Construction Vehicle Classification Can Affect Your Wallet

Several factors influence how much a contractor pays for business auto insurance. The amount of insurance bought, the firm’s loss history, employees’ driving records, the condition of the vehicles, deductible levels – all of these have a major effect on the policy premium. However, the way the insurance company classifies the vehicles also impacts the premium in very significant ways.

Under the rating rules for business auto insurance, insurance companies use three factors to classify a vehicle: Its gross vehicle weight, how the business uses it, and the normal radius of its operation. The size classifications are:

  • Light – 0 to 10,000 pounds gross vehicle weight;
  • Medium – between 10,000 and 20,000 pounds;
  • Heavy – between 20,000 and 45,000 pounds;
  • Extra-heavy – More than 45,000 pounds.

The heavier a vehicle, the higher its premium due to the increased potential for severe losses.

The use classifications relevant to contractors are:

  • Service – Vehicles used to transport the business’ personnel, tools, equipment and supplies to or from a job location. Only vehicles that the business parks at job locations for most of the working day or uses to transport supervisors between job locations get the service classification.
  • Commercial – Construction vehicles that are not eligible for the service classification.

Service vehicles, because they are parked for most of the day, qualify for a lower premium than do commercial vehicles.

The radius classifications are:

  • Local – Not regularly operated beyond a 50-mile radius from where the business garages them;
  • Intermediate – Operated within a radius of between 50 and 200 miles;
  • Long Distance – Operated within a radius of more than 200 miles.

The larger the radius, the more miles the vehicle is likely to be driven and the higher the premium.

The rules also contemplate the type of contractor that uses the vehicle, though the rating factors tend not to vary greatly from one type to another.

The rating rules have charts showing the mathematical factors that apply for different combinations of size, use and radius. The insurance company multiplies these factors by its basic premium for the vehicle. For example, the factor for liability insurance for a light service vehicle (a pickup truck) with a local radius might be 1.0. The company will take the basic premium for a truck (for example, $500) and multiply it by 1.0. Conversely, the factor for a heavy commercial vehicle (a dump truck) with a local radius might be 1.50. Multiplying this factor by the $500 basic premium produces a premium $250 higher. This vehicle is on the road more than the pickup and has the potential to cause more severe injuries and damage in an accident, so the premium is higher.

Different factors apply to the premiums for comprehensive and collision coverages, and the effect may be the opposite of that for liability coverage. For example, the factor for the pickup truck might be 1.0 but the factor for the dump truck might be only 0.80. This is because a heavier vehicle should be able to withstand a crash better and sustain less damage than the lighter one. The rules base comp and collision premiums on the original cost of the vehicle, so the dump truck’s higher initial value will offset the lower factor to some extent.

It is important that a business provide accurate information about its use of a vehicle to the insurance company. Vehicles that spend most of the day on the job site should get the lower-rated service classification. Insurance companies can verify a vehicle’s weight through independent sources and its radius by examining lists of work on hand, but they will rely on information from their agents for the use classification. The business that gives its insurance agent detailed information about all its operations is a business that will pay a premium that accurately reflects its loss potential.

Safeguarding Your Wedding Ring

Wearing a wedding ring is a tradition that dates back centuries. According to The, the custom began with the Romans, who believed that “the vein of love” in the fourth finger of the left hand traveled directly to the heart.

Today, brides and grooms still exchange rings as a symbol of love. Because your wedding ring has such deep sentimental value, you want to do all you can to take care of it. Here are some tips from

  • Protect the setting – Take your diamond off and put it in a safe place when washing dishes. Never put it near the sink because it can accidentally fall down the drain. Avoid wearing your diamond when gardening or during household repairs, since these activities might scratch the setting or damage the prongs that keep the stone secure.
  • Avoid exposing your diamond to household chemicals – Chlorine and hairspray can accumulate on the surface of a diamond and dull it. Periodic cleanings are crucial if you want to keep your diamond brilliant and prismatic.
  • Clean your diamond – Gently scrub it with a soft-bristle brush in a solution of plain alcohol diluted in warm water. Periodic ultrasonic cleanings by your local jeweler are also recommended to clean hard-to-reach areas under the settings.
  • Check the prongs – Be sure to occasionally take your diamond ring to a trusted local jeweler to check for loose prongs. They can weaken or break, even with normal wear.

Another important way to protect your wedding ring is to have adequate insurance should it be lost or stolen. Start by examining your homeowner’s or renters’ insurance. Although this policy may cover your ring if it is stolen, there may be no coverage if it is lost. Read your policy carefully, as it may have a coverage limit for certain kinds of personal property, such as your wedding ring. If the value of your ring exceeds the policy limit, or if you want to ensure that you have coverage if the ring is lost, consider purchasing a rider.

A rider is an endorsement to a homeowner’s or renter’s insurance policy that provides coverage for a particular piece of personal property. Items such as jewelry or furs whose full value is not covered under standard policies are typically covered by riders.

Typically, the additional premium required to insure a wedding ring would be approximately $1-2 per $100 of appraised value. For example, a ring appraised for $10,000 would cost about $100-200 per year to insure, but maybe slightly more in higher crime areas. To request coverage, you must have your wedding ring appraised and provide a certified copy of that appraisal to your insurer.

Using a Cell Phone While Driving Is Similar to Driving Under the Influence

A 2005 study conducted by the Insurance Institute for Highway Safety found that drivers who use cell phones while driving were four times more likely to get involved in an accident. It also concluded that accident risk wasn’t affected by whether the driver was using a hand-held phone or a hands-free phone.

New research from Carnegie Mellon University shows that just listening on a cell phone while driving is enough to distract a driver.  In this study, 29 volunteers used a driving simulator while inside an MRI brain scanner. They steered a car along a virtual winding road, driving at a high, fixed rate of speed. They were tested while driving undisturbed, and while driving and trying to decide whether a sentence they heard was true or false. The researchers measured activity in 20,000 brain locations, each about the size of a peppercorn.

After a thorough analysis of the data, the researchers were able to conclude that:

  • When the drivers were tested while listening to the sentence to see if it was true or false, they lost 37 percent of the normal activity of their brain’s parietal lobe. This is significant because this area of the brain is the one motorists rely on the most when driving. The parietal lobe assimilates all the information the body receives from the senses, and uses it to determine how near/far perceived objects are. There was also a decrease in the activity of the occipital lobe, which assimilates visual information.

When the drivers were tested while listening, they lost their ability to control the car. They not only were unable to stay in their lane, but they frequently hit objects such as guardrails. These are the kinds of driving errors most closely associated with motorists who drive while under the influence of alcohol.

Make MVR Checks Part of Your Driver Safety Program

It is more commonplace for workers to die in an automobile crash while on the job than it is for them to be killed while working on industrial machinery or at a construction site, so says the National Institute For Occupational Health and Safety (NIOSH). In fact, this alarming statistic has been the case since 1992. NIOSH reported that roadway car crashes killed 13,337 or 22 percent of all workers between 1992 and 2001.

Driving-related fatalities continued to increase while deaths from all other occupational-related causes dropped. Driving-related deaths averaged approximately one per 100,000 full-time equivalent workers between 1992 and 2001.

With the rising death toll came rising costs. The National Safety Council reported that in 2001 and 2002, injuries arising from roadway crashes averaged $27,500 per workers’ compensation claim. They were the single most costly workers’ compensation injury claim category. Crashes also caused workers to lose more days from work than any other type of work-related injury.

If you have employees who drive, cutting the costs associated with traffic accidents is an important part of your risk management program. The most effective way to cut costs is to institute a safe driver policy, which includes checking your employees’ Motor Vehicle Records (MVR).

Every state in the U.S. maintains MVRs on all of its drivers. This is a record that typically contains information about a person’s driving history, including such information as traffic violations and arrests and convictions for driving-related incidents. Individuals can obtain copies of their own driving records for employment purposes at their local DMV office. You can also obtain a copy of the record if you have the employee sign an MVR consent form.

The most effective way to use an MVR is to make a clean driving record a condition of employment for employees with driving responsibilities. Be sure you follow through and examine a potential employee’s MVR before you make a job offer. Also determine if the applicant has a driver’s license in another state and check the MVR in that state too.

However, that shouldn’t be the only time you check MVRs. Examine those records again on an annual basis for each employee with driving responsibilities. Included in your company’s safe driver policy should be the disciplinary action that will be enforced if you find a moving violation on a driver’s record during an annual check.

Using an MVR in this manner ensures that the employee will take an active role in your company’s driver safety program. As in any risk management strategy, employee buy-in is crucial if your driver safety program is to be effective.

Learn to Safely Navigate Winter’s Driving Conditions

The hazards of the road increase in winter, as the weather becomes less predictable. To avoid these conditions, you might be able to cut down on your driving, but you probably can’t eliminate it altogether…and maybe you wouldn’t want to. Therefore, it’s essential that you take steps to lessen your risk.

As with many things in life, preparation is the key to managing winter driving hazards. The following tips can help to keep you safe on the road, regardless of the weather:

  • Check tire pressure monthly. Keep your vehicle’s tires inflated at the manufacturer’s recommended pressure for maximum performance on icy roads. It’s important that you perform a pressure check monthly because a change in temperature of 10 degrees Fahrenheit changes the tire pressure about one pound per square inch. Added benefits of keeping tires properly inflated include better gas mileage and increased tire life.
  • Have your battery checked. Cold slows down the chemical reaction in a car’s battery, which decreases its power output. In fact, starting power drops dramatically below 77 degrees Fahrenheit. Be sure your car’s battery is fully charged to compensate for the drop in output.
  • Know what your car is capable of handling. Your vehicle may have all-wheel drive, anti-lock brakes and all-weather tires. However, don’t be fooled into thinking that these features are a panacea for all the problems associated with winter driving. Becoming too complacent about the car’s ability to handle tough road conditions is a sure fire way to find yourself in a bad situation.
  • Learn to stay focused. When you drive, focus all of your attention on the road so you can anticipate hazards. Keeping your mind on the road ahead allows you to plan for areas that usually remain icy even when roads are clear, like bridges, overpasses and heavily shaded spots. The more aware you are, the better your ability to respond.
  • Exercise extra caution when necessary. Intersections with stoplights or stop signs can become deceptively treacherous when the weather is bad. Because so much traffic slides to a halt in the same location, the snow tends to become packed, and develops a slick icy surface. Drivers who spin their tires when starting up from a stopped position compound the problem. To compensate for these conditions, begin braking sooner when approaching an intersection. This will allow you more time to make necessary adjustments.
  • Plan when and how you will travel. Travel during daylight hours and wear sunglasses that provide UV protection to shield your eyes from snow and ice glare. Take the most direct route possible to your destination, and allow extra travel time in case you encounter unexpected problems.

Keep your vehicle stocked for an emergency. Be sure to have blankets and snacks in your car or truck to tide you over if you are stranded or stopped by bad road conditions.

Longevity Is Key When It Comes to Lawyer’s Professional Liability Claims

Retirement usually means not only leaving your job, but everything associated with that job. However, when a lawyer retires, this isn’t necessarily the case. Whether they are no longer practicing law, or starting an entirely new career, lawyers may find themselves haunted by liability claims arising from their past work.

For this reason, it’s important for departing lawyers to confirm that liability coverage will remain intact for past work. To accomplish this goal, you should review the partnership agreement, the firm’s professional liability insurance, and any recent claims. Keep in mind that partnership agreements and insurance coverage vary from firm to firm. When you review the agreement, you may find an absence of provisions for the firm’s ongoing indemnity or insurance obligations towards former members.

When reviewing the firm’s professional liability policy you’ll probably find that is written on a “claims made” basis. This means that coverage is provided for any claims made during the policy term, even if the events that precipitated the claim happened before the policy’s effective date. Even if your firm has a claims made policy, it can still have coverage gaps that significantly affect you once you decide to leave. For example, the insurer may have included provisions that limit or exclude coverage of the firm’s activities in certain practice areas. Or with claims made policies, if an exclusion is added in the future, it is applicable to all past and future work in that practice area.

Your policy review should also include an examination of its coverage limits. Since these limits cover all claims made and reported within the policy term, there may not be funds available to cover a retiring lawyer if the firm has already submitted a substantial number of claims or even just one large one.

The next step in your evaluation is a determination of how the policy defines “insured.” In some attorney-client relationships, a lawyer may be considered an employee or independent contractor. Under some policies, coverage for employees and independent contractors is either limited or non-existent.

You should also review the conditions regarding the firm’s responsibilities for policy renewal and reporting claims. Don’t assume that the firm will continue to operate as a going concern after you are gone, or that it will continue to renew its liability policy. In fact, in the case of smaller firms, dissolution is often the outcome after a key partner retires.

If the practice is dissolved, it is important that the firm and its former partners maintain insurance coverage. And since time is a crucial factor in a dissolution scenario when it comes to coverage, it is important that you meet as soon as possible with your insurance representative to discuss your coverage status and appropriate options.

Families Should Have an Emergency Communication Plan

Severe weather is one of the most common sources of natural disasters, and no region of the U.S. is off limits. Does your family know what they should do in the event a weather-related natural disaster strikes?

According to the Home Safety Council, fewer than 30 percent of U.S. families have created and discussed an emergency communication plan. One of the reasons that so few families have developed one is that many people believe it requires considerable time and effort.

Creating an emergency communication plan is actually easier than you may think. The first component that you should have is a corded land line phone in your home. It is the most reliable source of communication in an emergency because it will continue to operate even if the power goes out in the house.

The second component is an emergency communication card that each family member should carry at all times. The Home Safety Council recommends creating wallet-sized emergency communication cards that include space to list important phone numbers and medical information. Families should discuss how they would communicate during an emergency situation, and then record important plan information on their emergency cards.

In addition to a communication plan, the Home Safety Council offers the following recommendations:

  • Have a “Ready-to-Go-Kit” – In a duffel bag or backpack, place one gallon of water per person, non-perishable canned food, a can opener, paper plates and cups, plastic utensils, a flashlight and extra batteries, a battery-operated radio, a change of clothes for each family member, personal hygiene items, a small first-aid kit, and pet food and supplies. Keep the kit near any medications you would need to take with you in an emergency.
  • Have a “Ready-to-Stay Kit” – You may have to stay inside your home for an extended period of time, and this kit will help you survive. In a large plastic tub with a cover, or easily accessible cabinet designated for this purpose only, place three gallons of water per family member, enough non-perishable canned food and snacks for at least three days, a can opener, toilet paper, blankets, books and games to keep you busy, a flashlight and extra batteries, a battery-operated radio, a small first-aid kit, paper plates and cups, plastic utensils, a change of clothes for each family member, personal hygiene items, and pet food and supplies.
  • Designate a safe meeting place outside your home.
  • Designate a safe place to seek shelter in your home in case of severe weather. Your survival supplies should be stored in this location.
  • Teach young children how to use the phone to call for help.
  • Update wireless phones with “in case of emergency” (ICE) contact information.

Everyone Bears Responsibility for Accident Prevention

When it comes to accident prevention in the workplace, you are your brother’s keeper. You have a responsibility to make sure that the co-workers around you, or those who use the same tools, equipment or materials that you do, are not injured because of your negligence. Furthermore, to make the workplace as safe as possible for everyone, all workers need to keep their eyes open for any dangerous situations in their midst.

Keep the following in mind to make your workplace as safe as possible:

·   Warn a worker who is in a dangerous position. Sometimes inexperience can cause a worker to perform a task in a manner that may result in injury. If you see this happening, don’t just explain to your co-worker what he or she is doing wrong; demonstrate the right way to do it.

·   Call attention to a task if a worker seems distracted. Conversation and noise can present serious distractions. If a co-worker seems not to be paying attention to the task at hand, go over and try to gently re-focus his or her attention.

·   Set a good example. Always use tools and equipment in the intended manner. Never joke around when handling tools or equipment. Remember, younger co-workers can be influenced by the behavior they see in their older peers.

·   Keep machine guards in place. Machines usually have moving parts that may accidentally come into contact with a worker’s body. When this happens, the worker can be killed or maimed. Machine guards prevent contact with moving parts during the normal operation of the machine.

·   Report tool/equipment defects to your supervisor. Continuing to use a defective tool or piece of equipment instead of reporting it could result in possible injury to you or a co-worker.

·   Encourage co-workers to report every injury. Sometimes an injury that seems insignificant can escalate down the road. If an accident is not reported at the time it occurs, it may not be covered by insurance if it is reported at a later date.

·   Encourage co-workers to wear personal protective equipment (PPE). Your employer provides PPE so that you will be protected. Always wear it if it is necessary for the task being performed. Ask co-workers to wear it as well.

·   Ask questions if you are confused about what you have been asked to do. Never perform a task unless you are completely sure of the correct way to do it. Ask your supervisor to show you the proper method.

·   Take safety suggestions in the cooperative spirit in which they are made. Co-workers are responsible for each other’s safety. If a suggestion is made about the way in which you are performing a task, don’t respond with anger. Instead, thank the co-worker making the suggestion for caring enough about your personal safety to take the time to correct you.

When all workers look out for themselves and others, everyone’s safety is enhanced.

Debunking Some Popular Car Insurance Folklore

You have probably heard at least one piece of urban folklore regarding some aspect of your daily life. Folklore is a bit of “wisdom” that gets repeated over and over as true, even though it usually has little or no basis in reality. It typically develops when people try to make sense out of a process they perceive as being complex, without bothering to investigate the facts.

Even something as routine as buying car insurance comes with its own folklore. Here are some popular myths:

Myth 1: The color of your car affects your insurance rate. This bit of folklore developed out of another popular myth – that people who drive red cars get more speeding rickets than other drivers. Insurance companies, in anticipation of this phenomenon, supposedly base a driver’s insurance rates on the color of the car they are driving, which is coded into the VIN number of your vehicle.

Truth: Both myths are false. An insurer takes a number of factors into consideration when determining rates, but color isn’t one of them. Driving a red car isn’t necessarily a precursor to a speeding ticket and the VIN number doesn’t provide any information about a vehicle’s color.

Myth 2: It’s more expensive to insure a two-door car than a four-door one.

Truth: It’s possible. Depending on the way companies classify cars when they analyze loss, injuries and claims, something as simple as the number of doors on your car could affect your insurance rates. Thus, one company may associate a relatively low history of claims with a particular model, while another company may have experienced nothing but trouble with the same vehicle.

Myth 3: Parking tickets affect your rates.

Truth: Parking tickets alone won’t affect your insurance rates. However, unpaid parking tickets could lead to license suspension which would affect your insurance rates. 

Myth 4: If I lend my car to a friend and they wreck it, their insurance will cover the damage.

Truth: Your car, your responsibility! And even though you weren’t in the car at the time of the accident, you will still receive a mark on your insurance record and your premium could possibly increase.

What’s the Difference Between Policy Cancellation and Non-Renewal?

In some policyowners’ minds, whether your insurance company cancels your auto coverage, or simply chooses not to renew it, it all means the same – you’re suddenly without insurance. However, it isn’t quite that simple. The difference between cancellation and non-renewal can be a significant factor in finding another auto insurance policy.

There are specific conditions, outlined in each state’s laws, under which an auto insurer is permitted to cancel your policy. Here are some common ones:

  • Failing to pay your premium in a timely manner.
  • Losing your ability to drive because your license was suspended or revoked, or because it expired during the term of the policy. This can also apply to any members of your family who are covered under the policy.
  • Falsifying information on your insurance application.

Your insurer has the right to cancel your policy at any time if you’re guilty of one of these actions. If it decides to do so, it must send you a written notice of the cancellation that explains why your coverage is being cancelled. Depending on the laws of your state, your insurer must provide 10 to 30 days notice before the cancellation becomes effective.

There is one other instance where an insurer has the right to cancel your coverage, and that is during the 60 day binding period immediately following your application. An insurer could cancel your policy during this time if it discovers some information that marks you as an unacceptable risk.

If your auto insurance is cancelled for any reason, you will likely have trouble finding another insurance company willing to issue you a policy. The only cancellation circumstance where the possibility of reinstatement exists, is being cancelled for not paying your premium.

In this case, you would be sent a letter informing you that your premium was not received and providing a specific amount of time to rectify the situation. If the payment is received before the cancellation date, you will receive a letter of reinstatement. However, reinstatement does carry consequences. You will probably have to pay a late fee and an extra premium to cover the period between the cancellation and the reinstatement.

You auto insurer can also elect not to renew your policy. State laws aren’t always as specific about what constitutes reasons for non-renewal as they are about reasons for cancellation.

If your insurer decides not to renew, it is usually because you filed too many claims for at fault accidents, were convicted of driving under the influence, or were cited for too many traffic violations during the previous three to five years.

As is the case with cancellation, your auto insurer has between 10 to 30 days to send written notice of non-renewal, which should explain the reason they chose not to renew. If this isn’t included in your non-renewal notice, request an explanation from your insurer. The one advantage non-renewal has over cancellation is that it is less of a deterrent in finding another company to provide you with auto coverage.