Is Real Estate Investing Boom or Bust?


Is the real estate market about to bust? Blackstone Group Inc. President Jon Gray doesn’t think so. He has advice for investors looking to make sense of the U.S. real estate market. “Don’t fear a bust anytime soon.

Home prices surged to their highest levels since 2005. Cheap mortgage interest rates are encouraging buyers toward new homes, while building costs are spiking due to rising raw material prices. Meanwhile, a worker shortage has reduced new construction. In commercial real estate, the wider acceptance of remote work during the Covid-19 pandemic is creating office vacancies across the country.

Despite all that, now’s a pretty good time for the market, according to Gray, who has been at the center of the biggest booms and busts in the industry over the past three decades.

The market isn’t showing the typical warning signs — too much leverage, too much capital, too much building, Gray said. There will be a “rediscovery” of cities such as New York and San Francisco, fueled by immigrants, creativity, entrepreneurship, and technology.

The billionaire also spoke about where he’d put $100,000 today, what to avoid pouring money into, the best way to invest in real estate, and how President Joe Biden’s tax policies could affect property owners.

Gray’s journey at the New York-based firm began in 1992 and by 2005, was running the real estate investment unit. Over the next 13 years, Gray built it into a behemoth with $115 billion of assets. The below is a condensed version of the Q and A between Gray and Bloomberg Wealth.

Question: The economy has been pretty good, but will probably head down at some point, so is this a good time to invest in real estate?

Answer: It’s still a pretty good time for real estate for a couple of reasons. There are two warning signs; one is too much leverage and too much capital, and neither is really the case in the real estate system today. The second is too many cranes and too much building, and we’re actually below historic levels in terms of new supply.

The other thing I’d point out is that the S&P 500 delivered something like four times the return of public REITs since the beginning of 2020, before Covid. So real estate is lagging coming out of the recovery because obviously people have been concerned about the physical world. As the economy reopens, people go back into spaces, real estate will see a little bit of a bounce. I think the risk is if interest rates move a lot.

Another positive thing about real estate is inflation drives up the replacement cost of buildings. And that gives you a little bit of a cushion on existing real estate.

Question: Is residential less or more risky than commercial real estate?

Answer: If you mean for-sale, single-family housing, there’s probably more risk in the sense that you’re building something and you’re selling it, and it’s a function of the market. If you’re talking about rental housing, such as an apartment complex, that tends to be less risky because it’s less cyclical. People don’t give up their apartments. There’s some volatility but nothing like, say, office buildings or hotels.

And then commercial real estate involves office buildings; warehouses, which has been the biggest theme for us over the last 10 years; hotels; shopping centers; senior living facilities. And all of them have different risk returns, depending on geography.

Question: New York City has seen a lot of people leave during Covid. Do you expect that people will come back, work five days a week, and use all the office space in New York or similar cities that they did before?

Answer: There is a sort of recency bias because we’ve been home, we assume that’s the way it will continue. When I think about our company, we know we’re better together. We’re better at being creative, we’re better at solving problems, we’re better at training our young people. It’s really an apprenticeship business, learning how to invest. We have a lot of smart, talented people who are connected by culture. Being together matters.

Some companies will conclude they don’t need quite as much space, so that’ll create some additional vacancies. People will be concerned about owning office buildings, and that may create an opportunity. There will be some headwinds for a number of years and then, over time, things will recover.

I would point out, though, outside the U.S., for instance, in China, buildings are back to full capacity. In Europe, people don’t have as much living space in their homes. So not all geographies are the same. And even here, I think there’ll be a bias toward going back to the office, even though it won’t be like it was before.

Question: A lot of people have moved to Florida and Texas, maybe for warm weather, maybe because those states don’t have income taxes. Do you think that trend will continue? And is that a good place to invest in real estate now?

Answer: It’s a bit of both. The weather, the lower cost of living, lower taxes, concerns about the quality of life. Texas is one of the fastest-growing states in the country, even though it’s enormous. I think that will continue, and it was accelerated a bit by the pandemic. On the other hand, New York City, San Francisco, are amazing places. And when you think about technology and innovation, entrepreneurship, immigrants, there will be a rediscovery of these cities. But, yes, Texas and Florida are well-positioned.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family-run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, auto insurance, commercial, and professional insurance to residential and commercial insurance customers enabling the cheapest rates available. Call to speak to one of our insurance professionals and see how painless insurance shopping can be.

Seeing Through Auto Windshield Repair

Auto windshield repairs are the number one auto insurance claim in the United States representing 30% of all auto claims. 70-80% of those claims are for “edge cracks”: cracks affecting the initial two inches of the windshield perimeter. As windshields are made of multiple fused together layers of glass (“annealed”), windshields may have a manufacturing defect known as “residual stresses”, created during the annealing process.

Not surprisingly, the major cause of windshield damage is flying rocks, creating windshield chips. Gravel is everywhere on the road, and cars and trucks traveling on the highway can kick rocks up. Rocks traveling at a high rate of speed meeting your windshield while you are also traveling at a high rate of speed can chip the top liner or carry through into both the outer and inside glass, causing cracks. Semi-trucks and construction vehicles carrying gravel are the two largest causes of airborne rock debris.

Which prompts questions for auto owners. If my windshield is damaged:

  • Should I replace the windshield?
  • Should I have my windshield repaired?
  • Can I just leave the crack alone?
  • If I do repair or replace the windshield, can I claim the repair on my insurance?

Repair? or Replace?

Federal law holds that cracks and chips smaller than 3/4 of an inch are permitted if they’re three inches or farther from other chips or cracks and, are not located within the driver’s view. While most police officers probably won’t stop you specifically because of a cracked windshield (which is not to say they absolutely won’t), there is the possibility of a second violation added onto another ticket.

Even if the chip or crack is located out of the drivers’ view, you may not be safe from receiving a traffic ticket. States carry their own specific laws: for example, the state of Illinois prohibits anything that obscures the view through the windshield or impedes the function of windshield wipers.

Recognize that small chips or cracks could easily grow into long cracks. Normally, a crack shorter than six inches and chips or dings fitting under a credit card can all be repaired. Cracks longer than twelve inches may require a windshield replacement, although some manufacturers have developed compounds successfully repairing cracks up to twenty-four inches in length. Repairs should be done as soon as possible to prevent cracks from getting worse.

Replacing the Windshield

Windshields are an indispensable component contributing 70% of the structural integrity and safety of a vehicle’s passenger compartment. Consumers should be cautious as a replacement may not match the structural support of the original installation, resulting in injuries and fatalities.

According to a report by ABC’s 20/20, 75% of windshield installations are done incorrectly, because of the lack of industry regulations and requirements:

  • Glass installers do NOT have to be licensed to be in business.
  • Anyone can legally install auto glass regardless of knowledge or training.
  • Some companies use inferior products or cut corners to save money.

All of which could lead to costly and fatal consequences:

  • Roof Cave in During a Roll-Over Accident:  As the windshield supports the structural integrity of the vehicle during a rollover accident, if the windshield doesn’t stay in place, the roof will collapse.
  • Airbags Not Working: Your car’s airbags bounce off the windshield when deployed. If the windshield was improperly installed, it can cause the airbags to blow the windshield out of the vehicle instead of bouncing off it, increasing the driver’s danger.

This is not to say, the windshield should never be replaced. There are times the windshield damage is severe enough the windshield must be replaced. If you must replace your windshield, find a reputable installer who uses quality materials and employs trained and experienced installers.

When a windshield is replaced, expect to be able to drive within an hour. However, it may take 8-24 hours for the adhesive to fully dry, meaning 8 – 24 hours before the windshield is fully set and will not pop off in the event of an accident.

Can I Repair My Windshield?

Windshields should be repaired when:

  1. The glass is tempered, not laminated.
  2. The crack is longer than a dollar bill.
  3. The crack or chip is deep enough that it goes more than halfway into the windshield.
  4. The crack or chip extends to the outside edge of the windshield.

Windshields should be repaired as soon as is practical as a small chip can spread across the windshield upon hitting a big pothole, or when driving on a bumpy road, or if making an aggressive turn. In several states, it is illegal to drive a car with a cracked windshield.

Originally, damaged windshields had to be replaced, which became quite expensive. As the technology evolved to repair windshields, insurance companies chose to cover the full cost of repair, as it was much cheaper than replacing the windshield. Repairing is also desirable because it maintains the original factory installation (and structural integrity) of the windshield. Repairing also helps the environment by reducing trash.

You may wonder which is safer: repairing or replacing? In the 30-year history of windshield repair, there has never been an injury or lawsuit from a windshield repair. There has been a number of injuries and deaths caused by windshield replacements.

How Much Does It Cost to Repair a Windshield?

Repairing typically costs about $50 for the first chip, plus about $10-$15 per additional chip. Cracks are more expensive to repair. Depending on the length, a crack could cost up to $100-$150. Replacing a windshield is significantly more expensive; the average price is commonly around $400 and can be well over $1,000 if an OEM windshield is used.

When looking for repairs, always get multiple bids and use reputable installers. We also recommend:

  • Look for companies affiliated with the Auto Glass Safety Council.
  • Ask what kind of warranty covers the work.
  • Get more than one written estimate when you’re looking for a repair company.
  • Pay only once the work has been completed.

How Does My Car Insurance Help?

Normally, cracks in windshields are covered under the Comprehensive section of your car insurance policy. Not all policies include comprehensive coverage, so you do want to confirm your coverage. Also, the cost of repair may not be covered by your deductible (the normal deductible amount being $500). However, some states require no deductible (in which case you pay nothing), and others have lower deductibles.

Some insurance companies encourage motorists to repair rather than replace windshields by covering the full cost of repair (far cheaper for the insurance company than paying for replacement). If the windshield does need to be replaced, be advised you can open a claim, and you will be subject to paying your deductible.

Always feel free to speak with your Aspen Insurance advisors for expert advice on handling windshield problems.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family-run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance advisors and see how painless insurance shopping can be.

Avoid Business Insurance Purchasing Mistakes – Part II

Continued…..

Owning and operating a business takes a lot of time and energy: satisfying customers, attracting, finding, and retaining talented employees, marketing products and services. The list goes on and on, and on. One responsibility which may not receive the attention it should is ensuring your business has appropriate insurance coverage.

Here are some of the mistakes made by businesspeople when choosing insurance.

Failing to Read Your Policies

Your insurance policy does not make for exciting reading but knowing what is and is not included is crucial.  It is the only way to know what risks are covered and which are excluded. Looking at your policies after a loss occurs is not effective timing. You cannot buy coverage for a loss that has already taken place.

While many insurance policies are written in simplified language, they still contain some “legalese.” If you have trouble comprehending the wording, ask your trusted insurance advisor or attorney to explain the policy wording.

Buying Too Little Property Insurance

When insuring buildings and personal property under a commercial property policy, make sure to have adequate limits. This is essential even if your policy includes replacement cost coverage. While the replacement cost coverage will automatically cover the cost to repair or replace your damaged property, it will not pay more than the limit of insurance. If the cost to repair or replace your property exceeds the limit, your policy will only cover that portion of the loss within the policy limits.

Watch out for coinsurance clauses and agreed value provisions, which are often found in property policies. Both impose a penalty for underinsuring your property. If a loss occurs and you have failed to maintain a minimum amount of insurance, your insurer will not pay the full amount of the loss. Deliberately underinsuring your property is not a good way to save money on property premiums.

Failing to Insure Potential Income Losses

Many business owners are careful to insure their company’s physical assets but fail to consider a common consequence of physical losses, namely a loss of income. A company will lose income if its premises suffer a physical loss and the business cannot operate until the damage is repaired.

Business Income insurance is intended to help companies survive an interruption in operation by reimbursing the company for the income it would have earned if the loss had not occurred. It also covers continuing expenses like rent or electricity regardless of whether your business is operating.

Your business may also need Extra Expense insurance: which covers expenses you incur to avoid or minimize a shutdown when property has been damaged by a covered peril.

Failing to Accurately List Entities or Locations

Under most liability policies, only the people or entities shown in the declarations qualify as named insureds. People or entities not listed on the policy generally are not covered.  Failing to list a business entity on a general liability, commercial auto, umbrella, or other liability policy can have disastrous consequences.

For example, for tax reasons, you transfer ownership of all your business property to a newly created subsidiary. However, your liability policy only lists your company name as the named insured, not the new subsidiary. Were an accident to occur on the property and the subsidiary sued, your insurer can refuse to cover the claim as the subsidiary was not named on the policy.

Similar problems can occur if business locations are omitted from a commercial property policy. Most property policies cover physical loss or damage to covered property at the premises described in the declarations. If damaged property is situated at premises not shown on the policy, the damage may not be covered.

Sticking With the Same Insurer or Policy for Too Long

While a long-term relationship with an insurer can be an asset, avoid staying with an insurance company no longer meeting your needs. An insurer (or insurance policy) that was suitable for your business in the past may no longer provide adequate coverage.

Insurers do change over time. Some grow and expand their product offerings, some improve the quality of their service while others allow theirs to decline. You can determine whether your insurer is still competitive in the marketplace by asking your trusted insurance advisor to obtain quotes from other insurers.

The best advice is to meet with your trusted insurance advisor every few years for a full assessment of your risks and insurance needs to determine you have the most appropriate coverage for your current and future business needs.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance advisors and see how painless insurance shopping can be.

Avoid Business Insurance Purchasing Mistakes – Part I

Owning and operating a business takes a lot of time and energy: satisfying customers, attracting, finding, and retaining talented employees, marketing products and services. The list goes on and on, and on. One responsibility which may not receive the attention it should is ensuring your business has appropriate insurance coverage.

Here are some of the mistakes made by businesspeople when choosing insurance.

Buying on Price Alone

When shopping for any form of insurance, it makes sense to shop around. Some insurers provide better value than others, meaning the policy which costs the least will not be a bargain if you and your business are left vulnerable to costly claims.

Obtain quotes from multiple insurers and compare the proposals in detail, line by line of offered coverage. Be sure to consider the types of coverage and the coverage amounts listed in a quote. Here is where your trusted insurance advisor can help you by explaining what is covered and what your level of risk exposure might be.

Always know what exclusions and limits exist in any policy under consideration.

Buying Too Little Liability Insurance

Every small business can be hit with a lawsuit, costing anywhere from $3,000 up to $150,000 or higher. Legal actions can threaten your company’s financial stability and its reputation. One large claim could put your company out of business. Don’t skimp on coverage limits when buying general liability or auto liability insurance.

Many businesses will not employ you as a sub-contractor until you provide proof of liability insurance, with a minimum coverage amount specified in the contract. A landlord may refuse to lease property unless your business has purchased sufficient liability insurance. 

 Automatically Choosing a Low Deductible

A deductible can reduce the cost of insurance premiums as it enables the business owner to pay small losses out of pocket as a form of self-insurance.

Do not automatically select the lowest deductible when buying commercial property or auto physical damage insurance. Rather, consider how much premium you will save by raising the deductible. Generally, choose the largest deductible the business can comfortably absorb in the event of an accident.

Failure to Adjust Your Coverage as Your Business Changes

Most businesses change over time: small companies may grow adding locations and hiring additional employees. The mix of products or services offered may expand into new potential business areas. As businesses change, insurance needs change as well.

When making a major change to a business, such as acquiring a new company or location, notify your agent or insurer right away. Any other changes should also be reported before policies renew. Plan to talk with your trusted advisor annually to review business insurance coverage and limits to determine if your insurance needs have changed.

Your agent can help you decide whether your insurance coverages or limits should be adjusted.

Plan to meet with your trusted insurance advisor every few years for a full assessment of your risks and insurance needs to determine whether you have the most appropriate coverage for your current and future business needs.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance advisors and see how painless insurance shopping can be.

Microsoft Security Warning

Urgent Security Warning: Update Your PC Immediately

As a family-owned insurance agency, we believe it is our responsibility to help our clients reduce their risks. We assist with coverage for auto, home, business and offer services to our clients to periodically review their portfolios identifying areas where our clients may be at risk.

We extend that dedication to reducing risk beyond their insurance coverage feeling the need to alert clients and potential customers of risks for which we may not be able to provide coverage in their personal lives, including their online presence. Microsoft is urging all Windows users to immediately install an update after security researchers found a serious vulnerability in the operating system.

PrintNightmare Threat

The vulnerability, known as PrintNightmare, affects the Windows Print Spooler service. Researchers at cybersecurity company Sangfor accidentally published a how-to guide for exploiting it. The researchers tweeted in late May that they had found vulnerabilities in Print Spooler, which allows multiple users to access a printer.

The researchers published a proof-of-concept online by mistake and subsequently deleted it — but not before it was published elsewhere online, including developer site GitHub.

Microsoft warned that hackers could exploit this vulnerability installing programs, viewing, and deleting data or even creating new user accounts with full user rights. This could give hackers enough command and control of your PC to do some serious damage.

Affected Windows Programs

This vulnerability effects Windows 10 and Windows 7, however Microsoft ended support for Windows 7 last year.

Even so, Microsoft issued a patch for Windows 7, a 12-year-old operating system, which emphasizes the severity of the PrintNightmare flaw. Updates for Windows Server 2016, Windows 10, version 1607, and Windows Server 2012 are “expected soon”.

The good news is that the current security update contains fixes for previous security issues as well.

In the last year and a half, Microsoft encountered multiple security alerts. Last year they were alerted by the National Security Agency of issue with the operating system that allowed hackers pose as legitimate software companies. Earlier this year, it was discovered that Exchange (Microsoft’s email and calendar services) had multiple vulnerabilites that allowed hackers to access servers.

It is important to note that Microsoft has not released a patch for Windows 11, its newest operating system, which is currently available only to beta testers.

How To Update

It is strongly recommended computer users allow Windows to automatically download and update Windows. If you are not sure if your computer has adopted the patch, type “update” in the search bar on the bottom left side of the Windows home screen. This will bring up a screen with a message stating: “Check for updates”. Clicking on that message will instruct your computer to show available updates, with the option to download now (recommended) or later.

Given the well-publicized attacks of the last few weeks, we should all reduce our risk by installing this update as soon as possible.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance professionals and see how painless insurance shopping can be.

Teen Drivers

Freedom of the Road

One of the great moments in a teenager’s life is receiving their driver’s license. For parents, it is a moment of pride in their son or daughter growing up. That pride is quickly overcome by fear, doubt, and uncertainty. What of their child’s safety? Will their teen be one of the many teen driver accident statistics? What will having a teen driver in the household do to my car insurance rates?

Parents primary concern is, of course, for the safety of their first-time driver and others sharing the road. With little prior driving experience, inexperienced drivers are at an elevated risk for accidents. Although safety certainly is a main concern, controlling cost and confirming sufficient coverage to protect against liability claims is also a major consideration. Even in the absence of any claims, many parents might also be concerned about the increased cost of auto insurance.  

Auto insurance, whether acquired through an insurance broker or insurance agent, can be expected to increase between $100 to $250 a month or more once a teen driver is added to the policy.

Parents should also take proper steps to further reduce risk by understanding how teen driving affects car and home policies. Working with your Aspen Insurance advisor is a great place to consider available options in coverage and in reducing financial exposure.

Include Your Teen in Car Insurance Discussions

Begin by making teens fully aware of the potential consequences of their actions. No one sets out to hit another car, hence the reason they are called “accidents”. Your teen should recognize driving is a privilege, a privilege which comes with responsibility.

Driving a car is piloting more than 3,000 pounds of steel and gasoline. A collision even at a slow rate of speed can cause a great deal of damage, including severe bodily injury. Teens should be aware that 98% of the time, driving is a low-risk endeavor. However, that risk increases greatly when drivers are distracted by high rates of speed, mobile phones, friend’s conversations or altered states.

As a result, automobile accidents can have far reaching financial consequences affecting your family’s financial future. As parents, we should continually reinforce driving safety and alert our teen to the negative consequences of receiving a driving citation or being at fault in an acciden, both of which result in insurance rate increases.

Teen Driving Statistics

Younger drivers may feel invincible, as in: “I can text and drive”, “I’ll keep my phone handy in case someone calls”. Statistics demonstrate something very different:

  • In their first year of driving, 1 in 5 16-year-old drivers will have an accident!
  • In 2019, distracted driving was a reported factor in 8.5% of fatal motor vehicle crashes.
  • Over 74,000 young people die or are injured each year by not wearing seatbelts.
  • 42% of high school students across the United States admitted that they text or email while driving.
  • Two-thirds of teen passenger deaths are in vehicles driven by other teenagers.
  • In 2018, 2,500 adolescents (ages 12-19) died and approximately 297,000 had nonfatal injuries resulting from motor vehicle crashes according to the most recent teen driver safety statistics compiled by the National Highway Traffic Safety Administration.
  • Underage drinking and drug use is illegal. Your automobile policy may be void if a car accident involves illegal activities.  

Taken together, these statistics show an alarming pattern of risk for less experienced drivers. In-car distractions and inexperience all contribute to a higher rate of accidents for teenagers.

Distracted Driving

According to the CDC, eight people are killed in the US each day in crashes reported to involve a distracted driver. Although not just a problem affecting teen drivers, teens are over-represented in distracted driving statistics. We should remind our teens that in three seconds, a car travels over 170 feet at thirty-five MPH.

There are three main types of distraction:

  • Visual: taking your eyes off the road
  • Manual: taking your hands off the wheel
  • Cognitive: taking your mind off driving

In the U.S. in 2018, over 2,800 people were killed and an estimated 400,000 were injured in crashes involving a distracted driver. About 1 in 5 of the people who died in crashes involving a distracted driver in 2018 were not riding in vehicles: they were walking, riding their bikes, or standing in their front yard.

Have frank discussions with your teen about the dangers of distracted driving and what distractions they need to prevent. Both holding a mobile phone or texting while driving are distractions, as is having a phone conversation while driving. Not only is cell phone use a distraction, but it is also against the law and a citable offense in many states.

Twenty-five states, D.C., Puerto Rico, Guam and the U.S. Virgin Islands all prohibitdrivers from using handheld cellphones while driving. All are primary enforcement laws; a traffic officer may cite the driver for using a cell phone. Thirty- states and D.C. ban all cellphone use by novice drivers, and 23 states and D.C. prohibit it for school bus drivers.

Currently, forty-eight states, D.C., Puerto Rico, Guam, and the U.S. Virgin Islands ban text messaging for all drivers.

Cell phones are not the only possible in-car distraction. Driving large groups of friends may cause the driver to lose road awareness for a few seconds: in those few seconds, a car traveling at 60 MPH will have traveled close to 200 feet!

Teen Education Discounts

One way to reduce the increased cost of auto insurance is with education discounts. Many insurance companies offer premium reductions for teens maintaining good school grades. Some discounts your teen driver may be eligible for include:

  • Students maintaining an average of “B” or above.
  • Teens completing a recognized driver training course, either through AAA, school or through local programs.
  • College students attending school a minimum of 100 miles away from home who do not bring their car to campus.
  • Teen (and adult) drivers using SafeDriving or TeleTrack applications receive discounts for verifiable safe driving habits.

Choose the Appropriate Auto Insurance Company

It will normally be cheaper to add teenagers to an existing parent policy rather than having teens purchase their own. Adding an additional automobile to an existing policy may enable a multi-vehicle discount.

Different insurance companies use proprietary methods for pricing young driver policies. Ask your insurance agent to research alternative possible policies, searching for the best fit for your specific circumstances.

Assigning Your Teen to the Correct Car

Some insurance companies will “assign” the most expensive-to-insure driver to the most expensive-to-insure car, increasing the total cost of your auto insurance. One possible way to reduce your insurance cost is to have the company assign your teen to the least expensive car. This will reduce the potential cost of damages and lower the monthly fees.

However, your teen must use the car to which they are assigned. If your teenager is involved in an accident driving a car they were not assigned to, there could be penalties, premium increases or negate the policy coverage.

Increase Liability Insurance for Greater Protection

Be advised that state minimums for liability insurance may not be sufficient to fully protect from lawsuits, were your son or daughter to be in a collision. It may be in your best interest to purchase umbrella policies with higher amounts of coverage for increased financial protection. If your teenager is involved in a collision and is found to be negligent, the damages could easily exceed the state minimum liability.

If you (or your teen) are found financially responsible, you could be sued in court for the amounts above and beyond your coverage maximum.

Changing Conditions

Depending on your state of residence, teens may have to contend with driving in changing conditions. The road to your house on bright, sunny can easily be navigated at 50 MPH. In high winds, or heavy rain, that same road may be unsafe at 35 MPH. Let your teen know of the varying road conditions which could impact speed and safety:

  • High water
  • Hydroplaning
  • Bright sun shining on the windshield.
  • Snow
  • Ice

All the above conditions change the operating safety and should also alter rate of speed. Teens should be advised of the increased caution required for driving in adverse conditions and the appropriate response to such conditions. They should know how to control a skid on snow, ice or mud, and proper driving speed for weather conditions.

These are all things which may not have been taught in driving classes and could increase the possibility of sliding into either other vehicles or stationary objects on the side of the road.

21st Century Driving

Cars continue to get larger and heavier, with the ability to cause considerable damage even at the lowest rates of speed. Cars are safer, and that safety engineering comes at a cost of more expensive auto repairs. Cell phones, text messages, after-school friends, dating, unfamiliar roads are all common situations which could cause your son or daughter to lose concentration with devastating results.

Make sure you and your family are protecting your financial security while minimizing the risk for your driving teen.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance professionals and see how painless insurance shopping can be.

Replacement Cost Coverage

Home loss is a terrible thing to experience. Fire, flood, tornado can destroy all your prized possessions in a flash. Family photographs, furniture, artwork, clothing, kitchen ware all gone! Fortunately, with insurance, you can rebuild, replacing those items which allow your family to love comfortably. Especially, if you have replacement cost coverage.

Depreciation

The overwhelming majority of homeowner insurance policies cover possessions for actual cash value at the time of loss. Actual cash value is calculated on the current value of your possessions minus depreciation (value reduction through use). The value of furniture, clothing, automobiles is considered reduced through use. Which means the value is depreciated to a percentage of original purchase cost.

For instance, a sofa purchased three years ago for $2,000, given depreciation might only be worth $700 today, the claim amount approved by your insurance company. Then that $700 claim would be further reduced by your deductible, resulting in an even lower claim payment.

Replacement Cost

Unfortunately, too many clients fail to recognize the cost and impact of refurnishing a home until they experience loss. One way to reduce the shock of rebuilding cost is to add replacement cost coverage. With replacement cost coverage, possessions are replaced at the current cost to replace with like kind or quality. With replacement cost coverage, the insurance company would approve a claim payment of $2,000 for that sofa: the cost to replace the sofa with like kind or quality.

The cost to add replacement cost coverage on your personal property is minimal. Call your Aspen Insurance advisor to review your homeowner policy and determine if you have replacement cost coverage. They are more than ready to assist you with adding this coverage, should you not have it and wish to have it.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance advisors and see how painless insurance shopping can be.

Commercial Auto Risks


Auto insurance rates have increased steadily over the last few years, well exceeding the rate of inflation over the same period. Why? What is driving this upward trend? There are six reasons for the increase in commercial auto insurance rates.

#1 Cost of Bodily Injury

While the frequency of auto claims involving bodily injury has fallen over the recent 9-year period, the average cost of claims that do involve bodily injury increased by 32% over the same period. The Covid pandemic reduced the number of cars on the road, but initial projections suggest the cost of each claim will be higher due to higher speeds at impact.

#2 Attorney Involvement

“Call the hammer!” …” For the people” …” we’ll get you money!”

With attorneys actively pursuing auto accident business, more claimants now have legal representation. These claims see higher rates of expenditures for medical procedures and treatment. A complete fleet management program can help reduce your exposure.

#3 Driver Distractions

Distractions behind the wheel, whether from vehicle in-car entertainment systems and mobile devices or from driving under the influence, can lead to significant risks. 77% of 1,000 drivers surveyed reported making or taking calls while driving. 31% said they have had a near-miss crash because of distracted driving.

#4 Inexperienced Drivers

A shortage of commercial operators is leading to increased rates of drivers switching companies and increases the chance for less-experienced drivers to get behind the wheel. Operators in new vehicles and covering new routes may also contribute to an increase in accident rates.

Here are ways that good drivers benefit your bottom line:

  • Reduce the cost of loss. Fleet vehicle accidents are among the costliest of injury claims for business. The average cost of a loss related to vehicle accidents is approximately $70,000. Safe drivers can help lower the possibility of loss due to accidents.
  • Lower liability in case of loss. Effective screening, hiring, training, and monitoring can help reduce liability.
  • Boost your public image. Every driver has the potential to send a message. When your truck is headed down the highway, you want it to tell a positive story about your company.

#5 Vehicle Repair Costs

Newer vehicles are outfitted with advanced materials and technologically advanced systems designed to make driving more comfortable and safer. Cars are designed to crumple to dispel the force of an accident. That also means when vehicles are involved in an accident, the cost of repair can be much higher.

#6 Business Interruption

A claim can cause significant disruption for business taking vehicles off the road and slowing or stopping shipments or deliveries. Having an established business continuity plan can help your organization prepare for and overcome such an interruption.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance professionals and see how painless insurance shopping can be.

Ransomware Payments Are On the Rise

In March of this year, CNA Financial Corp., among the largest insurance companies in the U.S., paid $40 million to regain control of its network after a ransomware attack. The Chicago-based company reportedly paid hackers two weeks after a large amount of company data was stolen. CNA officials were also locked out of their own network, according to individuals familiar with the attack, neither of whom was authorized to discuss the matter publicly.

CNA did release a formal statement stating the company consulted and shared intelligence with the FBI and the Treasury Department’s Office of Foreign Assets Control about the attack and the hacker’s identity.  The Treasury Department’s said last year facilitating ransom payments to hackers could pose sanctions risks.

Ransom Payment Trend

As Companies rarely disclose ransomware attacks or payments it is difficult to know actual past payments. According to Palo Alto Networks, the average payment in 2020 was $312,493, a 171% increase over the prior year. The $40 million payment by CNA is bigger than any previously disclosed payments to hackers, according to three people familiar with ransomware negotiations.

Ransomware demands have increased exponentially in the last six months, according to Melissa Hathaway, president of Hathaway Global Strategies and a former cybersecurity adviser to Presidents George W. Bush and Barack Obama.

The average ransom demand is now between $50 million and $70 million, Hathaway said. While those demands are often negotiated down, she stated that companies are frequently paying ransoms in the tens of millions of dollars, in part because cyber insurance policies cover some of the cost.

A taskforce of security experts and law enforcement agencies estimated that victims paid about $350 million in ransom last year, a 311% increase over 2019. The task force recommended 48 actions the Biden administration and private sector could take to mitigate such attacks, including better regulation of the digital currency market used to make ransom payments.

The task-force report, prepared by the Institute for Security and Technology, was delivered to the White House days before Colonial Pipeline Co. was compromised in a ransomware attack.  Bloomberg reported that Colonial paid the hackers nearly $5 million shortly after the attack.

What Is Ransomware?

Ransomware is a type of malware encrypting a victim’s data demanding a payment to unlock access to the data. Cybercriminals also use ransomware to steal too. The hackers then ask for a payment to unlock the files and promise not to leak stolen data. In recent years, hackers have been targeting victims with cyber insurance policies and huge volumes of sensitive consumer data that make them more likely to pay a ransom, according to cybersecurity experts.

The CNA hackers used malware called Phoenix Locker, a variant of ransomware dubbed ‘Hades.’ Hades was created by a Russian cybercrime syndicate known as Evil Corp., according to cybersecurity experts. Evil Corp. was sanctioned by the U.S. in 2019. Unfortunately, it is difficult to pinpoint blame as hacking groups share code or sell malware to one another.

Phoenix Locker appears to be a variant of Hades based on overlap of the code used in each, according to Barry Hensley, chief threat intelligence officer of cybersecurity firm Secureworks Corp. “We have a high degree of confidence this is a Hades variant,” Hensley said. He said they have not determined which hackers used the Hades variant to attack CNA.

Hades was created by Evil Corp. to bypass U.S. sanctions placed on the hacking group, according to research published in March by the cybersecurity firm CrowdStrike Holdings Inc.

CNA, which offers cyber insurance, said its investigation concluded that the hackers were a group called Phoenix not yet subject to U.S. sanctions.

The average ransom demand is now between $50 million and $70 million, subject to negotiation. Companies are frequently paying ransoms in the tens of millions of dollars, in part because cyber insurance policies cover some or all of the cost.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance professionals and see how painless insurance shopping can be.

Protecting From Cyber Attacks

Computers are everywhere: homes, business, libraries, schools, even in your pocket, if you own a smart phone. Computers are used for entertainment, business operations, navigation, government administration, heating, and cooling: the list goes on and on. As ubiquitous as computers have become, criminals are increasingly attempting to extort money or use our personal information to create a duplicate of our identity, destroying our finances through impersonation.

Rise in Computer Crime

Computer crime is not decreasing:

  • In 2020, 300 million people were affected by data breaches: 80% of the nation’s population.
  • 91% of organizations experienced at least one damaging cyber attack over the past two years. 60% had two or more over the past two years.
  • 1 in 4 businesses experienced a cyber event in 2020.
  • Ransomware attacks (where villains lock computer until a ransom is paid for release) exceeded one million dollars in 2018: in 2020, it was more than $30 million!

As a result of the rise in computer crime, 78% of risk managers now purchase some level of cyber insurance, up from 34% in 2011.

Business Cyber Protection

As the majority of cyber criminals are overseas where law enforcement may not be able to reach. Business owners might evaluate their internal business cyber protection. Even well-defended companies experience cyber losses. What can a business owner do?

First and foremost, each business owner should have a robust cyber security plan in place. One that is continually updated as new weapons are wielded by criminals.

To begin with:

Maintain A Robust Perimeter Defense: Many networked computer systems are protected by a firewall: think of a firewall as the castle wall. The wall keeps invaders out allowing entry only through a protected gate. The firewall is absolutely the first line of defense. However, be concerned if it is the only line of defense. If the walls are breached, invaders may be inside with complete access to customer data and individual computers.

Change Passwords every 30 days: over 55% of unauthorized access is from “spoofing” a legitimate user. Criminals have become sophisticated in their use of social media and publicly available information to induce employees to click on links installing malware software on your systems. Such malware lies hidden tracking every keyboard click, including the capture of passwords, customer social security numbers and birthdates and a lot more. By changing passwords, it reduces a criminal’s ability to impersonate your employees.

Install Anti-virus Security Solutions: Install products such as Norton or McAfee on all computers and keep the software up to date. In 2020, 360,000 new malicious files were detected each day. Current virus software will capture and isolate the software for review and deletion, before inflicting damage.

Restrict Browsing: Every company uses internet browsing for business purposes. However, criminals will upload malware to appear as a seemingly innocent picture or video (cute kittens, romping puppies!) which, when clicked upon, is designed to infect the computer without the user knowledge, then seek and infect other computers on your network.

Minimizing Risk of Cyber Attacks

Six of ten small to medium sized business (under $250 million annual revenue) have no cyber insurance protection. Business owners should consider the cost of losing all business data or paying a ransom for locked out computers and the impact these situations represent. Consider investing in risk management protection by expanding coverage such as:

  • Breach Response Costs
  • Cyber Extortion/Ransom
  • Business/Dependent Business Interruption
  • Systems Failure/Dependent
  • Systems Failure Digital Asset Recovery
  • Cyber Crime (Social Engineering, Funds Transfer Fraud)
  • Bricking

Speak to your Aspen Insurance industry expert to discuss possible options expanding your cyber security insurance and general liability insurance.

Aspen Insurance Agency is in Denver, CO servicing clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance professionals and see how painless insurance shopping can be.