Sunday, 7 December 2014

Dyman Associates Insurance Group of Companies: 10 Insurance Mistakes to Avoid in 2015

At least a few of the 365 days in 2015 will include a calamity or two for your bank.

Many will be small. A few might be large. Some that start small might morph into large.

Make sure your bank’s insurance is up to the task of protecting your assets from the calamities.

Here are some insurance mistakes to avoid:

Mistake 1: Ignoring coinsurance penalties in your policies.

Coinsurance is a penalty inside many policies that can hurt you at the time of a loss. It’s a penalty assessed when your insurance company thinks you are underinsured.

Ask your agent if you have coinsurance provisions in any of your property insurance policies. If so, ask why.

I have long held that having coinsurance penalties in an insurance policy is a good indication that your agent is not looking out for your best interests. Push hard to have the coinsurance penalties removed from your insurance coverage—and take a hard look at the quality of your insurance agent.

Mistake 2: Maintaining inadequate umbrella liability limits.

Umbrella liability insurance provides protection above and beyond the coverage included in your general liability, auto liability, and employer’s liability insurance. It’s an inexpensive way to increase your level of protection against someone suing you.

Premiums can be as low as $750 per $1 million of coverage. My minimum recommended limit for any bank is $5 million. (If your bank has over $300 million in assets, consider $8 million.)

The coverage is cheap, and the exposure can be huge. The most likely cause of a multi-million dollar lawsuit for a bank is an auto accident, probably an employee of the bank driving his or her personal vehicle. Consider the potential lawsuit against your bank if a vice-president driving her personal car hits a school bus.

Mistake 3: Having inadequate data-breach/privacy mitigation coverage.

Insurance agents have been (correctly) pushing cyber-liability insurance for several years. While I want my bank clients to have cyber-liability insurance, it’s the second part of the policy—privacy mitigation—that I'm most concerned with.

If you have a data breach, you’ll have to notify your customers. Expenses in mitigating a privacy event can reach $100 to $200 per breached name. Have a breach involving three thousand names and you have just spent between $300,000 and $600,000.

I see $500,000 of coverage as a minimum. Consider $1 million.

Several insurers are now expressing coverage in terms of a number of affected people. (One insurer provides coverage to notify up to 10 million individuals.) Your agent can get you information on your coverage and the cost of higher limits.

The extra coverage is almost always worth the relatively small premiums.

Mistake 4: Inadequate extra expense coverage.

Undoubtedly your property insurance covers the repair of a building damaged by fire or windstorm.

But how about the increased cost of operations for the six to eight months it takes to get you back into the building?

• How will you pay for rental of a temporary location?

• Or the cost of bringing in a mobile banking center?

• How about the cost of fitting out your temporary office quarters with power, phone, and internet connections?

Your branches should have at least $250,000 of extra expense coverage. Your main offices may need as much as $1 million.

Mistake 5: Tracking customer property insurance yourself.

Banks can no longer afford to track customer’s insurance. Why?

The insurance is too cheap and the cost of outsourcing too low for your staff to take on this onerous task. Taking this off your plate will also make your regulators happier. (There is currently a regulatory hate-fest going on over force-placed insurance coverage.)

Talk with the insurance broker handling your force-placed insurance about alternatives to in-house insurance tracking.

Costs are as low as $6 per year, per mortgage for insurance tracking.

Mistake 6: Failure to understand the call-back exclusion in your bond.

Your bond insurer has certain expectations regarding how you will prevent funds-transfer fraud. A common policy provision is the requirement that you perform call-back verifications on transactions over a certain dollar amount. (Insurers often use your deductible as the threshold for requiring a call-back.)

Some insurers are adding additional warranty provisions. One insurer requires that call-backs be documented with a voice recording of the call-back. Understand the provisions in your policy. Talk with your agent. Negotiate the removal of onerous requirements.

Mistake 7: Not knowing about—and addressing—shared directors and officers limits.

Do lender liability or employment practices liability claims reduce your coverage for future directors and officers claims?

Many management liability policies have an aggregate limit that is equal to the limit of coverage for D&O claims. This has the effect of reducing coverage for future claims.

For example, if you have a policy with a $5 million aggregate limit, a $5 million D&O  limit, a $2 million employment practices liability limit, and a $2 million lender liability limit, then a $1 million employment practices liability claim means there is only $4 million left available to pay a later D&O liability claim.

Check with your insurance advisor. Ask if your limits of coverage within the management liability insurance are separate. Show your agent this article.

Mistake 8: Not looking carefully at your bank’s own flood insurance.

Your bank’s package policy may include flood insurance. Many have an exclusion for locations located in flood zones. Some policies exclude locations where you could have purchased NFIP/FEMA flood insurance.

Ask your agent to detail for you which locations are included in flood coverage and which are not. Better yet, have your agent build a spreadsheet of your locations showing each location as a row. Columns should be the amount of property insurance, the flood coverage at that location, extra expense coverage at that location, and other coverage limitations that apply individually to buildings you use.

Mistake 9A: Not reviewing your coverage’s employee dishonesty exclusions.

Your bond insurer expects that you will be diligent in whom you hire. Your bond includes restrictions of coverage that are automatically activated if an employee has committed a past dishonest act. These exclusions can be triggered by events many years ago that have nothing to do with employment or your bank.

I urge management to discuss known dishonest acts by any employee to assess the insurability of an employee. A shoplifting incident when a teller was in high school can mean no coverage if that teller embezzles from the bank.

Mistake 9B: Not understanding that employee dishonesty losses involve intent to defraud and personal gain.

Lately I have received a number of calls from bankers complaining that their bond did not pay for a loan officer who falsified documents so that a friend could get a loan.

You may wonder how this can happen.

The employee dishonesty coverage in your bank’s bond pays for an employee stealing from the bank for his personal gain. There must be an intent to defraud or hurt the bank—and the employee must also realize a financial gain (or expect to gain) from the fraud.

No intent to defraud, no coverage—and no actual or expected personal gain, no coverage.

Mistake 10: Failing to review your bank’s insurance annually.

You rely on your insurance agent to provide advice and insurance guidance. He is a resource you should be able to depend on. An annual review of your insurance coverage will help keep your coverage up-to-date.

Meet with your agent about 120 days before your insurance expires. Go over the coverage you have now and your agent’s plan for the upcoming renewal.

Here are a few questions that can prompt useful actions:

1. Which insurers would you suggest we consider at renewal in addition to our current insurance company? Why?

2. What coverage limits should we consider increasing? What is your basis for determining if we have the right amount of coverage?

3. What are your three most pressing concerns regarding our insurance program? What coverages are we missing that we should have?

4. What actions can we take that will make us more attractive to insurance companies?

5. What trends do you see affecting our insurance over the next three years?

Your coverage isn’t perfect—count on that.

What I’ve outlined in this article are just some of the issues I find when I review the insurance coverage purchased by a bank.

I have worked with over 400 financial institutions. Not once have I seen the perfect insurance program. On average I identify over 20 insurance issues to be considered and discussed in my coverage reviews. I think the record is 65 potential gaps and overlaps.

When we do get the policies straightened out, a renewal comes up and insurers change the policies they offer you. The insurance policies you buy this year are dramatically different from those your bank bought five years ago. Coverages change. New insurers come on the scene. The insurance marketplace evolves, devolves, improves, and regresses.

Share this article with your insurance advisor. It can start the conversation towards improving your confidence in your bank’s insurance coverage.

Thursday, 4 December 2014

Dyman Associates Insurance Group of Companies: What Hospitals Can Do to Prevent Health Insurance Fraud

Health insurance scams are on the rise, and the government and health care organizations are renewing their focus on stopping them.

While most health insurance providers are honest, there are some that sell fake policies and medical discount cards to their customers.

Advances in technology, better availability of information and greater awareness have helped the government, medical facilities, physicians and consumers combat fraud more effectively these days, but there is still a lot more to be done.

Here is a look at some common health insurance scams and measures that hospitals and other medical outlets can take to prevent them.

Fake Health Insurance Policies

Health insurance scammers often target individuals, small businesses and associations, and they try to trick them into buying their fake policies by promising low premiums and guaranteed approval without medical exams.

Many of them operate through sophisticated syndicates that have strong marketing and money-laundering capabilities, and they may even be linked to organized crime.

Usually, people who have purchased fake health insurance do not know that their policies are fake until they need to file claims.

Fake Obamacare Policies

While the implementation of Obamacare promises better health coverage for Americans, it also opened a new way for scammers to prey on health insurance buyers.

According to an article entitled "Health Insurance Scams Using Health Care Bill," health insurance scam artists began targeting seniors, low-income people and others who need health insurance desperately as soon as the new health care bill was passed.

While some of them offer fake Obamacare policies, others try to commit identity theft by telling their targets that they need their social security and bank account numbers to help them get a national health card.

Phony Medical Discount Cards

Phony medical discount cards are usually presented as a way to get discounts for various medical services or an alternative to health insurance.

These cards are often sold to low-income individuals and families. They come with lists of phony health care providers, fake discounts and high hidden fees, but they do not provide actual benefits.

Some of the sellers of phony medical discount cards also try to get people to disclose their personal information in an attempt to steal their identities.

Reducing Health Insurance Scams

There are a number of things that hospitals can do to prevent health insurance scams.
First of all, they can try to raise awareness of these scams and provide advice on how to avoid them. This can be done by sharing information about health insurance scams on their websites or newsletters, or during consultations.

Additionally, hospitals can use fraud detection software to combat health insurance fraud.
The Fraud and Abuse Management System developed by IBM is an example of software that can help them reduce financial losses that result from health insurance scams.

It detects fraud by analyzing claims data and identifying insurance providers that deviate from the norms of their peer groups. Some hospitals have set up special investigation units to prevent health insurance fraud.

Health insurance fraud can have serious consequences for patients, medical organizations, insurance providers and the government.

It is a costly crime that should not be overlooked.

Monday, 1 December 2014

Dyman Associates Insurance: Province drives through auto insurance rate reductions

Ontario has passed the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, which will help the provincial government continue to fight fraud and abuse, reduce costs and uncertainty in the auto insurance system and protect more than nine million licensed drivers across the province.

With the passage of the bill, the province will strengthen consumer protection and help keep the auto insurance system fair, reliable and affordable by:

-Transforming Ontario's auto insurance dispute resolution system to help injured Ontario drivers have their disputed claims settled faster and get the benefits they require sooner;

-Providing consumer protections specific to the towing and vehicle storage industries through measures that require tow and storage providers to make their rates available publicly; accept alternative forms of payment from consumers, such as credit cards, and not insist on cash only; and provide an invoice, including an itemized list of the services provided and the total cost, before demanding or receiving payment;

-Giving the province authority to change the current 60-day period that a vehicle can be stored after an accident, accruing charges, without notice to the owner where required.

These changes will contribute to lower claim costs for insurers and more certainty in Ontario's auto insurance system, helping to reduce rates for drivers.

-Reducing auto insurance rates is part of the government's economic plan for Ontario. The four-part plan is building Ontario up by investing in people's talents and skills, building new public infrastructure like roads and transit, creating a dynamic, supportive environment where business thrives, and building a secure savings plan so everyone can afford to retire.

In August 2013, the province announced its plan to reduce auto insurance rates for Ontario drivers by a target of 15 per cent on average within the next two years.

From August 2013 to August 2014, auto insurance rates dropped by an average of more than six per cent.

An independent third party has assessed the impact of auto insurance reforms introduced to date on both costs and premiums. Its 2014 Annual Report was recently delivered to the Minister of Finance, who is now reviewing it.

The report affirms that the September 2010 auto insurance reforms have been successful in reducing costs and stabilizing rates for Ontarians and that the government’s current strategy has reduced average rates for Ontario’s drivers.However, it also notes that more action must be taken in order to meet the government’s average rate reduction target by August 2015. The full report will be released very soon.

So far, the province has taken action to address more than half of the 38 recommendations made by Ontario's Auto Insurance Anti-Fraud Task Force aimed at preventing fraud and helping to protect consumers, including key proposals for licensing health service providers that bill auto insurance companies directly, enhancing oversight of the towing industry and transforming the auto insurance dispute resolution system

Sunday, 7 September 2014

Dyman Associates Insurance Group of Companies Tips: 10 Answers To Credit Card Questions

Credit cards come with a lot of fine print. But the scene isn’t just complicated for cardholders; it’s complicated for the retailers that accept them, too. What needs signing, and what doesn’t? When can a store ask for ID? Are they allowed to charge different prices for cash and credit?

Six years ago, Consumerist answered your questions about these rules and others.

But since then, the law has changed, and so have the agreements the credit card companies have with the merchants who accept plastic. Here’s what you need to know now.

1. Can a merchant set a minimum purchase amount for credit card transactions?

Yes. According to both the Visa (PDF) and MasterCard (PDF) merchant agreements, a merchant may set a minimum transaction threshold for credit card purchases.

There are some conditions, though. For both MasterCard and for Visa, the minimum purchase amount…

- must not exceed $10
- must apply equally to card types from all issuers — so a Signature card or a Gold card from Capital One or from Chase all face the same minimum.
- The MasterCard agreement that also specifies a merchant may not establish a different minimum for “MasterCard and another acceptance brand,” which basically translates to “if you want to take MasterCard, your minimum transaction threshold needs to be the same for every credit card user.”

2. Can a merchant charge more (or add a fee) for using a credit card?

Yes, they can — and that’s a relatively new thing. Since a legal settlement in 2013, merchants have been able to charge their customers additional surcharges for paying with a credit card.

3. Can a merchant ask to see my ID? / I wrote ‘See ID’ on my card, so I am protected from fraud… right?

This one is a little complicated. Sometimes merchants are supposed to ask to see your ID, and sometimes they’re not. Writing the words “See ID” on the back of your card doesn’t actually help you.

4. Sometimes I have to sign for purchases and sometimes I don’t. What’s the deal?

Over the past few years, credit card companies have rolled out programs allowing for faster, no-signature-required transactions at many businesses.

5. Will I still have to sign for purchases after the big upgrade next year? What is the change next year?

American credit cards are getting an upgrade in 2015 to become more secure, less susceptible to fraud, and more like their European siblings.

6. Can a merchant put a “hold” on my card for more than I spent, or for what they think I will spend?

A “hold is when a merchant effectively tells your bank or credit card company to set aside a certain amount of money for an impending purchase. It’s most frequently seen at restaurants and hotels, where customers’ tips or add-on charges can’t be predicted in advance.

7. Can a merchant make me agree to not issue a chargeback if something’s wrong?

Nope. Under the Fair Credit Billing Act, you have a right to dispute transactions.

MasterCard’s merchant agreement simply says, “A Merchant must not impose, as a condition of MasterCard or Maestro Card acceptance, a requirement that the Cardholder waive a right to dispute a Transaction.

8. Everyone says I should never use my debit card, because credit cards have fraud protection and debit cards don’t. Is that true?

They both have some fraud protection. However, if someone takes your debit card on an Xbox-buying spree, that’s a few hundred dollars missing from your bank account until the situation is fixed. If someone does it with your credit card, the problem can be sorted out before you have to pay the bill.

9. Doesn’t my credit card give me extended warranties and other benefits?

Probably! Card-issuing banks offer a wide variety of quiet benefits, not really advertised, to their cardholders.

10. How do I report a merchant that’s not playing by the rules?

If a merchant does try to pull anything they’re not allowed to around credit cards, you can report them. Visa and MasterCard both have easy-to-use online forms for doing just that. American Express card holders can do it by calling the 800 number on the back of their cards.

Tuesday, 2 September 2014

Dyman Associates Insurance Group of Companies Tips: Be Careful Where Personal Information is Shared

TUCSON, AZ (Tucson News Now) - On July 23, law enforcement officials arrested seven suspects, from Russia to New York, after they allegedly hacked into more than 1,000 StubHub accounts and placed orders for over 1.6 million tickets.

According to the BBB of Southern Arizona this data hack was different from the one Target experienced in 2013; this information was stolen directly from consumers computers via viruses downloaded onto personal computers or through smaller data breaches on other websites.  The victims of this StubHub breach have been notified and many have already received refunds.  The BBB of Southern Arizona is reminding consumers to be careful and aware of where they share personal and financial information online, this stored information can easily be stolen by scammers and used to steal identities or empty bank accounts. 

The BBB reminds the public to check their credit reports and bank statements regularly for unusual activity, as well as to make sure anti-virus software is updated.  They are also offering the following tips to avoid falling victim to a data breach or identity theft:

Quick action - act fast to dispute the charges and limit liability; many companies have a 'zero' liability policy after reporting the loss or theft of a credit card, or when there is a data breach.  Write a follow-up letter to confirm the loss was reported.

Know your rights - policies are not the same across all credit cards or debit cards, though federal laws protect both. Many credit card consumer liability is largely limited; if the loss is reported before the card is used under the Fair Credit Billing Act, you are not responsible for any charges you did not authorize.  If the card number is stolen, but not the card, you are not liable for unauthorized use.  Debit cards are protected under a separate Electronic Funds Transfer Act, protection is tied in to how fast the theft is reported.

Check with insurance provider - check policies (homeowners or renters) they may cover losses due to fraud. 

Credit freezes/alerts - a credit freeze prevents any lender from accessing credit reports or scores as part of a credit application.  For those who been a victim of ID theft or accounts have been compromised and an Identity Theft Report has been created, an extended credit alert can be placed on the account as well. A minimal fee may be required.  An extended alert could last for almost seven years.

For more infomation visit our facebook page and follow us on twitter @DymanAssocIns.

Saturday, 30 August 2014

Dyman Associates Insurance Group of Companies Tips: How to avoid being victim of insurance fraud

DALLAS - For years Frenchitt Collins worked as a legitimate insurance adjustor. He was able to pull off a major insurance fraud by luring in victims with ads.

Ultimately Collins was sentenced to 15 years in prison and was ordered to pay $700,000 in restitution to his victims.

"Those P.O. boxes were rented by him (Collins), his wife, his brothers, or his girlfriends," said Bodon.

In order to attract clients with ads, he would go ahead and offer them $100 or $200 to use their identifiers.

Once that information was received, Collins went ahead and completed medical forms necessary and sent them to insurance companies.

The goal of these ads was to lure in more victims.

Insurance companies would then send Collins checks, lots of checks.

Federal officials said insurance fraud is a $30 billion business in the U.S.

"It is very lucrative for the criminal to perpetrate the crime because it’s low risk and it’s high reward and they know that," said Fred Lohmann of the National Insurance Crime Burea.

Experts are saying this abuse is costing all of us.

"The fact that this crime is occurring and is so prevalent in the U.S. it taxes resources federal, state and local that have to actually go in and investigate the crimes," said Lohmann.

To avoid becoming part of insurance scams do not give your Social Security number unless you are positive you are dealing with someone legitimate.

Wednesday, 27 August 2014

Dyman Associates Insurance Group of Companies Tips: Money-saving tips plentiful; small changes add up

Don’t buy a tech device just as a new version comes out, David Pogue says.

Who doesn’t want to save money? You’ve probably heard basic money-saving advice, such as never buy an expensive item on impulse. Wait a day or two and mull it over.

Then there’s the old standby tip: Put aside your loose change from your wallet or pocket every day. At the rate of 50 cents a day, you would have a small emergency fund of $182.50 in a year. But making small changes can add up, too

AARP’s fifth annual ‘‘99 Great Ways to Save,’’ published this month in AARP Bulletin, provides some interesting tips from experts in home improvement, finance, food, and more.

To see all 99 ways to save, go to and search for “99 great ways to save.”

Even if you’ve heard them before, it’s good to be reminded how little effort some saving tips take.

Home improvement expert Bob Vila’s tips include:

- Unplug it! ‘‘Vampire’’ electronics consume power even when turned off. A typical household can save $100 a year using smart power strips, which cut electricity to devices in standby mode.

- Install a low-flow showerhead. You won’t even notice the difference, Vila says, because a low-flow fixture reduces the volume of water but does not affect the water pressure.

Yahoo Tech founder David Pogue offers these tips:

- Learn when new gadgets come out, so you don’t buy something just before it’s made obsolete. In general, a new iPhone model debuts each September, and a new iPad every November. New cameras come out in February and October, and everything else is timed for the holidays.

- Consider a prepaid cellphone. You pay before you make calls, instead of after you’ve made them.

- Talk to far-away family members using an app like Skype, which is available for smartphones, tablets, and computers, or FaceTime, for Apple phones, tablets, and computers. You chat for free over the Internet.

Jean Chatzky, AARP financial ambassador says:

- Shop around for insurance. Auto insurers have a tactic called ‘‘price optimization.’’ They raise premiums based not on your risk factor, but on how much of an increase they believe you will accept. When it’s time to renew, ask your current insurer to do better.

- You can get your credit score for free at and

- At what age should you start collecting Social Security? The magic number is 80. If you’re single and you think you will live past it, wait until age 70 to begin collecting, to receive the maximum benefit. For couples, as long as you believe one of you will live past 80, the higher earner should delay as long as possible.

Tips from Holly Phillips, internist and medical contributor for CBS News:

- Switch to generic drugs. The price is usually lower, as well as the copay.

- Don’t smoke. Cigarette smokers pay more for insurance and require more medications and doctors visits. Cigarette smoking costs the United States up to $333 billion annually, including at least $130 billion in health care costs.

- Ask about independent facilities for radiologic tests. Having an MRI at a hospital costs an average of $1,200, but the same procedure at independent facilities costs about half that.

- Take advantage of wellness benefits. Many employers offer incentives for participation in exercise and other health programs. Insurance companies may offer a payment to those with gym memberships.

- Take your medications regularly. Many costly hospital visits are for conditions (like asthma or high blood pressure) that were managed well with medications until they worsened when the patients skipped doses.

Tips from Samantha Brown, AARP’s travel ambassador:

- For cheaper flights, look to the earliest and latest flights of the day.

- For weekend travel, stay in a business hotel. The road warriors are gone and so are the high prices. These hotels will be in the business district, which isn’t always the most vibrant part of town. But that’s a small trade-off if you gett a good deal.

- Avoid conventions. Cities such as Washington, Las Vegas, and Orlando have the best hotel rates when conventions are not in town. Check out a city’s official tourism website under Convention Calendar to spot the best times for a visit.

- Head to ski resorts in summer and beach locations in late August or early September.

- If hotel rates seem sky-high, there are often cheaper alternatives. Consider finding a room on sites like and; you’ll pay less and feel like a local.