Tag Archives: Workers compensation

5 Reasons Not to Include Loss of Income in Auto Insurance

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Auto insurance policies offer various coverage options to protect drivers in case of accidents, theft, and other unforeseen events. One such option is loss of income coverage, which helps replace lost wages if you’re unable to work due to injuries sustained in a car accident. While this coverage can be beneficial, there are certain scenarios where excluding it from your policy may be a financially sound decision.

  1. You Have a Strong Disability Insurance Policy

If you already have a comprehensive disability insurance plan through your employer or a private insurer, you may not need additional loss of income coverage. Disability insurance typically provides wage replacement in case of injury, making redundant coverage unnecessary.

  1. You Work in a Non-Traditional Employment Arrangement

Freelancers, independent contractors, and retirees may not have a consistent income structure that aligns with how loss of income claims are assessed. If your earnings vary significantly or are not dependent on physical work, this coverage might not be essential.

  1. You Have Sufficient Savings

If you have a robust emergency fund that can cover expenses during a period of temporary disability, you may opt to exclude loss of income coverage to reduce your premium. This is particularly relevant for individuals who have substantial financial security and can absorb short-term losses without hardship.

  1. You Drive Infrequently

Individuals who rarely drive may find loss of income coverage unnecessary. If you’re not on the road often, your risk of an accident is lower, making it less likely that you would need to claim lost wages due to an auto-related injury.

  1. Your Job Offers Paid Leave or Workers’ Compensation

Some employers provide generous paid leave policies or workers’ compensation that covers lost wages if you’re injured in an accident during work-related activities. If these benefits apply to you, the additional coverage from auto insurance may be redundant.

While loss of income coverage can be a valuable safety net, it is not always necessary for every driver. Assessing your personal financial situation, employment benefits, and driving habits can help determine whether excluding this coverage is a practical decision. Always consult with your insurance agent to ensure your policy aligns with your needs and financial goals.

About the Author:

David Dandaneau is a insurance agent that covers the insurance and financial services industry. He is known for his insightful analysis and comprehensive coverage of market trends and regulatory developments.

Who is the NCCI & What is the Importance of Proper Workers Compensation Classification? Let’s Find Out!

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Each and every day we continue to educate business owners online and in the area who may be still struggling to understand the value with the Professional Employer Organization (PEO) model and/or the pricing strategies available to them if they chose a PEO arrangement. Nonetheless, this week in our daily tip we are revisiting a work published by David Dandaneau last year that may help to educate you further about some of the basic terminology and industry standards, which may ultimately help you and/or your business reduce costs, while freeing up extra time.
First of all, who is the National Council on Compensation Insurance (NCCI)? Well, the NCCI is based out of Boca Raton, FL and is considered one of the country’s largest database managers of workers compensation insurance information. In fact, the NCCI helps to analyze industry trends and risks associated with them in order to help others prepare workers compensation insurance rates, while providing a combination of services, which help to maintain a healthier overall workers compensation system (NCCI Holdings, 2011).
Contrary to many people’s beliefs, the NCCI is not a rating bureau; instead, the organization is often referred to as an advisory committee because its board of directors is comprised of insurance executives and/or companies. At times it may seem a little biased to many people and businesses who use these same individuals or companies for their coverage needs, as these individuals or companies that they are dealing with are in business to make a profit. Nevertheless, having a board made up of top-notch executives and companies who compete in the industry make it a little easier to help determine a fair classification system for the approximately 700 different workers compensation classification codes, which cover almost any employee or workplace exposure or does it?
One of the most elementary parts of pricing workers compensation insurance for a client is by properly classifying a company’s workplace exposures into one of these several hundred codes previously mentioned. Indeed, each code developed by the NCCI carries with it an individual rate that is based on that codes exposure within a particular workplace. For example, the classification codes for a clerical or sales worker usually carry with them significantly lower rates versus classification codes that may be associated with a roofer or carpenter, as the workplace exposure of these different types of jobs are extremely different (mostly inside positions versus outside positions). However, when the exposure is not so obvious, classifying a specific exposure can be very complicated and something a business owner wants to be absolutely sure of since a misclassification can cost a business a lot of money they didn’t necessarily expect to pay if something does go wrong or they end up getting audited.
Today employers can also use multiple classification codes on a policy or a company can classify their workforce under one as a group but it is important to document or provide records that show what exact tasks workers complete or how they split their time between different comp codes if using multiple codes. What the costs (annual premiums) are for a policy most of the time are based on an employer’s annual payroll, which can be in the form of a standalone policy or a Professional Employer Organization (PEO) arrangement (PEOs offer pay-as-you go policies, which again is a huge benefit of this model). Therefore, for a decision maker of a company or the business owner, it becomes even more important to understand these different codes and make sure your employees who perform work for you are correctly classified for the actual work they perform. As a result, you could save a lot in the annual premiums and rates you receive in return.
Perhaps the one important part about all this is that the details the NCCI provides insurance carriers (i.e. SCOPES Manual)  in regards to the many workers compensation is NOT available anywhere unless you purchase the proprietary material or subscribe to the NCCI online database. However, as a Consulting Agency we welcome anyone to contact us directly if you would like your policy reviewed free of charge with us or through one of the many PEOs and insurance companies we have built relationships with over time. Having this/these expert opinions on whether your employees are classified correctly or not could even save you and/or your company more money, while minimizing costs or any additional fees for a misclassification.
As always and as we continue to encounter issues and questions online and in-person, you can expect more analysis and opinions about this and other common issues found in advancing technologies and/or within the workplace, which at times can make it hard for you to focus on your core business. Of course, we encourage our fans, readers, and followers to share and ask questions if you have any about this post or our other works, since we subscribe highly to the philosophy that everyone can achieve more by working together and each week this is what we try to do. Until next time, keep smiling, as it really does look good on you!

David Dandaneau is a Consultant at [SevenTimesSeven]. He specializes in helping business owners “manage their business and not their processes!” For more connect with him via Twitter @ddandaneau or any of the other social platforms you may find him on.



References

NCCI Holdings, Inc (2012). National Council on Compensation Insurance

Link

This is an analysis that details the importance of classifying employees correctly when obtaining workers compensation coverage. Also reviewed are some reasons why Professional Employer Organizations (PEOs) could be the answer for your company or small business.

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Each and every day we continue to educate business owners online and in the area who may be still struggling to understand the value with the Professional Employer Organization (PEO) model and/or the pricing strategies available to them if they chose a PEO arrangement. Nonetheless, this week in…

Who is the NCCI & What is The Importance of Proper Workers Compensation Classification Revistied? #SmallBusiness