuel-efficient vehicles.
While supporters of the plan say it will help cut our nation's greenhouse-gas emissions, opponents argue that the mandate will result in thousands more Americans dying or becoming seriously injured in auto accidents. Critics say that the number of auto fatalities could swell if hordes of "unsafe" subcompacts hit the road in coming years.
The physics behind car crashes
Why are bigger cars intrinsically safer? It all comes down to physics. According to the IIHS report, "These tests are about the physics of car crashes, which dictate that very small cars generally can't protect people in crashes as well as bigger, heavier models."
Based on the law of physics, when a large object crashes into a smaller object, the larger object creates a greater impact. This rule holds true for car crashes, as confirmed by the IIHS study.
For this study, the IIHS conducted three front-to-front crash tests, each involving a microcar or minicar colliding with a midsize model from the same manufacturer. The Institute did not use SUVs, pickup trucks or even large cars to pair with the micros and minis in the tests. "The choice of midsize cars reveals how much influence some extra size and weight can have on crash outcomes," the report explains.
Instead, the Institute chose pairs of 2009 models from Daimler, Honda and Toyota because these auto makers have micro and mini models that have earned good frontal crash ratings in barrier tests.
According to the final IIIHS report, "In a collision involving two vehicles that differ in size and weight, the people in the smaller, lighter vehicle will be at a disadvantage. The bigger, heavier vehicle will push the smaller, lighter one backward during the impact. This means there will be less force on the occupants of the heavier vehicle and more on the people in the lighter vehicle. Greater force means greater risk, so the likelihood of injury goes up in the smaller, lighter vehicle."
Real-world car crash statistics confirm this theory. In 2007, the death rate in 1 to 3-year-old minicars involved in multiple-vehicle crashes was nearly twice as high as the rate in large cars.
Good engineering makes a difference
Despite the recent IIHS study, some experts point out that vehicle safety doesn't come down to car size alone. They say that quality engineering and design are more important to vehicle safety than the actual car size. Added safety features, such as front and side airbags, seatbelts with pre-tensioners and force-limiters, rollover prevention mechanisms, head restraints and crash avoidance systems can also greatly improve a vehicle's safety.
Experts also say the size of a vehicle's front end can determine how the car fares in crash. If a lighter vehicle is engineered with a large front end, creating a bigger space between the front of the vehicle and the front seat, the car would be much safer. That's because a car with a large "crush space" decreases the severity of an impact and reduces the force to the car's occupants.
Plus, auto makers can also reduce a vehicle's weight without losing too much structural integrity by using aluminum, titanium or plastic. Unfortunately, most manufacturers steer clear of these materials because they carry a high price tag.
Any questions about Car Insurance, call Khalid Umerani, Agent, NOVA Insurance Group in Chantilly / South Riding, VA at 703.263.7800
www.south-riding-insurance.comwww.loudoun-insurance.comLabels: Chantilly Car Insurance, Fairfax Auto Insurance, loudoun car insurance, South Riding auto insurance
Personal Umbrella Policies
When It Rains, It Pours: Why You Need a Personal Umbrella Policy
In recent years, our society has become what some people call "lawsuit happy." In other words, an increasing number of people are filing lawsuits for everything from emotional injury to property damage-and they're suing for larger amounts than ever before. If someone were to file a lawsuit against you, you could end up losing hundreds of thousands of dollars or more, even if you won.
While you may have some personal liability coverage through your homeowner's or auto insurance policy, it's probably not nearly enough to cover a major lawsuit. Fortunately, you can further protect yourself with what's known as an umbrella policy. This type of policy offers a higher level of liability coverage and ensures that you and your family will be protected if someone sues you for damages.
Read on to learn more about these valuable policies:
Umbrella policies: A liability coverage "extension"
When it comes to lawsuits, the more assets you own, the more you stand to lose. A personal umbrella liability policy can protect you from these potentially devastating losses. These policies act as an extension to the current liability protection you probably have through your homeowner's or auto insurance policy.
Umbrella policies are typically sold in million dollar increments, and you can obtain a policy once your home and auto insurance policies meet a minimum "attachment point"-typically a liability limit of $250,000 or $500,000. Here in Loudoun County, Virginia, Agent Khalid Umerani often sells Umbrella policy limits of $2 million & $3 million.
What does it cover?
Most umbrella policies covers the following:
Personal injury, including false arrest, mental anguish, malicious prosecution, libel, slander, defamation of character, wrongful entry or eviction, negligent infliction of emotional distress or invasion of privacy.
Bodily injury, such as physical injury or death. In some jurisdictions, this also includes emotional injury.
Property damage, including destruction of the property of others, cost of recreation and loss of use. However, it does not cover damages done to your own property.
Defense coverage, including groundless, false and fraudulent suits, bail bond costs, loss of earning and other "reasonable" expenses.
Of course, it's probably easier to understand exactly what an umbrella policy covers by putting it into real-life terms. Here are a few examples of what this type of policy could cover:
A deliveryman is hauling your new washing machine into your home when he trips on your door mat, falls and breaks his neck. Your umbrella policy would likely cover the hundreds of thousands of dollars worth of damages.
You're driving down the road when an important corporate CEO steps into the crosswalk in front of your car. He sues you for millions of dollars in medical costs, lost earning and damages. Your umbrella policy can cover you for these damages.
Your daughter invites a friend over to play on her swing set. Her friend falls off the slide and suffers from serious injuries. When her parents sue you, your umbrella policy will cover the medical costs.
How much does is it cost?
The price of an umbrella policy depends on how much coverage you want, the number of properties you rent or own and the number of automobiles or watercraft you own. The cost associated with cars and watercraft are much higher than those associated with properties.
Let's say you are single, you own one home and one car, and you want to purchase a $5 million umbrella policy. You'll probably pay somewhere between $270 and $550 a year. On the other hand, if you are married with two children, you own two homes, a rental property and three cars, and you want a $10 million umbrella, you'll probably pay a good deal more-anywhere between $970 or $1,750 a year.
Call us here at NOVA Insurance Group, South Riding, VA (Loudoun County) to discuss whether or not an umbrella policy is right for you. In the long run, by paying a few hundred dollars per year, you could save millions. We can also be reached via our two websites:
www.south-riding-insurance.comwww.loudoun-insurance.comLabels: Personal Liability Insurance Fairfax / Loudoun Counties, Personal Umbrella Policy in South Riding / Chantilly, South Riding Insurance
