I hope you’ve all had a chance to enjoy some of our nice days. It’s been fun to watch the changes outside and to notice how energized my office is when the sun comes out.
At Brown & Brown Northwest Insurance, we continue to evolve. I could have never imagined the team we’ve become even a year ago. I am so proud that Brown & Brown Northwest Insurance was featured in regional issues of Bloomberg Business week, Fortune and Money magazines this April.
I’ll admit that I was skeptical after my first conversation with the reporter because I had no sense of the direction she was taking. Fortunately, my skepticism vanished when I read the first draft, which is not much different than the version publicized. What this experience solidified for me is that I am so fortunate to be a part of the Brown & Brown Insurance family.
Our decentralized model, which gives us the ability to access national resources and a breadth and depth of expertise for our clients and our ability to make decisions autonomously, is the story. We give our customers the best of both worlds. When I consider that our claims and risk management team is the best in the industry and that we provide property and casualty and personal insurance, bonds and employee benefits solutions, it gives me a lot of confidence in our ability to deliver comprehensive solutions to our clients.
To that end, I encourage all of you to take a moment to look at this newsletter. We are here for you so please reach out to your broker if you have questions or concerns. Thank you for entrusting us with your insurance needs. We appreciate your business.
Jessica Getman, President
State of the Insurance Market: The Hardening Auto Insurance Market
Auto insurance premiums have been on the rise since 2016, and both commercial and personal auto customers are noticing the effects. Factors such as the high cost of claims, rising vehicle repairs, and more cars on the road have contributed to policyholders seeing rate hikes as high as 6%.
The size of insurance claims are increasing due to poor driving habits (distracted driving), uninsured drivers, and insurance fraud which costs the United States $32 billion per year.
Credit history is another factor in determining car insurance rates. Insurers use a practice called “price optimization” to see how much they can raise their rates before the customers decide to choose another company. For example, customers who tolerate increases in their internet bills are more likely to stay loyal to their insurance carriers when premiums increase. With auto insurance premiums on the rise for both personal and commercial policies, it is important to be aware of your options at renewal time.
An Update on Health Care Reform: Republicans Pass Amended ACHA
On May 4, 2017, members of the U.S. House of Representatives voted to pass the American Health Care Act (AHCA), which is the proposed legislation to repeal and replace the Affordable Care Act (ACA). The AHCA will now move on to be considered by the Senate. It is likely that the Senate will make changes to the proposed legislation before taking a vote. The AHCA would only need a simple majority vote in the Senate to pass. However, unless the AHCA is passed by the Senate and signed by President Trump, the ACA will remain intact. The majority of the ACA would not be affected by the AHCA. For example, the following key ACA provisions would remain in place:
• Requirements to cover pre-existing conditions
• Coverage for adult children up to age 26
• Guaranteed availability and renewability of coverage
• Nondiscrimination rules (based on race, nationality, disability, age or sex)
• Prohibition on health status underwriting
The ACA imposes both an employer and individual mandate. The AHCA would reduce the penalties imposed under these provisions to zero beginning in 2016, effectively repealing both mandates (although they would technically still exist). The ACA currently offers federal subsidies in the form of premium tax credits and cost-sharing reductions to certain low-income individuals who purchase coverage through the Exchanges. The AHCA would repeal both of these subsidies, effective in 2020, and replace them with a portable, monthly tax credit for all individuals that could be used to purchase individual health insurance coverage.
The AHCA also provides enhancements to Health Savings Accounts (HSAs) to incentivize their use. Some of those enhancements include:
• Increase the maximum HSA contribution limit: The HSA contribution limit for 2017 is $3,400 for self-only coverage and $6,750 for family coverage. Beginning in 2018, the AHCA would allow HSA contributions up to the maximum out-of-pocket limits allowed by law (at least $6,550 for self-only coverage and $13,100 for family coverage).
• Allow both spouses to make catch-up contributions to the same HSA: It eligible for catch-up contributions, both spouses of a married couple could make catch-up contributions to one HSA, beginning in 2018.As the Health Care Reform puzzle unfolds, Brown & Brown is here to help you understand the changes that would impact your organization and employees.
What Lies Beneath: The Hidden Danger of Landslides
Landslides are a major geologic hazard because they occur in all 50 states and U.S. territories, cause $1-2 billion in damages, and result in more than 25 fatalities on average each year. Ever expanding urban growth into hillside areas has increased the threat of landslides to people and property.
The term “landslide” includes a wide range of earth movement events such as rock falls, deep failure of slopes, surface debris and mud flows. A landslide occurs when the force of gravity on the down-slope is greater than the strength of the slope. Landslides commonly occur alongside major natural disasters such as earthquakes, volcanoes, wildfires, and floods. Weak and/or steep slopes can have a landslide triggered by any combination of rainfall, snow-melt, changes in water levels, erosion, and human activities such as construction without adequate grading, poorly planned or altered drainage patterns, or by disturbing old landslides. You can be held liable for damages if you change a slope in any way without taking proper precautions such as seeking guidance from geotechnical experts and using good engineering practices.
“Earth Movement” is EXCLUDED on all standard homeowner and commercial policies to include landslides, mud flows, subsidence, and/or shifting, rising or sinking of land other than sink hole collapse. Thus, an earth movement event could expose you to a significant financial burden. Direct costs may include damaged buildings and their contents, cleanup and debris removal, and repairs or reconstruction. Indirect costs could include loss of business income, temporary living expenses, and litigation.
Optional coverage endorsements or specialized policies may be available in your area to off-set some of these costs. If you already have a Difference in Condition, flood or earthquake policy, it is important to review the language carefully to ensure you have the coverage you need. Once a disaster warning or event occurs, insurance companies typically place a moratorium on these policies making coverage unavailable for a period of time.
Here are some helpful resources on landslide dangers, prevention, and emergency response:
• American Red Cross: Landslide Safety
• USGS Landslide Hazards Program
• CDC: Natural Disasters & Severe Weather – Landslides and Mudslides
• State of Oregon: Statewide Landslide Activity Interactive Map
• Oregon Department of Geology and Mineral Industries Landslide Factsheet
Contact your Brown & Brown Northwest agent today to review your coverage options.
Is Your Home Covered When Your Sewer Line Breaks? Not Unless You Have Service Line Coverage.
Unexpected service line failures are often unforeseen, expensive, and are not covered under most homeowners insurance policies. Many homeowners don’t realize they are responsible for the maintenance of all underground service lines from the street to their home.
What is a Service Line?
A service line connects your home to various external service providers using underground pipe or wire. Examples include electrical power, heating, natural gas, sewer/waste disposal, compressed air, water, steam, internet access, telecommunications services, and wide area networks or data transmission.
Service Line Coverage That Really Covers
Service Line Coverage will pay to repair or replace an underground service line that is damaged as a result of:
• Wear and tear
• Rust or other corrosion, decay, deterioration
• Hidden or latent defect
• Collapse other than sinkhole collapse
• Electrical, mechanical or pressure systems breakdown
Typical policies include coverage for additional living expense, rental value, and green property replacement up to 150% of the replacement cost. Contact Brown & Brown Northwest for additional information on Service Line Coverage.
Brown & Brown Northwest Insurances encourages its teammates to get out of the office and volunteer. Teammates are given sixteen hours annually to volunteer on company-sanctioned projects.
On April 11, teammates helped the Oregon Food Bank inspect, sort and repackage refrigerated items for distribution to food banks and partner agencies servicing Oregon and Clark County, Washington.
Per Oregon Food Bank, 1 in 5 people in Oregon and Clark County, Washington, are without access to a sufficient quantity of affordable, nutritious food. However, Oregon Food Bank does much more than just distribute food. Their mission is to eliminate hunger and its root causes by working to influence public policy, raising awareness and providing education.