Insurance tips: Credit scores and insurance scores

Many insurers use a credit-based "insurance score" as a factor -- a major factor, often -- in setting your rates. It's a quick way of quoting you a price, and insurers maintain that there's a correlation between these credit-based scores and a person's claims history.

Washington state limits how insurers can use these scores, and Commissioner Kreidler has repeatedly pushed for legislation to ban their use completely.

In Washington, insurers cannot hold the following things against you:

• The number of credit inquiries
• Collection accounts identified as medical bills
• A loan if it's the initial purchase or finance of a vehicle or home.

In Washington, insurers must also tell you if you didn't get the best rate due to your score. If this happens, you're entitled to a free copy of your credit report from the credit agency that your insurer used.

What goes into an insurance score? Here's the breakdown of a score from FICO, one of the biggest companies generating these scores for insurers:

• Payment History (40%) – How well you have made payments on your outstanding debt in the past

• Outstanding Debt (30%) – How much debt you currently have

• Credit History Length (15%) – How long you have had a line of credit

• Pursuit of New Credit (10%) – If you have applied for new lines of credit recently

• Credit Mix (5%) – The types of credit you have (credit card, mortgage, auto loans, etc.)

How can you improve your score? The same way you'd improve your credit score: make payments (bills, taxes, fines, etc.) on time. Keep credit card balances as low as possible. Think carefully before opening new lines of credit, such as a department store charge card, just to get a discount.
 
You can check your credit reports from the three nationwide consumer credit reporting companies annually at http://www.annualcreditreport.com/. If you find errors, contact the credit reporting company to have them corrected.
 

Insurance and vintage or antique cars

Q: I'm rebuilding my antique car and my grandfather's one-seater vintage biplane in my garage. Will my homeowners policy cover all the parts if they are stolen?

A: Probably not. Most homeowners policies exclude autos, aircraft, other motorized vehicles and their parts. You might have coverage for, say, a riding lawn mower or golf cart, but you'd be wise to talk to your agent and insurer about separate coverage that may be available for the parts during the rebuild process and after completion. Most antique cars and plans can be covered on specialized policies designed for their generally limited and unique use.



Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)

Coming this fall: Agents and brokers in WA can submit fingerprints electronically

In Washington, as in most states, we require insurance agents and brokers to submit their fingerprints for the required background check.

For years, this has been done on paper cards, on which a worker rolls the applicant's inked fingers. It's messy, but more importantly, it's difficult to get good, usable prints. In fact, there's a 30 percent rejection rate by the State Patrol, meaning that the applicant has to go through the whole process again. We know it can be a pain, but we haven't had a good alternative.

So, good news: Starting late this summer or early fall, we will begin accepting electronically submitted fingerprints. We strongly encourage our resident applicants to use the service.

Why?

For one thing, the rejection rate is much lower. Instead of 30 percent, it's less than 3 percent.

It will also cost less. It now costs $42.50 to submit a paper fingerprint card. It will cost $32.50 to do it electronically.

It takes less time. In fact, in some cases, it could mean getting your license issued weeks earlier than with a paper card.

And there's probably a location close to you. More than 30 locations in Washington state can provide the fingerprinting service. Pearson Vue exam centers offer the service when applicants take the insurance exam, and the company also has a third-party vendor, Morpho Trust, that offers fingerprinting at several additional locations. You can find links to both on our new web page about electronic fingerprinting for insurance licensees.

Lastly, a question I know we'll get: Are electronic fingerprints required? No, not at this point. But we intend to require them starting during the first half of 2013.

Open letter from Commissioner Kreidler to Premera and LifeWise policyholders

Our office has denied requests from Premera Blue Cross to strip some of the company's health plans of vital prescription drug coverage.

Premera filed a request with our office in late April, seeking approval to remove all prescription drug coverage from its small employer plans. These are plans sold to employers with 1-50 employees. Premera subsidiary Lifewise filed a request to remove drugs from all of its catastrophic (meaning high-deductible) plans.

Commissioner Kreidler disapproved those requests. Here's an open letter from the commissioner to Premera and Lifewise policyholders. From the letter:

Let me be clear: Contrary to what Premera has implied, your health plan can keep generic drug coverage and even require you to use a generic drug first. Nothing in my recent decision restricts your health plan from covering generic drugs.But if you get sick and a generic drug doesn’t exist for your condition or doesn’t work for you, your health insurer must let you try a brand-name drug that could work.


I understand that generic drugs may work for many people most of the time, but it’s my job to protect all insurance consumers. There are some diseases for which generic drugs may not work, such as certain cancers and mental illnesses, diabetes, MS, certain types of arthritis, and AIDS.

Legally, if a plan has prescription drug coverage it cannot restrict someone’s access to a prescription drug that could be vital to a medical condition that’s otherwise covered by the plan and for which they’ve paid a premium.

New insurance bills take effect tomorrow

Four new insurance-related bills take effect tomorrow. None were insurance commissioner request legislation, but they will impact consumers starting June 7.

Whether you'd like to share your car or get evacuated home from a trip, there's something for everyone. Want to know more? Here's the complete list:

Usage-based insurance

Car sharing

Air rescue

PEBB ombudsman for retired state employees

Insurance and sleepovers

Q: My daughter's having a friend over for a sleepover. If the friend trips and falls or something, would my homeowners policy cover her medical bills?

A: Generally yes, since most modern homeowners policies have what's known as "guest medical" coverage. This is designed to pay the medical bills -- up to a specified dollar limit per accident -- for accidental injury to guests. But it doesn't cover you or other resident family members.

The coverage is a no-fault type of coverage that is designed to apply to accidents with no determination of fault or negligence on your part. Your insurer will still do an investigation to gather the facts of the accident.

Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)

Washington state insurance markets: Our annual report

Each year, we issue an annual report summarizing the insurance markets in Washington state, selected financial statement data, authorized insurers by line of business, top companies, top groups, company changes, etc.

Get 'em before they're sold out. (That's a joke. They're online only, and we have no shortage of pixels.)

New report: What repeal of the Affordable Care Act would mean in WA

We've just posted a new report detailing the effects in Washington state of the federal health care reform law. Among them:

Numerous consumer protections built into the law have already taken effect. Among these: drug discounts for more than 1 million Washington seniors, tax breaks for small businesses, and parents can now keep their adult children on the parents' health policy until age 26.

We also estimate that more than 800,000 Washingtonians who today have no health coverage at all would qualify for free or subsidized coverage in 2014.

Turning 65 soon?

If you or someone you know will be turning age 65 in the next year or so, check out our new Medicare web pages. We launched a series of web pages called “What is Medicare?” to help people who will soon become eligible for Medicare. The information provides a basic overview of Medicare, explaining the different parts and options available to people.

For additional help with Medicare choices, we also offer our free, unbiased and confidential Statewide Health Insurance Benefits Advisors (SHIBA) service. We have more than 300 volunteer advisors around the state who we extensively train to help advise people on their Medicare options. SHIBA’s a great service. These folks can help you navigate the Medicare maze. Call 1-800-562-6900 and ask to speak with a SHIBA advisor in your area.

Insurance and broken windows

Q: Am I covered if my son breaks a neighbor's window while he's hitting rocks with his baseball bat or mowing our lawn?

A: Generally yes -- if it's an accident. Your homeowners policy will typically cover this type of accident at home or even away from home. But if it was a deliberate act, the damage may not be covered.

Also, consider your deductible. If the estimate to repair the window is small, it may be worth it to pay the damages out of pocket.

Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)

WA to get at least $450,000 in MetLife settlement

From a press release our office issued this morning:

OLYMPIA, Wash. – Washington stands to receive at least $450,000 as part of a multi-state settlement with Metropolitan Life Insurance Company.

The $40 million settlement, which was announced in April and now involves at least 28 states, is based on concerns raised by insurance regulators over the extent of MetLife’s efforts to investigate and pay life insurance benefits. MetLife did not admit liability.

Under the terms of the settlement, MetLife agreed to regularly check the Social Security death master file or similar records to determine if its life insurance policyholders, annuity owners or retained asset account holders have died. The company will then make efforts to locate beneficiaries and pay claims.

“From what we’ve seen, I’m happy to report that there don’t appear to be major or widespread problems in Washington state with paying life insurance benefits in a timely manner,” said Insurance Commissioner Mike Kreidler. “But it’s important to hold companies accountable when they fail to pay benefits when due.”

Under Washington state law, insurers must pay interest on a life insurance policy from the date of death. Unclaimed policies are turned over to the state’s unclaimed property fund, which holds the money for any future claims.

Washington’s share of the settlement, to be determined in early July, depends on the number of states that sign on to the settlement. The money will go into the state’s general fund.

Spokane-area woman convicted of theft in insurance case

A Liberty Lake, Wash. woman pleaded guilty today in Spokane County Superior Court to theft for filing thousands of dollars in false insurance claims.

Sarah Shireee Walters was sentenced to 10 days in jail, which was converted to 80 hours of community service. She was also ordered to pay more than $4,000 in restitution and fees.

Walters and her husband, Jeremy Walters were both employees of Liberty Mutual/Safeco insurance company since early 2010. They had a renter's policy for their apartment in Liberty Lake.

Last April, Sarah Walters called Safeco and reported the loss of two Gateway laptops and computer games while the couple was on a day trip. The company processed the claim and issued a check for $1,524.

A few weeks later, Walters again called Safeco. This time, she reported the loss of two $500 iPod Touch devices, a set of $450 Dr. Dre headphones and a $580 camera. She said she'd left them in a Spokane park, and that they may have been stolen. The couple was sent a $2,030 check.

Less than three weeks after that, Walters again called Safeco to say that she'd lost two EVO phones and a BlackBerry. She said she'd had all three phones in her sweater pocket at the park.

After three claims in three months, the company referred the claim to one of its investors. Confronted with discrepancies in the claims, Sarah Walters admitted that the laptops, camera and other items were never really missing.

She pleaded guilty today to two counts of second-degree theft.

Insurance: When a driver admits liability

Q: I was in a car accident and the other driver admitted that it was his fault. But his insurance company won't pay 100 percent. Why not?

A: Determining who is at fault for an accident depends on the facts as discovered during the investigation, not on just one driver's opinion. Even though one driver might be cited by police or admit fault, the issue of liability can only be determined after all the accident facts, weather, visibility, and all other driver actions and factors at the scene are taken into account.

It may sound hard to believe, but even if someone runs a stop sign and gets a ticket, the other driver could be found partially at fault for contributing to the accident by speeding, for example.

Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)

Insurance company turned down your claim? We may be able to help.

Often when consumers call us with insurance problems, we suggest that they file a complaint with our office. And it's not uncommon for people to say something like “Why should I bother? I already called the insurance company, and they gave me their answer.”

First off, don't give up. Filing a complaint with our office can still help.

Here's why: When we receive complaints, we send the paperwork to our contact people at each insurance company. These are usually higher up in the insurance company than the front-line staff who answer customer service questions. Because of their position in the company, the insurance workers we deal with often have more discretion to consider all the factors and make a decision on your claim.

Also, state law says that when an insurance company receives a complaint from our office, the company needs to investigate the issue and respond to us in a timely manner. Sometimes, just the process of having another person from the insurance company take a closer look can lead to a resolution.

Finally, these complaints give our office a window into what’s going on within an insurance company, so the time that you spend filing the complaint can help us see a bigger picture. In the long run, that can help a lot of consumers in addition to you. In some cases, complaints by just a few individuals have led to investigations that resulted in refunds to hundreds of people. (Here's an example of that.)

So if you need help -- and live in Washington -- give us a call at 1-800-562-6900 or send an e-mail to AskMike@oic.wa.gov. (If you live elsewhere, here's how to find your area's insurance regulator.) Our services are free and we won't try to sell you anything. We're the government agency that regulates the insurance industry in Washington state.

Prestige Administration ordered to stop selling insurance products in WA

An Arizona company that has sold at least 82 vehicle service contracts illegally in Washington state has been ordered to stop.

Our office has issued a cease-and-desist order against Phoenix-based Prestige Administration Inc.

Our legal affairs investigators found that the company issued at least 82 motor vehicle service contracts or similar products to Washington consumers. (Under Washington law, these contracts are considered a form of insurance.)

The problem is that the company is not authorized to conduct insurance transactions here in Washington. Nor have they registered with our office as a service contract provider.

Here's a key part for consumers who bought those contracts: Nothing in our order prevents the company from fullfilling the terms of the existing contracts.

The company has the right to demand a hearing.

Agent charged with theft and forgery

An insurance agent in Pierce County has been charged with theft and forgery for allegedly collecting tens of thousands of dollars in payments from clients but not issuing them insurance.

Nancy M. Bishop, who did business as the Nancy Bishop Agency in Puyallup, Wash., was charged Thursday in Pierce County Superior Court with one count of first-degree theft and five counts of forgery.

In late 2009, our office received a complaint from the owner of a construction company. The owner said that she'd made multiple payments to Bishop, but that the company's policy had been cancelled for nonpayment. We launched an audit of Bishop -- which she twice tried to postpone. We found that she owed policyholders more than $131,000.

Our investigation found dozens of instances in which Bishop collected premiums but provided no insurance coverage. She continued to bill clients anyway. She overcharged some customers, according to the records. We found numerous instances in which she received refunds from a finance company but apparently failed to forward those refunds back to her customers.

We also found numerous cases in which forged certificates of insurance, with Nancy Bishop's name at the bottom, were sent to state regulators. Of the 24 such instances we found, there was no actual insurance.

Arraignment is scheduled for May 18.

Insurance commissioner's statement on Mackey v. McKenna

Insurance Commissioner Mike Kreidler on Thursday issued the following statement about the filing of a private lawsuit against Attorney General Rob McKenna over McKenna’s efforts to overturn federal health care reform:
“As this new lawsuit points out, Attorney General McKenna wants to have it both ways. Shortly after federal health reform passed, McKenna rushed to join fellow conservatives in challenging the law. Two years later, he seems to be trying hard to distance himself from the potential consequences of the case he signed his name to. Simply put, health care for hundreds of thousands of Washingtonians hangs in the balance.
“Mr. McKenna knows that many provisions of the law – such as letting parents keep adult children on their health coverage until age 26, expanding women's coverage, and barring insurers from denying coverage to sick children – are popular. He maintains that the challenge to the individual mandate will not overturn the entire law.
“The problem is that the case he joined seeks to do exactly that: throw out the entire law.
“About 700,000 Washingtonians stand to get free or subsidized health coverage through the health care reform law, starting in 2014. If the court challenge succeeds, those people will lose hope of coverage anytime soon.
"We cannot afford to play politics with people’s lives. History shows that as a nation, we summon the will to try to address health care reform only about once a generation. Hundreds of thousands of uninsured Washington families need meaningful, affordable coverage now. If the court challenge by Mr. McKenna and his conservative colleagues unravels the entire health care reform law, it will be a travesty. Washington's families cannot wait another 20 years.”

Insurance: Am I covered if I rent an RV?

Q: Does my auto insurance cover me if I rent a large RV for my vacation?

A: Maybe. Some policies will limit coverage to certain-sized vehicles that you may borrow or rent. So talk with your agent or insurer about your plans before you borrow or rent.

This can also be an important consideration if you're moving yourself or otherwise renting a large truck, by the way. Many auto policies exclude large trucks or other vehicles. It's a good idea to check first.



Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)

Updated to correct typo in the question about renting a large TV. Whoops. We meant RV.

Insurance agent's license revoked: Submitted dozens of bogus life insurance applications

Insurance Commissioner Mike Kreidler has revoked the license of a Renton insurance agent who submitted dozens of bogus life insurance policies, apparently to collect the commissions.

Angela M. Scott, a former agent for Primerica Life Insurance Co., lost her license, effective April 9.

"By using fraudulent and dishonest practices and demonstrating incompetence, untrustworthiness and financial irresponsibility, Ms. Scott violated" state insurance law, says Kreidler's order.

From June 1, 2010 to May 2011, Scott submitted 88 term life insurance policies to the insurer. The premiums were to be paid through automatic withdrawals from the applicants' bank accounts.

But of the 88 applications submitted, 76 had invalid bank account numbers. Some 67 had invalid social security numbers. And 52 listed phone numbers that didn't work. When the banks didn't pay the premiums because of the incorrect account numbers, Scott submitted 60 money orders for policies' first payments.

An investigator for Kreidler's office reviewed 15 of the policies and could find no driver's licenses or other information indicating that the applicants were in fact real people. Nor could he find any trace of three people whom Scott claimed had introduced her to those applicants.

Scott has the right to demand a hearing to contest the revocation.

With dam repaired, program to help Green River Valley businesses find flood coverage ends

Two years after launching a special program to help business owners in Washington's Green River Valley find flood coverage, we're ending the program.

At the time, area businesses said they were having trouble finding insurance due to concerns about slumping in an earthen embankment adjacent to the Howard Hanson Dam. There were serious concerns among local business groups and lawmakers that without flood insurance, businesses in the heavily industrialized valley would start looking for locations elsewhere.

At our request, insurance companies agreed to

Fast forward two years: The U.S. Army Corps of Engineers has performed repairs on the dam, tested it, and the Corps says it is confident that the dam is again able to operate at full flood capacity. From all indications, businesses seeking flood insurance area again able to get it. That's why we're ending the program, which helped pair businesses seeking coverage with insurers willing to sell it.

Here's a news release we sent out about it, with links to the official letter ending the program.

Insurance, building codes and rebuilding after a disaster

Q: Part of my home burned, and I'm repairing the large burned section of the home. County building codes require upgrades from what was originally there. Does my homeowners policy cover this added expense?

A: It depends. If your policy has what's called "law and ordinance coverage" -- it's often referred to as "L&O" or "upgrade coverage," then yes, your policy would address the added costs to make the required upgrades.

As a precaution, ask your agent or insurer if you already have the coverage or if you can add it to your policy.

Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.


Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)

Insurance and fallen trees

Q: Will my insurance pay to repair my neighbor's home if my tree falls on his home?

A: It may not have to. Typically, a homeowner's own insurance coverage pays for such damage, unless you were negligent and your negligence caused the tree to fall.

Say the tree was obviously diseased or damaged and posed a clear risk to your neighbor's home, for example. In such cases, you could be found negligent and your insurer would cover the claim.


Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.



Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)

Insurance: When a car is burglarized

Q: My clothes, camping gear, camera and guitar were stolen from my car. Will my auto insurance pay for these things?

A: Maybe, but there may well be dollar limits for things like clothing, sports equipment, etc. that might be incidental to an outing or vacation. Your auto policy would specify those limits. (We had an odd fraud case a couple of years ago involving a man who kept claiming that his $33,000 collection of silk neckties was being stolen from his car.)

For things that are generally considered personal property, rather than auto-related property like a spare tire, jack, or roadside emergency kit, you might be able to file a homeowner's or renter's insurance claim. Talk to your agent or insurer -- and think about your deductibles. If you have a high deductible, it may not be worth it to file a claim for a small loss.

Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)

Dogs and insurance

Q: Am I covered if my dog bites someone else visiting my home, or when we're at a city park or campground?

A: Generally yes. Your homeowners policy will typically cover the incident at home or away from home, but once your insurance company knows that your dog caused an injury, the company may take a second look at you as a risk. The company may not want to continue coverage, or could raise its rates, since it's hard to guarantee that the dog will never bite someone again.

Note: This is one of a series of common -- or in some cases, particularly unusual -- questions received by our consumer advocacy staff, who answer questions from consumers.
Got a question or insurance problem of your own? If you live in Washington, feel free to give us a call, toll-free at 1-800-562-6900. We'll do our best to help. (And if you live in another state or territory, here's a handy map that lists the contact info for your local insurance regulatory office.)

Job openings: Actuary, financial examiner, analyst, technician, receptionist

Due to retirements, a promotion, etc., we have several jobs that we're looking to fill. It's been quite a while since we've had this many openings.

The jobs are listed below, along with a few highlights. For the official job listing and specifics, including duties, salaries, required qualifications, etc., please click on each job's link below. Application deadlines vary -- these are listed under each job description -- but the earliest is next Monday.

Actuary: We're looking for someone to review health and disability insurance rate filings submitted by insurance carriers to our office. This person will also provide assistance to our company supervision division's work, which includes analysis of the finances of insurers, holding companies and other entities.

Financial examiner: These positions work out of our office in downtown Seattle. Among other duties, our examiners audit the operation of insurers.

Analyst: We're looking for a life- and health insurance compliance analyst to work in our consumer protection division, which is located in our main building in Tumwater. The job involves helping consumers with insurance questions, problems and complaints.

Insurance technician: This position involves answering consumer hotline calls and routing them to staff in various divisions, including agent/broker licensing and consumer advocacy. It also entails some IT support work.

Office assistant: This person will provide receptionist services and first-line help to phone and walk-in customers, as well as a variety of complex clerical duties.