The Insurance Report - October 2005

KATRINA & OTHER CONCERNS
By Roland L. Enz - President, California Plus Insurance Service, Inc.

The summer is winding down and soon the West Coast will be turning cold and wet. It’s time to start preparing yourself and your employees for some adverse driving conditions. Start now and get a jump on winter.

MVRs – I get tired of preaching the same sermon over and over, and it always falls on deaf ears. Your Motor Vehicle Record (MVR) is the single most important key to purchasing quality, competitive insurance and it is the single most important factor in securing a quality driving position with a good company.

It never ceases to amaze me how lax and cavalier most drivers take their driving records. How can someone that has chosen and is making his livelihood as a professional driver take this one important practice so nonchalantly? Over and over I hear the same story. “The system is against me," or, "Considering the miles that I drive”. In the case of accidents, it is always someone else’s fault. Drunk or reckless convictions are inexcusable for a professional driver. If you’re an employee, chances are it will cost you your job. Don’t say that it can’t be done. I have many customers that have been driving for twenty and thirty years that have clean records, and many have never had a ticket or accident EVER in their driving career.

Your driving record is a snapshot of your driving habits and practices. Research has found that the chances of being involved in an accident increases exponentially with each and every citation. Failures to Appear (FTAs) are a picture of your attitude toward responsibility. There is a strong correlation between moving violations and FTAs as to the future involvement in a traffic accident. In recent years, the number of traffic accidents was decreasing, but in the latest report I read, last year saw a 3% increase. Also, drivers with a CDL (Commercial Driver’s License) are no longer eligible for traffic school to remove violations from their driving record. So don't get a ticket!

If you drive for a living, treat it as any professional would with respect for your ability to make a living. Professional – 1) following an occupation as a means of livelihood, 2) making a constant practice of something. In other words, act professionally when behind the wheel.

Katrina – I would be remiss if I did not take some time to give a quick overview of the financial impact on the insurance industry, as well as the nation, by Hurricane Katrina. Four years ago, at this time, I wrote about the terrorist attack of the World Trade Center and the Pentagon and what impact it had on the economy. At this time, there are only estimates of Katrina’s impact and destruction on physical and economic damage. The loss of life will continue to climb from the reported 1,000 at this writing. The physical loss is being estimated at 125 to 150 BILLION dollars.

The economic loss will reverberate all over the nation, as well as the world. Some 40% of the nation's goods, both imported and exported, come through or are transported by the Mississippi River. 50% of the fuel used by that part of the nation comes from the Gulf of Mexico. The residual monetary effect will never be recaptured. I have not seen any projections of insurance loss, at this time, other than an estimate of 25 to 50 billion dollars.

What does this loss mean? Well, someone has to pay for it. For the purchaser of insurance, you will see and feel it in increased premiums. For the local population, taxes will have to be levied and, of course, our national debt will rise. As a nation, we will all shoulder the burden of loss and reconstruction of this vital area. But in the event of major loss, this country has always rallied together and came out stronger than before – let's hope this is the case here.

There is one point that I would like to take liberty in, through this column. Katrina was a major cataclysmic event to this nation, bringing destruction to property and devastation to its population. The people most affected were the poor and unfortunate. Right from the start this has been a partisan, political, finger-pointing event. Let’s get real – with a disaster this large, some of the pieces of the national and state’s response will fail or come apart. Politicians should be concentrating on the issue at hand and not their ability to get a leg up on their political adversary. Both sides of the aisle are at fault here. This was the largest natural disaster this nation has faced. No other government on earth could or would have responded as this nation has. Committees and hearings should be convened at some point, but they should be conducted in a way that will improve our ability to respond to both man-made or natural disasters, and not as a platform for partisan, petty grandstanding.

If you have any questions concerning insurance, Roland L. Enz can be contacted through California Plus Insurance Service at 1-800-699-7101.