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Did Santa Bring a New Pet?

This article was originally written by Sue Nester and published by Big I News.

The holiday season often includes images of cute puppies under a Christmas tree or a kitten with a sparkly ribbon around its neck. But before you do your holiday shopping at the pet shop, Trusted Choice® independent insurance agents and brokers recommend considering the risks and liabilities you may also be bringing home.

Many families have either given or received a pet as a gift, but unfortunately, most don't think about liability or risk factors of pet ownership such as higher insurance rates or the need for specialty coverage.

Remember to remind your clients about these points:

Sick puppy? It is important for pet owners to know that pet insurance is not suitable for everyone. These policies are non-regulated insurance products, so purchasers have no recourse through state insurance regulators if there is a complaint or problem with their coverage. In addition, many pet insurance policies exclude routine examinations, vaccinations and pre-existing conditions.

Is Fido a biter or a chewer? As a dog owner, you can be held financially responsible if your animal attacks and injures a person or property. That bite can also have huge implications for your insurance.

Most people are bitten by dogs they know, not strays, and medical costs for a severe injury can be staggering. Talk with your clients before they bring a new pet into their home to make sure they have adequate liability coverage and safety measures to protect people who visit their property.

What kind of dog is that? Many insurers are now routinely asking if homeowners or renters have dogs and if those dogs have a history of aggressive behavior. Some companies may even deny coverage to those who own certain breeds of dogs, including wolf hybrids, pit bulls and Rottweilers.

Insurance companies can deny claims or limit coverage for dog owners who do not take precautions to prevent their animals from attacking. Recommend at least $500,000 in liability protection for owners of large dogs or for those who own certain breeds.

How much was that doggy in the window? Pet owners must understand that no matter what they paid for their pooch—or any pet—most homeowners policies exclude any damage or injury to animals.

Cruisin' with canines. Some auto insurers include a pet clause, which allows for a certain amount of coverage for expenses relating to a dog's injuries if the driver is involved in an accident with a pet in the vehicle.

Beyond cats and dogs. Does your client's little princess want a pony? Or maybe your future farmer wants a baby goat? These types of gifts are not uncommon, especially with the popularity of state fairs, livestock competitions and youth agriculture programs.

Families who are considering the purchase of horses, goats, calves, pigs and other farm animals may want to consider livestock or animal mortality products that cover certain losses, including drowning and electrocution.


OIA is your one-stop resource for insurance for your clients!


Should an Agency Follow Up with Late-Paying Clients?


Following up with late-paying clients wastes large amounts of time at our agency. Is there a recommended follow-up policy that preserves workflow? If we have been following up with clients for late payments, are we stuck in that precedent forever?

Response 1:

If a client causes a wreck with lapsed coverage and you didn’t remind them to pay their premium like you always do, you will get sued. Start a new policy, inform clients of the new policy and stop following up on late pays.

Response 2:

Your first call should be to your errors & omissions insurer.  They'll tell you not to follow up because it creates an expectation that you can't and shouldn't live up to. That's been the advice from E&O and agency management experts for years. 

However, it’s easier said than done. Very few agents follow this best practice 100%. If you get a late notice on your biggest commercial client's homeowners policy, you're a rare breed of agent if you don't give them a call. Worse yet, once you've done this deed, you're probably stuck with it as a precedent forever. 

Follow the advice of your E&O insurer, who will probably tell you to stop sending reminders and never do it again.  If you're not prepared to do that, set up a workflow you can live with and follow it consistently. Also, make sure you have adequate limits on your agency’s E&O policy. 

Response 3:

The agency should never follow up on late-paying clients or cancellations. The insurance companies send out cancellation notices, which will legally suffice.

Since you’ve been reminding clients, you should notify all direct billed clients that you will no longer be sending reminders. The tone of that letter should be positive, courteous and explanatory. Next, you should contact your E&O carrier to request a full E&O audit.

Response 4:

If you’re going to continue following up, you must do so for all customers. In this instance, invariable practice—doing the same thing for every client all the time—is the key defense. Most states have evidentiary statutes that force the plaintiff to prove you didn’t follow your practice if you have one.

Response 5:

I call my clients. I only have about five habitual abusers of the cancellation follow-up. They are the same clients each month, so I may have created a monster. It’s much easier to send a simple email reminder and they usually remit that day. These clients are contractors who are just very busy during the construction season.

This question was originally submitted by an agent through the VU’s Ask an Expert Service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

Looking for additional information on E&O loss control training or have a question about your E&O policy? Contact our team of experts for help!

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New Tune: Understanding ISO’s Recent Changes to the PAP

This article was orignially written by Chris Boggs and published by IA Magazine.

Insurance Services Office (ISO) filed 30 changes to its personal auto policy program effective Sept. 1, 2018. Over a year later, most carriers have adopted the new language.

How well do you understand the changes ISO made to the base PAP form (PP 0 01) and the 21 endorsements it either revised, removed or created?

Base Form Revisions

Newly Acquired Auto Wording. Historically, the PAP granted insureds automatic liability, medical payments and uninsured motorist coverage for the remainder of the policy term when a replacement vehicle was purchased. Physical damage was the only coverage that did not continue for the remainder of the policy term.

If the insured wanted collision and/or other-than-collision coverage, the carrier had to be notified of the newly acquired vehicle and the desire for coverage. Time limits for this notification depended upon whether the insured’s policy already provided collision and/or other-than-collision coverage:

  • If the PAP extended collision and/or other-than-collision coverage to at least one vehicle, the insured had 14 days to notify the carrier of the newly acquired vehicle and the desire for coverage.

  • If the PAP extended no physical damage coverage to any vehicle, the insured had only four days to notify the carrier of the desire for coverage. 

ISO’s new PAP form wording requires the insured to notify the insurance carrier of any newly acquired vehicle—whether it’s an additional vehicle or a replacement vehicle—within 14 days of acquisition. No automatic coverage is granted. 

Supplementary Payments. ISO increased the coverage amount to $250 per day for loss of earnings to attend hearings from the prior limit of $200 per day.

Public or Livery Conveyance Exclusion. Prior to 2018, when a carrier wanted to specifically exclude any activities or exposures arising from the use of a covered vehicle as part of a transportation network platform such as Uber or Lyft, it attached the public or livery conveyance exclusion endorsement (PP 23 40), which ended coverage when the transportation network platform app was turned on and the vehicle was made available for use. This exclusionary wording is now included in the base PAP language.

ISO also addressed concerns that the public or livery conveyance exclusion might be misapplied when a vehicle is used for volunteer or charitable purposes, such as Meals on Wheels or volunteer medical transportation. New exception wording specifically states that the exclusion does not apply when the vehicle is being used for volunteer or charitable purposes.

Personal Vehicle Sharing Program Exclusion Endorsement (PP 23 16). ISO withdrew the endorsement and included the exclusionary wording within the PP 00 01 to specifically exclude coverage for any vehicle enrolled in and being used in a vehicle-sharing program.

Custom Equipment Exclusion Endorsement (PP 13 06). ISO withdrew the PP 13 06 endorsement and incorporated the wording into the base PAP to exclude specific types of custom equipment.

Racing Exclusion. ISO expanded the racing exclusion to exclude coverage for any vehicle located inside a facility designed for racing for the purpose of participating in any prearranged or organized driver skill training or driver skill event. Now, any activities occurring on or at a racing facility in an attempt to improve driver skill are excluded.

Flying Car Exclusion. There are no viable flying cars currently in existence, but the base form now contains a flying car exclusion.

Other Insurance Clarification. ISO added wording to the Part A Other Insurance provision to recognize the possibility of an umbrella and reduce potential legal confusion. New wording states that the PAP is not excess over a policy that is intended specifically as an excess policy.

Transportation Expense Coverage. ISO increased Coverage D’s transportation expense limit to $30 per day/$900 maximum from $20 per day/$600 maximum.

Duties After a Loss. Historically, the insured was not required to provide a recorded statement after an accident even if the carrier requested one; and such refusal did not endanger coverage. New policy wording requires the insured to submit to recorded statements as often as reasonably required.

Revised Endorsements

  • ISO added new mold exclusionary wording to the Trailer/Camper Body Coverage (Maximum Limit of Liability) PP 03 07 Endorsement, resulting in a reduction of coverage.

  • ISO inserted the statement “Coverage is not provided on an agreed value basis” into the Coverage for Damage to Your Auto (Maximum Limit of Liability) PP 03 08 Endorsement.

  • ISO withdrew the PP 03 10 Change Endorsement, which was intended for use when the policy was endorsed after the effective date.

  • ISO made three changes to the PP 03 11 Underinsured Motorist Coverage Endorsement to dovetail with revisions in the base form:

    • Addition of the volunteer or charitable use exception wording

    • Incorporation of the personal vehicle sharing exclusionary wording

    • Addition of the flying vehicle exclusionary wording

    • ISO revised the PP 03 21 Limited Mexico Coverage Endorsement based on research that determined not all accidents are considered criminal offenses in Mexico as previously thought. The new warning replaces “are” and “does” with less definitive language and now reads: 


  • ISO made minor alterations to the Miscellaneous Type Vehicle Endorsement PP 03 23, introducing a mold exclusion under coverage Part D and adding a definition of “fungi.” ISO also revised the exception to Exclusion 7 to reinforce that coverage is excluded for any motor home a named insured does not own when used as a temporary substitute for a covered motor home. 

  • ISO revised the PP 03 28 Miscellaneous Type Vehicle Amendment (Motor Homes) Endorsement to allow an insured to purchase liability, med pay, comp and/or collision when a motor home that is “your covered auto” is rented to others.

  • ISO revised the PP 03 34 Joint Ownership Coverage Endorsement to provide for a listing of joint owners and, if the person is a non-resident relative, space for name and address. ISO removed coverage information from the endorsement because it’s found in the declarations.

  • ISO altered the PP 03 35 Auto Loan/Lease Coverage Endorsement to address handling of interest from deferred payments and primacy of coverage when another source of gap coverage applies to the loss. 

  • ISO added other-than-collision coverage to the schedule of coverages that can be suspended under the PP 02 01 Suspension of Insurance Endorsement.

  • ISO revised the Named Non-Owner Coverage PP 03 22 Endorsement to make physical damage coverage an available option.

  • ISO revised the PP 13 03 Trust Endorsement to provide more flexibility to accommodate various trust structures.

New Endorsements

  • The PP 33 05 Full Safety Glass Coverage Endorsement applies when other-than-collision coverage is in effect and the auto is listed in the endorsement.

  • The Key Replacement and Related Services Coverage PP 33 27 Endorsement pays, without application of a deductible, for:

    • Reasonable expenses to get into the car if the fob is lost or stolen.

    • The cost to replace and program keys or key fobs lost or stolen.

    • The schedule for each listed auto shows a maximum limit.

  • The Pet Injury Coverage PP 33 31 Endorsement extends coverage from Part D and applies only when all of the following conditions are met:

    • Collision and other-than-collision coverage applies to at least one vehicle.

    • The dog or cat owned by “you” or a “family member” is in the car at the time of the accident.

    • The car qualifies as “your covered auto” or a “non-owned auto.”

    • Covered costs include vet expenses or costs to cremate or dispose of the pet incurred within one year of the date of loss. The limit is per occurrence.

  • The PP 33 30 Child Restraint System Coverage Endorsement provides coverage to replace a child restraint system following an accident. Coverage extends from Part D and applies only when all of the following conditions are met:

    • Collision and other-than-collision coverage applies to at least one vehicle.

    • The child restraint system is owned by “you” or a “family member.”

    • The child restraint system is inside “your covered auto” or a “non-owned auto” at the time of the loss.

    • The schedule or declarations shows a maximum limit, which provides replacement with like kind and quality without application of a deductible.

  • The PP 33 10 Replacement Cost Coverage Endorsement replaces actual cash value loss settlement with replacement cost. To qualify for replacement cost, all of the following conditions must be met:

    • The covered auto must be added to the policy and the loss must occur within 24 months of purchase, with the insured as the original owner.

    • The covered auto must have less than 24,000 miles at the time of the loss.

    • The covered auto must suffer a total loss.

    • There is no automatic coverage for a newly acquired auto or a leased vehicle. Coverage is subject to a deductible, and the amount of coverage is limited to the amount to replace with a new vehicle of the same make, model, trim level and equipment, or its equivalent. Wording does not specify model year. If the same make, model, trim or equipment is not available, the carrier will pay for one similar, but not to exceed 110% of the Manufacturer Suggested Retail Price of the covered auto.

  • The Additional Resident of Your Household PP 33 37 Endorsement was developed to extend coverage to individuals such as live-in nannies, roommates, legal domestic partners and significant others who do not own but have access to the named insured’s vehicle(s). The endorsement:

    • Allows the naming of an additional resident.

    • Amends the definition of “family member” to include the named resident.

    • Specifies that the carrier is depending on the insured to be truthful.

    • Requires the insured to notify the carrier if residency changes.

  • The Personal Property Coverage PP 33 42 Endorsement was designed to extend homeowners-like personal property coverage to personal property anywhere in the world. Coverage is provided on an open-perils basis and paid on an actual cash value basis, with a replacement cost option.

Note that although ISO filed these changes with an effective date of Sept. 1, 2018, not every carrier adopted the changes immediately, and two states did not adopt the changes at all: Hawaii and North Carolina. Additionally, ISO does not establish effective dates in four states: California, Colorado, Texas and Virginia.

Chris Boggs is executive director of the Big “I” Virtual University (VU). For more details on this topic, check out the VU’s webinar and Risk & Reality Report.

Shining A Light On Trucking Rate Increases

This article was originally written by Andy Hamilton, and published by JM Wilson.

These days, it’s common to hear our trucking agents ask “Why did my insured’s rate go up?” It’s a good, and honest question; especially when the insured has had no claims, a clean driving record, and no endorsement activity. It can be hard to deliver a 5% increase without having a good explanation. Here we’ll attempt to arm you with such info, so when that inevitable question does come, you’ll be ready. As you’ll see, there is not just one answer:

There Are More People on the Road

10 years ago, there were 209 Million Americans with Driver’s Licenses; today, we’re looking at close to 228 Million. The increase is also representative of truckers. “Truck Driver” is the most common occupation in 29 States. As 72% of all material goods in the US are moved by trucks, and with the economy over the last few years on the upswing, there are simply more trucks on the road than ever before. The economic demand for trucking has been so great that it has led to…

A Driver Shortage

Currently, there’s a driver shortage in the U.S. of nearly 60,000 people. Think of the Cleveland Browns stadium being completely empty, and needing to fill it up with truck drivers; that’s the current gap. This need is only expected to accelerate as the aging population of truck drivers retires, with shortage estimates of 160,000 over the next decade. This has led to more aggressive hiring of not-as-experienced drivers. This hiring has, in part, led to… 

More Frequent and Severe Accidents Involving Commercial Trucks

The combination of more Americans on the road and less experienced commercial truck drivers has created an environment for more accidents. Since 2009, (when the truck-related fatality rate was at its lowest), there has been an increase each year, with 2017 showing a 30% increase from 2009 levels. If you remember, something else started happening around 2009… that’s right…the Smartphone starts becoming more ubiquitous. Pew started keeping statistics on this in 2011 when the percent of U.S. adults that were smartphone users was 35%. In 2019, that number is 81%. Most of us are aware of how pervasive a problem distracted driving has become.  If you don’t believe me, just wait until the next time you sit through an entire left turn light with the driver in front of you oblivious; no doubt, head tilted down, and eyes on the screen. Correlation doesn’t always equal causation, but there’s been a strong link to the culture of interruption helping drive the increase in traffic accidents involving large trucks. Because large trucks often weigh 20-30X more than a passenger vehicle, when something does go wrong, it can often be severe. This severity has led the trucking industry to be…

Targeted By Sophisticated Law Firms

If you Google “Truck Accidents”, the entire first page is dedicated to law firms, or law firm searches. Many of the websites of these law firms are astute enough to list the size of potential settlements, as well as past settlement amounts. One law firm lists their $80M Settlement from just a couple of years ago, while another touts a $101M award. The industry refers to these as “Nuclear Verdicts.” With Federal insurance requirements of $750k to $5M, trucking is a targeted industry (anyone that’s driven on an interstate no doubt has seen the law billboards asking “Injured by a Truck?”) The injury settlements from truck cases have become so lucrative, that third party financiers have gotten in on the action; providing funding for litigation in hopes of reaping investment returns. Insurance companies are keenly aware of the increasing size of civil jury settlements and pay particular attention to the areas of the country whose jury pools are generating the largest awards. As insurance rating data evolves and continues to get smarter, a risk that drives many miles through a high jury award area may be rated differently than a similar risk that doesn’t. Insurance carriers are also aware of the younger demographic shift in juries. No matter our opinions, Millennials and Gen Z have grown up in a “social justice” culture, and this thinking has directly contributed to larger settlements, but also contributing to larger settlements are…

Rising Healthcare Costs

Large settlements are due in part to sizable medical outlays directly associated with a trucking accident. Large rehab bills and the incentive to treat come in to play when damages are calculated. Medical cost inflation is certainly on the mind of every truck insurance carrier when calculating their latest rates. This fact comes as no surprise to anyone that’s received a medical bill in the last few years. The average annual income increase of the American worker has not kept up with the increase in healthcare costs. Estimates put health care spending at right around 18% of the U.S. GDP. To use a familiar timeframe, the average healthcare cost per person in 2009, was $8,134; in 2017, it was $10,739 ( if you want a real shock, in 1960, it was $146/person). When you factor in more traffic, distracted driving, less experienced drivers, increased medical costs, and larger legal settlements, the picture becomes clearer as to how…

Trucking Insurers Have Not Been Profitable 

Since 2010, the commercial auto insurance space has not returned an underwriting profit. The components listed above have proven to be formidable when underwriting to a combined ratio under 100; leading insurers to move rates northward (or exit the commercial auto market altogether). The commercial auto combined ratio has performed at around 15 pts worse than that of the rest of commercial lines insurance, putting its close management of risk profile pricing high on the priority lists of Chief Underwriting Officers and actuaries alike. 

So, while having the conversation surrounding rate increases is never easy, we hope that you’ll be better equipped to deliver value, as well as educate your insureds when answering that age-old question… “Why?”  

A Fine Line: When Commercial Auto Isn’t Enough

This article was written by Walt Capell, and originally published by IA Magazine.

Inland marine: Just the name leads to confusion for many business owners, especially those who are not familiar with the insurance buying process.

Explaining a client’s need for commercial auto or even commercial property coverage is easy compared to doing the same for inland marine. But for many clients, a commercial auto policy is not enough—it does not cover all the expensive equipment they have in their car, nor does it cover the equipment they have loaded up on a trailer attached to their vehicle.

This is where the fine line between inland marine and commercial auto lies. Here are three steps for making sure your client understands all their insurance needs in these areas.

Start with the basics

The first conversation an agent has with a new client frequently revolves around general liability and workers compensation—coverages that are required by law in most states. It makes sense, then, that most first-time entrepreneurs start there when purchasing insurance.

Establishing trust with your prospect is crucial at this stage. The sooner the client trusts you, the more likely they are to listen to your advice when it’s time to discuss more difficult coverages.

This is also a good time to discuss commercial auto—another common coverage that’s usually easy to explain, if only because the business owner likely has a personal auto policy.

While personal and commercial auto policies are not exactly the same, their common ground makes the sale much easier—giving you another opportunity to establish credibility.

Move on to more complicated coverages

Explaining the need for a hired and non-owned auto policy, by contrast, may be a little trickier. The business owner may not understand the liability involved with their employees driving their own cars on company time.

This is a good time to broach the topic of inland marine, taking care to use terms like “floaters” and “equipment coverage.” A rookie business owner is much more likely to understand that they need coverage for the specialized equipment they use daily for their trade, but that connection isn’t immediately clear when they hear “inland marine.”

Close with a BOP

Closing the conversation by suggesting a business owners policy prevents difficult conversations—especially after a claim occurs that is not covered. A BOP can help bridge the grey area between commercial auto and inland marine.

Walt Capell is president and owner of the Insurance Shop LLC, the rapidly growing national insurance agency he founded in 2005.

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