A compilation of photos from claims adjusters playing to Randy Bachman’s “Highway”

Earlier this year, the agency’s eight-member Special Investigations Unit began operations following the 2006 Legislature’s establishment of a dedicated fraud unit to investigate and prosecute organized insurance fraud. Specifically, the newly appointed advisory board is charged with advising the Insurance Commissioner and the Legislature on the unit’s effectiveness, funding, use of resources, staffing and other issues in the battle against insurance fraud.

The National Insurance Crime Bureau estimates that fraud adds $200 to $300 to the typical Washington household’s annual insurance costs. A cost, Kreidler pointed out, that is ultimately paid by law-abiding insurance policyholders.

The new advisory board includes representatives from the insurance industry, consumers, the National Insurance Crime Bureau, county prosecutors and law enforcement.

Members include:

• David Lyons, State Farm Insurance, (industry) two-year term
• Glenn Kaleta, Safeco Insurance, (industry) four-year term
• John Tolton, Regence Group, (industry) one-year term
• Janet Paulson, Pemco, (industry) three-year term
• Bill Baldwin, Insurance Brokers & Agents of the West, (industry) three-year term
• Bill LaBorde, Washington State Public Interest Research Group, (consumer) three-year term
• Kent Davis, Law Firm Technology Specialists, (consumer) one-year term
• Dana McDonald, National Insurance Crime Bureau, two-year term
• Joe Wheeler, Thurston County Prosecutor’s Office (prosecutor) four-year-term
• Steve Boyer, Kitsap County Sheriff’s Office (law enforcement) four-year term

The advisory board will meet at least twice a year, with the first meeting scheduled for June.

Visit the Special Investigation Unit’s Web site.

Unitrin Direct, the direct marketing arm of Unitrin, Inc., has become the first auto insurance company to ‘build’ in Second Life. Their virtual skyscraper is modelled on the Unitrin Direct’s Chicago-based headquarter building. Rather than locate their building on an island, Unitrin chose to build in an ‘busy’ part of Second Life (probably because who would choose to visit an insurance company). Once inside the lobby, you can get a real-world auto insurance quote. Eventually real Unitrin employees will staff the lobby to talk to you about your insurance and answer your questions.

VISTA, Calif., Feb. 21, 2007 — PR NewsWire — With today’s opening of its cyber skyscraper, Unitrin Direct has become the first auto insurance company to own a virtual office building in Second Life, the popular online 3D world.

“Unitrin Direct takes pride in using the latest technology to offer outstanding auto coverage at a great value, so having a home base in Second Life is a perfect fit,” says Brian Crumbaker, senior vice president, operations and claims. “This is a fun way for us to reach out to our customers.”

To visit the Unitrin Direct cyber-scraper, where customers can shop for auto insurance and visit with other Unitrin customers, go to http://www.secondlife.com/ and sign up for a free membership. From there you can create and name a personal avatar, and then you can walk, drive or even fly — yes, your avatar flies — to the Unitrin Direct building, located just 30 meters from the well-trafficked Freebie Warehouse. Once visitors enter the Unitrin Direct lobby, they can get an instant auto insurance quote by simply typing in their zip code and answering a few questions. Average annual savings for Unitrin Direct customers is $303, which is L$81,810 or Linden Dollars, the official currency of Second Life.

“This is a fast and easy way for Second Life residents to get a free quote and compare Unitrin Direct’s affordable rates on our dependable car insurance,” says Tom Mercer, vice president, marketing. “We’re excited to offer a new way to introduce customers to our direct business model, which allows us to reduce overhead and pass on the savings to consumers while still providing first-class service.”

Visitors to the Unitrin Direct online office will be offered a free cyber souvenir: a miniature of the skyscraper that can be taken and placed on any land they own in Second Life. Like the big building, which is a replica of Unitrin Direct’s Chicago-based headquarters, the miniature is equipped to provide instant car insurance quotes.

Washington law offers very few remedies for the families of unmarried adults. And, as a result, does very little to deter negligent and reckless behavior on either an individual or corporate level.

Not only does Washington law fail to provide for punitive damages, it fails to impose any real consequences on those who–through their negligence or recklessness–cause the death of an unmarried adult. This combination of factors gives rise to the unfortunate reality that–as I have heard it expressed–it is cheaper to kill someone than to hurt them. At least in Washington.

So, in Washington state, those unmarried and over 21 are not worth as much as the rest of citizens of the state.

An SR-22 is simply a special form that the insurance company files with the Department of Motor Vehicles (DMV) stating that auto liability insurance is in force for a particular individual.

Typically the state requires an SR-22 when an individual is convicted of certain infractions such as a DUI/DWI or felony. Some states require an SR-22 if you have been convicted of driving without insurance.

Each state has different variations of this form and different requirements. The SR-22 must be filed with the DMV for the state in which you received your conviction, even if you live or move to a different state.

1. LOSS VALUATION The Personal Auto Policy (PAP) covers the lesser of the “actual cash value” of the vehicle or the amount “necessary” to repair or replace the damaged property. The rental agreement may very well contractually obligate the insured to reimburse the lessor for the “full value” of the vehicle. Under most PAP’s, the “betterment” clause may result in the insured being significantly underinsured relative to his/her obligations under the rental agreement.

2. LOSS SETTLEMENT As implied above, there may very well be disagreement over the value of the vehicle or the amount charged for labor and materials to repair the property depending on the PAP edition, the Appraisal clause may be invoked with its accompanying costs. More importantly, the PAP insurer has the right to “… inspect and appraise the damaged property before its repair or disposal” the rental company may choose to effect the repairs immediately, potentially resulting in a lack of PAP coverage because of failure to comply with the condition cited above.

3. LOSS PAYMENT The rental agreement may require immediate reimbursement for damages and it is not uncommon for the lessor to charge the insured’s credit card. This can create a significant debt, “max” out the card’s credit limit (perhaps shortening a vacation or business trip), result in litigation, etc.

4. LOSS DAMAGE WAIVERS (LDW) The rental agreement may require reimbursement for more than collision some include theft under certain circumstances and others may make the insured responsible for any “loss” in value beyond normal wear and tear. Obviously, the PAP must include collision coverage on at least one insured owned vehicle for coverage to transfer to the nonowned auto if the rental agreement includes a Loss (not just collision) Damage Waiver (LDW), the policy must also include comprehensive coverage to adequately protect the insured.

5. INDIRECT LOSSES The insured most likely will be responsible for the lessor’s loss of rental income on the damaged unit. The PAP has, at best, daily and maximum caps for this indirect loss and, depending on the edition date, an unendorsed policy may pay only for loss of income resulting from theft.

6. ADMINISTRATIVE EXPENSES The rental contract may make the insured liable for various “administrative” or loss-related expenses such as towing (e.g., one insured was charged for a 230-mile tow), appraisal, claims adjustment, etc. None of these expenses are covered by most PAP’s, although the 1998 ISO PAP has added some coverage for these expenses.

7. OTHER INSURANCE The PAP says it is excess over (1) any coverage provided by the owner of the auto (does “coverage” include self-insured funds?), (2) any other applicable physical damage insurance, and (3) any other source of recovery applicable to the loss travel policies, credit card coverages, etc. The potential controversy over who pays what is obvious and can result in litigation. In addition, keep in mind that many states (e.g., MD, MN, NY, TN, etc.) have statutes, proprietary forms, and/or case law precedents that may govern this and other rental car exposures.

8. EXCLUDED VEHICLES & TERRITORIES The PAP normally does not provide physical damage coverage for motorcycles or other non-auto/pickup/van vehicles (e.g., motorhomes) and use of covered vehicles is limited to the U.S., its territories and possessions, Puerto Rico, and Canada (the rental agreement may also exclude operation outside a specific geographical area). In addition, if the insured is renting a trailer (U-Haul, camper trailer, etc., coverage is limited to $500. The insured usually has no choice but to rely on the CDW or LDW for coverage.

9. EXCLUDED USES & DRIVERS The PAP may have limitations on use of vehicles that are not otherwise excluded by the rental agreement CDW or LDW for example, the ISO form provides no physical damage coverage for the business use of nonowned pickup trucks or vans (though this has been changed in the 1998 ISO PAP edition for coverages other than Medical Payments). Also, the PAP may include an exclusionary endorsement for certain individuals or may apply only to designated individuals the CDW will probably also only apply to designated individuals, but operators for which no PAP coverage is available may be afforded protection under the rental agreement by designating them as such.

10. ADDITIONAL AND/OR FUTURE COSTS The PAP will most certainly include a deductible in the range of $100-$500 or more. In addition, payment for damage to a rental car may result in a significant premium increase (if not nonrenewal) via surcharges or loss of credits.

Although most CDW/LDW fees are considered outrageous, if not unconscionable, your best advice is to purchase the CDW/LDW for short-term rentals.

Copyright 1996-1998 by the Independent Insurance Agents of Tennessee, Inc. All rights reserved.
Written by William C. Wilson, Jr., CPCU, ARM, AIM, AAM
Web Site: http://brightpath.hypermart.net/
E-mail address: QuoteNotes@aol.com