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CA Dept of Insurance Senior Advisory 2009-10

Date: 10/2009 SA10-09 – SENIOR ADVISORY

MEDICARE ADVANTAGE PLANS & MEDICARE PRESCRIPTION DRUG PROGRAM

This advisory was prepared by the California Department of Insurance to help seniors protect themselves against predatory insurance sales practices during open enrollment for Medicare Advantage plans and the Medicare Prescription Drug Program. Insurance is a difficult and challenging subject for everyone regardless of age, financial status, education, and experience. To help protect yourself from aggressive or deceptive sales practices, please consider these tips:

# Make Sure They’re Licensed: Not all people marketing Medicare
Advantage plans are insurance agents. If the person you are dealing with claims to be an insurance agent, contact the California Department of Insurance or visit www.insurance.ca.gov to verify license status. Insurance agents are required to print their license number on all business cards, quotations, and advertisements. Also, verify that the insurance company is licensed to do business in California.
# Cold Calls Prohibited: Federal regulations prohibit “cold calls”
which may take the form of uninvited sales calls, door-to-door visits, unsolicited emails, telephone calls or any other type of sales contact without your express invitation.
# Be Stingy with Personal Information: Never give out personal
information such as your Social Security number, bank account numbers, or credit card information over the phone. Verify that the person you are dealing with has proper authority to act on behalf of the plan before you provide your Medicare number. This is a good time to seek assistance from a trusted relative, friend or advisor.
# Medicare Has No Official Sales Reps: Be wary of any salesperson who
says that he/she is a Medicare representative. Medicare does not send “representatives” to solicit your business.
# No Marketing in Educational or Care Settings: Federal regulations
prohibit the marketing of Medicare products in places where health care is delivered (such as a doctor’s office, clinic, or pharmacy counter) or at an educational event.
# No Such Thing as a Free Lunch: Federal regulations prohibit offers
of free meals for listening to a sales presentation or for signing up in a particular plan.
# Don’t Let Them Oversell You: Federal regulations prohibit selling
additional insurance products during any sales or marketing presentation for a Medicare Advantage or Prescription Drug Plan.
# Read and Understand the Plan: Be sure that the plan that you choose
matches your needs and that you can continue to see your current health care providers if you wish. It may be very difficult or even impossible to “undo” your selection later.
# You have rights! Contact the California Department of Insurance at
1-800-927-HELP (4357) or visit our website at www.insurance.ca.gov, if you have any questions about an insurance offer, scheme or agent.

Additional Info: Information about Medicare is available at 1-800-MEDICARE (1-800-633-4227) or www.medicare.gov or the California Department of Aging Health Insurance Counseling and Advocacy Program (HICAP) at 1-800-434-0222 may be able to assist you. Revised 10/14/09

Deadline for Registering Pumps is Approaching

There is a December 31, 2009 deadline for registering Tier 1 or 2 concrete pumps with the California Air Resources Board. After that deadline, pump engines will have to meet the current Tier 3 requirements before they can be registered. For more information, contact the manufacturer of your pump and see the CARB website at http://www.arb.ca.gov/portable/portable.htm

Please note that registration is not required by any insurance companies we represent. This is between you and the State; we’re only passing on this information in the hopes it is helpful.

Pizza Delivery May Not be Covered by Personal Auto Policy

Pizza Delivery by Tracy Hunter on FlickrBe aware. Your mileage may vary in this situation.

I frequently see kids driving around with the name of one or another pizza place on their car and wonder if their parents checked out the insurance for the employer. You see, your personal auto policy does not cover business use. That is the job of a Business Auto policy and why it costs more. These kids are usually in a hurry to get the pizza to the customer on time, so the risk can be significant.

On the other hand, I’ve read of court decisions that favored requiring the company with the personal auto policy to pay. Like so many other things in life, it depends. It depends on the wording of the policy, the jurisdiction, and the individual situation.

One should first check with the employer. The pizza company should have Delivery Coverage to cover both the company and their drivers. This would be on either their business auto policy or their company liability policy. Many pizza places don’t have it and so you would by relying on your personal auto policy. If they don’t and your kid gets into an accident, your insurance company may deny the claim leaving you to foot the bill. These are questions that are best asked beforehand.

Flood Insurance: Affordable First-Step Protection

FEMA LogoPASADENA, Calif. — The recent winter rains are an urgent reminder to Californians living in flood-threatened areas that they can reduce future financial losses from flooding by buying flood insurance.

“Many residents are unaware that their homeowners insurance does not cover flood damage,” said Mark Neveau, federal coordinating officer for the Federal Emergency Management Agency (FEMA). “Flooding is the most common and most costly type of natural disaster in the United States. Having flood insurance coverage can make a huge difference when facing the need to make repairs and replace items following a flood.”

Managed by FEMA, the National Flood Insurance Program (NFIP) is designed to provide an alternative to disaster assistance and reduce the ever-rising costs of rebuilding. Flood insurance is a prudent and affordable first step for any home or business owner and also is available to renters.

“FEMA can only offer financial aid to residents in the event of a presidential disaster declaration,” notes Tom Maruyama, deputy state coordinating officer. “However, most floods are not extensive enough to warrant such as a declaration. An NFIP flood policy pays off whether there is a declaration or not.”

Insuring your property can be relatively inexpensive compared to the massive cost of reconstruction following a flood. Residents can buy flood insurance from their local insurance agent as long as they live in a participating NFIP community. It is wise to purchase enough coverage to replace property than to merely buy enough insurance to cover a mortgage. While flood insurance can be purchased at any time, there is a 30-day waiting period before the policy becomes effective.

AlertOC: Emergency Notification Service from County of Orange

DIAI

AlertOC is a mass notification system designed to keep Orange County residents and businesses informed of emergencies and certain community events. By registering with AlertOC, time-sensitive voice messages from the County or City in which you live or work may be sent to your home, cell or business phone. Text messages may also be sent to cell phones, e-mail accounts and hearing impaired receiving devices.

To sign up, go to www.alertoc.com

Should I Purchase Coverage from the Rental Agency?

When renting a car, one has a choice of whether or not to purchase the coverage offered by the rental agency. Unfortunately, like so many other things in life, there is no right answer to this question. Here are a few things to consider:

If you do not have both Collision and Comprehensive/Other-than-Collison coverage on your current policy purchasing the coverage from the rental agency probably makes sense since it would be the only coverage you would have in the event of an accident.

Policies with those coverages would usually give coverage for a rental car, however there could be what is called a “gap” in coverage which is an expense that is not covered. For example, rental contract often contain a charge for “diminuation in value” which is a way of reconizing that a repaired vehicle isn’t worth the same as it would have been before the damage. This coverage is not normally provided by one’s personal auto policy. Since rental cars tend to be less than 1 year old totalling one could be a serious expense. The rental contract could also require additional fees that the auto policy would not necessarily cover.

In the end, you would need to weigh the cost of the rental agency coverage with the risk you are taking without it.

Tips for College-Aged Adults and their Parents

This bulletin was recently sent by the California Department of Insurance:

SACRAMENTO – As college students head back to school this fall, Commissioner Poizner urges them to do their homework in researching their insurance options. Students and parents should make sure not to overlook the issue of insurance in their back-to-school preparations.

“Going to college can be an exhilarating, anxious and expensive process,” said Commissioner Poizner. “College costs are high enough. Parents don’t need the added expenses that can result from inadequate coverage of their children. I urge parents to carefully review all their insurance policies to determine exactly what is — and is not — covered for their college-bound children.”

Commissioner Poizner offered the following insurance tips for college-aged adults:

Health insurance:

In many cases, full-time college students are covered under their parents’ health insurance plans until they graduate or reach 23 years of age.

Students who are insured under their parents’ policies should make sure campus health facilities and local doctors and hospitals accept theirfamily’s insurance coverage.

If not, it may be advisable for a student to purchase an insurance plan through his or her school, or research additional insurance options.

Renters insurance:

Many students own computers, TVs, MP3 players, DVDs, and other valuables that could be stolen or destroyed in a fire or natural disaster.

More than $4 million in personal property was reported stolen to University of California police departments, and more than $5 million in personal property was reported stolen to California State University police departments in 2006.

Colleges and landlords typically do not pay for the loss of personal property. Parents should check their homeowners policies to see what is covered for their students.

Auto insurance:

If a student will be using the family vehicle when visiting home, parents should make sure the child is listed by name on the family’s auto insurance policy.

Notify your auto insurance company each semester if a student maintains good grades, which may help lower premiums.

Students who do not have auto insurance through their parents’ policies should ask themselves, do I have financial resources to pay for an accident if I am at fault? What would I do if my car was stolen? Would I be able to purchase another vehicle?

California drivers between the ages of 18-24 were involved in nearly 200,000 accidents in 2006.

Auto insurance can be expensive, especially for students. But driving without liability coverage is illegal.

Fortunately, there is an affordable option for eligible college students.

The California Low Cost Automobile Insurance Program offers low-cost automobile liability insurance to good drivers who meet eligibility criteria.

In Sacramento, drivers can be insured for $378 per year. Medical coverage and uninsured motorist bodily injury coverage are also available through this program at additional costs. For more information about this program, visit the Department of Insurance website at www.insurance.ca.gov.

Adequate Auto Limits are a Necessity

They really are. I’m not just making this stuff up

One of the things we spend a fair amount of time with is trying to talk new customer out of minimum auto limits. Now, I know what some of you are thinking. “They’re just trying to boost up their sales.” Trust me, for the few extra bucks we would get in commission it’s really not worth the effort. It’s a lot easier to just let our customers pick what they want and move on. However, we see the other side. We’ve seen customers that had an accident and chose to under insure. The minimum liability limits for California are 15/30/10. That’s $15,000 for each person, $30,000 for each accident, and $10,000 in property damage. Let’s look at that last number. $10,000 is all that would be paid if some else’s car was totaled. How many $10,000 cars are out there today? Not many. What happens if the limit isn’t enough? You pay. $15,000 isn’t much coverage for the medical and hospital bills of someone that gets hurt now is it?

The additional cost isn’t worth the anguish you’ll experience if it isn’t enough.

Mechanical Breakdown Policies

or…how to get a better deal from your dealer

Also known as extended warranties, Mechanical Breakdown Policies, have been available from independent agents for a long time. Problem is, most of the time we don’t hear about your new car until you’ve already finished the deal and so if you are the kind of customer that likes extended warranties you’ve already taken the dealer’s plan. Now, the dealer plans have their advantages however they can be very expensive. I know firsthand that there is a huge markup for the dealer in the prices they quote you.

Here’s a suggestion. Before you go to the dealer to finish the deal, give us a call. We can give you a quote on one of our plans. Then, when it comes time to make the deal you can use the quote to get the dealer to come down on his price. If he doesn’t, call us again and we’ll set you up on our plan.