Info About Insurance

It may cost more to fly by the first of the year, and for a change, soaring fuel prices will not be entirely to blame.

Passengers can blame higher ticket prices on terrorists.

Airlines are facing the possible loss of a federal program that, since the Sept. 11, 2001, terrorist attacks, has provided carriers with less costly insurance than what they had been getting from insurance companies. The insurers, finding the risks too high, virtually abandoned the commercial aviation industry after hijacked passenger planes were flown into the World Trade Center and the Pentagon.

Under the Federal Aviation Administration’s War Risk Insurance Program, started a few weeks after the Sept. 11 attacks, about 70 large and small airlines have been paying a total of about $150 million a year in premiums for coverage against damage, death or injury caused by terrorists, industry sources said.

Experts said they believe airlines would pay at least $500 million a year if the FAA program is not renewed.

Earlier this week, the Department of Transportation extended the program until Dec. 31. But after that, its future is uncertain, said airline and other experts.

A spokesman for the department said no decision has been made about whether to extend the insurance program further, but the matter is being evaluated. The decision will depend in part on the availability of commercial insurance, the spokesman said.

“It’s very definite that if the airlines are forced to pay higher premiums, the cost is going to be reflected in higher fares to passengers,” said Shalem Massey, an attorney with the law firm of Bryan Cave in Irvine, Calif., who specializes in the aviation industry.

Massey said the issue is now “a major industry concern” right behind fuel costs.

While intense competition had blocked most major airlines from raising fares in the past, carriers have jacked up ticket prices 21 times since the beginning of 2005, according to a report by Jamie Baker, who follows the industry for the investment bank JPMorgan in Manhattan.

How much ticket prices might rise is uncertain, although fare hikes have ranged anywhere from $5 to $20 one-way.

The uncertainty about insurance coverage comes as airlines are making a comeback. Even with fuel costs this summer 142 percent higher than in 2000, major carriers including Southwest Airlines and Continental Airlines saw profits double in the second quarter, while American Airlines reported a profit for the second time in the past 22 quarters.

But raising ticket prices is always a risk. “You could get to the point where customers say, ‘I’m not going to fly. It’s too costly. I’ll drive or telecommute,’ ” said David Castelveter, a spokesman for the industry’s major trade group, the Air Transport Association.

If they don’t raise ticket prices, airlines could eliminate some routes, park some airplanes or try to trim salaries even further to cut costs, industry experts said.

There may be room for compromise. Robert Hartwig, chief economist for the Insurance Information Institute, an industry trade organization in Manhattan, said insurers would like at least some of the airline business back.

KUWAIT: The health insurance problem continues, said officials at the Ministry of Health. Originally the MoH used a Health Guarantee System that generated revenues in excess of KD 103 million for the state. Then law 1/59 changed the Health Guarantee System into a health insurance programme that worked with a number of different insurance companies. However, many of the insurance companies borrowed money from the state and never paid it back. “Some of these companies still owe us millions,” said one MoH official. Insurance companies owe the Kuwaiti government over KD 6 million.

“We decided to return to the old system, but we had problems with some local banks that totally rejected the whole idea while others demanded an additional fee for providing the service,” explained the MoH official.
Under the new system individuals would pay the additional KD 3 fee for each transaction at participating banks, and KD 5 at non-participating banks.
A dispute arose between insurance companies and the MoH when the insurance companies wanted to work on Thursdays. The MoH rejected the plan, extending the business day during the week to make up for not working on Thursdays.
Officials said that centres in Hawally and Farwaniya tend to be more crowded compared to other centres because of the large number of expatriates in those areas. Other centres have also received increased traffic because of bedoons getting new paperwork.
Officials urged people to perform health care transactions for themselves. They added that the ministry’s contract with the Insurance Services Company would be valid until 2008, and the company’s staff is currently training MoH employees to carry out the required tasks.
The company also increased in size to 100 employees.

• Students who don’t bring big-ticket items to school or easily can afford on their own to replace damaged or stolen items don’t need to buy insurance.

• Besides, there’s a good chance they are covered under their parents’ homeowner’s policy. Parents need to read their policy or talk to their agent.

— Chubb Group covers students living on and off campus.

— State Farm Insurance covers college students as long as they remain dependents.

— Allstate Insurance says it has similar student coverage in some policies.

• Even if a student is covered under a homeowner’s policy, check the limits. Often policies cover electronics or jewelry only up to $2,500, which might not be enough for the entire family.

• Some homeowner’s policies limit the protection for college students in other ways. A student’s coverage might be 10 percent of the parent’s home coverage or $1,000, whichever is greater, says the National Association of Insurance Commissioners.

• Students living in their own apartment, as well as those not covered by a parent’s policy, should consider renter’s insurance. Besides reimbursing students for damaged or stolen property, the policy often includes liability coverage in case someone is injured in the apartment.

Renter’s insurance runs about $15 to $30 per month, according to Allstate.

• Personal property insurers also sell policies specifically targeted at college students. Typical policies at National Student Services and Fireman’s Fund Insurance cost about $125 a year for $5,000 in coverage and a $25 deductible.

• When buying insurance, students will have an option of “replacement cost” or “actual cash value” coverage. Experts advise choosing replacement cost even though it’s more expensive.

That way, the insurance company will pay the full amount of what it costs to replace items, even if they’re old. Actual cash value will pay only the cost of items minus depreciation.

— Los Angeles Times

IAG, the parent company of State Insurance, has pleaded guilty to 30 breaches of the Fair Trading Act and has been fined $127,000 by the District Court in Auckland.

The Court found that State Insurance misled customers about their right to choose a windscreen repairer when making an insurance claim.

State Insurance’s brochures said that policy holders could choose any company to carry out windscreen repairs, but contact centre staff told a significant number of customers that they had to use Smith & Smith for the work.

Commerce Commission Chair Paula Rebstock said that the case had attracted considerable interest since the Commission began investigating in October 2004.

“The Commission is pleased with these penalties, which recognise that companies must honour the promises they make,” Ms Rebstock said.

IAG’s 2003 brochure lists 17 “Main Policy Benefits.” Number 10 is “Choose to have repairs carried out by any repair service nationwide.”

Ms Rebstock said that the ability to choose one’s own repairer would be an attractive feature to some people when buying insurance, and may well have influenced their decision to insure with IAG.

“Once IAG had made that representation, they had to honour it. Instead they misled customers and deprived them of the right to choose,” Ms Rebstock said.

“IAG has a very large share of the insurance market in New Zealand so this behaviour is likely to have had a significant impact on the competitive environment,” Ms Rebstock said.

Ms Rebstock said that IAG should have done more to ensure that its staff were not misleading customers.

“They knew about the problem, but their behaviour suggests that they did not take the misrepresentation issue seriously until the Commission began investigating.”

A competitor of Smith & Smith wrote to the IAG chief executive in June 2004, telling him that contact centre staff were making the misleading claims.

The Commission found the misleading statements were still being made in October 2004 when it began its investigation.

Once IAG were told that the Commission was investigating, it took steps to stop staff from misleading customers.

She said the Commission’s investigation had been hampered by the company failing to provide complete information and that the Commission had had to resort to gaining search warrants.

The scenes are harrowing. Thousands of people have besieged the dockside in Beirut, waiting for ships to ferry them to safety. One pregnant woman, infant son in tow, was turned away after being promised she’d be among the first to be rescued. “Never mind the Israeli bombs,” said one of the people on the dock. “It’s the Lebanese sun that’s going to decimate these people. People are going to start falling like flies out here.”

Back home, the hapless Peter MacKay was on the CBC. “What’s gone wrong?” the interviewer demanded angrily, as if the Foreign Affairs Minister were personally responsible for the outbreak of hostilities. One family, which got out of Lebanon on its own hook, expressed outrage at the lack of government help. “They won’t get our vote again,” the father vowed.

Why was the government caught so flat-footed? Where was the plan? Where were the ships? “The NDP called for an evacuation plan on Friday,” sniped Jack Layton.

Personally, I’m inclined to cut our guys a bit of slack. Perhaps it’s a touch unrealistic to expect that we’d have an emergency evacuation plan for 25,000 people tucked in our back pocket. Canada is thousands of miles away. The conflict broke out without warning, and Beirut’s airport was bombed. What were we supposed to do — have ships and 600 consular officials on standby, just in case?

Little Canada, amazingly, has as many as 50,000 nationals in Lebanon, half of whom have frantically signed up with the embassy. We have more citizens in Lebanon than the Americans, the British and the French. A few of these people are tourists. A lot are dual nationals on holiday visiting their relatives. Quite a lot are part-time residents of both countries. Probably half are full-time residents of Lebanon who became Canadian citizens, then, after the civil war died down, returned home.

When it’s not at war, Lebanon is a very pleasant place to live. Canadian old-age pensions go a long way there. And a Canadian passport is a wonderful insurance policy. It guarantees you a ticket out if things get tough. “When you have a Canadian passport, you become very demanding,” says Martin Collacott, who was once Canada’s ambassador to Syria and Lebanon. He has been involved in several evacuation plans, all with far more time to put together than this one.

Once upon a time, immigrants set sail across the ocean and never went back. Gradually, they lost touch with their relatives, their homelands and their original identities. That’s all changed now. Cheap air travel, e-mail and cellphones mean you can go home again, as often and as long as you want. The world is full of dual citizens who shuttle back and forth between Vancouver and Hong Kong, Lebanon and Montreal, Toronto and Seoul. Some acquired their citizenship strictly as a hedge. Before the handover of Hong Kong to the Chinese, there were perhaps half a million newly minted Chinese Canadians living there, far more than in Vancouver. Not for nothing did novelist Yann Martel call Canada the world’s finest hotel.

With dual nationalities come dual sets of loyalties. That’s not entirely bad. Canada is now intimately connected to every corner of Earth. But what happens to our own national identity? “No country, and especially no democracy, can afford to have large numbers of citizens with shallow civic and national attachments,” says U.S. political scientist Stanley Renshon.

Of course we should do whatever we can to extract innocents from the war zone. (We don’t even charge them.) But it’s worth noting that Lebanon has been an iffy neighbourhood for quite a while. Everyone knows that Hezbollah controls the towns in the south, including the town where eight members of a Lebanese-Canadian family lost their lives. That’s a tragedy. But that’s what Hezbollah does. It keeps its rockets stashed in civilian neighbourhoods and uses civilians as human shields.

“My family are all martyrs,” said one of the relatives in Canada, as he condemned our foreign policy. But it’s not Hezbollah that will protect the Lebanese-Canadian kids cowering in the cellars. It’s us — because when Canada takes you in, we look after you forever.

The Madhya Pradesh Police on Thursday arrested a couple and an insurance agent for allegedly killing a youth to claim insurance money, police said.

Deepak Ahirwar and his wife Kirti, residents of Itarsi in Hoshangabad district, hatched the conspiracy in connivance with insurance agent Mukesh Malajpure and burnt to death Barunath Pardhi, said a police official.

“Ahirwar’s game plan included searching for a person of his physique, getting himself insured, killing the person and asking his wife to claim the insurance money with the help of the agent,” the official added.

Kirti showed Pardhi’s charred body claiming it was her husband’s and applied for the claim.

The police have registered a case of murder against the three.

An insurance company is suing one of its top salesmen for claiming he worked while he was off sick.

An insurance company is suing one of its top salesmen for claiming he worked while he was off sick. Canada Life is suing Liam O’Connor for €80,000 in sick pay, which it says he claimed while he was working.

The two sides spent five days in the High Court last week. Estimated legal costs to date are €250,000.

An application by O’Connor to the Employment Appeals Tribunal was adjourned four years ago pending the hearing of the High Court case.

Canada Life alleged that O’Connor had been working while he received disability income support, but O’Connor’s counsel said that O’Connor had been attending a consultant psychiatrist and a psychologist and was on strong medication.

Any work was done exclusively for Canada Life, which profited from it.

In closing submissions last Friday, O’Connor’s counsel, John McGuiggan, told the court: ‘‘There was a contractual procedure to deal with allegations of sickness abuse, but Canada Life never used it.

They had several chances to trigger the procedure and they did not do so.

‘‘Under that procedure, they would have had to take into account Mr O’Connor’s 17 years of unblemished service, his outstanding performance - he was the company’s representative to the Million Dollar Table club - and his certified psychiatric illness. Their response would have had to be proportionate.

“Instead, they moved straight to a dismissal response, accusing him of draconian criminal acts, and frauds attracting ten-year sentences and two million-euro fines.”

Mr Justice Quirke will deliver his judgment at a later date.

Former senior sales director Shay McGrath is also suing Canada Life for up to €2 million after it refused to cover his permanent health insurance policy.

McGrath was sacked from Canada Life three years ago after an internal investigation into a €19,000 loan from another employee.

COMPLAINTS about travel insurance firms have soared by almost a fifth in the past year as new figures also reveal the ‘hotspots’ where British tourists get into trouble while abroad.

The Financial Ombudsman Service has revealed that it dealt with 1,507 new cases of complaints about travel insurance in 2005/06 in the UK compared with just 1,133 the previous year.

The number of serious disputes over holiday insurance has doubled since 2001.

It believes the increasing number of travellers taking part in adventurous holiday activities in exotic locations is fuelling the rise in complaints as policyholders find they are not covered when their holiday goes wrong.

The three highest claims are for loss or damage to baggage, cancellation and medical expenses. But the Association of British Insurers estimates that only 5% of all formal complaints reach the ombudsman as most are dealt with by the companies themselves, meaning more than 30,000 travellers suffered problems with their travel insurance last year.

A spokeswoman from the Financial Ombudsman said: “The market has changed quite a lot and the types of holidays that people are taking are far more adventurous. This has a lot to do with the rise in the number of complaints we are receiving due to a mismatch in what people expect and what policies provide.

“We have seen some evidence of claim handling that we don’t think is appropriate and there is a wide difference in the level of cover that is available.”

She added that around 30% of all complaints that reach the ombudsman are upheld in favour of the consumer.

Scotland on Sunday can also reveal the holiday destinations where British tourists are most likely to encounter a holiday nightmare as the drink-fuelled antics of louts while abroad are believed to be leading to more British holidaymakers than ever ending up behind bars and in hospital.

Figures released by the Foreign and Commonwealth Office show the number of consulate contacts with British citizens at the most popular holiday destinations.

They reveal that the most dangerous place to visit was the popular beach paradise of Thailand where one in every 6,500 British visitors died and one in 3,600 was hospitalised.

Thailand also had the highest arrest rate, and travellers to Barbados were most likely to lose their passports or have them stolen.

France was the most trouble- free country to visit with fewer than one in 322,000 British visitors ending up in hospital and one in 218,000 dying there.

THIRUVANANTHAPURAM: New India Assurance Company Limited is launching a unique insurance scheme for those living in panchayats through the local self-government institutions (LSGIs) in the State.

The General Insurance Service Through Local Administrative Bodies (GISLAB) is aimed at extending general insurance facility to the rural population. This is expected to provide employment to 8,000 persons.

As per the scheme, medical assistance of Rs.10,000 would be given to a family comprising father, mother and three children at a very low premium.

Moreover, the scheme will offer insurance cover to a house estimated at Rs.2 lakhs, furniture and home appliances for Rs.50,000. All these will be covered by one policy. The policies will be issued only through the LSGIs. Five persons will be selected in each panchayat. They will be trained by the insurance company and made to appear for an examination conducted by the Insurance Regulatory Development Authority and appointed as insurance advisors in the panchayats. Already 25 persons have passed the examination in Thiruvananthapuram and Kollam districts. Local Self-Government Minister Paloli Mohammed Kutty will launch the scheme at a function to be held here on Monday.

Law Minister M. Vijayakumar will distribute the licences to the advisors, an insurance company release said.

On Aug. 5 of last year, in his weekly column to constituents, Sen. Trent Lott, R-Miss., praised Congress for passing legal reform that would “curtail frivolous lawsuits which threaten American jobs.”

Twenty-four days later, Hurricane Katrina took out Sen. Lott’s house in Pascagoula. Last December, Sen. Lott hired one of those rapacious trial lawyers - who also happens to be the senator’s brother-in-law - to go after the insurance company that Sen. Lott believes owes him money for his destroyed home. Funny how lawsuits look less “frivolous” when you’re the plaintiff.

Sen. Lott is among 3,000 Mississippi clients of Richard “Dickie” Scruggs, who was in court last week on behalf of Julie and Paul Leonard. Their losses from Katrina came to $130,000. The insurance company paid $1,300, claiming that almost all of the damage was from water, not wind. Mr. Scruggs counters that devastating winds came three hours before the storm surge, and that the Leonards’ casualty agent told them not to bother with flood insurance. Mr. Scruggs makes the same argument for Sen. Lott, who once criticized Democrats for thinking that “the answer is a lawsuit. Sue everybody.”

Florida has been through the wind vs. water legal debate. Here, the ruling in 2004 went against the insurance companies. But the Legislature fixed that in 2005 with a law that overrode the court. Why does Tallahassee wonder why Floridians are so mad about insurance?

Getting out of paying claims

The facts of the Florida wind-water case were slightly different, but the issue was the same.

In October 1999, Hurricane Irene caused damage to a Broward County home that amounted to more than half of the property’s insured value. Under county rules, that meant the home had to be torn down and rebuilt under a tougher code. The owners had property and flood insurance, but they faced a big gap between what their claims paid and their cost. So, they sued to have their wind insurer - the Florida Windstorm Underwriting Association, the first version of Citizens - pay the balance.

The owners lost at trial. In June 2004, however, the 4th District Court of Appeal in West Palm Beach ruled for them. In its opinion, the court said that a company responsible for “even a fractional share” is “liable for the face amount” - in that case, the total insured value - because, under Florida rules, ambiguous policies go “in favor of the owner.”

Repealing that decision was the insurance industry’s top priority for the 2005 legislative session. As so often happens, when insurers discover that they might actually have to pay claims - mold, sinkholes, hurricanes - they try to get out of paying claims. Why do insurance companies wonder why so many of their customers are mad at them?

Start doing favors for consumers

Since Hurricane Andrew in 1992, here is what Florida has done for the property insurance industry:

The state created the hurricane catastrophe fund, which helps insurers pay claims in a bad storm year.

The state allowed insurers to form state versions, known as “pups,” of their big-dog companies. Allstate Floridian, for example, can claim that it needs a huge rate increase to make up for storm claims, even as Allstate is bragging about how much money it’s making.

The state created a system of arbitration for rate increases, rather than let the insurance commissioner decide. The companies win almost every time.

The state refused to create an Office of Public Counsel that would represent consumers during rate requests. The state has such an office for utility rate requests. For the most part, the state relies on the insurance industry for information when deciding what premiums should be. An Office of Public Counsel, staffed with trained specialists, could challenge the industry’s numbers.

The state refused to enact a “loyalty clause” that would have prevented insurers from dropping policies if a customer had paid premiums for three years and done nothing to breach the contract with the company.

And, of course, the state negated that appeals court ruling the industry hated.

It took personal tragedy for Trent Lott to lose his political dislike for lawsuits. How much more will it take in Florida for the many groups worried about insurance costs - Realtors, small businesses, retailers, chambers of commerce - to understand that they outnumber even all the insurance lobbyists in Tallahassee and to make the Legislature understand why so many people are mad?