Volume 22, Issue 6 - Independent Insurance Agent

iiaba.net

Volume 22, Issue 6 - Independent Insurance Agent

The West Virginia

Insuror

INSIDE

THIS ISSUE

VIRGINIA SENATOR MARK WARNER

TO ADDRESS BIG “I” LEGISLATIVE

CONFERENCE

IIAWV Representatives to Visit Congressional

Delegation

The Independent Insurance Agents &

Brokers of America has announced that

Senator Mark Warner (D-Virginia), who

serves on the Senate Committee on

Banking, Housing & Urban Affairs, will

address the association’s membership on

Thursday, April 18, 2013.

IIAWV CEO Gray Marion and a delegation

representing the state association will be in

attendance at the conference. In addition

to attending the conference sessions, the

group will make calls on the offices of West

Virginia’s three Representatives as well as

Senators Rockefeller and Manchin during a

day-long visit to Capitol Hill.

Senator Warner will be a keynote speaker at

the legislative conference breakfast which

occurs just prior to the association’s annual

Big “I” Day on Capitol Hill. Every year,

agents and brokers visit Capitol Hill offices

to educate members of the House, Senate

and their staffs on issues that directly impact

independent insurance agents, brokers and

consumers.

“The Big ‘I’ is honored to have Sen. Warner

address our members just before they head

to Capitol Hill to talk with their members of

Congress,” says Robert A. Rusbuldt, Big

“I” president and CEO. “Senator Warner’s

perspective is important to independent

agents and brokers because he has an

understanding of the challenges facing the

business community.”

Senator Warner was first elected to

the Senate in 2008 and serves on the

Senate Banking, Budget, Commerce and

Intelligence Committees. He also serves

on numerous important subcommittees

including the Subcommittee on Securities,

Insurance, and Investment. Sen. Warner

is known for numerous bipartisan efforts

including organizing the Senate's “Gang

of Six,” which has worked since 2011 to

find bipartisan solutions for deficit and debt

reduction. He previously served as Virginia’s

governor and was a businessman and early

investor in cellular technology. Sen. Warner

earned his undergraduate degree from the

(continued on page 4)

2 The Real Time/Download

Campaign Needs Your Agency’s

Help

3 Agency 2020: Be the Agency of

the Future

3 Note from the CEO

4 Driving Rules for Older Drivers

6 Pennsylvania’s Overall Workers’

Comp Rates to Drop 4.01%

6 FHFA Issues New Forced-Place

Insurance Rule

7 FEMA Revises Severe

Repetitive Loss Letters

7 Top 10 Consumer Complaint

Categories

8 10 Things to Know About Home

and Auto

8 RLI Personal Umbrella Policy

Makes Offering Coverage Easy

10 Caliper Organizational

Management Webinar Library

Available to Big "I" Members

11 Will Wind/Hail Cosmetic

Damage Exclusion

Endorsements Become the

Norm?

12 Can One CGL Insured Sue

Another One?

14 Helping Your Employees

Embrace Change

Volume XXII | Issue vI

March 31, 2013

A Publication of

Independent Insurance

Agents of West Virginia

Gray Marion, CAE, Publisher


The Real Time/Download Campaign Needs

Your Agency’s Help

The Independent Insurance Agents & Brokers of America need

your help measuring the impact of a major, all-industry agency

workflow improvement initiative sponsored by the Real Time/

Download Campaign.

Regardless of how "automated" you feel your agency is, your

input is extremely valuable. We would greatly appreciate your

taking a short survey, which should take less than seven minutes

to complete. Please take the survey now by going to this link.

If you receive this survey request from any other organization with

which you're affiliated, please only respond once. We conduct

this survey every 18 months so we can measure agency progress

in implementing improved workflows such as Real Time and

Download. The 2011 survey provided invaluable insights to the

industry, which helped numerous carriers and vendors to continue

to improve and broaden the innovative workflows they provide to

their agencies.

Thank you very much for taking the survey.

Independent Insurance Agents

of West Virginia, Inc.

page 2

A Publication of Independent Insurance Agents of WV


Agency 2020: Be the

Agency of the Future

Contest to showcase agency for

cutting-edge marketing, technology

and business best practices.

Project CAP is launching Agency 2020, a year-long program

to provide the vision and resources necessary for independent

agencies to compete in the next decade and beyond.

Agency 2020 will emphasize all aspects of business operations

for an independent agency. The program will provide specific

tools, techniques, technology and counsel for independent

agencies by highlighting the ongoing experience of “spotlight”

agencies selected to receive complimentary products and

services:

Note from

The CEO

Gray Marion, CAE

IIAWV Chief Executive Officer

gmarion@iiawv.org

I am pleased to report that our association has completed its

60th successful annual Insurance Day program. This year’s

program was once again held at the Charleston Marriott Hotel

and featured a wide range of educational opportunities along

with presentations from West Virginia’s new Attorney General,

Patrick Morrisey, our Insurance Commissioner, Mike Riley and

the Insurance Commission’s senior staff member on healthcare

reform, Jeremiah Samples.

The small but enthusiastic crowd in attendance had a chance

to talk directly with those folks and to ask the questions on their

minds. If you missed out on this opportunity, I encourage you

to put the next gathering of the association on your calendar.

• Human resources consulting for recruiting and staffing

• Leadership training

• Change management

• Perpetuation training

• Brand assessment

Insurance education

• Information technology consulting, software and hardware

review

• Financial consulting

• Sales consulting

• Process management

• Business intelligence training

• Interior design and signage

As the spotlight agencies implement these new products and

services throughout the year, Project CAP will use each phase

as an opportunity to educate and inform all independent agents

about the benefit of that product or service in their respective

business.

These highlights will be shared in print and electronic media,

as well as through national and local industry organizations.

By following the transformation of the spotlight agencies, all

independent agencies will learn how to apply the featured

products and services to their own businesses.

Agency 2020 is an opportunity for your agency to transform

into the agency of the future.

To learn more and to sign up, go to the Project CAP website.

A panel of representatives from program sponsors will be

evaluating the applications and awarding a grand-prize winner

and finalist winners later this year.

I am also pleased to report that with just a little over two

weeks remaining in this year’s legislative session, there does

not appear to be any legislation moving that would do real

damage to West Virginia’s independent agent community.

While there have been a handful of bills that have generated

some debate, there does not appear to be any real trouble on

the legislative horizon. Watch your e-mail on Tuesday for a

complete Legislative Update.

During the week following the adjournment of West Virginia’s

legislative Session, a group of IIAWV membership and I

will be participating in the annual Big I Federal Legislative

Conference in Washington, DC. This conference provides a

great opportunity for us to meet with our US Senate and House

delegations and to talk with them about Federal issues of

concern to our community. If you have never attended this

conference and have an interest in insurance issues, I would

suggest that you consider attending. It’s a great way to have

direct input into decision making that affects each and every

one of us. If you’re interested, please give me a call or send me

a note and I’ll call you to chat about how you can get involved

in one of our association’s premier events.

Once we get the West Virginia Legislature out of town and the

Big I Federal Legislative Conference behind us, you are going

to start hearing from the IIAWV about association elections

and other governance issues. I can’t encourage you strongly

enough to take a real interest in these matters. The IIAWV is

your association. Your personal participation helps assure

that no one agent group of agents or agencies control the

organization. Your personal participation helps assure that

we are working on the issues that are important to you and

your agency and not any individual. If you have ever had any

interest in serving on a committee or perhaps on the Board, I

encourage you to make your interest known. Good help is hard

to find. Stand out in the crowd.

page 3

A Publication of Independent Insurance Agents of WV


Driving Rules for Older Drivers

Here is a thumbnail sketch of rules for drivers’ licenses for older

drivers in West Virginia and our surrounding states.

WEST VIRGINIA: Licenses are renewed every five years, with

no special provisions for older drivers.

VIRGINIA: Licenses are renewed every eight years. Starting at

age 80, drivers must renew in person and pass an eye test or

present proof of a recent vision exam.

DISTRICT OF COLUMBIA: Standard license renewal is every

eight years. Starting at age 70, drivers must renew in person and

bring a doctor’s certification that they’re medically fit to drive.

MARYLAND: Starting October 1, all new licenses will last for

eight years instead of five, regardless of age. However, an eye

exam is required starting at age 40 for every renewal.

PENNSYLVANIA: Licenses are renewed every four years, with

no special provisions for older drivers. The state Department of

Transportation essentially audits drivers. About 1,900 randomly

chosen drivers a month, all over age 45, are required to get a

physical from their own doctor and an eye exam, either from

licensing officials or an eye doctor, before they can renew a

license. It also fields about 22,000 reports a year of possibly

unsafe drivers from health providers, family members and others.

OHIO: Licenses last four years, with no special provisions for

older drivers. The state operates a web site – http://www.dmv.

com/oh/ohio/senior-drivers – that explains some requirements

older drivers may face if they fail standard vision tests or report

certain health conditions.

KENTUCKY: All drivers renew their licenses every four years,

with no older age requirements.

Last year, the state legislature killed a proposal to require drivers

80 and older to get a doctor’s approval for license renewals.

VIRGINIA SENATOR MARK WARNER TO ADDRESS BIG

“I” LEGISLATIVE CONFERENCE

(CONTinued from page 1)

George Washington University and a law degree from Harvard

Law School.

“Senator Warner is an original cosponsor of NARAB II legislation

that would reform the agent licensing system and is one of the

Big ‘I’s’ top legislative priorities,” says Charles E. Symington, Jr.,

Big “I” senior vice president for external and government affairs.

“We look forward to continuing to work with him on NARAB

II and many other issues that directly impact the quarter of a

million professionals we represent and the millions of insurance

consumers they serve.”

The Big “I” Legislative Conference will take place April 17-19 at

the Grand Hyatt Washington Hotel in Washington, D.C.

The legislative conference is an opportunity for Big “I” member

agents and brokers from across the nation to discuss important

issues with their congressional representatives. Top issues this

year include: tax reform, the National Flood Insurance Program

(NFIP), insurance regulatory reform, agent licensing reform,

health insurance, the Federal Crop Insurance Program (FCIP),

terrorism risk insurance, and other economic challenges facing

independent insurance agents and the industry.

For registration and hotel information, go to www.

independentagent.com and select the “Events and Conferences”

link or please contact IIAWV CEO Gray Marion, CAE at (800)

274-4298 or gmarion@iiawv.org

page 4

A Publication of Independent Insurance Agents of WV


You’re an independent agent.

Who’s got

your back?

The Big “I” Professional Liability Program

Prevent.

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teams are in your corner in the

event of a claim.

The Big “I” and Swiss Re are jointly committed to providing IIABA members with leading

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associations endorse Swiss Re’s comprehensive professional liability program.

www.independentagent.com/EO

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Insurance products underwritten by Westport Insurance Corporation, Overland Park, Kansas.

Westport is a member of the Swiss Re group of companies and is licensed in all 50 states and the District of Columbia. ©2008 Big “I” Advantage, Inc. and Swiss Re

page 5

A Publication of Independent Insurance Agents of WV


Pennsylvania’s Overall Workers’ Comp Rates to

Drop 4.01%

Pennsylvania Insurance Commissioner

Mike Consedine announced Thursday

that a workers’ compensation rate

reduction will go into effect next week for

employers. The overall decrease of 4.01

percent is effective April 1, 2013.

“We are very pleased with the rate

reduction which is the second workers’

compensation decrease in a row,”

Commissioner Consedine said. “The

lower rate will benefit Pennsylvania employers with ongoing cost

savings.”

The rate cut could result in a projected overall premium reduction

of up to $110 million for Pennsylvania employers. This savings

estimate is based on employer risk classifications and may vary

according to claims experience, payroll, and other factors.

Not all employers will see a decrease. Employers should contact

their insurance agent prior to their next renewal date to determine

the impact of the rate cut on their premium.

“Pennsylvania employers are able to

benefit from the outstanding job they

are doing to provide safer workplaces,”

Pennsylvania Labor & Industry Secretary

Julia Hearthway said. “Establishing

a state-certified workplace safety

committee encourages a safe workplace

and a productive workforce.

“More than 10,000 state-certified

workplace safety committees have been

established, protecting more than 1.3 million workers and saving

employers close to $500 million in workers’ compensation

premiums,” Hearthway said.

Workers’ compensation insurance provides for the cost of

medical care and rehabilitation for injured workers, and lost

wages and death benefits for the dependents of persons killed

in work-related accidents. The Pennsylvania Compensation

Rating Bureau advisory rates determine the premiums

businesses pay for workers’ compensation insurance. The

insurance department’s actuaries then confirm and approve the

calculations submitted.

FHFA Issues New Forced-Place Insurance Rule

Proposal follows numerous state and federal inquiries

The Federal Housing Finance Agency proposed a rule this week

that prohibits fees and commissions paid by insurers to banks

on forced-place insurance policies. It would apply nationwide to

all mortgages guaranteed or owned by Fannie Mae and Freddie

Mac, which represents about half of the housing market.

Force-placed policies are those policies purchased directly by

a lender on behalf of a homeowner whose standard property

coverage either lapses or is not present at a loan closing.

The FHFA’s proposed rule was put in the Federal Register, and a

comment period is open to the public for 60 days.

The new proposed rule comes on the heels of a decision by the

FHFA last month to reject a Fannie Mae proposal to cut the cost

of force-placed insurance by 30%-40% by bringing in a group

of preapproved insurers that would have been their exclusive

insurance carriers.

Lenders and some insurance carriers are expected to object to

the latest proposed FHFA rule as they have previously stated the

current fee structure is necessary because of the additional risk

Visit us online!

these force-placed policies pose.

There is also increasing concern over the efforts by FHFA, as

well as other federal regulators, to attempt to regulate this line

of insurance business. A number of individual state insurance

commissioners are currently investigating force-placed insurance

practices and, in some cases, have already taken action against

what they deem abuses in the housing market.

John Prible is Big “I” vice president of federal government affairs.

Independent Insurance Agents

of West Virginia, Inc.

www.iiawv.org

page 6

A Publication of Independent Insurance Agents of WV


FEMA Revises Severe Repetitive Loss Letters

Change stems from Biggert-Waters 2012.

The Federal Emergency Management Agency has issued a

new bulletin, W-1305, on revised notification letters for severe

repetitive loss properties under the National Flood Insurance

Program.

The notification letters are sent to agents, lenders and

policyholders to advise that flood policies for severe repetitive

loss properties will be transferred to the NFIP Special Direct

facility for handling.

Beginning May 1, new notification letters will reference the

Flood Mitigation Assistance Program instead of the SRL Grants

Program, which was eliminated by Biggert-Waters 2012

(BW-12). The FMA program was first authorized in the Flood

Insurance Reform Act of 1994 and was amended by BW-12.

The FMA program continues to focuses on the mitigation of

severe repetitive loss properties, and a property may qualify for

lower flood insurance rates, if it is mitigated properly. The FMA

program may even pay for 100% of the mitigation activity, such

as elevating the structure.

Copies of the new letter can viewed in this W-1305 bulletin.

Big “I” Flood continually updates its website, Biggert-Waters

2012 News, with the latest information released from FEMA.

Bookmark this page and check back frequently.

Stay informed about all things related to flood insurance with

Big “I” Flood, and feel free to email bigiflood@iiaba.net any

questions. Partner today with Big “I” Flood “in, above and

outside of the NFIP!”

Top 10 Consumer Complaint Categories

The Federal Trade

Commission (FTC) has

released its top 10

consumer complaint

categories for 2012.

For the first time ever,

the agency received

more than two million

complaints. Of the two

million complaints, 18

percent were related to identity theft. Of those 18 percent,

almost half were related to tax or wage fraud.

The list of the top 10 complaint categories:

1. Identity Theft – 369,132 complaints

2. Debt collection – 199,721 complaints

3. Banks and Lenders – 132,340 complaints

4. Shop-at-Home and Catalog Sales – 115,184 complaints

5. Prizes, Sweepstakes and Lotteries – 98,479 complaints

6. Impostor Scams – 98,479 complaints

7. Internet Services – 81,438 complaints

8. Auto-Related Complaints – 78,062 complaints

9. Telephone and Mobile Services – 76,783 complaints

10. Credit Cards – 51,550 complaints

The FTC uses the Consumer Sentinel Network to record

complaints throughout the year. The database is available to

more than 2,000 civil and criminal law enforcement agencies

across the country and helps agencies research cases and

track targets.

Among the federal and state law enforcement agencies

contributing to Consumer Sentinel are the Consumer Financial

Protection Bureau, the U.S. Postal Inspection Service, the

(continued on page 10)

page 7

A Publication of Independent Insurance Agents of WV


10 Things to Know About Home and Auto

1. There are more than 132 million housing units in the United

States, more than 80 million of which are detached, singlefamily

homes, and roughly one-in-four of those homes

were built prior to the 1970s. (U.S. Census Bureau)

6. In 2011 less than 1 percent of those with liability insurance

had a bodily injury liability claim while 3.5 percent of those

with liability insurance had a property damage liability claim.

(Insurance Services Office)

2. In 2011, homeowners insurance accounted for 14.9

percent of the total direct written premiums for all property

casualty lines of insurance. (SNL Financial LC)

3. A 2012 poll found 96 percent of homeowners had

homeowners insurance, but only 31 percent of renters had

renters insurance. (Insurance Information Institute)

4. Five million existing-home sales are expected to occur this

year, and the median home price in the U.S. was $173,600

as of January. (National Association of Realtors)

5. More than 15.4 million new vehicles will be purchased or

leased in the U.S. in 2013, up by 1 million vehicles over

2012. (National Automobile Dealers Association)

7. Passenger cars per capita in the U.S. numbered 627 to

1,000 people as measured from 2008 to 2012. It was 427

in the United Kingdom and 472 in Norway. The per capita

in Bangladesh was 2. (The World Bank)

8. In 2011, auto insurance paid out $117.4 billion for auto

insurance claims. (Insurance Information Institute)

9. There are more than 1,700 fatalities and 840,000 injuries

yearly due to vehicle crashes on public highways. (National

Highway Traffic Safety Administration)

10. Sending or receiving a text takes a driver’s eyes from the

road for an average of 4.6 seconds, the equivalent-at 55

mph-of driving the length of an entire football field, blind.

(U.S. Department of Transportation)

RLI Personal Umbrella Policy Makes Offering

Coverage Easy

Offer protection to each customer before an accident occurs

As a Big “I” member, you have access to stand-alone personal

umbrella coverage for your clients through RLI. Product features

and benefits include:

• Limits of $1 million, $2 million, $3 million and $5 million

• Excess uninsured/underinsured motorist coverage

• Auto limits as low as 100/300/50 available in most cases

• Ability for customers to keep current homeowners and auto

insurers

• No underlying carrier rating requirements

• Backing of a financially secure, A+ rated company

By making clients aware of this liability protection now, you won’t

have to answer this question later: “If extra liability coverage was

available, why didn’t you offer it to me before this accident?”

For more information, contact Valerie Toney at vtoney@iiawv.

org or visit independentagent.com/RLI

Customers can sign and pay for their personal umbrella online,

and agents can access an easy-to-use online rating and policy

management system.

page 8

Independent Insurance Agents

of West Virginia, Inc.

A Publication of Independent Insurance Agents of WV


Relax...

You’ve offered each of your clients

a personal umbrella policy.

Right?

It might not be quite as relaxing as a day at the beach, but knowing you’ve done everything in your power to protect

the customers who trust you to help them will go a long way towards easing your mind.

Offering each and every client an umbrella not only protects those who choose to purchase the coverage. It protects

your agency from liability. And it protects your book of business, since studies show that customers who have

multiple policies are less likely to move their business elsewhere.

As a Big “I” member, you have access to a stand alone personal umbrella program from A+ rated carrier RLI,

featuring:

Limits up to $5 million available

You can keep your current homeowner/auto insurer

New drivers accepted - no age limit on drivers

Up to one DWI/DUI per household allowed

Auto limits as low as 100/300/50 in certain cases

Competitive, low premiums for increased limits of liability

Simple, self-underwriting application that lets you know immediately if the insured is accepted

E-signature and credit card payment options

Immediate coverage available in all 50 states plus D.C.

So cover your clients... protect your agency... and profit from umbrella sales!

To access log onto www.bigimarkets.com

or visit www.iiaba.net/Umbrella.

®

page 9

A Publication of Independent Insurance Agents of WV


Caliper Organizational Management Webinar

Library Available to Big "I" Member

Need to brush up on hiring skills? Need advice on maximizing

the effectiveness of your limited staff? What to hear more about

how companies are making it through difficult economic times?

Caliper, the Big "I" endorsed provider of employee hiring and

development resources has a library of recorded webinars

on such topics. Free and typically an hour in duration, they

feature academics and business leaders sharing their insights,

experiences and secrets for success in achieving personal and

organizational goals. Below is a sample of the webinar topics

available to you. Click here to access either the full recordings

or presentation slides.

• How Effective Leaders Think Strategically and Make

Winning Decisions

• Uncovering the Leader Within: How to Find Your True North

• Are You Ready to Start Hiring? How to Bring on the Right

People and Make Sure They Succeed

• The 3 Things You Need to Do to Improve Your Managers

and Teams

• How to Get New Employees Up to Speed – Faster!

• Leading Through Tough Times

• How Are Top Companies Selling Through These Tough

Times?

• Five Steps to Building Teams That Deliver

• How to Develop the Future Executives of Your Organization

• Who's Next? Recognizing and Developing High-Potential

Employees

• Help First-Time Managers Realize Their Potential

Among the products available to you from Caliper is the Caliper

Profile, an assessment instrument for measuring an individual's

characteristics, potential and motivation. This personality test,

validated by more than four decades of research, measures over

twenty-five personality traits that Caliper consultants analyze in a

variety of combinations to determine how someone will perform

in a specific role. Big "I" members can have one completed on

a current or potential employee at the discounted rate of $245.

For more information, go to www.iiaba.net/caliper

Top 10 Consumer Complaint Categories

(Continued from page 7)

Federal Bureau of Investigation’s Internet Crime Complaint

Center and the offices of 14 state attorneys general. Privatesector

organizations contributing data include all Better Business

Bureaus in the U.S. and Canada, PrivacyStar, Publishers

Clearing House and others.

State regulators handle most insurance complaints and the

FTC report does not track insurance as a category. However,

in the identity theft statistics, 0.3 percent of complaints involved

misuse of information for insurance purposes.

Fraud

Over one million complaints were fraud-related. Consumers

reported paying over $1.4 billion in those fraud complaints;

the median amount paid was $535. Fifty-nine percent of the

consumers who reported a fraud-related complaint also

reported an amount paid.

Fifty-seven percent of all fraud-related complaints reported

the method of initial contact. Of those complaints, 38 percent

said email, while another 34 percent said the telephone. Only 9

percent of those consumers reported mail as the initial point of

contact.

Florida is the state with the highest per capita rate of reported

fraud and other types of complaints, followed by Georgia and

Maryland.

Identity Theft

Government documents/benefits fraud (46 percent) was the

most common form of reported identity theft, followed by credit

card fraud (13 percent), phone or utilities fraud (10 percent), and

bank fraud (6 percent). Other significant categories of identity

theft reported by victims were employment-related fraud (5

percent) and loan fraud (2 percent).

Complaints about government documents/benefits fraud

increased 27 percentage points since calendar year 2010; tax

or wage-related fraud accounted for the growth in this area, with

43.4 percent of identity theft victims reporting this problem in

2012. Employment-related fraud complaints, in contrast, have

declined 6 percentage points since calendar year 2010.

Forty-two percent of identity theft complainants reported

whether they contacted law enforcement. Of those victims, 68

percent notified a police department. Fifty-four percent of these

indicated a report was taken.

Florida is the state with the highest per capita rate of reported

identity theft complaints, followed by Georgia and California.

page 10

A Publication of Independent Insurance Agents of WV


Will Wind/Hail Cosmetic Damage Exclusion

Endorsements Become the Norm?

Cosmetic damage from wind and hail to homeowner and

commercial properties may no longer be covered if insurers opt

to use new endorsements, one for homeowners and another for

commercial roofs, that are becoming available.

The two organizations that standardize forms and policies

for property/casualty insurers, the American Association of

Insurance Services (AAIS) and ISO, have both filed cosmetic

damage endorsements.

ISO, a member of the Verisk Insurance Solutions group at

Verisk Analytics, is also working on another cosmetic damage

endorsement, this one for homeowners.

Some believe use of these endorsements could become the

norm.

The two organizations said they created the forms at the request

of their member carriers that were experiencing an Increase in

insured losses from what they considered “cosmetic” wind and

hail damage to a property. Cosmetic damage is damage that

just affects the appearance but not the function of a specific

property component.

endorsement automatically included in certain geographic

territories, but that would be “clearly communicated to the

consumer,” Harrington said.

The endorsement also enables the insurer to exclude one

component – such as the roof – separately.

Some carriers have already introduced their own proprietary

endorsements to deal with these losses, but Harrington said

he believes AAIS’s is the first that attempts to systematically

address the exterior components. “For homeowners insurers

writing coverage, particularly in Midwestern states, their

exposure can grow quite substantially based on a new way of

seeing hail damage,” he says.

ISO

As part of its complete 100 page commercial property form

revision, which was filed last year and will take effect April 1,

ISO added a cosmetic roof limitation for commercial properties.

Most U.S. property/casualty insurers, including all of the top 100

and all of the 10 largest global reinsurers, are customers of ISO

and the Verisk Insurance Solutions Group at Verisk Analytics.

AAIS’s “cosmetic damage exclusion” was filed in most states

at the beginning of February and works as an optional policy

endorsement for homeowner insurers. The endorsement

excludes coverage for exterior surfacing of walls, roofs, and/

or doors and windows if wind and hail damage just affects

the appearance of these surfaces but not their ability to keep

weather-related or other elements from entering.

Because the endorsement is optional, insureds who receive it

could get a premium credit, which would be a small percentage

of the premium as it relates to wind and hail.

“Insurers have reported to us that they are seeing more of

these types of claims, and their only response would be to

raise premiums on all homeowners,” says Joseph Harrington,

director of corporate communications for AAIS. “Insurers would

prefer to have the choice to allow some homeowner insureds to

get a break on their premium for damage that is purely cosmetic

in nature.”

Harrington says even if a policy has the endorsement, the

insured is still covered for any functional physical damage to

these exterior components because the endorsement only

applies if the damage is cosmetic.

The endorsement is optional to the 330 companies that use

AAIS’ homeowners programs, and not all insurers will use it on

all policies. Harrington said it’s possible some companies will

apply the endorsement on a policy-by-policy basis with input

from applicants and insureds, but AAIS expects companies will

either use it or not use it on a general basis.

Some insurers may also decide to sell coverage with this

The ISO endorsement actually contains two options: the first

allows insurance carriers to cover a building on a full replacement

cost basis, but limit the valuation on “roof surfacing” to actual

cash value (ACV). Option two applies to the cosmetic limitation,

which is defined as any kind of marring or pitting or other

superficial damage specifically from wind and hail that alters the

appearance of the roof but does not prohibit it from functioning

as intended as a barrier.

“As long as the roof still has the primary function of protecting

the inside of the building, it would not be covered,” says Stephen

Clarke, assistant vice president of ISO’s Commercial Multi-Line

Division.

Clarke says ISO, too, received requests from its carrier

customers for a tool to underwrite that specific part of the

exposure because of concern over roof losses in the industry.

The endorsement can be attached to an underlying form –

whether it is builders’ risk, building property, standard property

or various condo forms.

The endorsement can include both the ACV option and the

cosmetic damage option, or an insurer can use one or the

other. Clarke says the two were placed together because both

concepts deal with roof surfacing.

Clarke says ISO is currently in the research and development

phase for extending this endorsement to the homeowners

insurance segment, and he expects that could come out this

year.

By Amy O'Connor

page 11

A Publication of Independent Insurance Agents of WV


Can One CGL Insured Sue Another One?

Agents are often asked to provide cross-liability coverage. But does it

exist?

One of the most common

questions received by the Big

“I” Virtual University’s Ask an

Expert service is how to provide

“cross-liability” coverage under

commercial general liability. The

question typically arises from a

certificate request for the coverage

or, more often, a request to remove

a cross-liability exclusion.

The term “cross liability” deals

with whether or not one insured can sue another under a liability

policy. The bad news is that, under the ISO program, there is

no endorsement to provide cross-liability coverage. The good

news is that there’s no endorsement because none is needed; it’s

included in the CGL policy itself and has been since 1986:

7. Separation Of Insureds

Except with respect to the Limits of Insurance, and any rights

or duties specifically assigned in this Coverage Part to the first

Named Insured, this insurance applies:

a. As if each Named Insured were the only Named Insured; and

b. Separately to each insured against whom claim is made or

“suit” is brought.

mystery. In fact, some states

may have a statutory provision

prohibiting the use of crosssuit

exclusions in most basic

liability policies.

Most likely, you’re dealing

with attorneys or consultants

who either aren’t up on things

or don’t know what they’re

asking for—they’re just

looking at an outdated “cheat

sheet” that says they should ask for this.

Bill Wilson, bill.wilson@iiaba.net, is director of the Big “I” Virtual

University.

Why people still ask for a “cross-liability” endorsement to remove

a nonexistent exclusion (unless they want to limit such suits) is a

Independent Insurance Agents

of West Virginia, Inc.

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Insuror

page 12

A Publication of Independent Insurance Agents of WV


www.iiaba.net/Flood

It’s time to upgrade to Big “I” Flood.

Individual attention. Education and guidance. Timely response. Going above and

beyond. These are the hallmarks of excellent service you strive to provide your

clients every day. Are you getting the same kind of treatment from your current

flood carrier?

Big “I” Flood provides:

ACCESS - In, Above & Outside of the NFIP!

EDUCATION - Classroom CE or the new Flood Learning Center on VU

ADVOCACY - Representation on Capitol Hill & NFIP advisory committees

Learn more at www.iiaba.net/Flood, or contact Big “I” Flood Program Manager

Linda Mackey at linda.mackey@iiaba.net or (800) 221-7917. Let us explain how we

operate in, above, and outside the NFIP!

FLOOD

In, Above, and Outside the NFIP!

page 13

A Publication of Independent Insurance Agents of WV


Helping Your Employees Embrace Change

Do you remember the scene in the movie Wayne’s World where

Rob Lowe’s character explains to Wayne and Garth the new

structure of their previously self-produced cable show? Garth’s

response: “We fear change.”

Garth is not alone in his trepidation. When you take people out

of their comfort zones, they get, well…uncomfortable. Even if

the current circumstance is not ideal, at least it’s familiar territory.

In the business world, fear of change often stems from two main

concerns: Am I still going to have a job when all is said and

done; and if I do, how much more work is going to be expected

of me?

Here are 8 quick tips to help keep panic to a minimum in times

of change:

1. Explain your vision. Help people understand why the changes

are necessary. Also let them know what’s in it for them and

what the downsides are of not changing. Communicate

these things regularly so it begins to feel natural.

2. Get people involved in the planning process. The more

included people feel, the more vested they are in making the

new process succeed.

3. Make sure you have a plan. The plan should show how

you expect to make your vision a reality, how the proposed

changes relate to the goal, and the time frames for

implementing and achieving each step in the process.

4. Before rolling out the new process, give everyone a preview

of the plan. Break it down into digestible pieces. Start with

small, easy to handle steps so people can meet with initial

success and develop confidence in their abilities and the

plan.

5. Don’t expect people to be committed to the new procedures

immediately. Let commitment grow slowly and it is more

likely to be lasting.

6. Anticipate resistance. It will be important to determine if the

resistance is founded, such as initial fear of the unknown

and genuine concerns about potential problems with the

change—or if some people are just habitually negative and

will consistently work against your efforts. Try to nip this in

the bud by getting them to contribute ideas and eventually

buy into the changes. Be aware, however, that you may

also determine they’re contributions to the company are not

really worth the turmoil they’re likely to continue causing.

7. Provide the extra resources people need to adapt to the

new changes. Make training and assistance available, as

well as an “open door” policy that enables people to feel

comfortable expressing problems, concerns or confusion—

including the ability to say, “I’m not sure how to do this.” ]

8. Identify people who are positive and succeed early in the

change cycle. Reward them for their progress, and allow

them to share their success stories and serve as examples

to others.

9. Keep people updated on how the new plan is progressing

and share the positive outcomes of the changes.

Adapting to change always takes time. Continue to keep the

communication open and avoid surprises Make sure you

are doing your part to make people as comfortable with it as

possible so you truly earn their trust and commitment to the

new vision.

Independent Insurance Agents

of West Virginia, Inc.

Independent Insurance Agents

of West Virginia, Inc.

P.O. Box 1226 | Charleston, WV | 25324

P: (304) 342-2440| TF: (800) 274-4298 | F: (304) 344-4492

page 14

A Publication of Independent Insurance Agents of WV


The mission of the Independent Insurance Agents of West Virginia is to

be the unrelenting advocate for independent insurance agents and to

fulfill member needs while serving the public’s best interest.

www.iiawv.org | (304) 342-2440

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