It’s crazy how the Coronavirus has taken over our lives for the last 2 months. It will continue to impact us for the rest of our lives. I’m writing this article on ways insurance maybe utilized to help you recover from the financial impact this virus has had on you and your family. Everything from Auto insurance to Workers Compensation insurance is being affected.

As the virus began gaining recognition for its medical implications, virtually everyone assumed it would be impacting the medical field of doctors, clinics, labs and hospitals; inter-related is the impact on the Health Insurance industry such as Blue Cross, United Health, and Health Source RI. Prior to the virus outbreak, those needing health insurance had a limited enrollment period. Those enrollment periods have been relaxed or suspended to allow the uninsured access to health insurance.

As the virus spread into and across the United States businesses began to question the impact it would have on Workers Compensation Insurance. While normally associated with work related injuries, workers compensation also is intended to pay for work related illnesses. Because you contracted the virus in the workplace alone technically does not mean that your exposure was related to the job you were performing.  To date I have not heard of any insurance company rejecting a claim related to the Coronavirus.  I do know most Workers Compensation companies are taking each claim on a case by case basis. The key is to be able to show a link connecting you to the workplace as the virus contact source.  It is unlikely you can prove that your exposure came from work rather than the grocery store, pharmacy, or any one of the select few places that remain open  you may have encountered an infected person. But with a link to an infected fellow employee(s), or simply working in an environment that is recognized for its employees being exposed, you likely would be eligible for workers compensation insurance.

The economy was soaring one day and it soured the next.  Within days of each other schools, restaurants, bars and all non-essential workplaces were shut down. From that the economy screeched to a halt. Thousands began to apply for Unemployment Insurance.  Many professions that have never been hit by unemployment issues are now in the thick of it. Many with jobs are working reduced hours. That reduced level of employment may mean you’re eligible for a partial or supplemental unemployment check—especially through the CARES Act.  While the CARES Act does not come out and say it, a big part of the $600 a week Federal Unemployment Benefit you’ve likely heard about addresses the income loss from the jobs that historically have been associated with cash businesses; people such as the self employed, independent contractors, or even those paid “under the table”.  

Rhode Island’s Temporary Disability Insurance program is seeing a huge increase in claims activity relating to people, with the virus along with people out of work in a self quarantine status after being exposed to someone in their work environment.

The people who have Disability Insurance through their work or a private insurer such as AFLAC may find themselves putting a claim in through that insurance company.  The qualifying requirement for most of those policies is that a doctor or hospital has directed you to stay out of work for medical reasons.

Several of my business customers have asked me about filing a “Business Interruption” claim. When Governor Raimondo ordered all Day Care centers to close, you might have expected the business interruption component of a business owner’s policy to respond to a government or civil authority’s order to shut down.  The intent of the coverage is to augment the primary coverages on a business policy; this coverage is triggered by a “covered property related loss”.  Simply put, if a fire caused the business to shut down, then the resulting loss of income would be your business interruption loss. There are several exclusions in a business interruption policy that would prevent business interruption coverage applying to this. Legislatively there maybe attempts to force insurance companies to expand this coverage to apply now.  Such legislative action could be taken for future coverage. But if the legislation were attempting to back date the coverage to this current outbreak, I have little doubt courts would side with the insurance companies.

I am cautioning my insureds to keep vigorous records to be able to show month to month income and expenses for up to three years prior to this current year. Should a court case over turn past coverage challenges, there will be a mass movement to submit claims for the business interruption expenses.  Even if there is no change in the legal climate relating to business interruption, your accountant will be able to advise you how to write off at least some of this loss of income on your taxes.

Early on insurance companies began making it known that they would be making adjustments; some automatically while others were upon request. Businesses with fewer employees should not be paying for their workers compensation based on the same level of wages paid last year.  A used car dealer with dealer plates has to keep liability insurance in place or turn in the plates. The insurer was willing to restructure the premium payments to skip a month or two without penalties. A local tour bus operator has been forced to park 3 of their 5 buses. Their carrier agreed to keep the full coverages in place to satisfy the lien holders, the RI Dept. of Motor Vehicles, and Public Utilities Commission while charging pennies on the dollar that would otherwise be charged while the vehicles are parked.

The lack of consumer travel has dramatically reduced the auto loss experience of insurance companies.  Last week Allstate began promoting that they were “rebating” their insureds a portion of their Auto Insurance premiums. That was followed by other carriers like Progressive, American Commerce, Main Street America, Travelers and Liberty Mutual announcing similar programs. Those following the initial announcement included a caveat that the amounts to be returned would be subject to the Department of Business Regulation approval.  Any reduction that you receive from a carrier today is only a partial indication of the savings they are experiencing with you and your family staying at home. The full actuarial impact on your auto insurance rates will not be fully realized for 12, 24, and even 36 months down the road. Rates will then reflect this experience.

 Some of you are now or will be finding yourselves in the position of deciding between putting food on the table or going without insurance. Believe it or not, most insurance companies are uncomfortable with you being in that predicament. If it’s the timing of a payment, talk with your agent or insurance carrier. If it is likely to be a long term situation for you, lower your limits and raise your deductibles.  Insurance is not a luxury expense; it is a necessity. Going without insurance now may have legal implications affecting your home mortgage or auto loan. Your family could be crippled financially in the event of a loss. And, a lapse in coverage will increase your insurance costs as you begin to recover from this mess we’re in. It’s becoming an iconic phrase but it is so true; Together we will get through this.