May 2009 Archives

Virginia credit card users should be delighted. On May 20, 2009, the House of Representatives passed the Credit Cardholders' Bill of Rights, sending it to President Obama's desk. The new law will ban most interest rate increases on existing balances and requires better notice of interest rate hikes going forward on new purchases. Of particular note to Virginia consumers, It includes freshman Congressman Tom Perriello's provisions to require credit card companies to have a 6-month minimum on promotional - or "teaser" - rates.

Perriello noted that he has "talked to too many 5th District families who have been blindsided by these teaser rate gimmicks and unfair fee hikes." The Credit Cardholders' Bill of Rights attacks unfair practices of the credit card industry and seeks to protect consumers from tactics that have driven Americans deeper and deeper into debt.

Among its many provisions, the new legislation will require that bills be sent 21 days before the due date. It will prohibit charging fees just to pay a bill by phone, mail or web, and will bans over-the-limit fees unless a consumer opts-in in advance. It contains measures to prevent due-date tricks, and requires payments to be applied fairly to the highest interest rate balance first. Finally, it should strengthen credit card protections for young people.

Soccer is one of the biggest sports in the United States now. Most parents think of soccer as a safe alternative to football or lacrosse. Did you know that from 1979 to May 2009, there have been 35 deaths and 53 reported injuries from portable soccer goals? This number consists of known and reported incidents only! How many more are out there? I am currently handling a case involving the death of a child resulting from a portable soccer goal tip over, and I can tell you there is not a sadder case than a family that has lost a child from a preventable incident.

Many portable soccer goals can weigh hundreds of pounds and are poorly designed. The goals are not properly counter weighted or rely solely upon anchors, which can become lost or separated from the goals. The reported deaths involve goals that accidentally tipped over from the wind, from children playing or climbing on them, and from people moving the goals to another location or to put nets on them. The Consumer Product Safety Commission published a guide book in 1995 and the family of a child killed by a falling portable soccer goal has developed a website that lists the victims I mentioned above, along with ways to prevent goals from tipping over.

It is clear that goal manufacturers are not properly designing their goals and/or not properly warning the public. If you, your children or your relatives play soccer warn them about the dangers of portable soccer goals and refer them to the two websites I have linked to above. 

Each year, it seems that the automobile manufacturers issue hundreds of recall notices. Some affect the current model year, others affect vehicles manufactured years ago. If you bought your vehicle used, or have moved, you may never get notice of the recall. Any easy way to determine if your current vehicle has been the subject of any recalls is to visit the National Highway Traffic Safety Administration website to check. You can also sign up on this site for receive recall alerts via email. I have used this site before, and in fact my wife has shown up at the Volkswagon dealership, before they dealership has even received word of the recall. Always make sure that you have the work done! Usually it is free or at a reduced rate, and in some cases, if you have already paid for the work, you can get reimbursed.

Each year over 10,000 people are killed from rollover crashes or accidents. Many of these deaths are attributable to the weak roof of the vehicle caving in and crushing the occupants. The current NHTSA roof crush standard requires that a vehicle withstand 1.5 times the weight of the vehicle, applied to one side of the roof, for "light vehicles" up to 6,000 pounds in weight. Anyone who has seen this test can tell you how useless it is. Literally, a large metal plate is placed against the roof and slowly pressed against the roof up to the required testing limit. This is what is called a static test. This test fails, in my opinion, and many others, to adequately duplicate a real world rollover event where a vehicle can be traveling at anywhere from 15 to 60+ miles per hour when it suddenly flips and lands on its roof--a dynamic event, requiring a dynamic test. This roof standard has been in force since 1971 and has been heavily criticized in recent years.

The NHTSA (National Highway Traffic Safety Administration) has passed a new rule specifying that both the driver and passenger sides of the roof must be capable of withstanding a force equal to 3 times the weight of the vehicle. Heavier vehicles (6,000 to 10,000) must now have both sides of the roof capable of withstanding a force equal to 1.5 times the weight of the vehicle. The phase in schedule begins in September 2012. While the increased weight limits are much needed, as was the testing to both sides of the roof, this still remains a static test and does not duplicate the forces applied to a roof as it is crashing to the ground in a real world rollover event. A step in the right direction but still woefully inadequate to protect the consumer.

Earlier this week I wrote about insurance coverage and how important it is. I recently received an inquiry about umbrella policies. Umbrella policies are large liability policies ($1million dollars or more) written to cover individuals or businesses. In most cases, these policies are less expensive than a comparable liability limit on your automobile or homeowner policy. In most cases, the insurer will also require that you carry a certain amount of liability coverage on your automobile and homeowner or renter's policy.

Umbrella policies are a good thing and I highly recommend them. However, most umbrella policies DO NOT cover underinsured or uninsured motorist claims. Therefore, it is still necessary to carry a large underinsured or uninsured motorist coverage liability limit. Ask your agent if you existing umbrella policy or the one your are contemplating, covers uninsured motorist or underinsured motorist claims. If the agent says they are covered, make him/her show you the policy itself to back up their opinion.

From the title of this piece, you may have assumed it was an article or ad written by an insurance company. I assure you it is not. A client was in my office a couple of weeks ago, and was involved in a very serious automobile accident. He was shocked to find out that the person who was at fault only had insurance limits of $25,000. The client had over $25,000 in medical bills alone. I told him that all was not lost, we could make what is called an underinsured motorist's claim against his insurance company. He happily went home to get me his insurance information and eagerly awaited my review. Unfortunately for him, he too had $25,000 in liability and underinsured motorist coverage as well; meaning that his total recovery was limited to $25,000! He was in stunned disbelief as he had been assured that he was "fully insured". Technically speaking, he did have the full insurance requirements of Virginia, currently $25,000 per person bodily injury limits, with a maximum of $50,000 total; and $20,000 in property damage coverage. I quickly advised him that while he had full coverage, he was not adequately insured for his own good.

While this client was "fully insured" or had "full coverage" as I have heard insurance agents and adjusters say, to the extent that he caused an accident and bodily injury to a pedestrian or the other driver or his own passengers, his insurance would only pay up to $25,000 per person injured, with a limit of $50,000! Obviously, if he accidentally struck a pedestrian or fell asleep at the wheel and rolled his vehicle down an embankment, medical bills alone for the victims could surpass $25,000. Welcome to bankruptcy!

The bigger problem for him was the fact that his underinsured motorist coverage (limits of which cannot be written or obtained greater than your liability coverage limits in Virginia at least) were $25,0000/$50,000, so he had no available underinsured motorist coverage. Underinsured motorist coverage is a coverage that can cover you if you are involved in an accident with a person that does not have sufficient liability coverage to cover your injuries. In this case for example, if the client had $500,000/$1million underinsured motorist coverage, he would have had an additional $475,000 in coverage available to cover his own injuries, medical bills and pain and suffering. Worst of all, increasing your liability, uninsured and uninsured motorist coverages is not that expensive. In my opinion, I would not operate a car today without having at least $1million in liability, uninsured and underinsured motorist coverages. Given the price of today's automobiles, I would carry at least $100,000 in property damage coverage. If you were to cause an accident that totaled a tractor trailer, many tractors cost in excess of $100,000, this does not take into account the trailer or its cargo.

Do yourself a favor and call your insurance agent today!!!