Business of Insurance: 2009

Claims adjusters investigate insurance claims by interviewing the claimant and witnesses, consulting police and hospital records, and inspecting property damage to determine the extent of the company’s liability. In the United Kingdom, the Republic of Ireland, Australia, and South Africa the term Loss adjuster is used.

Claims adjusters have the knowledge to complete the preparation of a property damage claim which, to an unrepresented homeowner, may be unfamiliar territory. The documents contain technical terms such as depreciation, replacement costs, and actual cash value, that may be unknown to the policyholder, and a trained claims adjuster can ensure a correct completion.

There are three classes of claims adjusters:

* staff adjusters (employed by an insurance company or self-insured entity),
* independent (independent contractors; not insurance company employees)
* public adjusters (employed by the policyholder).

It should be very clear that in the two first instances, the adjuster defends the rights of the insurer and works for a fair settlement for both parties.

Adjusters may handle "property claims" involving damage to buildings and structures, or "liability claims" involving personal injuries or third-person property damage from liability situations, such as motor vehicle accidents, slip and falls, dog bites, or alleged negligent behavior. Some adjusters handle both types of claims and are known as "Multi-Line" adjusters. Public adjusters work exclusively for the policyholder. This means there should be no inherent conflict of interest when it comes to advocating on the policyholders behalf to the insurance company.

An independent adjuster could be working for multiple insurance companies.

An adjuster will frequently verify that coverage applies through an insurance policy, investigate liability for the damages caused, and make restitution to the injured person based on their physical, emotional, or physical property damages.

Many homeowners reach a fair settlement with the staff or independent adjuster they are working with. In the event they are not, they can hire a public adjuster. Public adjusters claim that many homeowners do not collect all the money to which they are entitled due to a lack of familiarity with the claim process. The use of a public adjuster may mitigate this risk and could help put the policyholder on a more equal footing with the insurance companies, which increasingly use experts to support their side of a claim settlement. Public adjusters charge for their services, the standard rate is 10% of your claim settlement. For example, If you suffer a $250,000.00 fire loss, the public adjuster fee for assisting you would be $25,000.00 This $25,000.00 is taken out of your claim settlement. The objective of a claims adjuster should be to protect the insured against not only financial loss, but also the cost of recovering it.

Specific duties include:

* Responding to claims in a timely manner
* Filing paperwork
* Communicating with policy holders
* Investigate liability
* Assess damages
* Research, detail and substantiate each aspect of the claim, including building damage, contents, and extra living expense claims.
* Negotiate with product/service providers on time and cost of repairs for the purpose of making an offer of settlement to the insured.
* Ensuring accurate procedures
* Protect the interest of the insurance company the adjuster represents, when dealing with claimants.

Some states now require public adjusters disclose to claimants whose interest specifically independent, staff and public adjuster represent, before they are retained by the policyholder. There is no such requirement at this time for insurance companies to do the same.

Most Colleges have not yet recognized the need for a major specifically for those who wish to become Claims Adjusters, however there are some professional designations that have become prevalent among higher achievers in the field. For example, The American Institute for Chartered Property Casualty Underwriters awards the Chartered Property and Casualty Underwriter (CPCU) designation to experienced underwriters. Some Adjusters find that gaining these types of designations have been very advatantageous to their careers. Many insurance companies prefer their claims adjusters to have a 4-year college degree preferably in business related fields, however having a degree in liberal arts is acceptable as well. There are times in which a person with a high school education will become a claims adjuster usually by promotion from within the claims department while serving as a customer service representative. Since there are no college majors for claims adjusters, many states require a state certification in order to practice as an adjuster. States also require that a certain number of continuing education credits for claims adjusters are earned each year in order to maintain their license. This continuing education is achieved by attending seminars and online training from different claim adjuster educational resources. One brief example of an educational seminar is where a group of claims adjusters will meet and discuss how to distinguish a false claim from a true claim.

Florida is one of the few states in the United States that has created specific designations for the licensing of insurance claims adjusters. The Accredited Claims Adjuster Designation, created by statute in 2003, allows an individual to obtain the Florida All Lines Independent or Company license, without taking the state licensing exam. The University of Central Florida is the only major university in the state to recognize the expanding need for insurance pre-licensing and offers the designation throughout the country. www.ce.ucf.edu/pc_course.asp?prog=517

Most states require licensed adjusters to continue their education through a 'continuing education' requirement. Florida requires 24 hours of CE every two years. Courses, such as those found at the University of Central Florida, are offered live and online. www.ce.ucf.edu/insurance

Many claims adjusters may work long hours. The majority of claims adjusters work more than 50 hours a week, they work nights, and sometimes weekends because claims adjuster usually have to make appointments to see their clients, so the adjuster must be able to adapt their schedules in order to accommodate their clients.

The more experienced claims adjusters are able to work from home. They will receive their work load for that day through their private fax machine or their email accounts. The most common claim adjusters receive their assignments when they arrive at the office first thing in the morning. In the case of a severe natural disaster such as floods or tornadoes, adjusters from another city or town are called in to support the local government. This results in the adjuster being away from home for days at a time until all claims are resolved.

Laptop computers, cell phones, and other technology has made the process of claims adjusting easier and it consumes less time; however, there are positions that require physical strength as well as stamina. Property adjusters, for example, many times are required to operate a 50-pound ladder, able to stand, walk, kneel, crawl, and other physical demands as they investigate property that has been damaged
source wikipedia
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Car insurance for teenager

need car insurance for your teen or do I just insure the car? The research I've done all says that the VEHICLE has to be insured but it doesn't say anything about the DRIVER. This doesn't make sense to me but almost every website says it's the vehicle that has to be covered. Does your son need to be specifically named on the policy?

The statistics about teenage drivers aren't good. According to the Insurance Institute for Highway Safety (IIHS), 16-year-olds get into accidents almost six times more often than drivers between the age of 30 and 59. No wonder car insurance premiums are so high for this age group.

However, not all car insurance companies take the same dim view of young drivers. And some discounts are available to help you cut costs. Remember, the higher the risk, the higher the cost of insurance premiums. Let this be your guiding principle as you shop for insurance.

Here are 10 suggestions to help lower premiums and keep your teenager's license free of violations:

1. Help your teen learn the laws and follow them to the letter. By far, the best way to lower car insurance costs for teens is for them to keep their driving record clean. Make safe driving a family project. In some states, restrictions apply to new drivers. Parents should know what the laws are and insist that their sons and daughters follow them.

2. Set a good example. Do you break the speed limit and tailgate? Do you yell at other drivers when you're behind the wheel? If you do these things, how can you expect your children to act differently? Start watching your own driving long before they get their license and you'll have a much easier time convincing them to be safe drivers. Remember, actions speak louder than words.

3. Put your teenager on your policy. Rather than setting up an independent policy for your teen driver, put them on your auto insurance policy as an additional driver. In this way, all the discounts applied to your policies will be passed on to them.

4. Pay your teenager to get good grades. Here's a creative tip — find out how much you save if your teenager gets a good grade point average and pass it on to them. Usually, having a 3.0 or higher GPA will reduce your car insurance premium by 10 percent. Figure out exactly how much this saves you and give that money to your teenager. This accomplishes two things. First, it provides a direct reward for academic performance. Secondly, it motivates them to continue getting good grades.

5. Enroll them in driver education courses. Discounts are available for teens who take recognized driving classes. But call your car insurance company to find out which schools are covered before paying big bucks.

6. Steer clear of sports cars. Don't try to live vicariously through your teenager by giving them the hot car you couldn't get in high school. Getting your teenager a safe car to drive, with the latest safety equipment, will lower your premiums. Not only will you save money on car insurance, but fast driving will be less of a temptation.

7. Get their support. Don't assume that your teenager wants to vacuum clean your wallet. Ask them for help cutting costs and point out that you will share in the savings (see rule #4). Tell them how much car insurance costs and show them how this fits into the family budget. If nothing else, you will score points for treating them as adults.

8. Talk to your kids about drugs and alcohol. This is a tough subject to broach with teenagers, who think they have everything under control. But the consequences of saying nothing can be catastrophic. Take the time to lay down some guidelines in this important area.

9. Take traffic school to beat tickets. Once a ticket is on your teen's license, it takes months to get the violation removed. Instead, encourage them to take traffic school if the judge allows it. A day spent thinking about the consequences of unsafe driving can bring rewards for years to come.

10. Ride with your teenager. Your teenager was a safe driver last year when he or she got a license. But what's happened since then? Let your son or daughter take the wheel while you sit back and relax in the passenger seat. If you see them doing something that breaks rules or seems unsafe, point this out in a diplomatic way. If they are doing a good job driving, praise them for their efforts.

If you follow the above suggestions, you will find that you can make it through the teenage years safely — and without paying an arm and a leg for car insurance. It just takes cooperation and understanding from both sides of the generation gap.

Discounts for Auto Insurance

Get great service and great coverage at a great price with affordable car insurance from Nationwide. Start saving today with auto insurance discounts that meet your needs, life and budget.
Home owners and car insurance discount

Combine and save. Get a discount on your auto insurance policy when you insure your home, condo or apartment with Nationwide.
Multi-car insurance discount

Insure more than one vehicle with Nationwide and save up to 20 percent.
Accident-free car insurance discount

Save up to 10 percent if you have at least 5 years of driving experience and have been free of chargeable accidents for the last 5 years.
Good Student car insurance discount

Get up to a 15 percent discount on your auto insurance when your teen earns a B average or above on their report card.
Long-term policyholder car insurance discount

Save up to 15 percent on your auto insurance if you are insured with Nationwide for at least 5 years. Save up to 5 percent if you are insured with Nationwide for at least 3 years.
Affinity car insurance discount

Save up to 3 percent on auto insurance if you are a member of a qualifying organization.
Anti-theft car insurance discount

Save when you install an anti-theft device in your vehicle. Savings vary based on the device installed and the state where you garage your vehicle.
Passive occupant restraint car insurance discount

Save when you insure a vehicle with full front-seat airbags or restraint devices that work automatically when your door closes.
Accident prevention or defensive driver car insurance discount

Save when you successfully completed a motor vehicle accident prevention course approved by your state’s Department of Motor Vehicles.

*The availability, amount and eligibility for auto insurance discounts may vary by state.
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Saving A Buck On Insurance

By Laura Donaldson

Saving A Buck On Insurance

FORT WAYNE, Ind. (Indiana’s NewsCenter) - With money tight, we wanted to know if local drivers are cutting back on state required auto insurance coverage.

Area insurance agents say they haven't seen a drastic increase or decrease in business. But they do say more motorists are revisiting their auto insurance plans, looking for ways to cut back.

State Farm Agent Larry Ice II says he's not sure how much the economic downturn has effected business because State Farm doesn't track why clients may drop a policy.

But he has noticed more financially strapped customers looking for a discount.

“There’s a lot more focus on saving money,” said Ice.

He says foot traffic is increasing at his small business, as consumers become more financially conscience.

“And I think that overall that goes from health insurance, auto, home every type of insurance,” said Ice.

Ice says he’s seeing a new and surprising trend; more clients are purchasing health insurance policies.

“People are a lot more concerned about what might happen if my husband losses his job, or if I loss my job, I might not be able to continue that health insurance coverage,” said Ice.

But the financial concern isn’t limited to auto and health insurance.

Indiana’s NewsCenter spoke with several area auto repair shops that say customers are waiting longer to get an oil change.

But what's most concerning, auto experts say more motorists are waiting until the last minute to repair their breaks.

Auto experts warn that the metal on metal grind could become dangerous not only for the driver but also other motorists.

Ice says his company recognizes the financial strains on families and is taking steps to speak with clients about ways they can reduce their rates without lowering their coverage.

Progressive Auto Insurance Shares Car Insurance Tips

Use these car insurance tips and hints from Progressive to save money and select the right coverage. Plus, Progressive says it will include all available auto insurance discounts when you get a quote.

Savvy consumers know it pays to do the legwork and shop around for car insurance. Considering auto insurance prices for a six-month policy can vary greatly between companies, why not take the time to compare rates for several companies? To help you in your quest for car insurance, we've compiled a few tips that can help you save money and make the right choices for your situation.

Before you get started, review your auto insurance coverages and keep your auto policy on hand to make fair comparisons to your current coverage. Then start shopping. Visit insurance Web sites and insurance agents/brokers and get quotes. Following are a few more shopping tips.

Learn The Auto Insurance Lingo

Do you know whether or not you need PIP coverage? Can you explain BI or PD coverage? Before you buy, learn the basic auto insurance lingo — it can help you make coverage decisions that are right for you. Visit our insurance definitions section and expand your knowledge now!

Stay with a Leader

Visit A.M. Best, Moody's Investor Service, and Standard & Poor's for information on the financial strength of various car insurance companies and what benefits and features they offer.

Enhance Your Car Insurance Experience

For 24/7 customer and claims service and the ability to manage your auto insurance policy and pay your bills online, you need a company that can do more than simply provide a car insurance quote on its Web site. Visit progressive.com to see how much online control and access you have with Progressive.

By Progressive Auto Insurance
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[Credit Plays Into Auto Insurance Rates] Insurers Can Use Credit To Increase New Policy Rates

[Credit Plays Into Auto Insurance Rates] Insurers Can Use Credit To Increase New Policy Rates

BALTIMORE -- The WBAL TV 11 News I-Team has discovered that your credit can play a huge role in what you pay for auto insurance and there's little you can do about it.
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Flu prompts flood of calls to insurers

By Josephine Cumbo

Travellers worried about swine flu are being urged to check their insurance policies to see if they are covered for cancelling trips to areas most affected by the outbreak, such as Mexico.

Fears about the spread of swine flu have led to a huge increase in calls to travel insurance providers, with worried holidaymakers eager to take out cover as swine flu spreads across the globe.

Most policies will refund the cancellations of travel arrangements to a destination if the Foreign and Commonwealth Office (FCO) has advised against all but essential travel to the area - which was the case this week with Mexico.

But insurers said this wasn't the case with allpolicies.

"Where the FCO has advised against all but essential travel, most policyholders will be able to claim a refund or an alternative trip from their tour operator or travel agent," said the British Insurance Brokers Association (Biba).

"This would be the correct procedure for travellers to follow before submitting an insurance claim."

However, Biba added: "Not all travel insurance policies will cover cancellation due to a pandemic or FCO advice against travel. Travellers are advised to contact their insurance broker or travel insurance provider for clarification."

Biba explained that if tour operators or travel agents arrange an alternative destination, the existing travel insurance policy should normally cover the new destination instead, but travellers should check this with their insurance broker.

Travellers who are concerned about swine flu but delay taking out cover could find themselves unable to obtain insurance.

"We would only cover people with policies taken out and trips booked before the FCO issues advice," said Emma Holyer, of LV=, the insurer. "If someone has booked a trip to Mexico after the FCO has issued advice (i.e. in the last 24 hours) they would not be covered.

"It's always best to take out insurance at the time of booking a trip or have an annual policy in place to avoid this kind of problem."

A warning was also given to those with existing insurance policies who insist on travelling to areas against official advice, with providers unlikely to cover any costs if the traveller falls ill.

However, while swine flu cases have been confirmed in the UK, US, Spain and Canada, travellers cannot expect a refund if they simply wanted to be cautious and not travel.

"Any cautious Brits cancelling their holidays to these areas for this reason are unlikely to be covered by their insurer or compensated by the airline or travel firm they have booked with," said moneysupermarket.com, the price comparison website.

"But those paying for their holiday, or flight, with a credit card, provided it is over £100, get the added benefit of cover from the credit card company which becomes equally liable for providing a refund if the holiday cannot be fulfilled due to a cancellation by the holiday operator or airline."

Meanwhile, those who have package holidays booked to Mexico departing in the near future are being advised that tour operators will decide how far in advance they are prepared to offer refunds or alternatives.

"The exact period will vary as the advice from the FCO can change rapidly," said the Travel Association, which represents British tour operators and travel agencies.

"If your departure date is some weeks or months ahead, therefore, your tour operator will keep the matter under review and contact you closer to your departure date if it's necessary to change your holiday," it added. "If you're concerned, please contact your tour operator."

With ongoing uncertainty over the extent of the outbreak likely to lead to more cancellations, some companies are offering to alleviate the disappointments of some holidaymakers.

M&S travel money customers can take their unused Mexican pesos or US dollars into any of the 116 M&S bureaux de change until close of business on Friday May 8 and exchange them for thesterling amount they paid for the currency.

For more advice see: FCO www.fco.gov.uk; The Travel Association www.abta.com; World Health Organisation www.who.int

Click here for more from FT.com

WHO Raises Flu Threat Level, Warns Pandemic Imminent

'THE HORSES ARE OUT' reading posting from insurancejournal.com
"At this point, (health officials) have not recommended a border closing," he said. "From their perspective, it would be akin to closing the barn door after the horses are out, because we already have cases here in the United States."

Obama also praised his predecessor for stockpiling anti-viral medication in anticipation of such an outbreak. "I think the Bush administration did a good job of creating the infrastructure so that we can respond," Obama said. "For example, we've got 50 million courses of anti-viral drugs in the event that they're needed."

Despite worries that a major flu outbreak could hit the struggling global economy, world stocks rallied on Wednesday after the Federal Reserve said the U.S. recession appeared to be easing.

Almost all cases outside Mexico have had mild symptoms, and only a handful have required hospitalization.

Chan also urged companies who make the drugs to ramp up production. Two antiviral drugs -- Relenza, made by GlaxoSmithKline and Tamiflu, made by Roche AG and Gilead Sciences Inc. -- have been shown to work against the H1N1 swine flu strain.

In Mexico City, a metropolis of 20 million, all schools, restaurants, nightclubs and public events have been shut down to try to stop the sickness from spreading.

Insurance any purpose

Insurance Sales Professionals

Sales people who are unsure of their abilities are quick to blame the economy when their sales slide. Skilled insurance sales professionals refuse to let a slow economy affect their sales. Find out how they excel, while others find themselves in a dead end.

Why do over 10 insurance sales people fail for everyone who succeeds? It is the way they control their attitude. their outlook. There are three types of attitude to control during an economic slowdown.. The three are the attitude you have about the economy, how you feel about your abilities and situation, and how you feel your prospects are affected regarding the economy. Two of these three you control, the other you cannot.

IT'S NOT THE ECONOMY Throughout the stages of your insurance sales career you are going to go through stages of economic growth, stagnation, and downturn. When you are not making sales, it is easiest to blame the economy. Gas prices are skyrocketing, job growth is not occurring, the stock market is not rising, and people have less money to spend are just 4 conditions you could name and blame. Here is what immediately separates the pros from the failures, no matter what you sell.

HOW YOU CONTROL THE SITUATION Skilled insurance sales professionals understand that Either you control the situation, the situation controls you, or the situation cannot be controlled. If you personally cannot control a situation, like the economy, do not let it control you. So what if the economy is on a down spin? History shows that it will always recover. Will You? The experienced sales professional can actually use it to his advantage. If gas prices are zooming upward, choose prospects to see more carefully. Giving out $10 to $20 gas certificates to your prospects before the sales presentation starts reaps financial benefits. You mention that seeing knowledgeable prospects, like them, who realize the value in _____ is beneficial. This not only saves you gas, but provides you with more time to see truly interested prospects. They want to buy from a person unshaken by the economy.

YOUR INDIVIDUAL SITUATION The sales person has a personal situation that must be handled properly, yet few have the sales ability to do so. It that the image you have of yourself? Are you nervous for lack of practice? Are you concerned that prospects might ask questions hard to answer? Or are you fearful of the pay that you could lose if the sale is not made?. You must have the sales ability to conquer this entirely personal situation of faith in yourself.

Picture before going into any sales situation, already having made the sale. Therefore, your presentation is only a formality. Pick out two or three products and become and expert of knowing all you can about them. Do not attempt becoming a jack-of-all-trades about 43 products. Remember that the more confident you are, the more sales you will make. Keep in mind that even super confident baseball hitters, also strike out. Nevertheless, on the next chance they feel a home run coming on.

YOUR PROSPECT SITUATION What type of prospects are you are currently pursuing? Most sales people would answer "every type". Your answer should be "only those who can afford and would benefit from the main products I offer". Next take a trip to a large lake or campground, and drive around the parking area. See how many of these people are similar to your clients. NEVER assume that all people let the economy rule them.

In fact, use emotions to present your product so. If your prospect fears not receiving the benefits that your product can deliver, a downturn economy should be super. You can control yourself, and your prospect. You cannot control the economy, but you can adjust your sales presentation, so it always works in your favor.

If a prospect is convinced enough that a product is beneficial, he will buy it, regardless of the economy. In turn if you are a smart enough sales person you can sell your product in any economical condition. If you are a failure at selling, scream out "IT'S THE ECONOMY STUPID". Repeat it, until you realize how stupid this is to a person of your caliber.

Of course, it's impossible to put everything about the economy and sales market into just one article. However, this clearly emphasizes how important your sales ability and mind dictates what you can and cannot do about it.

Well published author, Don Yerke likes to concentrate on what you don't know or what no one else dares to print. Tell it like it is.

Watch for his new paperback book debuting on Amazon this spring. It is loaded with great insurance marketing and recruiting information.

Come and get your FREE "Think and Grow Rich" Ebook by Napoleon Hill instantly. The website address is http://www.agentsinsurancemarketing.com

Article Source: http://EzineArticles.com/?expert=Donald_Yerke

Credit insurance

Credit insurance repays some or all of a loan when certain things happen to the borrower such as unemployment, disability, or death.

Mortgage insurance insures the lender against default by the borrower. Mortgage insurance is a form of credit insurance, although the name credit insurance more often is used to refer to policies that cover other kinds of debt.

Liability insurance

Liability insurance is a very broad superset that covers legal claims against the insured. Many types of insurance include an aspect of liability coverage. For example, a homeowner's insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property; automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others' lives, health, or property. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of wilful or intentional acts by the insured.

Directors and officers liability insurance protects an organization (usually a corporation) from costs associated with litigation resulting from mistakes made by directors and officers for which they are liable. In the industry, it is usually called "D&O" for short.
Environmental liability insurance protects the insured from bodily injury, property damage and cleanup costs as a result of the dispersal, release or escape of pollutants.
Errors and omissions insurance: See "Professional liability insurance" under "Liability insurance".
Prize indemnity insurance protects the insured from giving away a large prize at a specific event. Examples would include offering prizes to contestants who can make a half-court shot at a basketball game, or a hole-in-one at a golf tournament.
Professional liability insurance, also called professional indemnity insurance, protects insured professionals such as architectural corporation and medical practice against potential negligence claims made by their patients/clients. Professional liability insurance may take on different names depending on the profession. For example, professional liability insurance in reference to the medical profession may be called malpractice insurance. Notaries public may take out errors and omissions insurance (E&O). Other potential E&O policyholders include, for example, real estate brokers, Insurance agents, home inspectors, appraisers, and website developers.

Property insurance

This tornado damage to an Illinois home would be considered an "Act of God" for insurance purposes

Property insurance provides protection against risks to property, such as fire, theft or weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.

Automobile insurance, known in the UK as motor insurance, is probably the most common form of insurance and may cover both legal liability claims against the driver and loss of or damage to the insured's vehicle itself. Throughout the United States an auto insurance policy is required to legally operate a motor vehicle on public roads. In some jurisdictions, bodily injury compensation for automobile accident victims has been changed to a no-fault system, which reduces or eliminates the ability to sue for compensation but provides automatic eligibility for benefits. Credit card companies insure against damage on rented cars.
- Driving School Insurance insurance provides cover for any authorized driver whilst undergoing tuition, cover also unlike other motor policies provides cover for instructor liability where both the pupil and driving instructor are equally liable in the event of a claim.
Aviation insurance insures against hull, spares, deductibles, hull wear and liability risks.
Boiler insurance (also known as boiler and machinery insurance or equipment breakdown insurance) insures against accidental physical damage to equipment or machinery.
Builder's risk insurance insures against the risk of physical loss or damage to property during construction. Builder's risk insurance is typically written on an "all risk" basis covering damage due to any cause (including the negligence of the insured) not otherwise expressly excluded.
Crop insurance "Farmers use crop insurance to reduce or manage various risks associated with growing crops. Such risks include crop loss or damage caused by weather, hail, drought, frost damage, insects, or disease, for instance."^[11]
Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake damage. Most earthquake insurance policies feature a high deductible. Rates depend on location and the probability of an earthquake, as well as the construction of the home.
A fidelity bond is a form of casualty insurance that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees.
Flood insurance protects against property loss due to flooding. Many insurers in the U.S. do not provide flood insurance in some portions of the country. In response to this, the federal government created the National Flood Insurance Program which serves as the insurer of last resort.
Home insurance or homeowners' insurance: See "Property insurance".
Landlord insurance is specifically designed for people who own properties which they rent out. Most house insurance cover in the U.K will not be valid if the property is rented out therefore landlords must take out this specialist form of home insurance.
Marine insurance and marine cargo insurance cover the loss or damage of ships at sea or on inland waterways, and of the cargo that may be on them. When the owner of the cargo and the carrier are separate corporations, marine cargo insurance typically compensates the owner of cargo for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier or the carrier's insurance. Many marine insurance underwriters will include "time element" coverage in such policies, which extends the indemnity to cover loss of profit and other business expenses attributable to the delay caused by a covered loss.
Surety bond insurance is a three party insurance guaranteeing the performance of the principal.
Terrorism insurance provides protection against any loss or damage caused by terrorist activities.
Volcano insurance is an insurance that covers volcano damage in Hawaii.
Windstorm insurance is an insurance covering the damage that can be caused by hurricanes and tropical cyclones.

Casualty insurance

Casualty insurance insures against accidents, not necessarily tied to any specific property.

Main article: Casualty insurance

Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.
Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss.

Disability Insurance

Disability insurance policies provide financial support in the event the policyholder is unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as mortgages and credit cards.

Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work.

Total permanent disability insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance.

Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expenses incurred because of a job-related injury.

Health insurance

Health insurance policies by the National Health Service in the United Kingdom (NHS) or other publicly-funded health programs will cover the cost of medical treatments. Dental insurance, like medical insurance, is coverage for individuals to protect them against dental costs. In the U.S., dental insurance is often part of an employer's benefits package, along with health insurance. Most countries rely on public funding to ensure that all citizens have universal access to health care.

Home insurance

Home insurance provides compensation for damage or destruction of a home from disasters. In some geographical areas, the standard insurances excludes certain types of disasters, such as flood and earthquakes, that require additional coverage. Maintenance-related problems are the homeowners' responsibility. The policy may include inventory, or this can be bought as a separate policy, especially for people who rent housing. In some countries, insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household, including pets

Auto Insurance

Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. Auto insurance provides property, liability and medical coverage: Property coverage pays for damage to or theft of your car. Liability coverage pays for your legal responsibility to others for bodily injury or property damage. and Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses. An auto insurance policy is comprised of six different kinds of coverage. Most countries require you to buy some, but not all, of these coverages. If you're financing a car, your lender may also have requirements.

Most auto policies are for six months to a year. Your insurance company should notify you by mail when it’s time to renew the policy and to pay your premium.

Claims

Finally, claims and loss handling is the materialized utility of insurance; it is the actual "product" paid for, though one hopes it will never need to be used. Claims may be filed by insureds directly with the insurer or through brokers or agents. The insurer may require that the claim be filed on its own proprietary forms, or may accept claims on a standard industry form such as those produced by ACORD.

Insurance company claim departments employ a large number of claims adjusters supported by a staff of records management and data entry clerks. Incoming claims are classified based on severity and are assigned to adjusters whose settlement authority varies with their knowledge and experience. The adjuster undertakes a thorough investigation of each claim, usually in close cooperation with the insured, determines its reasonable monetary value, and authorizes payment. Adjusting liability insurance claims is particularly difficult because there is a third party involved (the plaintiff who is suing the insured) who is under no contractual obligation to cooperate with the insurer and in fact may regard the insurer as a deep pocket. The adjuster must obtain legal counsel for the insured (either inside "house" counsel or outside "panel" counsel), monitor litigation that may take years to complete, and appear in person or over the telephone with settlement authority at a mandatory settlement conference when requested by the judge.

In managing the claims handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages. As part of this balancing act, fraudulent insurance practices are a major business risk that must be managed and overcome. Disputes between insurers and insureds over the validity of claims or claims handling practices occasionally escalate into litigation; see insurance bad faith.

Underwriting and investing

The business model can be reduced to a simple equation: Profit = earned premium + investment income - incurred loss - underwriting expenses.

Insurers make money in two ways: (1) through underwriting, the process by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks and (2) by investing the premiums they collect from insured parties.

The most complicated aspect of the insurance business is the underwriting of policies. Using a wide assortment of data, insurers predict the likelihood that a claim will be made against their policies and price products accordingly. To this end, insurers use actuarial science to quantify the risks they are willing to assume and the premium they will charge to assume them. Data is analyzed to fairly accurately project the rate of future claims based on a given risk. Actuarial science uses statistics and probability to analyze the risks associated with the range of perils covered, and these scientific principles are used to determine an insurer's overall exposure. Upon termination of a given policy, the amount of premium collected and the investment gains thereon minus the amount paid out in claims is the insurer's underwriting profit on that policy. Of course, from the insurer's perspective, some policies are winners (i.e., the insurer pays out less in claims and expenses than it receives in premiums and investment income) and some are losers (i.e., the insurer pays out more in claims and expenses than it receives in premiums and investment income).

An insurer's underwriting performance is measured in its combined ratio. The loss ratio (incurred losses and loss-adjustment expenses divided by net earned premium) is added to the expense ratio (underwriting expenses divided by net premium written) to determine the company's combined ratio. The combined ratio is a reflection of the company's overall underwriting profitability. A combined ratio of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an underwriting loss.

Insurance companies also earn investment profits on “float”. “Float” or available reserve is the amount of money, at hand at any given moment, that an insurer has collected in insurance premiums but has not been paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest on them until claims are paid out.

In the United States, the underwriting loss of property and casualty insurance companies was $142.3 billion in the five years ending 2003. But overall profit for the same period was $68.4 billion, as the result of float. Some insurance industry insiders, most notably Hank Greenberg, do not believe that it is forever possible to sustain a profit from float without an underwriting profit as well, but this opinion is not universally held. Naturally, the “float” method is difficult to carry out in an economically depressed period. Bear markets do cause insurers to shift away from investments and to toughen up their underwriting standards. So a poor economy generally means high insurance premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the "underwriting" or insurance cycle.

Property and casualty insurers currently make the most money from their auto insurance line of business. Generally better statistics are available on auto losses and underwriting on this line of business has benefited greatly from advances in computing. Additionally, property losses in the United States, due to unpredictable natural catastrophes, have exacerbated this trend.

Insurers' business model

Underwriting and investing

The business model can be reduced to a simple equation: Profit = earned premium + investment income - incurred loss - underwriting expenses.

Claims

Indemnification

The technical definition of "indemnity" means to make whole again. There are two types of insurance contracts;

an "indemnity" policy and
a "pay on behalf" or "on behalf of"^[3] policy.

The difference is significant on paper, but rarely material in practice.

An "indemnity" policy will never pay claims until the insured has paid out of pocket to some third party; for example, a visitor to your home slips on a floor that you left wet and sues you for $10,000 and wins. Under an "indemnity" policy the homeowner would have to come up with the $10,000 to pay for the visitor's fall and then would be "indemnified" by the insurance carrier for the out of pocket costs (the $10,000)^[4].

Under the same situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the insured (the homeowner) would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language^[5].

An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, called an insurance 'policy'. Generally, an insurance contract includes, at a minimum, the following elements: the parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be "indemnified" against the loss covered in the policy.

When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a 'claim' against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the 'premium'. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims—in theory for a relatively few claimants—and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (i.e., reserves), the remaining margin is an insurer's profit.

Principles of insurance

Commercially insurable risks typically share seven common characteristics.^[1]

A large number of homogeneous exposure units. The vast majority of insurance policies are provided for individual members of very large classes. Automobile insurance, for example, covered about 175 million automobiles in the United States in 2004.^[2] The existence of a large number of homogeneous exposure units allows insurers to benefit from the so-called “law of large numbers,” which in effect states that as the number of exposure units increases, the actual results are increasingly likely to become close to expected results. There are exceptions to this criterion. Lloyd's of London is famous for insuring the life or health of actors, actresses and sports figures. Satellite Launch insurance covers events that are infrequent. Large commercial property policies may insure exceptional properties for which there are no ‘homogeneous’ exposure units. Despite failing on this criterion, many exposures like these are generally considered to be insurable.
Definite Loss. The event that gives rise to the loss that is subject to insurance should, at least in principle, take place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.
Accidental Loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be ‘pure,’ in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks, are generally not considered insurable.
Large Loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is little point in paying such costs unless the protection offered has real value to a buyer.
Affordable Premium. If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that anyone will buy insurance, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance. (See the U.S. Financial Accounting Standards Board standard number 113)
Calculable Loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim.
Limited risk of catastrophically large losses. The essential risk is often aggregation. If the same event can cause losses to numerous policyholders of the same insurer, the ability of that insurer to issue policies becomes constrained, not by factors surrounding the individual characteristics of a given policyholder, but by the factors surrounding the sum of all policyholders so exposed. Typically, insurers prefer to limit their exposure to a loss from a single event to some small portion of their capital base, on the order of 5 percent. Where the loss can be aggregated, or an individual policy could produce exceptionally large claims, the capital constraint will restrict an insurer's appetite for additional policyholders. The classic example is earthquake insurance, where the ability of an underwriter to issue a new policy depends on the number and size of the policies that it has already underwritten. Wind insurance in hurricane zones, particularly along coast lines, is another example of this phenomenon. In extreme cases, the aggregation can affect the entire industry, since the combined capital of insurers and reinsurers can be small compared to the needs of potential policyholders in areas exposed to aggregation risk. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer’s capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market. http://en.wikipedia.org/wiki/Insurance#Principles_of_insurance

Insurance

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed small loss to prevent a large, possibly devastating loss. An insurer is a company selling the insurance; an insured is the person or entity buying the insurance. The insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. from wikipedia http://en.wikipedia.org/wiki/Insurance

Business of Insurance