Chicago Insurance Expert - An Interview with Paul Rauner
Q. Tell us about yourself and your firm
A. I have been working in the insurance industry for 12 years, first litigating the insurance coverage as a lawyer representing insurance companies. Then I worked as a consultant and broker at large commercial brokerages and now I am working for myself as a consultant and insurance broker. Chicago Risk Services Inc. is the company I started in 2005 to provide brokerage and consulting services to commercial and personal lines clients.
Q. What are the various types of insurance you offer?
A. Chicago Risk Services Inc. provides virtually every type of insurance from home owner, auto and life insurance to coverage for directors and officers of public companies. My specialty is executive and professional liability.
Q. How long do you take to process a claim?
A .Strictly speaking, I don’t process claims. I represent the buyer in purchasing insurance and when my clients have claims, I help them negotiate the claims process to achieve the best possible result. The time it takes to process a claim depends on the type of claim, the circumstances and the insurance company the risk was placed with.
Q. If a person wants to have home insurance coverage what personal belongings should be insured?
A. Most home insurance includes coverage for personal belongings. Generally this is a percentage of the amount of coverage on the structure that looks like a really big number. However the coverage amount for personal property can be deceiving. The coverage available for individual items is usually limited on a per item basis to items that are under a specific value for example $3000. For most household items that are not fixtures this lower limit called a “Sub-Limit” is not a problem, but for some so called luxury items it is something to be aware of. If you own any of the following sort of items be sure to ask what the included per-item limit of insurance is under your policy and get them scheduled for full value, if they exceed the Sub-Limit. The sort of items to keep in mind include but may not be limited to Furs, Guns, Jewelry, Fine Art Silverware/Goldware, Cash Coins and Financial Instruments.
Q. How can a person tell if the amount of insurance carried on his/her house is adequate?
A. The Coverage A number in a Home Owner's policy typically represents the amount available to rebuild the structure in the event of a total loss. Every insurer has an estimation tool that they use to fix this value and drive their pricing model. These models incorporate the cost of materials and work to rebuild a home but the estimates can vary quite a bit. Most carriers won’t move from their coverage A estimate, but they may provide an option to increase the Coverage A available in the event of a loss. Some carriers provide Guaranteed Replacement Cost Coverage in which they agree that the estimate will drive their pricing model, but in the event of a claim the insurer will replace the house regardless of cost.
Q. A Teenager has been driving under his parent’s policy for a few years. Now he wants to get insurance in his own name. Would you be able to help him with insurance?
A. As long as teens are living with their parents or away at school, they should typically be insured on a family policy. Teens are the highest risk drivers and insurance companies price them accordingly. Policies available to a teen on their own are expensive and may not provide the best coverage. We recommend that teens work toward moving out on their own, with a clean driving record and good credit.
Q. How does car insurance work for a teen with a learner’s permit?
A. When teens are learning to drive under a permit, they are permissive drivers using the vehicle with their parent’s permission. Most policies will allow the permit driver to operate the vehicle under supervision without adding them to the policy. Parents should consult with their insurance representative to confirm whether or not the new driver needs to be listed on the policy during the permit period.
Q. What is the difference between comprehensive and collision coverage?
A. Collision insurance is just what it sounds like. It’s insurance that covers damage caused by a collision. Comprehensive insurance covers some additional risks such as theft and vandalism.
Q. What are the common policy variations of term life insurance?
A. There are many different “bells and whistles” that can come on term life insurance. The standard variable in term life insurance is the length of time. During the term, the premium and the amount of insurance the policy provides will stay the same. Typical terms are 5, 10 and 20 years. Probably the most important variations on the policy relate to what happens at the end of the term. Term policies generally include provisions that allow the insured to maintain the policy at the end of the term, for a significantly higher premium. Some policies allow for a one time payment to convert the policy into a “whole life” policy that will provide a specific benefit amount. Insured’s should consider their options in light of the goals they hope to achieve through buying the insurance. We recommend speaking with a financial planner or investment specialist when considering life insurance.
