As more new vehicles become equipped with crash-avoidance features, some owners report significant issues with the technologies after repairs, according to a recent report from the Insurance Institute of Highway Safety (IIHS).

 

In the survey, approximately half of those who reported an issue with equipped front crash prevention, blind-spot detection, or rearview or other visibility-enhancing cameras said at least one of those systems presented problems after the repair job was completed.

 

Nevertheless, many owners remained eager to have a vehicle with these features and were pleased with the out-of-pocket cost, according to Alexandra Mueller, IIHS senior research scientist.

 

“These technologies have been proven to reduce crashes and related injuries,” Mueller said. “Our goal is that they continue to deliver those benefits after repairs and for owners to be confident that they’re working properly.”

 

Still, as problems with these technologies persist, the study notes that it is important to track repair issues to further the adoption of crash avoidance features. IIHS research has shown that front-crash prevention, blind-spot detection, and rearview cameras all substantially reduce the types of crashes they are designed to address. For example, IIHS said, automatic emergency braking reduces police-reported rear-end crashes by 50 percent.

 

An analysis conducted by the IIHS-affiliated Highway Loss Data Institute (HLDI) showed the reduction in insurance claims associated with Subaru and Honda crash-avoidance systems remained essentially constant, even in vehicles more than five years old. But repairs can make it necessary to calibrate the cameras and sensors that the features rely on to work properly, making repairs complicated and costly.

 

For example, a simple windshield replacement can cost as little as $250, while a separate HLDI study found vehicles equipped with front crash prevention were much more likely to have glass claims of $1,000 or more. Much of that higher cost is likely related to calibration.

 

The new IIHS study found that owners often had more than one reason requiring repairs to these safety features. Most had received a vehicle recall or service bulletin about their feature, but that was rarely the sole reason they brought their vehicles in for service or repair.

 

“Other common reasons — which were not mutually exclusive — included windshield replacement, crash damage, a recommendation from the dealership or repair shop, and a warning light or error message from the vehicle itself,” according to the study.

 

Repair difficulties could motivate drivers to turn off crash avoidance features, potentially making collisions more likely.  But, despite the post-repair issues, the study found that slightly more than 5 percent of owners would opt not to purchase another vehicle with the repaired feature. As reckless driving and traffic fatalities continue to rise, advanced driver-assistance systems will only become more important for the roadway safety, necessitating reliable technology.

 

Source:  Max Dorfman | https://www.iii.org/insuranceindustryblog/crash-avoidance-features-complicate-auto-repairs-but-still-are-valued/

Insurance safeguards your business, family, and personal welfare in case something bad happens. And most would agree that the worst event that can occur is the loss of life. Having insurance policies in place that can protect your employees, their families, and your business at these unfortunate times can become a little solace in a tragic situation that makes the event a bit less damaging for all.

As a business owner, you have options when it comes to purchasing life insurance. You can provide policies to all employees, but there is more you can do. But what policies should you get key man insurance vs life insurance?

Key person insurance, previously referred to as key man insurance–snaps for the insurance industry’s wokeness–is a special kind of insurance that can be purchased for select individuals. We’ll break down the differences between traditional life insurance and this specified kind of coverage. Let’s start with the kind you likely already know something about:

What is Life Insurance? 

A standard life insurance policy is something that practically all employers offer. Life insurance is a contract between a person and an insurance company. If an employer offers life insurance, it is seen as an employee benefit, as policies may be available at a lesser rate when purchased in bulk as opposed to when bought as a single entity.

If death occurs, the insurance company will pay beneficiaries a lump sum known as a death benefit. There are two primary kinds of classifications of life insurance:

1. Term life insurance: This kind of life insurance provides coverage for a specific period of time, usually between 10-40 years, the term is typically tied to the anticipated date of retirement.
2. Permanent or whole life insurance: Permanent policies provide coverage for the lifetime of the insured and accumulate in value as a portion of the premiums is deposited into a cash-value account overtime.

What Does Life Insurance Cover? 

Life insurance usually covers most causes of death, including: natural causes, accidents, homicide and suicide. In the event of death, money will be paid directly to beneficiaries. They can use the money how they like, but common uses include things like:

• Estate taxes and funeral expenses
• Covering basic living expenses
• Paying household debts
• Replacing lost income
• Funding a child’s education
• Supplementing retirement savings

What Doesn’t Life Insurance Cover? 

Under some circumstances, life insurance policies will withhold a payout to beneficiaries. Reasons may include things like:

• A life insurance policy is expired
• There was fraudulent or criminal activity committed on behalf of the policy holder
• The policy holder’s death involved risky behavior, like partaking in extreme sports

What is Key Person Insurance? 

Somewhat similar to life insurance in practice–it’s a policy that is paid out at the time of an employee’s death–key person insurance is paid out to the business–as they are the policy holder in this case. It is a form of company-owned life insurance (COLI). There are times though, when both the business and the family members receive a pay out.

Plainly put, the business owns the policy, pays the premiums and is the beneficiary. Key person insurance is a life insurance policy that a business takes out on its most valuable employee or employees.

The employee does have to provide consent. In addition to coverage in case of a death, a policy can also include a rider for disability coverage. If a key person dies, the business then collects a death benefit. The purpose of this kind of insurance protects a business in the event that they lose an invaluable person to their business due to death–and not a termination or voluntary exit.

What Does Key Person Insurance Cover? 

Key person insurance can be used by a business to rebound after the loss of a key contributor. This individual had a direct line to the company’s overall success and therefore the funds can be used to:

• Ramp up recruitment of high-performing and competitive candidates to fill the vacant role
• Make up for lost sales, productivity and operational disruption costs
• Aid in funding rebranding efforts if the individual had a consumer-facing role
• Provide money to the family of the deceased

What Doesn’t Key Person Insurance Cover? 

These policies will not cover contractors or freelancers and payouts are only made when the person dies and will not provide funds in the event of a retirement or termination.

What Does a Key Person Look Like? 

A key person is an employee that is considered irreplaceable. In some cases, it can be a business owner, especially if the business or brand is named after that person. Policies can also be taken out for C-suite individuals or niche product developers. Those in highly specialized roles or those who are superior in their field and drive revenue in exceptional capacities can also be considered key people.

What’s the Cost of Life and Key Person Insurance? 

While any cost of an insurance plan will take certain factors into consideration, typically, insurance companies base group life premiums on the overall risk of the company or group. Term life insurance is typically less costly than permanent or whole insurance. Generally, a good rule of thumb is that the higher the death benefit, the higher the cost of the policy.

As for determining the cost of key person insurance, cost will also differ case by base, but to get an idea of the expense you can add the person’s salary to their direct financial contribution to your company’s bottom line per year, then multiply the result by five. Insurance companies will also consider additional factors like: the time and effort it will take to find and recruit a replacement, the cost of recruitment, operational disruption costs, lost productivity and lost sales.

Should Your Business Get Key Man Insurance vs Life Insurance? 

Outside of having the assurance that your company won’t incur great financial loss concurrent with the loss of a human life, another reason you may be interested in key person insurance could be because you are applying for a business loan or other financing. In these cases, a lender or investor may require a key person policy as collateral.

But ultimately, when deciding between the two kinds of insurance, you may find that you’ll end up with both. As noted earlier, key person insurance doesn’t cover all employees–so even if you do have a person in mind, it won’t cover all of your staff. Group life insurance is a type of personal life insurance employers can offer to all their workers at lesser rates and can be available to the entire company.

Source:  https://www.embroker.com/blog/key-man-insurance-vs-life-insurance/