Insurance companies are working quickly to keep their products in pace with the changing environment and weather related issues. The following article outlines plans and changes the insurance industry is working on to keep in-line with weather and environmental changes–Marty O’Neill, Insurance Agent
FORT LAUDERDALE, Fla. (BestWire) - The global insurance industry vastly expanded its efforts to respond to global warming in 2007, more than doubling the climate change-related products and services that existed just 14 months ago, a new study from the environmentally focused institutional investor group Ceres found.

Presented to the annual meeting of the International Association of Insurance Supervisors by Evan Mills, staff scientist with the U.S. Department of Energy’s Lawrence Berkeley National Laboratory, the report details 422 industry initiatives from more than 190 firms in 26 countries, that each look to respond in one way or another to climate change and its related risks. Mills had earlier completed an August 2006 survey that identified 192 climate-related products.

Mills found 13 insurers that have pledged to become carbon neutral, with the U.K.’s Aviva successfully reducing emissions by two-thirds between 2000 and 2005 through the purchase of carbon offsets. An even more ambitious program by Tokio Marine & Nichido has seen the Japanese insurer pay to reforest 12,000 acres of mangrove trees throughout Southeast Asia, originally with the goal of becoming a carbon neutral organization before realizing the program also offered storm surge protection benefit for typhoons and tsunamis.

Though insurance company emissions aren’t typically perceived as a significant problem, Mills noted an eightfold spread in carbon dioxide emissions by 20 insurers who voluntarily responded to questionnaires offered by the Carbon Risk Disclosure Project, with the median insurer reporting greater emissions than those in the transportation or housing sectors.

“These emissions per employee are more than those employees emit in their own personal cars or their homes,” Mills said. “Some people like to say insurance is not a polluting industry, and sure it’s not making steel or things like that, but the emissions are not trivial. So, reducing their own emissions is a sensible thing for insurance companies to do.”

With automobile emissions a major focus of climate change scientists, insurers rolled out several products that reward policyholders for “green” driving behaviors. For more than a year, Travelers has been offering a 10% discount for U.S. drivers of hybrid vehicles, while Axa has introduced similar incentives in France, Canada, Thailand and Ireland. The coverage is now widely popular in Japan, with Sompo Japan Insurance and Tokio Marine & Nichido signing up 3.25 million and 6.23 million policyholders, respectively, in just under two years.

Mills also identified 19 companies that now offer “pay-as-you-drive” personal automobile insurance, including U.S. firms GMAC and Progressive Corp. By making premiums more proportional to miles driven, the programs can reduce total miles driven by 10% to 15%, he said, adding that coordinating such programs with global positioning systems helps to insulate them from fraud.

French insurer AGF now has 250,000 pay-as-you-drive policies in force, representing about 20% of its new customers. Other firms — such as Axa, Allianz and Cooperative — are offering “carbon neutral” car and travel insurance, while Insurance Australia Group provides customers an opportunity to purchase “carbon-offset” services through the company’s Web site.

Carbon offset, trading and risk management services are offered on a much broader scale to commercial enterprises through programs crafted by global names like Swiss Re, American International Group and Marsh, Mills said. Swiss Re, in particular, has pioneered cost risk hedge products such as carbon-delivery insurance and carbon-credit price volatility insurance, in connection with the $30 billion European carbon emissions trading market.

The past year also has seen the introduction of new liability products for energy management businesses, who often cannot be covered under traditional errors and omissions policies, Evans noted, with Lockton Risk Services offering group liability coverage for home energy auditors. Energy savings insurance contracts have begun to appear in the Lloyd’s market, while Munich Re has been offering new “exploration risk” coverage for firms seeking out sources of geothermal energy.

Fireman’s Fund last year introduced “green buildings” insurance in the United States, offering 5% premium credits for commercial properties with certain energy efficiency features, as well as a promise to rebuild to a higher green standard following a loss. Evans reported that AIG’s Lexington Insurance Co. is set to introduce a similar product later this year in the residential property market, while Sompo has been offering the coverage since 2003. The report notes that green practices can reduce building emissions by up to half, and that buildings acount for more than 33% of all U.S. greenhouse gas emissions.

But despite notable progress in the industry’s response, Mills said his overall evaluation still was that insurers hadn’t done nearly enough, particularly given the threats they face. Though hurricanes receive the most attention, among the severe weather that a massive shift in climate patterns could portend are more severe heat waves, lightning, droughts, insect infestations, wildfires, mudslides, winter storms, torrential rains, hail and flood, Evans said. He also expects the industry could be facing climate change-related increases in claims for political risk, fiduciary liability, pollutant releases, mental health, general liability, infectious disease, roadway liability, and directors and officers liability.

“We have hundreds of examples (of climate-related initiatives), but of course, most insurance companies aren’t doing anything,” Mills said. “These are companies with modest initiatives, but it’s not as if this industry is rushing in to anything. I’m focusing on the best practices, but they are by far the minority.”

Mills suggested regulators could help spur further changes in the industry by seeking “appropriate disclosure” of insurers’ carbon disclosure, while not going so far as to require “excessive onerous reporting,” and pointed to the 113 insurance companies that already have voluntarily responded to the Carbon Risk Disclosure Project. He similarly challenged regulators to promote “risk-based pricing with sensitivity to affordability.”

“I know that’s a very difficult balancing act, and I’m glad I’m not the one who has to do that, but the price does need to send a signal,” Mills said.

(By R.J. Lehmann, Washington bureau manager: raymond.lehmann@ambest.com)

By:  Marty O’Neill, Insurance Agent

Chances are, either your home or the home of someone you know, has a fuse box.  Fuses function the same way breakers do—to cut off power if an electrical circuit is overloaded.  Both fuses and breakers can be very effective in protecting your home against an electrical fire.

However, one problem that can arise with fuses occurs when someone inserts a fuse of higher amperage than the circuit is designed for.  For example, a homeowner tires of replacing blown fuses and inserts a 30-amp fuse where a 20-amp fuse should go, the 30-amp fuse allows more current into the circuit than the circuit was designed to accommodate.  The fuse “blows” indicating that the circuits are overloaded. These must be replaced as the fuse element burns up.  A fire can result.

If you have a fuse box, it’s a great idea to have an electrician inspect it and check the wire size to install the proper fuse bases. Type S fuses should be used in aging fuse panels to prevent over fusing. Type S fuses are the only type allowed by the National Electrical Code in new fuse box installations.

Whether you have a fuse box or a breaker box, have your electrician tell you the size of your electrical service to make sure it is sufficient. Years ago, 60-amp or 100-amp service wasn’t uncommon; but most families today have electrical appliances that demand more service.  It’s smart to get an electrician’s opinion on whether an update is needed since modern homes are typically wired for minimum 200-amp service.

Electrical fires are all too common, and many homes in the U.S. need electrical updates.  Please take whatever action necessary to update the electrical service in your home.

For Teenagers, a New Car May Not Be the Wisest Choice
Friday, October 5th, 2007

This article appeared in the NY Times and addresses a question I get all the time, “my son/daughter is turning 16, what should I do about my insurance?” This article sheds light on the situation–Marty O’Neill, Insurance Agent.

Copyright 2007 The New York Times Company. All Rights Reserved.

ON a recent Sunday afternoon, Barbara and Steve Skor did what many parents do when their teenagers start to drive: shop for a first car — in their case, for their 15-year-old daughter, Elise.

The Skors, who live in Scottsdale, Ariz., had considered spending $16,000 to $18,000 on a midsize used car, but after shopping they learned that for a few thousand more dollars they could have a new car with up-to-date safety features. Elise wants a sporty car, but Ms. Skor isn’t so keen on that. ”Our focus is: No. 1, safety, No. 2, price,” Ms. Skor said. They have not yet chosen a car.

Selecting a car for teenage drivers is a modern rite of passage for many families, but sometimes little attention is paid to which types of vehicles are best for teenagers.

”It’s often overlooked, but it’s a huge factor,” said Allan F. Williams, a road safety consultant and former chief scientist at the Insurance Institute for Highway Safety. Crash and injury risk, he said, are determined not only by the conditions under which teenagers drive but also by which vehicles they drive and how often they drive them.

Teenage drivers ages 16 to 19 are four times as likely to crash as older drivers, based on miles driven, and the risk is particularly high during the first year after getting a license, according to the Insurance Institute.

All states have some form of graduated driver licensing, through which they monitor conditions in which teenagers learn to drive. Dr. Williams said that after such rules were adopted, there was generally a drop of 20 to 30 percent in crashes involving 16-year-old drivers.

But the law does not guide the choice of vehicles. Parents and teenagers, he said, need to conduct some research.

In doing so, they may find that spending more is not necessary. Bella Dinh-Zarr, the North American director of Make Roads Safe, a nonprofit group based in London, said: ”What I usually tell parents is, you don’t have to buy the most expensive car on the lot to keep them safe. It doesn’t even have to be a new car.”

Most experts agree that parents and teenagers should look for cars with the most advanced safety equipment in their chosen price range, like the latest air bags, seat-belt reminder systems and electronic stability control, which helps prevent skidding that leads to many rollover crashes. Many cars also have antilock brakes, which can keep a driver in control, but it is important for teenagers to know how to handle them.

It is also a good idea to check crash-test ratings. The Insurance Institute for Highway Safety and the National Highway Traffic Safety Administration publish ratings. The tests are different, so experts advise checking both.

”I’m asked regularly, ‘What’s the cheapest new car I can buy?’ ” said John Nielsen, director of the AAA Auto Repair and Buying Network in Florida. ”You can buy a used car a few years old with as many or more safety features for less money than the least expensive new car.”

An $18,000 new car may not have side-impact air bags, though a late-model used car with a known reliability record that has the side-impact bags can cost just $13,000.

But with older-model bargains come different safety concerns.

Gail Erickson, of Clinton, Mass., bought a 1994 model-year vehicle several years ago for her son, then 14, to use when he was old enough to drive. She researched costs at the used-vehicle Web site of the National Automobile Dealers Association and ended up paying $1,500, or $2,000 less than the association’s suggested price. Her son, now 17, drives the vehicle, but it does not have air bags.

”We are looking for a safer car,” Mrs. Erickson said. ”I wish more parents knew about these things.”

A survey released in June by the Insurance Institute found that vehicles bought in anticipation of adding a new driver to the family were more likely to be of sizes and types considered less safe than vehicles already owned.

”The message we’d like parents to know is that midsize to large is safer, all things being equal,” said Anne McCartt, senior vice president for research at the institute. Death rates in small cars are about twice those in large cars, she said.

Smaller cars are easier to maneuver and respond faster in an emergency, but larger cars offer more crash protection. On the other hand, very large vehicles, like vans, allow for many passengers. In the last 10 years, a number of studies have shown that the more teenagers are in a vehicle, the more likely it is that the driver will crash it.

”The type of vehicle is more important than the model year,” said Linda Gorman, public affairs manager for AAA Arizona. For teenagers, an older midsize car is better than a new S.U.V., she said, although in Arizona, S.U.V.’s and pickups are popular because off-road driving is common. Such vehicles are substantial but, because they have a high center of gravity, are more likely than cars to roll over.

A paper published last year in the journal Traffic Injury Prevention showed that many vehicles teenagers drive in their first year behind the wheel ranked low in crash protection or were more likely than other vehicles to be in crashes. Small cars were the most common. Over the year of the study, the percentage of teenagers driving small cars rose to 42 percent from 36 percent. About a quarter drove S.U.V.’s, pickups or sports cars.

The findings were based on a study of about 3,500 Connecticut teenagers and their parents that was conducted by the National Institute of Child Health and Human Development and the Preusser Research Group.

About a third of the vehicles driven by the teenagers were at least 10 years old. Cost is thought to be a major reason that teenagers drive smaller and older vehicles, particularly for teenagers who own their own cars.

The researchers also found that teenage owners were more likely to drive more miles, drive more riskily and have more traffic violations and crashes than those who did not own vehicles.

But neither vehicle type nor ownership is the most important factor in safety for teenagers, said Dr. Dinh-Zarr, of Make Roads Safe. ”There is a safe vehicle in almost every price range,” she said, ”but there’s no car that will protect your teen if you haven’t taught them good safety habits.”

PARENTS should keep safety in mind if they are considering buying a new car for themselves and giving the old one to their teenager, which has been a trend, said David Champion, director of automobile testing for Consumer Reports. More experienced drivers may be better able to handle a vehicle that does not have the latest safety equipment, he said.

”Parents really need to stand up to teens,” he said, conceding that ”no self-respecting 16- or 17-year-old male wants to be seen driving the family sedan.”

But he advises parents to provide their teenagers with the safest car possible until they acquire more driving skills. ”Let’s keep them around so they can buy a car of their own choice,” he said. ”People always ask what to pay for a car. I say, ‘How much would you pay to have your child back?’ I’d pay anything. This is the most dangerous part of their lives.”’