What's an umbrella policy?

Commissioner Kreidler recently participated in a Facebook live Q&A with KIRO TV reporter Jesse Jones, where viewers submitted their insurance questions. Jesse and Commissioner Kreidler got lots of great questions, including a couple about umbrella policies.

Umbrella policy is one of those insurance terms that a lot of people have heard but many aren’t quite sure what it means. Simply put, an umbrella policy extends your liability coverage beyond what is covered by your homeowner and auto policies. Umbrella policies pay only after you exhaust the liability limit of your homeowner or auto policies, which are referred to as underlying policies.

Here’s an example: Your dog bites a visitor in your home. The visitor sues you for damages and wins a $1 million award against you. Your homeowner’s insurance policy will only pay up to the $300,000 liability coverage limit listed in your home policy. If you have a $1 million umbrella policy, it will pay the remaining $700,000, minus any deductible. According to the Insurance Information Institute, a $1 million umbrella policy costs $150-$300 per year – that’s about $13 to $25 per month in premiums.

If you are interested in buying an umbrella policy, you should contact your insurance agent or company.

Questions? You can contact our consumer advocates online or at 1-800-562-6900.

Fight health care fraud: guard your Medicare number!

Medicare open enrollment is here (October 15 to December 7), which means fraudsters and identity thieves will increase their efforts to get and abuse Medicare numbers from people.

Fortunately, there are many measures you can take to fight health care fraud:

• Guard your Medicare number. Protect it the same way you do for your credit card numbers. Medicare will never contact you for your Medicare number or other personal information. Don’t share your Medicare number or other personal information with anyone who contacts you by phone, email, or by approaching you in person, unless you’ve given them permission in advance. 
• Don’t ever let anyone borrow or pay to use your Medicare number.
• If you’re looking to enroll in a Medicare plan, be suspicious of anyone who pressures you to act now for the best deal. There are no “early bird discounts” or “limited time offers.” Any offer that sounds too good to be true probably is.
• Be skeptical of offers for free gifts and free medical services. A common ploy of identity thieves is to say they can send you your free gift right away—they just need your Medicare number to confirm. Decline politely but firmly. 
• Do your part to protect your friends and neighbors: remind them to guard their Medicare numbers, too.
• Check your Medicare Summary Notice (MSN)–which gives you information on services submitted under your Medicare number–to make sure you and Medicare are only being charged for services you actually received. While the MSN is only mailed to you every 3 months, you can access your Original Medicare claims at any time on MyMedicare.gov. You’ll usually be able to see a claim within 24 hours after Medicare processes it.

You can report suspected fraud by calling 1-800-MEDICARE (1-800-633-4227).

TTY users should call 1-877-486-2048. 

To learn more about how to protect yourself from health care fraud, visit Medicare.gov/fraud, or contact our state’s local Senior Medicare Patrol (SMP), which is the OIC's Statewide Health Insurance Benefits Advisors (SHIBA) program.

Outdoor, indoor features that you think are covered may surprise you

Many consumers think their homeowner policy covers everything they own, both inside and on their premises outside of their home. However, you should be aware that most homeowner policies do not cover everything you own. 

Creative Commons Backyard Pool by
Alvin Smith is licensed under CC BY 2.0 

Here are some common features that people may think is covered by a standard homeowner policy. 

Outside your home:

• Retaining walls
• Pools that sit above and below ground
• Gazebos
• Spas/hot tubs 
• Rockeries and other landscaped areas
• Driveways
• Sidewalks
• Foundations
• Fences
• Pump houses
• Garden sheds
• Greenhouses 
• Playground equipment

Inside your home:

• Collectibles
• Money
• Jewelry
• Artwork 
• Musical instruments

Talk to your agent or broker to find out if items like these are covered.  If coverage isn’t available, you’ll want to maintain and safeguard the property at your own cost, and do the best you can to keep it from damage. It’s a good idea to have a discussion about these types of property before you buy a policy.

Read more about homeowner's insurance on our website. Questions? You can contact our consumer advocates online or at 1-800-562-6900.

Areas hit by wildfire are at risk for flood damage – are you covered?

We are reaching the end of a “normal” fire season, thanks to this year’s snowpack and spring rain. While that is good news, the more than 15,000 acres that have burned are at higher risk for flash flooding and mudflows. Vegetation absorbs water and reduces runoff that causes mudflows. Even areas that are not historically prone to flood are at risk due to the landscape changes caused by fire. Flood risk remains high until vegetation grows back, up to five years after the fire. That means that the million-plus acres that burned the last two summers are still at higher risk for flooding and mudflows. 

Photo courtesy Washington state Department of Natural Resources

Homeowner’s and commercial insurance policies do not cover flood or mudflow damage. Consumers who want to protect their property must purchase a flood policy, available only through the National Flood Insurance Program (NFIP). Most properties qualify for flood insurance, as long as it is located in a community that participates in the program.

Typically, there is a 30-day waiting period before your flood insurance policy takes effect. This time of year is a good time to do some research into flood insurance, before the fall and winter weather that can bring floods start in earnest.

More information:

• Find an agent near you who sells flood insurance policies through NFIP.
• NFIP’s Flood After Fire fact sheet
• FEMA’s Flood after Fire Risks fact sheet

Questions? Get more information about flood insurance or contact our consumer advocates.

Consumers should be wary of short-term health plans

Consumers looking for health insurance outside of the annual open enrollment period should be wary of short term health plans. These plans may be marketed as alternatives to Affordable Care Act (ACA) health insurance, but they could leave you without adequate coverage and facing financial penalties at tax time. 

Originally, short-term health plans were sold as a stop-gap measure until you could get real major medical coverage. After the ACA kicked in, people had many other options for coverage, but these limited plans were still being marketed to consumers as a viable alternative. However, short-term  plans do not count as 'minimum essential coverage' under the ACA - meaning you'll have to pay a tax penalty. They also do not cover the 10 essential health benefits, can limit your annual benefits to $100,000 or less, and deny you coverage for any pre-existing conditions. 

These policies are sold year-round, unlike ACA-plans that must be purchased during the annual open enrollment period, unless you qualify for a special enrollment. Some states allow for coverage to last up to a year and policies can be renewed. This effectively takes people out of the insurance pool that the ACA was designed to expand, leading to increased costs for everyone. 

In an effort to bring the limited short-term health plans back to their original purpose and to protect consumers, the federal government is proposing a regulation to limit the duration of these policies to three months and increase consumer awareness of their limitations.

Insurance Commissioner Kreidler agrees with this effort and sent a letter yesterday in support of the new regulation.