Insurelane Insurance Blog

It’s been reported that over 400,000 workers in a total of 27 different states will have lost their federal unemployment insurance by May 12. The data, provided by the National Employment Law Project, shows that the workers will lose between 13 and 20 weeks of the Extended Benefits program insurance.

The National Employment Law Project said many long-term unemployed people are being left behind because they’ll be losing the last 13 to 20 weeks of insurance they rely on due to legislation that Congress passed back in February. The Project said the economy isn’t improving that quickly and more people will have to try and make ends meet without any government assistance, meaning they won’t have any money to pump back into the frail economy.

The cuts will take place in eight states on May 12 and will affect over 200,000 long-term unemployed people. States including Illinois, California, Pennsylvania, Texas, and Florida are being phased out of the insurance system at the same time with about 100,000 California workers being affected.

Between January and February there were four states which had the unemployment insurance payments reduced. Then 15 more states were affected in April. The cuts on May 12 make it 27 states in all. Another seven states are scheduled to be phased out in late September. After the cuts, workers will see their maximum insurance benefits set at 79 weeks. However, they’ll be cut down again when more federal cuts are implemented.

According to an article by Jobmouse.com, since the recession began, more than 19 million Americans have depended on some type of federal unemployment assistance insurance since the recession began. The average length of unemployment currently stands at 39 weeks with 41 per cent of those out of work being unemployed for a minimum of six months. About 33 per cent have been out of a job for at least a year.

However, this data doesn’t include the millions of people who have used up all of their federal and state unemployment insurance who are still looking for employment. It’s believed that less than 50 per cent of unemployed workers will be eligible for insurance benefits once the Extended Benefits introduces even more cuts.

The article stated that if the Emergency Unemployment Compensation program expires in December then only 25 per cent of jobless people will be receiving unemployment benefits.

There was an interesting article in the New York Daily News recently which said there are several types of insurance that aren’t really worth the money. Consumer Reports magazine pointed out that important items and people should always be covered, such as your health, home, and life, but other things can be done without. Basically, they’re saying you should insure the things that you can’t afford to cover yourself and don’t bother insuring costs that you can handle.

Consumer Reports questions buying life insurance for your child or children since they did a little math work. They gave an example in which you would pay annual premiums of $1,602 over 20 years for a juvenile policy that’s worth $10,000, but the policy’s guaranteed cash value only reaches $1,536. The magazine pointed out that the death rate for children under 14 years of age is quite low, making it unlikely that you’ll need the coverage.

Where credit insurance is concerned, which pays off your credit card bill or loan should you become disabled or die, the magazine said it’s way overpriced and you’d be better off spending the money on a term life insurance policy.

Many people are purchasing pet insurance these days and Consumer Reports analyzed and researched nine different pet policies that were taken out on pet beagles for a period of 10 years. The magazine stated that in all nine cases the premiums ended up costing more than the total cost of veterinarian bills.

The article also questioned the insuring of your cell phone in case it’s damaged, lost or stolen. Even with a low premium of about $6 a month and a deductible that ranges between $25 and $200 you would be paying between $115 and $325 to file a claim after 18 months, which could be worth more than the phone itself.

It’s also recommended that you buy comprehensive health insurance instead of focusing on a specific type of disease, such as cancer. In addition, they say ID theft insurance isn’t really worth the rates, which are generally between $120 and $300 each year, because federal protections cover you for most financial losses if your identification is stolen.

Another type of coverage you may want to reconsider is flight insurance. This pays your beneficiary a lump sum in case you lose your life in a plane crash. Consumer Reports feels you’d be better off buying a life insurance policy with the premium money.

While some Americans forgo purchasing health insurance for themselves, they’re not willing to let their pets go without suitable health care. According to a recent article by the Washington Post, pet lovers spent approximately $450 million on health insurance for their pets in 2011 and that figure is expected to jump by another $50 million this year. It’s estimated that about 800,000 cats and 3,000,000 dogs in America have health insurance.

Pet insurance isn’t really too different from human policies as it also comes with familiar things such as deductibles, exclusions, and co-insurance. The coverage basically looks after services and procedures such as surgeries, emergencies, routine care, medications, and on-going care for specific health conditions including diabetes. Like some human health plans, you’ll find it’s pretty hard to get coverage for your pet if it happens to have a pre-existing condition.

The plans typically come with monthly premiums and cost approximately $200 a year to cover a cat and about $500 to insure a dog. However, the price comes down to the chosen health plan and where you live. Also, some breeds happen to be more prone to specific illnesses and this can certainly affect the price of the policy as well as the coverage terms.

For example, bulldogs are known to suffer breathing problems and coverage for this could be excluded from the health plan. If the plan does cover a well-known illness for a certain breed of dog, your rates will likely be higher for the coverage, perhaps by as much as 50 per cent or more.

If your pet is insured and it needs treatment from a veterinarian, you’ll be asked to pay the vet and then submit a claim for reimbursement. The insurer will subtract any co-insurance or deductibles that need to be paid before sending you a check.

Pet insurance can easily be found on the internet and believe it or not, some employers also offer it. However, they don’t chip in and pay a portion of the premiums the same way most of them do with their employees. Like human health care, costs for pet care are also on the rise and treatments can be quite expensive. You’ll find that some dogs undergo chemotherapy, receive heart pacemakers, or need stem cell treatments when they suffer from hip problems.

A poll by AP-Petside.com found that about 12.5 per cent of pet owners took their furry friends to the vet during the past 12 months and at least $1,000 for treatment. But according to Consumer Reports, pet insurance usually isn’t worth the money because the premiums usually end up costing more than the treatment during the lifetime of the pet.

Some people prefer to create a find for pet emergencies and add to it each month. If their pet needs treatment the money’s used and if the pet is healthy then the money’s still available to be used for something else.

It was announced on March 6 that the FHA (Federal Housing Administration) is going to reduce mortgage insurance premiums for those who want to refinance their loans. The move was made by the government to help improve the nation’s struggling housing market.

According to an article by the San Francisco Chronicle, the FHA said it will reduce up-front premiums from one per cent down to 0.01 per cent. Also, the annual fees are set to go down from 1.15 per cent to 0.55 per cent for people with FHA loans that were borrowed prior to June 1, 2009.

It’s been estimated by the FHA that the recent changes will save most borrowers approximately up to $1,000 each year and they may affect close to three million borrowers. An FHA fact sheet stated that fees and lender reticence have kept a lot of families from participating. It also said that about approximately 180,000 total refinancing deals took place in the program during the 2011 fiscal year.

The new refinancing program will be made available to those borrowers who are current on their payments with their FHA-insured loans. It’s also available to people who owe more money than their homes are actually worth. Borrowers don’t have to verify their employment and income and their property doesn’t have to be reappraised either.

After the announcement was made, private mortgage insurers saw a decline in trading in New York. These insurance companies basically compete with the FHA when it comes to supplying insurance coverage on loans in which the borrowers’ down payments are below 20 per cent.

In addition, the government is set to announce that it has agreed with mortgage services to offer financial compensation to military members who had their homes wrongfully foreclosed and to give refunds to those who were denied refinancing. All members of the military who had their homes wrongly foreclosed and repossessed will be paid $116, 785 along with equity lost plus interest.

While the FHA announced that it will be cutting premium rates on existing loans to help encourage refinancing, it will be raising the premiums on all new loans as a way to replenish the reserve fund, which has fallen to $2.6 billion.

Beginning in April, up-front premiums will be 1.75 per cent for 30-year mortgages and the yearly premiums on loans from $625,500 to $729,750 will go up by 35 basis points. Premiums on all loans up to the amount of $625,500 will go up by 10 basis points.

Some Canadians are up in arms because the public is paying for doctors’ malpractice insurance in a roundabout way. The CMPA, which stands for the Canadian Medical Protective Association, is a non-profit mutual medical defense organization. It’s supposed to help promote safer medical care in the nation and preserve the integrity of physicians.

But in reality, the CMPA also acts as a type of insurance company since it provides professional coverage for Canadian doctors. What has Canadians grumbling is the fact the physicians don’t have to pay any of the premiums out of their own pockets, but they do pay the CMPA membership fees. When a doctor is sued for malpractice the organization pays for the doctor’s legal fees.

According to an article by the Toronto Sun, there aren’t any co-payments or deductibles paid by physicians on claims and the membership fees don’t increase no matter how many times the doctor may be sued. In addition, there’s no limit on the amount of insurance they receive and the taxpayers are paying for the majority of the membership fees.

The article argues that the membership fees are actually insurance premiums and they’re costing taxpayers more than $100 million each year, which means they’ve contributed more than $1 billion over the last decade. This could be the reason the CMPA lists about $3 billion for its net assets.

The Canadian health care system differs to the American one since the doctors are basically civil servants who are paid by the government. People are upset because money is being given to the doctors and there’s not really any accountability regarding how it’s spent. Also, if a taxpayer decides to sue a doctor, he or she is technically paying for the physician’s legal defense.

The doctors receive the best lawyers that money can buy by using taxpayers’ funds while anybody who’s suffered from malpractice has to pay their legal fees out of their own pocket. It’s a hard to beat the system this way and perhaps people realize it and that’s why there were just 96 malpractice lawsuits that reached the courts in 2010.

What also bothers Canadian taxpayers is that doctors who are obviously sub-par could be sued a dozen times and there’s no punishment for them such as deductibles and fee increases. This enables bad doctors to keep on practicing medicine knowing they’re entitled to the best legal defense possible and no financial penalties.

The grounding of the Costa Concordia cruise ship could end up being the costliest marine disaster in history, at least for the insurance companies. Because of this, Ole Wikborg, the International Union of Marine Insurance’s president, said that operators of passenger ships need to improve their safety standards as well as the training provided to crew members to prevent this type of thing from taking place again.

Speaking to reporters at a London press conference, Wikborg said some of these issues have been brought up and discussed in the past, such as the competence of the crew, stability issues, safe navigation methods, and the evacuation procedures. He added that the insurance industry feels it’s time the regulations regarding shipping were changed or improved.

There were more than 4,000 total passengers and crew on the Costa Concordia when it ran aground off the coast of Italy and killed at least 16 people on January 13. Shipping experts and insurance analysts said it may cost as much as $1 billion to the insurers. If that figure is true, it’ll be costlier than the cleanup of the huge oil spill that took place in 1989 when the Exxon Valdez crashed in Alaska.

According to an article by Business Insurance, the International Maritime Organization said the safety rules for these passenger vessels need to be looked at closely, but it’s believes that not all shipping executives are on board with this idea and aren’t in a hurry to change things. The biggest concerns are regarding the quality of training that some of the crew are given, especially those who work in the hospitality and entertainment areas of cruise ships. It was reported that about 66 per cent of the crew on the Costa Concordia worked in these departments.

Wikborg said the crash of the Concordia doesn’t guarantee that shipping insurance costs will rise since it might not affect many underwriters. If this is the case, then there won’t be any incentive for the entire market to tighten things up. However, some analysts and underwriters have said that the Concordia disaster could mean the marine insurance industry will lose money for the year even though 2012 has just started and this will force insurance companies to raise their rates.

Lawmakers in Arizona are considering legislation that would enable dog owners to let their pets run free as long as the animals are insured to cover any damage they may do. Sen. Lori Klein, R-Anthem, drafted the idea and said currently dogs need to be on leashes when in public, but if the owners had coverage up to a minimum of $50,000 then they wouldn’t need to be leashed. She reasoned that if the dogs are well-behaved and insured there’s no reason they couldn’t be let loose.

According to an article by the East Valley Tribune, Klein doesn’t like the current laws which force dogs to be leashed even while sitting in their owners’ unfenced front yards. However, her idea didn’t go down too well with animal-control and law-enforcement officers at a hearing of the Senate Committee on Government Reform. Senator Frank Antenori also had his doubts about the idea.

Klein said she feels the current laws for off-leash dogs are being enforced too aggressively. She believes if the owner has insurance on the dog to cover for damages and injuries then the owner is responsible enough to let the animal off its leash. She argued that if a dog is under proper control then it should be allowed to play in a park.

Mark Cousins of the Phoenix police said insuring the pets doesn’t equate to public safety. He said the best way to ensure safety is to prevent harm from happening, not to compensate for damage after the fact. He said the current leash laws protect the public and the animals. He added that good dogs and under-control dogs can suddenly become uncontrolled at any time.

The Maricopa County Animal Care and Control department also said the proposal has holes in it. It said that bad dog owners simply have to buy an insurance policy and can then let their pets out the front door to roam at large without taking care of them properly. The animal control organization also said there’s no legal definition of “trained and under control” and it would simply be too hard to prove if an animal is properly trained.

In addition, opponents to the measure asked if dog owners would have to carry insurance policies with them or would control officers have to follow the owner home to see proof of insurance. It appears Klein is barking up the wrong tree with this proposal and most Arizona residents would be surprised if it became law.

With the recent tragic accident regarding the sinking of the Costa Concordia cruise ship in Italy, many people are wondering if buying travel insurance is the right thing to do before heading out on a vacation. Travel insurance has always been a good choice if you aren’t covered through any other types of insurance plans. If you decide to take a vacation and you don’t have the proper insurance plan in place you could end up losing quite a bit of money and/or personal property.

While disasters such as a cruise ship sinking rarely happen, you just never know when they’re going to strike, especially when it comes down to human error. Passengers who had travel insurance on the Costa Concordia received benefits from their policies when the ship flipped in shallow water. Most passengers who had travel coverage had their identification documents replaced, since many of them were left on the sinking ship, and flights were also arranged for them to return home.

The typical cost for insurance on that particular cruise was approximately five to seven per cent of the cruise. The insurance covered trip cancellation and interruption along with baggage protection, medical expenses, and emergency evacuation. Luckily, more lives weren’t lost during the accident and there weren’t as many serious injuries as there could have been. But those who had insurance were sure glad they bought it before their trip.

The insured passengers on the ship will be reimbursed for medical expenses and emergency evacuation costs that they ended up having to pay. In addition, most travel insurance plans include a specified amount for dismemberment and accidental death coverage, which is usually about $10,000. Baggage claims can also be made since everybody should have most left their luggage on board the ship.

It’s unclear exactly what the cruise line will do as far as reimbursements go since many of these cruise companies ask passengers to sign long documents before they board ship that resolves them of any responsibility. However, in cases like these they are often challenged in court, especially since the captain as basically admitted fault for the mishap.

The fact is, those passengers who had travel insurance will come out of this ordeal a lot better off than those who didn’t have coverage. It’s never a bad idea to shop around for the best prices, service and coverage before taking a vacation, no matter how far you’re traveling and how you’re getting there.

The insurance business can often be a dog-eat-dog world as it’s highly competitive and quite serious. However, there is a lighter side to it sometimes and we can take a bit of a break and look into that aspect of the insurance world today.

Entertainers have been insuring themselves or at least parts of themselves for decades now. For instance, Second World War pinup girl Betty Grable had her legs insured by her movie production company for a cool million dollars. Entertainers are still in the habit of taking out huge insurance policies and of course when adding inflation into the equation some of the policies are enormous these days.

Let’s have a look at some modern-day singers and musicians to see what insurance policies they reportedly possess. Gene Simmons, the bass player for rock band Kiss and reality TV star, supposedly had his tongue insured for $1 million when the band was at its peak. Rolling Stones guitarist Keith Richards insured his middle finger for $1.6 million, but just on his left hand.

Jeff Beck, another famous British guitar player formerly of the Yardbirds, learned his lesson several years ago when he happened to slice off the top of his left index finger when chopping carrots in the kitchen. The finger was reattached surgically and Beck then insured each one of his fingers for $1 million, for a $10 million insurance policy.

American pop Singer Mariah Carey reportedly has her legs insured for a grand total of a billion dollars. The premiums on this must be sky high. If anybody asked British singer Tom Jones, “What’s new pussycat?” he could tell them he’s taken a $7 million insurance policy out on his fur, I mean chest hair.

According to an article by tonedeaf.com.au, American singer/actress Jennifer Lopez has a policy that’s worth between $27 million and $1 billion to cover her rear end. Another singer/actress, Dolly Parton, has supposedly insured each one of her breasts for $300,000.

Singers Rod Stewart and Bruce Springsteen both realize their careers would be over without their voices so they’ve each taken a $6 million insurance policy out on their vocal chords. Stewart underwent surgery for throat cancer back in 2000, so it was probably a good idea on his part.

Bono, singer for Irish rock group U2, was thankful he had an insurance policy since the band’s 2010 tour had to be postponed due to the front man’s back injury. It cost his insurance carrier about $17.5 million.

America’s National Flood Insurance Program (NFIP) was extended for five more months at the end of 2011 just before it was about to expire. Supporters of the program are hoping it’s just the first step in a more permanent extension. President Obama signed the bill into law on Dec. 23 and the insurance program will now be set to expire again on May 31, 2012.

The program’s supporters would have preferred to see the NFIP given a new five-year lease on life and it would have been if a House measure was passed in 2011. Still, they see a five-month extension as better than nothing and feel it can be used as a launching pad for their long-range goals.

One of the reasons all of the recent extensions have been relatively short ones is because the Senate and the House have been debating for years whether or not the NFIP should also have to offer coverage for windstorms along with the flood insurance. However, at this moment in time, it appears that the windstorm insurance issue has been put on the back burner.

According to an article by BusinessInsurance.com, Tom Santos of the American Insurance Association said a five-month extension offers some breathing room since some of the previous extensions were for just a month at a time. He feels this will enable the association to focus on getting a longer-term bill passed.

The five-year bill to reauthorize the NFIP has been passed by the House as well as the Senate Banking Committee, but it still has to pass through the Senate and many insurance experts feel now is the time to do it. Santos said the next move is to get floor time from the Senate leadership so it can consider the measure from the Senate Banking Committee. He added that the House measure garnered 406 votes while the Senate Banking Committee bill was passed by a voice vote.

It’s believed the issues that separate the House and Senate, such as mapping standards and deductibles, are basically just technical and those gaps such should be able to be bridged with a little work. Ironically, the NFIP extension expires on May 31, and the Atlantic hurricane season starts the very next day.

Dec. 9 saw Republican leaders unveil a new bill which would chop off 40 weeks of federal unemployment benefits from those eligible and also allow the states to give them drug tests before they receive financial aid.

There hasn’t been any research indicating that drug use actually contributes to the high unemployment numbers or that the rate of drug use among the jobless is any higher than the average. However, some Republicans said local businesses are saying that many job seekers wouldn’t be able to pass a drug test, but there hasn’t been any proof of this.

Currently, American laws don’t allow states to deny anybody unemployment benefits for anything other than fraud, misconduct on the job, or earning too much from part-time employment. If the new bill was passed, then failing a drug test would be another reason somebody could be denied benefits. But the legislation that was announced on Dec. 9 leaves it up to the individual states to decide if they want to test for drugs or not.

The drug testing and reduction of benefit weeks from 73 to 33 are just a part of the new bill. It also includes the reduction of payroll taxes. Individual states would also be allowed to reduce benefits even more. At the moment, most of states offer another 26 weeks of benefits, which means some people can collect them for a total of 99 weeks. This would be cut to 59 weeks if the bill went through.

If the current unemployment insurance benefit structure is extended then millions of Americans will be eligible for help for much longer than 33 weeks. The Democrats want to extend the benefits while the Republicans are obviously in favor of a different scenario.

According to an article by the Huffington Post, it’s estimated that there are four unemployed Americans for each job opening in the country. In addition, the jobless, which currently sits at 8.6 per cent, receive a maximum of $300 each week on average in unemployment insurance benefits.

The U.S. government has extended its unemployment insurance programs into 2012 due to the nation’s constant high rate of jobless citizens. The website Unemployment-Extension.org announced that the democrats have decided to make the extension available and that’s sure to come as good news to those who are out of work.

Many Americans lost their jobs during the recent recession and the country’s rate of unemployment has hovered somewhere between nine and 10 per cent since the recession kicked in. If the extension wasn’t announced, then all of the nation’s federal programs would have been halted on Dec. 31. This would have meant that millions of Americans would have found the going mighty tough in the New Year as their unemployment compensation benefits would have expired on Jan.1 2012.

However, the democrats in the White House realized this and everything has been renewed for next year. If the extensions weren’t put in place it’s estimated that at least three million unemployed Americans would have lost their unemployment benefit payments completely by the time February rolled around and millions more would have joined them just a few months later.

The extensions were welcomed by Americans, but they didn’t take everybody by surprise as Congress hasn’t allowed unemployment extension benefits to ever expire at any time the nation’s unemployment rate has been 7.2 per cent or higher.

The Democrats Means Committee implemented the country’s Emergency Unemployment Compensation Act on Nov. 5, which effectively forced legislation to extend the current unemployment benefit programs throughout next year.

Anybody who needs to file for Unemployment Extension Benefits and Emergency Unemployment Compensation for 2011 and 2012 are asked to do so at www.Unemployment-Extension.org.

Twenty states will be charging employers higher taxes in 2012 because they haven’t paid back loans to the federal government which kept their unemployment benefit programs going during the recent recession. In total, the states owe the government $37.6 billion which was borrowed after their insurance funds hit zero. California owes the most at $9 billion.

Some states are dealing with the unemployment insurance problem by hiking employers’ state payroll taxes or by cutting back on benefits. In fact, some states are doing both. However, several other states have decided it’d be a better idea to issue bonds. Texas tried this out last year with Idaho following suit this year.

It looks like Illinois will soon be joining them. Lawmakers have recently approved legislation which enables bonds to be issued to help repay the $2 billion that Illinois owes the government. Illinois believes it will save millions of dollars because the interest rate on the government loan is four per cent and it can get a better rate.

According to a recent article in the Columbus Dispatch, local business people said the move makes sense and it’s necessary and reasonable considering how much the state owes and how many people needed unemployment insurance help during the recession. However, others feel that it’s just a case of borrowing from one person to pay another back and either way it’s going to cost them. Illinois employers won’t get any relief though until the bond is actually issued by the state, which will likely happen in 2012.

Unemployment insurance is financed partly by state payroll taxes as well as by federal taxes that are collected through the Federal Unemployment Tax Act. The current tax rate sits at six per cent of an employee’s first $7,000 of income, but it’s their employers who pay the tax. The employers typically receive a credit of 5.4 per cent from the government though, which means the net tax they pay on it is just 0.6 per cent.

If a state has to borrow money from the federal government’s unemployment account without paying it back on time, then the credit will be reduced by a total of 0.3 percentage points during the first year. This results in employers having to pay an extra $21 for each employee in federal unemployment taxes for their wages in 2011.

There are about 14 million unemployed Americans and almost half of them depend on unemployment insurance. Before the country went into recession, about 2.5 million people were collecting benefits. If a person runs out of benefits, they can get assistance for several more weeks via temporary programs. The states administer these programs, but the federal government takes care of the costs.

Social media sites are the bee’s knees all over the world these days, but you better think twice about what you’re posing for the rest of the world to see. According to an article on TodaysTMJ4, insurance investigators are keeping their eyes on sites such as Twitter, My Space, and Facebook while checking out cases of insurance fraud.

One young man happened to post photos to his Facebook site of a day out at the beach. The photos showed him drinking beer with his buddies at the beach while he was collecting workman’s compensation benefits from his insurance company.

Needless to say, they weren’t too impressed and cancelled his benefit payments which forced him to delay an operation to repair his shoulder. However, the man’s medical records backed up his injury claims, but his lawyer still had to fight the insurer in front of a labor board before they relented and reinstated his benefits.

It’s been reported that checking out people’s social media sites is one of the quickest and easiest ways to keep tabs on some people, especially if their privacy settings allow strangers to view their posts. This could lead to people being charged with fraud and/or having their policies cancelled if they’re faking injuries and it could also lead to higher premiums for certain types of insurance. For instance, if an applicant fails to mention they enjoy skydiving every weekend or smoke cigarettes while they claimed to be non smokers they could be in for an increase.

Jeanne Salvatore, who is a representative of the Insurance Information Institute, said some insurers definitely look at clients' social media pages as a way to discover fraud. She said that fraudulent cases cost consumers and the insurance industry around $30 million every year.

Steve Davis, a private investigator, said he does a lot of work for insurance companies and one of the first places he looks is on social media sites. He said it’s paid off several times and one woman was posted photos of herself taking flying lessons in a helicopter while claiming she was severely injured.

According to Salvatore, the insurance companies will continue to view social media sites as it’s been a successful way for them to detect fraud.

The early snowstorm that took the eastern U.S. by surprise in October left a lot of businesses in the dark as their power was lost. However, their business interruption insurance may not cover them. Business insurance doesn’t kick in unless there was any physical damage on the company’s property. A power failure doesn’t fall under the coverage of most policies. If the business was damaged physically though by things such as falling trees then they’ll be covered.

Most businesses purchase insurance to protect themselves from property damage that’s caused by the weather as well as a separate plan to cover them from lost income and expenses in case they can’t operate for a certain period of time. The coverage for expenses and loss of income is known as business interruption insurance.

Most policies pay business owners for the amount of time their business is shut down. The first two or three days may not be covered as it’s often used as the policy’s deductible. Some insurance companies will offer additional coverage for power failures, but many businesses decline it.

When a company is eligible for business interruption insurance the insurer has to do some investigating before deciding how much money has been lost. The insurer will check out all of the sales figures for the same month in the previous year or two as well as all of the current year’s figures. This is done because it’s hard to predict exactly how much money a business loses when it’s forced to close down for awhile.

According to an article by the Hartford Courant, when the power went out during the recent storm many establishments such as grocery stores and restaurants saw their food supply spoiled. But it may not have been covered if the proper policy wasn’t in place. Most commercial insurance plans don’t cover businesses that lose food due to power outages if the cause of the failure occurred somewhere else.

For example, if a power station or power line was damaged two miles away then the business isn’t covered. However, if a fire resulted due to a power failure the damage would be covered by the business property insurance. It can get a little complicated and that’s why it’s always a good idea to know exactly what you’re covered for at all times and in all circumstances.