Maine Ins. Commissioner: Consider Flood Insurance

Two days after this post on our blog, Maine’s Insurance Superintendent, Mila Kofman, echoed our recommendation to consider flood insurance, especially following this winter’s heavy snowfall.


Her bulletin points out that “now is the time for home and business owners to seriously consider the advantages of flood insurance”. She further points out that 9 of 11 federal disaster declarations in Maine from 2000 to 2008 involved spring flooding, and that the damages “impacted every county in Maine on multiple occasions”.

Don’t forget that flood damage is not covered by homeowners or standard business policies, and that the National Flood Insurance Program has a mandatory 30 day waiting period before coverage takes effect (unless it’s a new property purchase). Now really IS the time to think about protecting your property.

For more information about flood coverage, visit the Bureau of Insurance’s flood information page, read our February 18 blog post, or contact us via our web site, or on Twitter.


Welcome to High Deductible Health Insurance…Ready or Not!

Our company recently joined the ranks of employers switching from traditional health insurance plans to high-deductible, HSA compatible plans. We switched from our HMO plan for two reasons: First, the fourth or fifth consecutive year of double-digit premium increases was driving our benefits expenses beyond the palatable. The new model allows us to reduce our premiums. We plowed the savings back into assisting employees with their health care expenses (more about that later).

Second, the high deductible plan encourages us to be more informed consumers of  medical services. In the past, we paid a co-payment for every office visit or prescription, regardless of the real cost of the product or service. Because we’ll be paying 100% of the first $2,500 per person for “sick office visits” and prescriptions, we’re bound to pay more attention to the cost of these things. I know I’ll be more likely to see if there’s a generic alternative to a brand-name drug for example.

Even though I’m in the insurance business, my experience with health insurance is strictly from the consumer side. And, I’m quick to admit that I don’t quickly grasp the concepts of embedded deductibles, co-pays and maximum out-of-pocket expenses. It gives me more sympathy for our clients trying to understand insurance terms that we carelessly toss around every day.

Going from a plan with a $500 deductible to one 5 or more times higher was  a bit scary for me. It took a while to get my head around. As one of the decision-makers, I was also concerned that the plan would work well for our employees. Fortunately, our agent was very patient in explaining the plan repeatedly, and in answering our (ok, mostly my) questions.

How does one absorb such an increase in deductible? Plan participants establish Health Savings Accounts (HSAs), into which they can deposit pre-tax dollars for medical expenses. We decided to deposit $750 in each participant’s account at the beginning of the year, to front-end load their expense account. To further encourage employees to fund their own accounts, we agreed to match the first $750 that they deposited via payroll deduction. So, if they contribute $750, they’ll have a total of $2,250 in their HSA. That goes a long way towards the $2,500 deductible.

My HSA debit card arrived in today’s mail. The plan starts on January 1. I’ll post more occasionally during the year to explain how the plan’s working, and how I’m adjusting to having a high-deductible plan.

Improved Maine Workplace Safety Likely to Lead to WC Rate Drop

The Lewiston Sun Journal reported last week that Maine Superintendent of Insurance Mila Koffman approved a request from the National Council on Compensation Insurance for a reduction in Maine workers’ compensation rates of 7.6%.  NCCI is the primary gatherer of workers’ compensation data.

It’s up to each individual insurer to decide whether or not to follow NCCI’s advice, but most do at least base their rate filings on NCCI’s indications.

This is good news on many fronts. Lower accident rates obviously are good for workers and their families; lower workers’ compensation rates help Maine employers as they compete in the global marketplace; and the reduced costs come at a time when other business expenses are increasing and many industries face shrinking revenues.

Just last month MEMIC, the state’s largest workers comp insurer, returned about 10% of 2005 premiums to its policyholders in the form of a dividend. MEMIC has received well-deserved attention for its efforts to increase workplace safety in Maine.

Whether or how much Maine WC rates decrease in 2009 remains to be seen. What is certain is that the system is much healthier than it has been in a very long time.

Kyle Causes Suspension of Binding Authority

Insurance companies suspend agents’ authority to bind any new coverage or to increase coverage on buildings, vehicles or other property when an area is under a “severe storm warning”. This includes

  • Gale Warnings
  • Tropical Storm Watch or Warning 
  • Hurricane Watch or Warning. 

 As a result, we expect to  be unable to bind coverage for most of the weekend.  

Our 24/7 claim service will be available as usual. Call our office at 207.799.5541 for instructions. 
For instructions on how to protect your property in the event of a storm, visit the Insurance Information Institute’s Disaster Preparedness page
Be safe this weekend!

A Useful Site to Learn About Insurance

The National Association of Insurance Commissioners (NAIC) has produced a consumer-friendly educational site that we recommend to anyone wanting to learn more without any sales pressure, implied or otherwise. 

Many people like to do their research online before consulting with an agent or buying insurance. This site is especially good, because it's created by regulators, who 
  1. Don't sell insurance; and
  2. Are charged with protecting consumers.   

Check it out!