Louisiana Department of Insurance Publishes November 2011 Consumer Advocacy Newsletter

Auto Insurance: The Basics

Automobile insurance consumers frequently ask “How much coverage do I need?”  There is no one correct answer to this question because it depends on one’s personal situation. One important factor is: You need to be covered. Not only is having auto insurance important for the safety of you, your family and those around you, it is also the law.

Louisiana law LRS 32:900 requires all motorists to carry liability coverage of at least $15,000 covering bodily injury to one person, $30,000 for more than one person injured in a single accident and $25,000 to cover damage to another person’s vehicle or property.

Even though auto liability is mandatory, not everyone has it.  Individuals who drive uninsured should be aware of Louisiana’s “No Pay, No Play” law (LRS 32:866) which prohibits uninsured motorists from collecting the first $15,000 in personal injuries and the first $25,000 in property damages, regardless of who caused the accident.

While only the minimum liability limits are required, there are other factors to consider when deciding how much coverage you need to purchase.  Do you own a home?  Are you a small business owner?  What type of assets do you own?  These are all important things to consider when determining how much coverage you need.

If you are involved in an at-fault accident which injures another party, the minimum liability limits may not cover the medical bills or property damage incurred by the injured party. With the volume of lawsuits filed in Louisiana, chances are you could find yourself named as a party in a suit.  If you are underinsured, this could be a costly situation for you and your family.  So, in order to protect yourself and your family’s assets, more coverage would be a wise decision.

Consider whether you want to purchase comprehensive and collision coverage.  Collision coverage does just what the name implies.  It covers damage to your vehicle if you hit another car or that pesky mailbox next to your driveway.  In the same fashion, comprehensive covers other things that might happen to your vehicle like fire, theft, or vandalism.

The thought of purchasing insurance may give you budgeting nightmares, but when you consider the number of vehicles on the road at any given time, you can be sure that having auto insurance and the appropriate coverage will benefit you in the long run. So know your needs, know your coverage, and you will be ready when something unexpected happens.

If you are still unsure of how much coverage you need or would like to learn more about the additional types of auto coverage, speak with a licensed insurance producer or contact the Louisiana Department of Insurance Office of Consumer Advocacy for more information.

How to Prevent Identity Theft

Identity theft occurs when someone uses your personal identity information such as your name, Social Security number or credit card number to commit fraud and other crimes. Millions of people are losing their savings and once they learn they have been victimized, it is too late.  Identity theft has increased because of the rapid advancement of technology.  Many criminals are turning identity theft into their new vocation.  It is fairly easy, hard to detect and can be done from the comfort of home.   

As identity theft has become one of the most prevalent crimes in the world, insurance companies are increasingly marketing identity theft insurance policies to consumers. Identity theft insurance offers individuals a chance to lower their out-of-pocket expenses if their identity is stolen. Some policies cover expenses an individual may incur from having accounts frozen while assembling proof that a loss was actually a case of identity theft.  Some credit card companies offer identity theft insurance  free or at a small cost for a certain promotional period, while others, provide protection to card holders for free indefinitely.  Yet, as with many products and services purportedly used to assist victims of identity theft, including credit monitoring services, consumers need to carefully investigate individual identity theft insurance products and determine if the insurance would actually cover the types of losses the consumer is most likely to incur.

When determining the type of identity theft insurance to purchase, it is important to find out the amount of the deductible. This is the out-of-pocket amount that must be paid before the insurance coverage begins covering your losses.  According to the Federal Trade Commission, the average deductible amount is $100 – $150 for an average individual loss less than $1,500.

Identity theft is a problem that can be controlled with people being more aware of tactics that criminals use to steal their information.  Skilled thieves use a variety of methods to obtain information:

1.     Dumpster Diving:  Thieves go through trash looking for bills or other papers with personal information on it.

2.     Skimming: Thieves steal credit/debit card numbers when processing cards used for purchases.  A special storage device copies the information for later use.

3.     Phishing:  Thieves pretend to be financial institutions or companies and send spam or pop up messages through different electronic services to gather financial information.

4.     Changing of address:  Thieves divert billing statements to another location by completing a change of address form.

5.     Old Fashioned Stealing: Thieves steal wallets, purses, and mail (including bank and credit card statements); personal records or even bribe employees who have access to this type of information.

Individuals can take steps to prevent identity theft by following some of these tips:

1.     Do not carry your Social Security card or number in your wallet or purse. If your Social Security number is listed on your driver’s license, health insurance card, or checkbook, request to have it reissued with the sensitive information removed.

2.     Make a list of all your credit card account numbers and bank account numbers with customer service phone numbers, and keep it in a safe place. An easy way to do this is to photocopy or scan the front and back of all the contents of your wallet regularly. This will make it easier to contact the creditors in case of theft or loss, as well as replace items such as your health insurance card and driver’s license.

3.     Review your credit report annually and correct any mistakes promptly. Credit reports are available for free from http://www.annualcreditreport.com/. This central site allows you to request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion.

4.     Memorize your Social Security number, passwords, and Personal Identification Numbers. If you must write them down, do not carry them with you.

5.     Clean out your wallet or purse frequently.  Remove receipts or statements with your account numbers on them, and then shred or file as appropriate.

6.     Shred your old statements and other sensitive documents.  Invest in a cross-cut or confetti type shredder. Destroy anything containing your personal information that can be used in identity theft, such as account numbers, Social Security numbers, pre-approved credit applications and cash advance checks.

7.     Keep your phone number and address unlisted.

8.     Remove rarely used credit cards from your wallet or purse. Make sure your credit report reflects the account closures.

9.     Be cautious of anyone who tries to solicit sensitive information from you over the phone. If someone claims to be from a company you do business with, he should already have your account number and address on record. You should never be asked for your password or Personal Identification Number. If you are suspicious, ask the caller for a number where he can be reached, and then compare it with the information in your records.

When it comes to protecting your personal information, be diligent. A stolen identity can be a nightmare to deal with and quite costly to resolve.

EDITOR’S LETTER

Go Green and Save Money

You may be eligible for premium discounts and lower-priced coverage from your insurer if you “go green.” Insurers have begun to offer lower premiums on both automobile and property polices for energy-efficient usage and construction.  Purchasing hybrid vehicles, carpooling and reducing driving times leads to fewer cars on the road, fewer automobile accidents and reduces fuel emissions to the atmosphere.  Constructing buildings with solar panels and environmentally conscious materials reduces energy costs and decreases waste.

Insurance companies continuously study the behavior of their current and potential customers.  According to insureme.com, studies show that policyholders who do their part to keep the air clean, conserve energy and use fewer natural resources also tend to drive less and be healthier, more mature and responsible, as well as less likely to file insurance claims on losses. By slightly changing your environmental actions, you may reduce your insurance costs 5 to 10 percent.

You can also go green by managing your insurance related transactions electronically. Many companies now allow applicants and policyholders to acquire quotes online, receive policies, notices and statements by email, pay bills online and use Electronic Fund Transfers (EFT).  These uses of modern technology reduce paper usage, decrease administrative and mailing costs and lead to premium reductions for everyone.

Going green and being more environmentally aware is our civic responsibility.  Reduce your carbon footprint and preserve the planet by going green. It will also save you money.

Deputy Commissioner
Clarissa A. Preston, CIC, APIR