“Black Ice” results when the air temperature is warmer than that of the pavement. This causes moisture to rapidly freeze and create a thin, transparent layer of ice on the roadway, sidewalk or other surface. “Black Ice” is clear and appears to be black as the dark asphalt surface underneath shows through. It will often form on heavily congested highways, but it may also form on roads or walkways that are situated in shaded areas, near lakes and rivers, in tunnels and on overpasses. As a result, vehicle collisions can occur along with slip and fall conditions for pedestrians. Injury and even death can result. “Black Ice” can result from snow, freezing rain, sleet, freezing fog, residual rainwater and/or groundwater, hail, man-made icy roads from breaks in outdoor sprinkler systems and water mains, and frost. “Black Ice” can be treated with both salting and sanding, however, salt will lose its effectiveness at about 15 degrees and colder. For temperatures below 15 degrees, sand and de-icing liquids can be utilized to neutralize this condition. From a statistical standpoint, freezing rain and resulting “Black Ice” kills more people than tornadoes, hurricanes, lightning and floods.  

Safety Tips  

• Wait for conditions to improve. The best way to avoid an accident or mishap is to stay off the roads and walkways until the threat passes. 

• Pay attention to weather forecasts. An awareness of conditions will help you to be better prepared.

• Keep aware that “Black Ice” is nearly invisible.  

• Exercise extreme care on bridges, overpasses and tunnels. Be particularly cautious during the early morning when the air temperature rises faster than the pavement temperature.  

• Maintain an adequate distance when driving. Maintain at least a three-car length distance from the vehicle directly in front of you. Use greater lengths at faster speeds.  

• Never brake while driving on ice – this will cause your vehicle to skid. Brake only during your approach to a length of road that is iced over. ABS (anti-lock brakes) does not work well on ice and will often lock up your wheels as well.  

• Turn into a slide – turn your wheels in the direction that the rear of your car is sliding. Look with your eyes where you want the vehicle to go and turn the steering wheel in that direction. 

• Be aware of other out-of-control vehicles in your immediate area.  

Being cautious around and aware of “Black Ice” is no accident. Be safe. Take note of the topics and recommendations discussed in this bulletin. We encourage you to put them into practice – doing so helps ensure your safety. It is the philosophy of Frankenmuth Insurance and your Independent Insurance Agent to provide services that give policyholders peace of mind. At Frankenmuth Insurance, we truly are with you all the way.

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As winter precipitation starts falling again in the Midwest, it becomes important to remind drivers about the hazards of the season and how to be ready for them.  

Being prepared for winter conditions

When preparing to drive in winter conditions, it is critical to keep lights, mirrors and windshields clean due to the extended hours of darkness. Drivers should also equip themselves with a “winter kit” including such items as basic tools (hammer, crowbar, wrenches, screwdriver, and a small shovel) deicer, some form of traction aid (salt, sand, kitty litter), warm clothes, heavy bedding, food and something to drink. A driver may never have to use this kit, but it is better to have it and never need it than to need it and not have it. Make sure your vehicle is in good working order. First, keep current on all preventive maintenance. Drivers should also be conducting inspections of the tires, brakes, heating and defrosting systems, and exhaust systems. It is also advisable to keep the fuel tank above half full at all times. Additionally, due to the extended hours of darkness, drivers should be well rested. A fatigued driver will not generally hold up well under the stress of night driving in winter weather conditions.

Driving in winter conditions

Drivers need to be aware of the loss of visibility and traction realized when winter precipitation falls. To avoid accidents, drivers need to see, decide and act. It takes roughly two seconds to see, decide and react to a situation – in favorable conditions! If driving at a speed that allows two seconds of visibility, the driver is likely to have little or no hope of avoiding an accident in poor conditions. It is recommended 12 to 15 seconds of forward visibility be accounted for in winter driving situations. Once a driver reacts, he or she will be relying on traction, and traction is based on friction. The ability of the brake linings to get friction with the drums or rotors is what allows braking to begin. The ability of the tires to maintain friction with the roadway is what provides the driver with the necessary traction to control the vehicle. If any precipitation gets either into the brake area or between the tires and the pavement, the driver may have difficulty controlling the vehicle. To compensate for this the driver will need to reduce speed.

It’s not just you out there

One key winter driving concept drivers must be reminded of is they are not the only ones on the road. When selecting a safe speed, the ability to avoid accidents must be considered. If a driver operates at a speed that keeps the vehicle“ on the edge of control,” what happens when the vehicle in front of the driver slides out of control? Hitting the brakes or steering to avoid will more than likely result in loss of control. When conditions deteriorate, drivers should reduce their speed to allow them to control their vehicle – regardless of what happens around them.

After the precipitation stops

Just because the snow or freezing rain has stopped, it does not mean there will be smooth sailing. The severity of the storm, the ability of road crews to clear the roadways during and immediately after the storm, and the weather conditions that follow the storm are going to be factors in how long it will take to see “bare pavement” again. One dangerous situation drivers need to be alert for during this period is only parts of a roadway may be back to bare pavement. This situation can be caused by shade (the sun is not heating the pavement to help clear it), differences in the performance of road maintenance efforts, or localized blowing of snow. The big danger with these areas is ending up at a speed far too fast for the road conditions. Cautious and conscientious winter weather driving is no accident. Be safe. Take note of the topics and recommendations discussed in this bulletin. We encourage you to put them into practice – doing so helps ensure your safety. It is the philosophy of Frankenmuth Insurance and your Independent Insurance Agent to provide services that give policyholders peace of mind. At Frankenmuth Insurance, we truly are with you all the way.

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2010 Health Savings Accounts (HSA) maximum contribution

WASHINGTON-The maximum contributions that can be made to health savings accounts in 2010 will increase as will the minimum deductible imposed by health insurance plans linked to HSAs and the maximum out-of-pocket expenses that employees can be required to pay, the Internal Revenue Service said.

The maximum contribution that can be made to an HSA in 2010 for employees with single coverage will be $3,050, up from $3,000 in 2009. The maximum HSA contribution for those with family coverage will rise to $6,150, up from $5,950.

Additionally, the maximum out-of-pocket expense, including deductibles, that employees can be required to pay next year will rise to $5,950 for single coverage, up from $5,800 this year, and $11,900 for family coverage, up from $11,600.

The minimum deductible of the high-deductible health insurance plan to which HSAs must be linked will increase next year to $1,200 for single coverage and $2,400 for family coverage. The current minimum deductibles are $1,150 for single coverage and $2,300 for family coverage.

The maximum “Catch-Up” contributions for each spouse age 55 or older is $1,000.

The new limits that the IRS announced Thursday reflect increases in the cost of living

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Michigan Catastrophic Claims Association (MCCA)

What is the Michigan Catastrophic Claims Association (MCCA)?

Michigan is the only state that offers unlimited personal injury protection benefits.  These benefits are offered through no-fault auto insurance policies.  The Michigan Catastrophic Claims Association (MCCA) reimburses no-fault auto insurers for benefits that exceed $460,000, as of July 1, 2009.  MCCA was created by the legislature a means of spreading costs across all Michigan motorists for providing these unique unlimited benefits.

Although created by statute, the MCCA is a private, nonprofit association.  All of its dealings are with insurance companies, not the general public.  The MCCA has a Board of Directors that consists of 5 representatives from insurance companies, appointed by the Commissioner of the Office of Financial and Insurance Regulation (OIFR) according to statute.  The insurance companies appointed to serve on this board are among the top writers, by volume of business, of auto insurance in Michigan.  The Commissioner of OFIR serves as an ex-officio member of the board without a vote.

How is the MCCA assessment determined?

Each year, the MCCA analyzes the amount needed to cover the lifetime claims of all people catastrophically injured in a car accident.  This analysis includes review of the investment return that the fund receives, medical cost inflation, and any changes to coverages.  The analysis yields an amount needed to pay those lifetime claims and a per vehicle assessment is set based on that amount.

Since 1979, 23,100 catastrophic claims have been reported to the MCCA.  Based on current estimates, 11,408 claims remain active, resulting in future lifetime payments in excess of $70 billion.  This figure assumes inflating costs for products, services, and accommodations necessary for the care, recovery and rehabilitation of injured persons throughout their lives.  The MCCA further estimates that an additional 1,050 Michigan insureds will be catastrophically injured in auto accidents next year.  It is the cost of providing these medical benefits that influences the MCCA assessment.

How is the MCCA funded?

An MCCA assessment is charged to every Michigan auto insurance premium.  The assessment funds a pool of money for medical costs exceeding $460,000, as of July 1, 2009, resulting from an auto accident.

Do I pay this assessment?

Although the MCCA assessment technically is made to the insurance company, companies typically pass the assessment on to policyholders.  Some insurance companies include the MCCA assessment in the Personal Injury Protection (PIP) portion of your insurance premium.  Other companies sometimes list this as a “statutory assessment” of “MCCA assessment” on the declarations page of your policy.

Even though the amount assessed each insurer by the MCCA is the same, each company may include administrative and other miscellaneous costs in the amount it assesses policyholders for this coverage.  Therefore, the amount assessed by the MCCA may affect each policyholder’s premium differently.  If you have questions about the amount being assessed, you may wish to contact your insurance agent or insurance company.

What is the assessment for 2009?

The MCCA announced that the 2009 assessment will be $124.89.  The pure premium (the actual cost for each vehicle in the state of Michigan to fund the MCCA pool) is $100.78 and the deficit adjustment is $23.89, with a $.22 administrative expense, setting the assessment at $124.89.

What will happen to the assessment in the future?

The MCCA Board meets every spring to set the assessment for the year beginning July 1^st.  The assessment is set using the same criteria – by analyzing the amount needed to cover the lifetime claims of all people catastrophically injured in a car accident.  Investment return, medical cost inflation, and any changes to coverages will again be considered.

Do I pay the full assessment if I own a historic vehicle?

Public Act 662 of 2002 reduced the MCCA assessment for historic vehicles to 20 percent for the full assessment charged for vehicles effective July 1, 2003.  The assessment for historic vehicles beginning July 1, 2009 will be $24.98.

*This article was updated April 2, 2009 by the State of Michigan Office of Financial and Insurance Regulation.

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Investing in Michigan

Annuities, the safe investment!

Basically, most annuities are a fixed interest investment, similar to a CD.  The advantages of an annuity are that the interest is guaranteed and tax deferred.  In addition, you can access a portion of the money right away and you can use it as a conservative part of an investment or estate portfolio.  You can even set up annuities on your children or grandchildren for payment of tuition or other events in the future.  When purchased as part of an estate, the annuity avoids probate and goes directly to the beneficiary!

Why is it smart to purchase your annuity from Auto Owners Insurance Company?   Auto Owners is financially sound, are one of the top twenty “strongest” annuity providers in America, and of those twenty; are the only company based in Michigan.  If you are ready to purchase an annuity, purchase it from a company you can trust, and a company that you know will invest your dollars locally.

Why is it smart to purchase your Auto Owners annuity from First Independent?  Auto Owners only sells their products thru the Independent Agency system.  They recognize that a good independent agent doesn’t “steer” his / her client for profit reasons.  In fact, Auto Owners typically pays a lower commission to the selling agency, and utilizes that savings in their products to the benefit of the client.  A good Independent Agent works on their client’s side, shopping many options for the most competitive products.  Make First Independent Insurance Agency “Your First Choice!” for all your insurance and retirement needs.

Have questions?  Contact Bryant at bgoodreau@fiiains.com or any of our other licensed professionals for more information

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