2003-03-30 - 11:51 p.m.

Financial Embarrassment

Excuse me, I've been having a mental Margarita here.

A little over a week ago I got a letter in the mail from the New York State government. It sort of rocked my world. Such a little thing, but boy it had big repercussions! I get mail from the state all the time, most of it's junk, so I didn�t think too much about it.

When I opened it up and looked at it, it gave me pause. It was a simple inquiry: the state didn't have a record of my Workers' Disability insurance policy - could I please send them the number?

Hmmm. As far as I knew I didn't have any insurance like that, but I did have a big old expensive insurance policy on the house, maybe it was covered by that. So I called my insurance agent and found out that, no it wasn't covered by my other insurance.

"Well, Jeez, how long has this stuff been required," I asked.

"Oh, forever" replied my insurance agent. "You need Workers' Disability insurance the same way you need Workers' Compensation insurance."

"Wait... you need Worker's Compensation insurance too?"

Uh oh. These two insurance policies are required by law, and I didn't have them. I immediately set about getting them, but it was a slow process.

When I told Lily my tale of woe, she asked me a quite reasonable question: what the hell were these policies for? I had only a very vague idea, so I looked it up on the internet, which I have nicknamed the Death of All Curiosity.

When an employee is injured, either on the job or off it, they need Worker's Comp insurance to pay their medical bills, and Disability insurance to bay their day-to-day bills while they get better. Well, you could have knocked me over with a feather. I thought hurting yourself was your own damn responsibility. Live and learn!

The reason why the insurance is required is that it's a trade-off - employers carry insurance, and employees can't sue their employers when they get hurt. At least that's how it was explained to me. Frankly it just sounds to me like a scam designed to enrich the insurance industry.

I got the estimate for the Disability policy - it was $100 a year. That wasn't so bad. However when I got the estimate for the Workers' Comp policy I nearly swallowed my tongue - it was like $800. I talked to my insurance broker, and she essentially told me that it was pointless to try to shop around looking for a better rate - the charges were mandated by law.

So basically, I'm now paying an extra $900 a year just for the privilege of being an employer in New York State. And people wonder why businesses are leaving this state.

This couldn't have come at a worse time. This is the worst time of year for me - it's tax time, the business is usually slow and money is tight. This new charge is not going to make things any easier. Then I discovered that this was only the beginning of my troubles.

First, my insurance broker informed me that I was going to have to get new liability insurance on my house. The company that was currently handling it had been downgraded to a "B" in their rating. While I've always thought that B was a pretty good grade myself, for insurance companies, B is pretty bad. My insurance broker wouldn't carry a company rated that low, so I had to find a new company. This is a hassle because a new company is going to want to inspect the house again and they'll have all sort of demands to make about how the place should be set up or they won't insure me. Also, new insurance probably means a rate hike. Well, of course.

What's worse is that when my insurance agent plugged my house's vital statistics into their little rate computer my liability rates jumped by a power of three. Holy crap! My insurance became so expensive that I could BUY the house with about 13 years worth of premiums.

Screw that! I just won't have insurance if it's that expensive!

Nice try, Mr. Hamster. Since I have a mortgage on my house, insurance is required. Well, I just hope that the insurance agent miscalculated my rate. This is an ongoing headache.

Ah, but there is something else. I had another look at the letter of inquiry that started all of this. If you don't have Workers' Disability insurance, you are liable to a penalty. I calculated the penalty in my head and it came to about $4,000. Oh, crap. And there is probably a similar penalty for Workers' Comp, probably a much larger one. If the state decides to hit me with those penalties, I'm screwed, but good. Covering a financial hit like that is going to be a big problem.

Well, I should have known about this, shouldn't I? One of the pillars of law is that ignorance of the law is no excuse. I asked one of the other local comic store owners how he knew about the insurance, and he said "Oh my accountant handled it - I don't pay attention to stuff like that."

Probably my accountant should have informed me about this back in 1985 when I first stated having employees, but the trouble was back then I really didn�t have an accountant - I just had a guy who helped me with my tax forms. Besides, I would do no good to point the finger for something this guy should have told me 18 years ago. I can't blame the guy who's doing my tax forms now either - back in 1985 he was probably in high school.

And so I've spent an entire long entry talking about insurance, probably about the dullest thing in the whole world. I don't know about you folks, but when the talk turns to insurance, my eyes slam shut. And yet, it's part of the no-fun world of being a grown-up. You have to think about petty stuff like this, or it will bite you in the ass. Yes, I know my bad attitude is showing, but I'm a little pissed off about this.

So all I can do is wait and see if the state decides to let me off the hook. I'm not hopeful.