Risk Management Insurance

[LXAAlum]

Originally posted by DeltAlum
Thanks LXA and Bluefish,

I think there was a thread a few months ago where a company (might have been Lloyds) was going to refuse to pay a claim for just that reason. The chapter didn't follow the rules. I don't remember the outcome -- perhaps a compromise -- but some of the undergrads were probably outraged.

To borrow a line from a former TV detective show, "Don't do the crime if you can't do the time."

Well, OK, the analogy is weak, but I've always liked the line.

You're right...not a good analogy....rather an ironic one, considering the show, and the star of it, isn't it?

The chapter you refer to I believe was the LXA chapter at ASU - regarding the death of an underage girl who, if memory serves, received alcohol at a chapter function, and was hit by a car on the way home, or otherwise involved in some sort of traffic accident, which killed her.

So, providing underaged students (or anyone for that matter) NEGATED the Risk Management Insurance. I believe the matter was settled out of court, but, the insurance company did not pay at all.

Tom, you're right...the alums have to work together to ensure the active members "get it" - we used to do a risk management seminar at CSU, and an attorney versed in fraternal litigation (yes, it is it's own legal discipline these days!), laid it on the line. The members did "get it" - and that meeting led to some heated discussions in subsequent chapter meetings - the topic of insurance was brought up.

Sadly, a few years later, this chapter was closed for risk management - I was no longer chapter advisor, and there was some disconnect that occurred between alums/actives - and it happened in a short period of time, so this is something that needs consistent follow-up. To fail to do so puts the chapter in peril.

[Lady Pi Phi]

Originally posted by LXAAlum
You're right...not a good analogy....rather an ironic one, considering the show, and the star of it, isn't it?

The chapter you refer to I believe was the LXA chapter at ASU - regarding the death of an underage girl who, if memory serves, received alcohol at a chapter function, and was hit by a car on the way home, or otherwise involved in some sort of traffic accident, which killed her.

Reading this incident, it is important to note that the chapter could have been liable for her death even if she was of age. I don't know what the law is like in your neck of the woods but I'm sure it's very similar. A party host/hostess can be liable for death involving (whether caused by or happened to) a party guest.
For example, if a guest leaves a party after consuming too much alcohol and gets into their car and causes an accident, the part host/hostess could be found at fault.
This is also something chapters should be aware of (if indeed it's law). Which is why many (inter)nationals require events involving alcohol be at thrid party vendors.

[Rudey]

Originally posted by DeltAlum
Thanks LXA and Bluefish,

I think there was a thread a few months ago where a company (might have been Lloyds) was going to refuse to pay a claim for just that reason. The chapter didn't follow the rules. I don't remember the outcome -- perhaps a compromise -- but some of the undergrads were probably outraged.

To borrow a line from a former TV detective show, "Don't do the crime if you can't do the time."

Well, OK, the analogy is weak, but I've always liked the line.

What would the insurance cover if it doesn't cover drinking? If it doesn't cover drinking shouldn't the insurance be exponentially (being a bit drastic I know) less?

-Rudey

[DeltAlum]

Originally posted by Rudey
What would the insurance cover if it doesn't cover drinking? If it doesn't cover drinking shouldn't the insurance be exponentially (being a bit drastic I know) less?

-Rudey

General liability, fire, accidents on property, etc. (like any home or car policy).

The reason for the company not honoring the policy in the case above was that the chapter broke the law by giving alcohol to a minor. Pretty much any policy will become null and void if the law or the guildlines of the policy aren't followed.

[Rudey]

Originally posted by DeltAlum
General liability, fire, accidents on property, etc. (like any home or car policy).

The reason for the company not honoring the policy in the case above was that the chapter broke the law by giving alcohol to a minor. Pretty much any policy will become null and void if the law or the guildlines of the policy aren't followed.

It's expensive because of the high risk of fraternities, correct?

Now that risk is mainly from underaged drinking and hazing, correct?

Those last 2 risks are against the law, correct?

If they're against the law, and thus the insurance won't cover them then why is the insurance since it won't touch that risk threshold?

-Rudey

[DeltAlum]

Sorry, I don't understand the question.

[Rudey]

Originally posted by DeltAlum
Sorry, I don't understand the question.

If fraternities pay that much more for insurance because they are higher risks, then wouldn't it make sense that the insurance should cover those risks?

-Rudey

[Tom Earp]

The Higher Risk Insurance does not cover such things as breaking the laws. While I dont think that this little girl got her alcohol from LXA Party as it was nver proved,and she was killed by a drunken driver who was a lawyer, after 3 years it was so ajudged. Did they deserve it, I dont think so, but it was still handed down by ASU and LXA Hdq.

So, they are gone.

The higher Risk Insurance covers Liability, Accident, Fire, ETC!

Once The Contract with a Company is broken, they deem themselves not bonded by that agreement or contract.

According to Stipulation Z, Section 1000, and Section 50 qazillion part xyz, they can and will deny any fault and payments.

So basically, No Fault Risk Insurance is written just like your Homeowner, Vehicle, Medical, and Life Insurance!

Pay out the butt but, duck and cover.

[madmax]

Originally posted by Tom Earp
The Higher Risk Insurance does not cover such things as breaking the laws. While I dont think that this little girl got her alcohol from LXA Party as it was nver proved,and she was killed by a drunken driver who was a lawyer, after 3 years it was so ajudged. Did they deserve it, I dont think so, but it was still handed down by ASU and LXA Hdq.

So, they are gone.

The higher Risk Insurance covers Liability, Accident, Fire, ETC!

Once The Contract with a Company is broken, they deem themselves not bonded by that agreement or contract.

According to Stipulation Z, Section 1000, and Section 50 qazillion part xyz, they can and will deny any fault and payments.

So basically, No Fault Risk Insurance is written just like your Homeowner, Vehicle, Medical, and Life Insurance!

Pay out the butt but, duck and cover.

That still doesn't answer the question. A standard homeowner's policy covers liability, accident and fire. Why should a fraternity pay a high risk premium that is over and above the standard premium if none of the high risk activities are going to be covered? It would be like buying flood insurance because you live in a flood plane but the insurance doesn't cover floods.

[Rudey]

Originally posted by madmax
That still doesn't answer the question. A standard homeowner's policy covers liability, accident and fire. Why should a fraternity pay a high risk premium that is over and above the standard premium if none of the high risk activities are going to be covered? It would be like buying flood insurance because you live in a flood plane but the insurance doesn't cover floods.

Precisely.

-Rudey

[DeltAlum]

Ah, I understand. Actually, the highest items, liability wise, for fraternities are fire, injuries from falls (many alcohol related -- whether the drinking was in the house or not) and damage to structures related to parties, etc. Alcohol is on top of that.

I'm sure there are some stats on costs for "dry" houses as oppossed to "wet" or "damp," but I don't have them.

[AGDee]

I just have to say.. I live in a flood zone, am required to purchase flood insurance at the cost of $1200 per year, and it doesn't cover anything in the basement except the washer, dryer, furnace and hot water heater (expected items to be in a basement). So, I do ask that question often, because if there was a flood, which part of the house would get ruined without a doubt??? The BASEMENT! The insurance industry is truly insane.

Dee

[bluefish81]

Originally posted by madmax
That still doesn't answer the question. A standard homeowner's policy covers liability, accident and fire. Why should a fraternity pay a high risk premium that is over and above the standard premium if none of the high risk activities are going to be covered? It would be like buying flood insurance because you live in a flood plane but the insurance doesn't cover floods.

While the homeowner's policy does cover those, if the fire starts as a result of the homeowner manufacturing meth in their home or doing something illegal - the insurance company isn't going to pay a dime.
Chances are the reason their (fraternities) insurance is higher is because there is a greater risk for something to happen, but if something happens that's illegal and is excluded on the policy like serving minors, whatever, then they aren't going to cover it. It's all going to depend on what the insurance company has choosen to exclude in their coverage. This probably isn't giving a really good answer though, is it?

AGDee, as for the flood insurance thing, I don't do flood insurance. But I'm pretty sure the reason that you wouldn't have anything other than coverage for those items is because you are aware that you live in a flood plane and as a result - a flood is almost inevitable and therefore a risk you solely assume for choosing to live there. That's just a guess though. And yes insurance is a crazy thing.

[Rudey]

Originally posted by DeltAlum
Ah, I understand. Actually, the highest items, liability wise, for fraternities are fire, injuries from falls (many alcohol related -- whether the drinking was in the house or not) and damage to structures related to parties, etc. Alcohol is on top of that.

I'm sure there are some stats on costs for "dry" houses as oppossed to "wet" or "damp," but I don't have them.

I don't see how fraternities will have more fires and people falling, so the one factor that makes a fraternity's insurance higher than a sorority's is that there might be damages to the structure from parties?

-Rudey

[LXAAlum]

Originally posted by Rudey
I don't see how fraternities will have more fires and people falling, so the one factor that makes a fraternity's insurance higher than a sorority's is that there might be damages to the structure from parties?

-Rudey

Historically speaking, I think you are partially right. Plus, Panhellenic orgs also have much more stringent controls over their chapters than do fraternities...not to mention housemothers. Plus, sorority houses are also by and large in much better condition quality-wise than fraternity structures.

The fact is we have created this own problem for ourselves. The loosening if not complete abandoning of central control in the early 70's by most GLO's, and the subsequent wild 80's and early 90's are now being paid for by today's members.

But the fact remains that fraternity claims are more frequent than at sorority houses.