On the restriction front, I have seen some new places – Montana and Utah – due to wildfires. Whether that is good or bad, I do write a lot of business in the surrounding ‘non-restricted’ area. The problem I run into occasionally is the garaging location.
For instance, say we have a hurricane or tropical storm ready to smack Florida’s gulf coast and my potential insured has a mailing address in Jacksonville (on the Atlantic side), but a garaging address of Tampa (on the gulf side). I still would put that risk on hold until any restriction has passed.
When we look at the location we have to assess the risk and then charge to keep in line with any claims that may come about. So, enter the risk meter – the underwriters way a putting a toe into the murky waters of weather and crime.
We can give a location and the risk meter will tell us information like the risk of wildfires, how far away is the nearest fault line, the potential of hail, or how many car thefts, burglaries, and arsons happened in that area. This is one of the many tools actuaries use to come up with rates.
Another caveat to the garaging conversation – the military. The majority of the major carriers will write a policy based on the registration statement; however, because military personnel moves around, your military carriers will write a policy based on garaging location – not registration.
In conjunction, each of the states has laws that ‘pause’ registration and licensing requirements for military personnel. More on that later.
It is important to make sure we know where the risk is before the policy is written. Don’t stop at the mailing address, find out more. For instance, I had a recent claim relating to a lawyer I insured.
Our insured had a home with a six car garage in Calabasas, California, but his office location was a house in Compton, California – one hour away. If he was working late or had a large case this caused him to stay in the office and utilize street parking for his 2013 Mercedes AMG model for several days.
After being a policyholder for five years with no claims, his car was stolen one night from the on the street parking. There were notes in the file that the agent had stopped at the mailing address. Of course, after the claim, an alternate garage was added and that jacked rate – sending the insured over the edge and looking for other insurance.
I could see if the insured had misrepresented and said he took the bus to work or if he said he had a garage at the office location and just did not use it. I am pretty sure if the alternate garage had been discussed and added initially, the customer would have stayed.
Additionally, there are the snow birds who may live half the year in a southern state and half a year in a northern state. They may have an extra car registered and garaged in each state. If not done properly for the insured, this type of incidence may lead to alternate garaging problems or additional/separate policy problems.
I once had a new policy insured come to me with one car – registered in two states. He kept the license plates he wasn’t using in the trunk. Clever, funny, and completely illegal. At eighty-seven years old – no one had ever told him the problem. Imagine.
Make sure you’re clicking off that section of the application and chatting with the insured about it. It could save plenty of time and unnecessary work.
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