The ERISA bond coverage is usually determined as follows:

• Each person having access to funds of an employer-sponsored retirement plan must be covered for at least 10% of the amount they handled or had access to in the previous year.
• In most cases, coverage cannot be less than $1,000 or more than $500,000.
• The maximum coverage required extends to $1 million when the employer-sponsored plan includes securities issued by the employer.

It is unlawful for any person to “receive, handle, disburse, or otherwise exercise custody or control of plan funds (stocks, bonds, mutual funds, or ETFs) or property (land, buildings, mortgages) without being properly bonded.

ERISA bonds must be issued by an independent insurance company and acquired through an independent insurance broker.

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Here are some of the reasons why these changes are happening:

• Significant reinsurance pricing increases due to the following:
  1. Global catastrophe activity, including floods, earthquakes, wildfires, windstorms, etc.
  2. Severe losses from Hurricanes Irma and Michael
  3. Reduction in overall reinsurance capital due to COVID
  4. Trapped capital in the “retro” reinsurance markets
     A recent report from Aon Benfield estimated that “around $15B of collateral remains trapped in the wake of recent major natural catastrophe events. The reduced amount of capacity available for deployment is impacting the retrocessional market”. Retrocession, or “retro”, reinsurance refers to reinsurance for reinsurers. Trapped collateral and capital from insurance-linked securities (ILS) funds and other third-party capital backed reinsurance entities was expected to be a key catalyst for 2020 renewals. In the end, this lack of available capital proved to be a rate driver for the primary markets as evidenced in part by the rate filings occurring across the board for insurers.
  5. Social inflation and roof claims
     1. Increased litigation, broader definitions of liability and insured behavior.
     2. The feeling that someone needs to pay when there is some kind of damage or injury, regardless of negligence.
     3. Weather claims on rooves which are simply aged or worn. As a result, carriers are refusing to insure rooves older than ten years. Major rate increases on older rooves and coverage limitations. Florida is among the top five states for this type of fraud.

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The following is an attempt to summarize 10 of the top questions you might have about homeowner’s insurance but were afraid to ask. We can go into much more depth if you wish. But this is a beginning:

1. What is homeowner’s insurance?

   Homeowners insurance is a package policy of property and liability insurance. It is designed primarily to cover your home and the things inside it—the things that can fall out if you tip your home upside down—in the event of some problems. It is also designed to protect you if you are sued for negligence and causing injury or property damage to another.

2. What perils are covered by homeowner’s insurance?

   Homeowner’s insurance commonly covers these perils: fire, windstorm, hail, lightning, smoke, explosion, theft, vandalism, riot and vehicle collision. It commonly excludes — i.e. doesn’t cover– earthquakes, flood, power failure, war, nuclear explosion, neglect, ordinance of law (locally forced repairs) or intentional damage.

3. How do I insure against risks that the homeowner’s policy doesn’t cover?

   If you live in an area that is prone to flood or earthquake, you can purchase a separate policy to cover these perils. In fact, a mortgagee will probably require you to purchase flood or earthquake insurance if you live in an area prone to them.

4. Is homeowner’s insurance required by law?

   No, it is not. Unlike automobile insurance, you are not required to buy homeowner’s insurance. If you have a mortgage, the mortgagee will most likely require it. The bank doesn’t want to lose its investment.
   Homes are expensive and perils such as fire, windstorm, or flooding doen’t always discriminate based on the value of the home. Most homeowners are not in a position to self-insure if they have a catastrophic loss, like a fire, wind or a flood.

5. Will homeowner’s insurance replace my home if it is destroyed by, for example, a wildfire?

   Depending on your coverage and the amount of insurance you purchased, the homeowner’s policy will go a long way toward making you whole. It will even pay for “loss of use”, i.e., for you to secure temporary housing while your home is being repaired. As we like to say: “No one regretted having too much insurance at the time of loss”.

6. What are the different types of homeowner’s insurance?

   There are main types of homeowner’s policies: A replacement cost homeowners insurance policy, the better of the two, pays claims based on the cost of rebuilding or repairing your home with new like kind and quality at the time it is damaged or destroyed. An actual cash value homeowner’s insurance policy, which is less expensive, pays claims after accounting for any depreciation in your home’s value.

7. How do I determine how much homeowner’s insurance I need?

   The answer to this question really depends on the size and condition of your home (replacement value) and the value of your contents. The standard homeowner’s policy covers personal belongings at 50% of the limit of your dwelling coverage. Some valuable items, like jewelry and fine arts, should be insured separately.

8. How does liability coverage work?

   The liability section of the homeowner’s policy protects you if you are liable for someone’s injuries at or around your home. An example is if they slip and break a leg on a broken tile. The liability portion of the homeowner’s policy also covers property damage caused by you or a member of your household. The minimum limit is usually $100,000, but we recommend at least $300,000 to adequately protect your assets in the event of a loss.

9. How can I lower the cost of homeowner’s insurance?

   You can opt for a higher deductible — that’s the amount of money you’ll have to pay out of pocket before your insurance kicks in. But you should also ask if you qualify for any discounts, such as alarm system credits or wind mitigation credits. Be sure that the values on your home and your contents are accurate. Remember that we are talking about replacement value and not market value (including the value of land).

10. What is a Personal Umbrella Policy?

    Umbrella insurance policies are designed to give you extra liability coverage above and beyond that of your auto and homeowner’s policies. They are especially valuable for someone with substantial assets and/or someone with teenage drivers. Specific levels of underlying insurance are required. Uninsured Motorist Umbrella coverage should be included.

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If you have any questions or need help navigating the complex world of medical malpractice insurance in Florida, please call Gracey-Backer, Inc. at 800-272-6055.

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• The type of work the employees do;
• The gross payroll for all employees, including salaries, wages, bonuses, commissions and draws against commissions, plus holiday, vacation and sick pay;
• The state where the business is located;

Premiums for Florida workers’ compensation insurance are calculated by the following formula:
Payroll (per $100) X Classification Rate X Experience Modifier = Premium

Sole proprietors are excluded from Florida Workers’ Compensation Insurance coverage unless they request to be included. Corporate officers are automatically covered by the Florida Workers’ Compensation policy unless they request to be excluded.

The simplest way to calculate the annual premium for Florida Workers’ Compensation is to multiply the annual payroll by the rate classification.

The 2017 Florida Workers Compensation Classification Rate for a physician, oral surgeon or dentist in Florida is $.48 per $100 of payroll.

As an aside, Florida Workers’ Compensation Insurance rates increased by 14.5% in December 2016, in response to the overturning of two court rulings:

The Florida Supreme Court ruling on April 28, 2016 stated that the attorney fee schedule that was passed in 2009 was unconstitutional as a violation of due process in the case of Marvin Castellanos v. Next Door Company, et. al.

Also, on June 9, 2016, The Florida Supreme Court issued an opinion in the case of Bradley Westphal vs. City of St. Petersburg, etc, et al declaring the 104-week limitation on temporary total disability benefits unconstitutional.

Because Gracey-Backer, Inc. insures over 2,000 physicians, surgeons, oral surgeons, and dentists in Florida, we were able to use that leverage as bargaining power and we created an exclusive workers’ compensation insurance dividend program. Our exclusive workers compensation insurance dividend program for Florida healthcare providers offers a guaranteed 10% dividend and up to a potential 30% dividend on your Workers’ Compensation Insurance, based on your individual loss experience. You are not grouped with other practices, and therefore are not hurt by their claims. That’s 30% that goes right to your bottom line.

Call us today to learn more about Workers’ Compensation Insurance for Florida physicians, surgeons, oral surgeons and dentists.

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The answer is not as simple as it seems. It depends on the source of the damage. Homeowners insurance policies do cover water damage but are very specific on the kinds and types of water damage that are covered.

Sudden and Accidental: Covered water damage is defined under most homeowners’ insurance policies as sudden and accidental discharge of water. If, for instance, you inadvertently leave the handle of the toilet down while you are away for the weekend, and water overflows onto your floor, this loss is probably covered. If a water pipe breaks under your floor and, a few weeks later, you find the floor buckling, the homeowners’ policy will likely respond. The homeowners’ insurance policy generally pays for damage from rain coming through a hole in the roof or a broken window if the hole is caused by violent winds.

There are cases where there is no coverage. These are as follows:

• Seepage: If the water seeped into the floor over time from an unresolved maintenance problem, such as a damaged plumbing fixture or a leaking faucet, there is no coverage on the homeowners’ insurance policy.
• Replacing or repairing the source of the water damage: Most insurance policies will not cover the source of the water damage. So, while your policy may cover the cost of tearing out and replacing that damaged floor, you shouldn’t expect it to cover the cost of replacing your broken dishwasher, washing machine, or pipe.
• Water backup from an outside sewer or drain: You also will not typically be covered by a traditional Florida homeowners’ insurance policy if water backs into your home through an outside sewer or drain. You may, however, be able to purchase additional sewer or water backup coverage (typically $5,000-$10,000 of coverage) that may help provide protection in case of such an event.
• Flood: No type of flood damage, no matter the source of the water, is covered by standard Florida homeowners’ insurance policies. Flooding, for example, can occur from heavy rains, over-saturated ground, overflowing or surging bodies of water such as rivers, ponds, lakes and oceans. Flooding can be thought of as rising waters coming from the outside into your home. In these cases, you will need to purchase flood insurance to cover damage.

The best thing one can do when it comes to water damage and their homeowner’s insurance is talk with us. Each homeowner’s insurance company is a little different and coverage can vary. The last thing a homeowner wants is to discover their water damage claim denied after suffering a water damage loss.

Some of the insurers that cater to high valued homes offer broader coverage for backup of sewers and drains. For instance, Chubb, AIG and PURE all cover backup of sewers and drains with no limitation.

For more information on this confusing subject, please call me at 1-800-272-6055 X118.

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Umbrella insurance is a form of liability insurance that will supplement your basic liability policies, such as your auto, home or renters insurance. An umbrella liability policy covers a much higher limit and goes above and beyond your primary policies claims directly relating to your home and auto.

The main purpose of your umbrella policy is to protect your assets from an unforeseen event, such as a tragic accident in which you are held responsible for damages or bodily injuries. If another party files a lawsuit against you, your umbrella coverage will pay for the damages you’re legally responsible for up to the policy limit. Umbrella policies also provide a broader form of coverage and can help cover legal fees, false arrest, libel, and slander.

How Does Umbrella Insurance Work?

An umbrella policy only pays once your primary liability limits have been exhausted. The claim will be made against you, the policyholder, on behalf of the wronged party. Then your insurance company may pay the settlement amount up to the limits of your coverage. (Most umbrella insurers require underlying liability limits of $300,000 or $500,000.) If the settlement amount exceeds your coverage limits, you are responsible for paying the remaining amount out of pocket.

How Much Umbrella Insurance Should I Carry?

When choosing your coverage limits, consider three things:

1. The risks you may face. Consider risks as a homeowner or renter, the risk of causing an accident during your work commute, and any potentially dangerous activities you participate in that could put those around you at risk. High profile professionals might need more coverage, even though they do not have significant assets, as they are considered a target for lawsuits. Similarly, persons with lavish lifestyles and expensive possessions should purchase higher limits, as they too are targets.
2. Youthful Drivers. If you have teenage drivers in your household, you are at greater risk for a liability claim. Studies suggest that two-thirds of drivers between the ages of nineteen and twenty-nine text and drive while over eighty percent use their cell phone while driving.
3. The value of your assets. These include properties, possessions, stocks, bonds, savings and retirement funds. The more assets you have to protect, the higher the umbrella policy limit you should consider. In a lawsuit, lawyers will aim for your available assets but probably settle for a comparable insurance amount. In this way, you are not dragged into court, where the results of a jury settlement are problematic.
4. The potential loss of future income. Because liability lawsuits can result in loss of both current assets and future income, even those with few assets to protect may want to consider. The umbrella policy will also pay for defense costs, which can be considerable, even if you win a judgment.

How Much Does Umbrella Insurance Cost?

Umbrella insurance is very inexpensive, because the odds of it ever paying out are quite small. Most claims are paid by your primary auto and homeowners policies. Umbrella policies provide peace of mind for a reasonable cost.

To receive a firm quote on personal umbrella coverage, please call me at 1-800-272-6055 X118.

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• • Characteristics of the automobile – Age, manufacturer, value, safety features (anti-lock brakes, anti-theft devices, adaptive cruise control, lane departure feature) all matter to insurance companies.
• • The coverage selected – Liability limits, uninsured motorist, collision, comprehensive coverages vary significantly depending on your willingness to take on more risk.
• • Deductible you select – Higher deductibles mean that the driver pays more to repair his vehicle before the insurance kicks in, thus reducing your premium.
• • Profile of the driver – Age, gender, marital status, place of residence, driving record all help determine your ultimate premium.
• • Usage of the car – Do you commute to work, use your vehicle for business or pleasure only?

Before the dawn of advanced technology, determining an auto rate was fairly simple: look at the prospect’s age, driving record, location and type of vehicle. Today, because of advances in data technology, automobile insurance companies can pinpoint more exactly how much to charge based on our individual risk profile. The following are individual risk factors that will determine if you are charged more or less money by your auto insurance company:

1. Credit Rating – Study after study indicates that a person’s credit rating can determine their propensity to have an accident. The best automobile insurance companies insure drivers with the best credit scores.
2. Payment History – Similar to your credit history, if you pay your automobile premiums on time, you may be able to reduce your premium.
3. Age – Around 30% of all vehicle injuries in the U.S. are caused by drivers aged 15-24. Those in the 16-19 group are three times as likely as those over age 20 to be in a fatal car crash. Motor vehicle accidents are the leading cause of death for teenagers in the country. For this reason, drivers age 16-19 pay 50% more on average for automobile insurance than drivers aged 20-24. As drivers age, their rates typically decline until, by age 55, drivers can enjoy senior discounts.
4. Driving Record – Driving history has shown to be an accurate indicator of future claims. Drivers with a clean driving record enjoy discounts not granted to those with tickets or accidents.
5. Gender – Men, especially young ones, are much more likely to be involved in automobile accidents than women, regardless of their age. For this reason, men pay significantly more for their automobile insurance over the years than women.
6. Nature of Employment – Drivers who use their cars for business, like real estate salespeople, pay higher rates than drivers who work from home. While it is difficult to quantify, drivers who work in high stress jobs for long hours, like doctors, tend to have more accidents than those in low stress occupations.
7. Vehicle type – Cars that are more expensive to repair or which are most likely to be stolen carry higher rates than others. Some high performance automobiles are very difficult and expensive to insure. Cars with extra safety features may be subject to additional credits.
8. Location of your home – Drivers who live in high risk urban areas of the country and those who live in high-crime neighborhoods where their vehicles are more likely to be stolen or vandalized, pay higher rates than others.
9. Marital Status – Married people tend to be better drivers than singles and pay lower premiums. In many cases, the multi-car discount kicks in, thus reducing your premium.

Armed with this information, there are many ways you can reduce your automobile insurance rates by improving your risk profile. There are no quick-fix solutions but rather improving your risk profile is a long-term operation.
Talk with us to understand the wide array of options for automobile insurance. You are very likely subject to credits about which you were unaware. We represent many different insurance companies and can design a custom-made automobile insurance policy to fit your specific needs.

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According to the survey, at least 73 percent of respondents have not purchased flood insurance, to protect themselves against rising water or flooding, including the common problem of seepage of underground water into their homes. Many think a flood will be covered by their homeowner’s policy. According to FEMA, floods are the leading cause of loss in the United States. Most flood losses occur in areas outside the high-risk flood zones.

More than 40 percent of respondents did not know if they have coverage that will fully replace their furnishings and their home in the event of a covered loss (replacement cost coverage) or if they had actual cash value coverage, which takes depreciation of the building and personal property into consideration. Many agents sell actual cash value policies as a way to save the consumer premium dollars, much to the chagrin of the policyholder at the time of loss.

Most respondents to the survey were not able to fully support themselves for up to three months if they were out of their homes as the result of a covered loss. They didn’t realize that a standard homeowner’s policy provides only limited protection and a flood policy provides no coverage for these expenses, which, especially during the season, can be considerable.

The survey was conducted in August 2016, according to Insurance Journal, September 6, 2016, Vlume 94, no. 17, page 12.

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So.. here are some tips for avoiding house fires at the holidays.
One out of every three home Christmas tree fires is caused by electrical problems. Our fire began when some twinkling lights came in contact with gold mesh that was draped over a manger scene—all placed on a wicker table that burst into flames.

According to Today.com, “most house fires happen during the holidays, and Christmas trees are one of the biggest reasons“. Even more frightening is the fact that, once Christmas trees ignite, they can explode into flames in seconds. Be sure you pick a Christmas tree that is green and whose needles do not fall off easily, and then water your tree daily. Brown needles are highly flammable.

Place the tree at least three feet away from any heat source, like fireplaces, radiators, candles, heat vents or lights. Make sure the tree is not blocking an exit. This is especially important for older people, who might have trouble navigating an escape.

When lighting your tree, only use lights that have the label of a recognized testing laboratory. Some lights are appropriate for inside use and some should only be used outside. If the light strand has worn or frayed cords or loose bulb connections, replace the string. Do not connect too many light strands together. NEVER use candles as lights on the tree.

Be sure to turn your tree lights off when you leave your house or retire for the night. If we had done this simple step, we would have avoided our fire.

With outside lights, be careful with the plug-in cords. These cords are susceptible to water and can shock you or catch fire. In the same vein, remember not to use indoor light bulbs outside your home or outside light bulbs inside.

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