The Importance of Insurance

A lot of people are very much out of the know when it has to do with exactly what insurance is, and the real power you’re afforded when you utilize its capabilities. Well for all of you that would like a brief explanation on the ins and outs of how it works, and what it can do, this article is for you.

The easiest way to describe insurance in layman’s terms would have to be that it is a tool for owners to protect their assets from situations and occurrences beyond their control, with homes, it would be theft, vandalism or forces of nature. For vehicles it would be accidents or theft and for anything else, well the possibilities are endless. For any investor or owner it is one of the most powerful tools they can possess. It acts as a buffer between you and any potential damage done to your assets.

Insurance is a form of risk management, accrued through a third party in which you compensate some times biyearly, sometimes monthly depending on the piece of property the insurance policy is taken out on. Also, depending on the value of the property, the price can have a drastic difference. Whether it be a car, or a valuable piece of machinery or a home, this piece of property needs to be appraised, and through the appraisal of the property the insurance policy can be made, and paid depending on the value of the item.

Now, the transaction is between the owner and the agency, the agency guarantees to compensate, or in technical jargon, to indemnify the insured party, if ever something is to happen to the insured item, therefore giving the owner a reason to exchange a relatively small amount to the insurer. When the moneys are exchanged, the owner receives a contract from the insurer called an insurance policy.

To give you a clear picture of all the possibilities of insurable assets, I’ll include a few of the insurable goods and investments, it can reach to many lengths, and isn’t just constrained to the assets I am including here, but just for your information here are some things you can procure a policy on. There’s auto insurance policies, in which you insure your personal or business vehicles with. There’s home insurance, a way to keep from losing an expensive asset, your home. There’s also health insurance, this insurance policy protects you when you’re hurt or get sick, offsetting the cost of expensive doctors and emergency room visits. There’s also casualty insurance, now this protects you in case of accidents, you or someone else. Life insurance is a way to protect your family in case an untimely death happens. Another form of insurance is property insurance. Property insurance is a policy that compensates you in the even of fire, earthquake or something such as this. A very important policy available to home owners.

In summation, this isn’t a very comprehensive explanation of all the possibilities of insurance but a brief summation of the possibilities of it.

Insurance - Long Term Agreements

The insured is obliged to offer to renew at each renewal date on the same terms as applied in the immediately preceding period of insurance. The insurer's obligation is to grant the discount if the offer is accepted.

However, the insurer is not required to accept the renewal offer, can alter the premium from that previously charged and can alter the terms and conditions. The insured is not obliged to renew if the insurer alters the premium or terms, but he will have to reveal the effective declinature of the insurer to those insurers whom he approaches.

The long-term agreement is clearly biased in favour of the insurer, because a commitment to a specified rate of premium is worthless from the insured's point of view unless identical or near-identical terms continue to apply.

This point was recently made clear by several insurers' decisions to remove terrorist cover from their UK policies, despite the existence of long-term agreements under which the insureds felt secure that they had firm commitment for three years or more to the policy terms previously agreed.

This also demonstrates the fact that insurers will usually renew unless different external factors which may substantially affect the policy, such as an increase in terrorist activity, have occurred, or they realise that the risk was originally misunderstood or otherwise misrated. Usually insurers will continue the insurance, although they may feel obliged to increase the premium or reduce the risk by requiring the insured to comply with additional warranties.

If the insurer feels unable to renew, then the insured must reveal this fact to any other insurer whom he approaches, because technically his offer has been refused. Nevertheless, the long-term agreement is often used and its wording is critical.

Poorly drafted clauses can result in the agreement becoming a continuous contract cancellable after three years or a three year contract which is automatically renewed twice, instead of a one year contract capable of renewal.

Willis J. Watson is a freelance writer since 2006, living in United States and he writes about he enjoys the most...insurance policies. If you want to read more informations about Landlord Insurance Quote and also read more reviews about Commercial Insurance Quotes, you can check out his websites.

Insurance - Alteration Of Risk

Although it would appear contrary to common sense for the insured to be able to increase the risk with impunity after the contract of insurance has incepted, it is perfectly possible for him to do so provided that there has been no breach of the duty of good faith and that whatever facts were represented or warranted to the insurer as correct at the date of the contract were correct at that time.

The distinction that must be drawn is that between an alteration of the risk and an alteration of the subject matter insured. Where the subject matter of the contract is materially altered, then this effectively constitutes a substitution of a new risk, and the premise upon which the insurance was agreed is negated.

ARPI insurers often include a condition avoiding the policy following alteration of the risk unless their written approval is obtained, as follows:

"This policy shall be avoided with respect to any item in regard to which there is any alteration after the commencement of this insurance -

- by removal; or

- whereby the risk of Damage is increased; or

- whereby the Insured's interest ceases except by will or operation of law unless the alteration is admitted in writing by the Insurers, except that workmen are allowed in and about any of the premises for the purposes of carrying out minor alterations, decoration, repairs, general maintenance and the like."

Mere notification of an alteration is not usually adequate to discharge this obligation. Alternatively, the ARPI policy may provide for payment by the insured of an additional premium relating to the increase in value, or even make no charge until renewal provided the value of the additions or alterations to the premises is no more than 10 per cent of the sum insured.

Insurance Issues - Fire Protection Clause

However, any failure to maintain the appliances in good working order, which is caused by circumstances unknown to or beyond the control of the insured, does not invalidate the insurance.

Sprinkler installation clauses are usually separately itemised and again are utilised when a premium discount is given to the insured provided he installs and maintains a sprinkler installation in good working order.

The insured will be specifically required to test the sprinkler alarms weekly to ensure that the system works and that all relevant valves controlling the water supply are full)' open, to remedy any defect promptly, to give immediate notice to the insurer should the water supply be turned off or the sprinkler installation be rendered inoperative, to take all reasonable steps to prevent frost and other damage to the sprinkler system, to notify the insurer of any alterations and to allow the insurer access to the premises for the purposes of inspection.

Insurers may also require the insured to warrant that the maintenance of any fire protection systems is placed with an approved specialist contractor. Not only should this reduce the risk, but it will also give the insurer an attractive right of subrogated recovery if that contractor can be shown to have been in breach of his maintenance contract, and that breach contributed to the loss later sustained by the insured.

Frequently these terms are embodied in a warranty (allowing the insurer to rescind the contract from the date of breach) or a condition precedent (meaning that the insurer will not be liable if the condition is not fulfilled).

Insurance Definitions - Inherent Vice & Wear and Tear

Inherent vice
In the case of Chute v. North River Ins. Co. (1927) 172 Minn 13, it was held that an all risks policy did not cover the cracking of an opal which had an inherent tendency to disintegrate even though the policy covered breakage. Interestingly, the court said that it takes explicit language to extend the insurance beyond damage arising from extraneous causes so that it covers automatic deterioration alone. This suggests that the court considered such damage could be expressly covered although it would turn the agreement into a contract of warranty rather than insurance.

Wear and tear
Wear and tear covers damage caused by constant use or action. It has been applied to the discoloration of paintwork, although perhaps it would be more accurate to describe such discoloration as an inherent vice, and the chipping and marking of the paintwork as being wear and tear. It is most accurate to describe the damage as being caused by wear and tear where some form of action or motion (whether it be mechanical, human or natural) has created the damage - for example, the moving parts of machinery or carpet worn out by constant use.

The difficulty for the insurer, as always, is identifying whether the damage is caused by wear and tear or an accidental event. It may, for example, be quite natural for a particular piece of machinery gradually to lose its effectiveness through wear and tear, but if a piece of it breaks off and causes damage, is the proximate cause of that damage the wear and tear which is excluded or the event of the piece breaking off? Is the loss an inevitable result of the process or was it unexpected? It is possible to look at it from the perspective of proximate cause, namely was wear and tear the proximate cause or the breaking of the machinery part. There is little guidance that can be given as each case will depend very much upon its own facts, but generally where there has been an identifiable single event which has created the damage, it is unlikely that the court will find that the proximate cause is wear and tear.

Willis J. Watson is a freelance writer since 2006, living in United States and he writes about he enjoys the most...insurance policies. If you want to read more information about Landlord Insurance Quote and also read more reviews about Compare Building Insurance, you can check out his websites.

An Insurance Example - Application Of Deductibles - Part II

Any one of alternatives 2,3 or 4 could be chosen with the same result. It limits the number of deductibles to each separate container. The only reservation in respect of the fourth alternative (and possibly the second) is that the word "event" or "occurrence" in the English language usually denotes something that is circumscribed in time and space and, although it need not be instantaneous, it should have a defined beginning and an end. It is not usually equated with a process. However, it could be argued that the "occurrence" takes place when the faulty material first fails sufficiently to allow the air into the container. This could certainly be the favored interpretation if there was evidence to suggest that the seal in some instances did not fail or, alternatively, that the seals on individual containers cracked at different times.

Another example of the problems surrounding occurrence deductibles is where an assured purchases an additive to use in its production of cakes. The additive was produced elsewhere but, unfortunately, as a result of poor quality control, dirt and grease became incorporated in the additive. The additive was delivered to the assured in six separate batches. It was mixed with other ingredients on the assured's premises. Again, the deductible was defined by occurrence and, again, there are various alternatives as to what constituted the occurrence:

- the poor quality control which resulted in the impurities in the additive;

- the delivery of each separate batch of additive;

- on each occasion the additive was mixed into the other ingredients; or

- on each occasion a cake was manufactured.

Alternative number 3 is probably the most likely choice as the effective occurrence - or, to look at it from a causation viewpoint, the proximate cause.

Insurance Industry - Japan

During the heydays of the 80's and the first half of 90's, like rest of its economy, Japan's insurance industry was growing as a juggernaut. The sheer volume of premium income and asset formation, sometimes comparable with even the mightiest U.S.A. and the limitation of domestic investment opportunity, led Japanese insurance firms to look outwards for investment. The industry's position as a major international investor beginning in the 1980's brought it under the scanner of analysts around the world

The global insurance giants tried to set a foothold in the market, eyeing the gargantuan size of the market. But the restrictive nature of Japanese insurance laws led to intense, sometimes acrimonious, negotiations between Washington and Tokyo in the mid-1990s. The bilateral and multilateral agreements that resulted coincided with Japan's Big Bang financial reforms and deregulation.

Building on the outcome of the 1994 US-Japan insurance talks, a series of liberalization and deregulation measures has since been implemented. But the deregulation process was very slow, and more often than not, very selective in protecting the domestic companies interest and market share. Although the Japanese economy was comparable with its counterpart in USA in size, the very basis of efficient financial markets - the sound rules and regulations for a competitive economic environment - were conspicuously absent. And its institutional structure was different, too, from the rest of the developed countries.

The kieretsu structure - the corporate group with cross holdings in large number of companies in different industries - was a unique phenomenon in Japan. As a result, the necessary shareholder activism to force the companies to adopt optimal business strategy for the company was absent. Although initially touted as a model one in the days of Japan's prosperity, the vulnerability of this system became too evident when the bubble of the economic boom went burst in the nineties. Also working against Japan was its inability to keep pace with the software development elsewhere in the world. Software was the engine of growth in the world economy in the last decade, and countries lagging in this field faced the sagging economies of the nineties.

Japan, the world leader in the "brick and mortar" industries, surprisingly lagged far behind in the "New World" economy after the Internet revolution. Now Japan is calling the nineties a "lost decade" for its economy, which lost its sheen following 3 recessions in the last decade. Interest rates nose-dived to historic lows, to thwart the falling economy - in vain. For insurers, whose lifeline is the interest spread in their investment, this wreaked havoc. Quite a few large insurance companies went bankrupt in the face of "negative spread" and rising volume of non-performing assets. While Japanese insurers largely have escaped the scandals afflicting their brethren in the banking and securities industries, they are currently enduring unprecedented financial difficulties, including catastrophic bankruptcies.

Institutional Weaknesses

The Japanese market is a gigantic one, yet it is comprised of only a few companies. Unlike its USA counterpart, in which around two thousand companies are fiercely competing in the life segment, Japan's market is comprised of only twenty-nine companies classified as domestic and a handful of foreign entities. The same situation prevailed in the non-life sector with twenty-six domestic companies and thirty-one foreign firms offering their products. So, consumers have far fewer choices than their American counterparts in choosing their carrier. There is less variety also on the product side. Both the life and non-life insurers in Japan are characterized by "plain vanilla" offerings. This is more apparent in automobile insurance, where, until recently premiums were not permitted to reflect differential risk, such as, by gender, driving record etc. Drivers were classified in three age groups only for purposes of premium determination, whereas US rates long have reflected all these factors and others as well.

The demand varies for different types of products, too. Japanese insurance products are more savings-oriented. Similarly, although many Japanese life insurance companies offer a few limited kinds of variable life policies (in which benefits reflect the value of the underlying financial assets held by the insurance company, thereby exposing the insured to market risk), there are few takers for such policies. At ¥100=$1.00, Japanese variable life policies in force as of March 31, 1996 had a value of only $7.5 billion, representing a scant 0.08 percent of all life insurance. By contrast, American variable life policies in force as of 1995 were worth $2.7 trillion, roughly 5 percent of the total, with many options, such as variable universal life, available.

Japanese insurance companies in both parts of the industry have competed less than their American counterparts. In an environment where a few firms offer a limited number of products to a market in which new entry is closely regulated, implicit price coordination to restrain competition would be expected. However, factors peculiar to Japan further reduce rivalry.

A lack of both price competition and product differentiation implies that an insurance company can grab a firm's business and then keep it almost indefinitely. American analysts sometimes have noted that keiretsu (corporate group) ties are just such an excuse. A member of the Mitsubishi Group of companies, for example, ordinarily might shop around for the best deal on the hundreds or thousands of goods and services it buys. But in the case of non-life insurance, such comparative pricing would be futile, since all companies would offer much the same product at the same price. As a result, a Mitsubishi Group company, more often than not, gives business to Tokio Marine & Fire Insurance Co., Ltd., a member of the Mitsubishi keiretsu for decades.

On paper, life insurance premiums have been more flexible. However, the government's role looms large in this part of the industry as well — and in a way that affects the pricing of insurance products. The nation's postal system operates, in addition to its enormous savings system, the postal life insurance system popularly known as Kampo. Transactions for Kampo are conducted at the windows of thousands of post offices. As of March 1995, Kampo had 84.1 million policies outstanding, or roughly one per household, and nearly 10 percent of the life insurance market, as measured by policies in force.

Funds invested in Kampo mostly go into a huge fund called the Trust Fund, which, in turn, invests in several government financial institutions as well as numerous semipublic units that engage in a variety of activities associated with government, such as ports and highways. Although the Ministry of Posts and Telecommunications (MPT) has direct responsibility for Kampo, the Ministry of Finance runs the Trust Fund. Hence, theoretically MOF can exert influence over the returns Kampo is able to earn and, by extension, the premiums it is likely to charge.

Kampo has a number of characteristics that influence its interaction with the private sector. As a government-run institution, it inarguably is less efficient, raising its costs, rendering it noncompetitive, and implying a declining market share over time. However, since Kampo cannot fail, it has a high risk-tolerance that ultimately could be borne by taxpayers. This implies an expanding market share to the extent that this postal life insurance system is able to underprice its products. While the growth scenario presumably is what MPT prefers, MOF seemingly is just as interested in protecting the insurance companies under its wing from "excessive" competition.

The net effect of these conflicting incentives is that Kampo appears to restrain the premiums charged by insurers. If their prices go up excessively, then Kampo will capture additional share. In response, insurers may roll back premiums. Conversely, if returns on investments or greater efficiency reduce private-sector premiums relative to the underlying insurance, Kampo will lose market share unless it adjusts.

Japan's life insurance sector also lags behind its American counterpart in formulating inter-company cooperative approaches against the threats of anti-selection and fraudulent activities by individuals. Although the number of companies is far lower in Japan, distrust and disunity among them resulted in isolated approaches in dealing with these threats. In USA, the existence of sector sponsored entities like Medical Information Bureau (MIB) acts as a first line of defense against frauds and in turn saves the industry around $1 Billion a year in terms protective value and sentinel effect. Off late, major Japanese carriers are initiating approaches similar to formation of common data warehousing and data sharing.

Analysts often complain against insurance companies for their reluctance to adhere to prudent international norms regarding disclosure of their financial data to the investment community and their policyholders. This is particularly true because of the mutual characteristic of the companies as compared with their "public" counterpart in US. For example, Nissan Mutual Life Insurance Co., failed in 1997, generally reported net assets and profits in recent years, even though the company's president conceded after its failure that the firm had been insolvent for years.

Foreign Participation in Life Insurance

Since February 1973, when the American Life Insurance Company (ALICO) first went to Japan to participate in the market, fifteen foreign life insurance companies (with more than 50% foreign capital) are currently in business. However, companies like American Family Life (AFLAC) were initially permitted to operate only in the third sector, namely the Medical Supplement Area, like critical illness plans and cancer plans, which were not attractive to Japanese insurance companies. The mainstream life insurance business was kept out of reach of foreign carriers. However, the big turmoil in the industry in the late nineties left many of the domestic companies in deep financial trouble. In their scurry for protection, Japan allowed foreign companies to acquire the ailing ones and keep them afloat.

Foreign operators continue to enter the Japanese market. As one of the world's top two life insurance markets, Japan is considered to be as strategically important as North America and the European Union. Consolidation in the Japanese life market, facilitated by the collapse of domestic insurers and by ongoing deregulation, is providing global insurers with prime opportunities to expand their business in Japan. The total market share of foreign players is gradually increasing, with global insurers accounting for over 5% in terms of premium incomes at the end of fiscal 1999 and over 6% of individual business in force. These figures are roughly two times higher than those five years earlier.

In 2000, the AXA Group strengthened its base of operations in Japan through the acquisition of Nippon Dantai Life Insurance Co. Ltd, a second-tier domestic insurer with a weak financial profile. To this end, AXA formed the first holding company in the Japanese life sector. Aetna Life Insurance Co. followed suit, acquiring Heiwa Life Insurance Co., while Winterthur Group bought Nicos Life Insurance and Prudential UK bought Orico Life Insurance. Also newly active in the Japanese market are Hartford Life Insurance Co., a U.S.-based insurer well known for its variable insurance business, and France's Cardiff Vie Assurance.

In addition, Manulife Century, subsidiary of Manufacturers Life Insurance Company inherited the operations and assets of Daihyaku Mutual Life Insurance Co., which had failed in May 1999. In April 2001, AIG Life Insurance Co. assumed the operations of Chiyoda Life, and Prudential Life Insurance Co. Ltd. took over Kyoei Life. Both the Japanese companies filed for court protection last October.

The foreign entrants bring with them reputations as part of international insurance groups, supported by favorable global track records and strong financial capacity. They are also free of the negative spreads that have plagued Japanese insurers for a decade. Foreign players are better positioned to optimize business opportunities despite turmoil in the market. Although several large Japanese insurers still dominate the market in terms of share, the dynamics are changing as existing business blocks shift from the domestic insurers, including failed companies, to the newcomers in line with policyholders' flight to quality. The list of companies, with foreign participation, is the following:

INA Himawari Life
Prudential Life
Manulife Century Life

Skandia Life
GE Edison Life
Aoba Life

Aetna Heiwa Life
Nichidan Life
Zurich Life

ALICO Japan
American Family Life
AXA Nichidan Life

Prudential Life
ING Life
CARDIFF Assurance Vie

NICOS Life

Foreign insurers are expected to be able to prevail over their domestic rivals to some extent in terms of innovative products and distribution, where they can draw on broader experience in global insurance markets. One immediate challenge for the foreign insurers will be how to establish a large enough franchise in Japan so that they can leverage these competitive advantages.

What ails the life insurance industry?

Apart from its own operational inefficiency, Japan's life insurance sector is also a victim of government policies intended in part to rescue banks from financial distress. By keeping short-term interest rates low, the Bank of Japan encouraged in the mid-1990s a relatively wide spread between short-term rates and long-term rates. That benefited banks, which tend to pay short-term rates on their deposits and charge long-term rates on their loans.

The same policy, however, was detrimental to life insurance companies. Their customers had locked in relatively high rates on typically long-term investment-type insurance policies. The drop in interest rates generally meant that returns on insurers' assets fell. By late 1997 insurance company officials were reporting that guaranteed rates of return averaged 4 percent, while returns on a favored asset, long-term Japanese government bonds, hovered below 2 percent.

Insurance companies cannot make up for a negative spread even with increased volume. In FY 1996 they tried to get out of their dilemma by cutting yields on pension-type investments, only to witness a massive outflow of money under their management to competitors.

To add insult to injury, life insurance companies are shouldering part of the cost of cleaning up banks' non-performing asset mess. Beginning in 1990, the Finance Ministry permitted the issuance of subordinated debt made to order for banks. They can count any funds raised through such instruments as part of their capital, thereby making it easier than otherwise to meet capital/asset ratio requirements in place. This treatment arguably makes sense, inasmuch as holders of such debt, like equity holders, stand almost last in line in the event of bankruptcy.

Subordinated debt carries high rates of interest precisely because the risk of default is higher. In the early 1990s insurers, figuring bank defaults were next to impossible and tempted by the high returns available, lent large amounts to banks and other financial institutions on a subordinated basis. Smaller companies, perhaps out of eagerness to catch up with their larger counterparts, were especially big participants. Tokyo Mutual Life Insurance Co., which ranks 16th in Japan's life insurance industry on the basis of assets, had roughly 8 percent of its assets as subordinated debt as of March 31, 1997, while industry leader Nippon Life had only 3 percent.

The rest, of course, is history. Banks and securities companies, to which insurers also had lent, began to fail in the mid-1990s. The collapse of Sanyo Securities Co., Ltd. last fall was precipitated in part by the refusal of life insurance companies to roll over the brokerage firm's subordinated loans. Life insurers complained that they sometimes were not paid off even when the conditions of a bank failure implied that they should have been. For example, Meiji Life Insurance Co. reportedly had ¥35 billion ($291.7 million) outstanding in subordinated debt to Hokkaido Takushoku Bank, Ltd. when the bank collapsed in November. Even though the Hokkaido bank did have some good loans that were transferred to North Pacific Bank, Ltd., Meiji Life was not compensated from these assets. It apparently will have to write off the entire loan balance.

Subordinated debt is only part of the bad-debt story. Insurance companies had a role in nearly every large-scale, half-baked lending scheme that collapsed along with the bubble economy in the early 1990s. For example, they were lenders to jusen (housing finance companies) and had to share in the costly cleanup of that mess. Moreover, like banks, insurers counted on unrealized profits from their equity holdings to bail them out if they got into trouble. Smaller insurers of the bubble period bought such stock at relatively high prices, with the result that, at 1997's year-end depressed stock prices, all but two middle-tier (size rank 9 to 16) life insurance companies had unrealized net losses.

What Lies Ahead

Analysts have identified the following short-term challenges to the sector:

New market entrants;
Pressure on earnings;
Poor asset quality; and,
Capitalization.
The recent high-profile failures of several life insurance companies have turned up the pressure on life companies to address these challenges urgently and in recognizable ways.

The investment market has been even worse than expected. Interest rates have not risen from historically low levels. The Nikkei index has sagged since January 2001, and plummeted to 9 year low following recent terrorist attack on American soil. Unrealized gains used to provide some cushion for most insurers, but, depending on the insurers' reliance on unrealized gains, the volatility of retained earnings is now affecting capitalization levels and thus financial flexibility.

Table 1
Major Risks Facing Japanese Life Insurance Companies

Business risks
Financial risks

Weak Japanese economy
Strong earnings pressures

Lack of policyholder confidence, flight to quality
Low interest rates, exposure to domestic, overseas investment market fluctuations

Deregulation, mounting competition
Poor asset quality

Inadequate policyholders’ safety net
Weakened capitalization

Accelerating consolidation within life sector, with other financial sectors
Limited financial flexibility

Most analysts probably would agree that Japan's life insurers face problems of both solvency and liquidity. Heavy contractual obligations to policyholders, shrinking returns on assets, and little or no cushion from unrealized gains on stock portfolios combine to make the continued viability of some companies far from certain. Many others, while obviously solvent, face the risk that they will have to pay off uneasy policyholders earlier than they had planned. Either solvency or liquidity concerns raise the question as to how insurers will manage their assets. Another factor that has to be considered is Japan's aging population. As Mr. Yasuo Satoh, Program Manager of insurance industry, finance sector, IBM Japan, points out, "The industry needs to change the business model. They have to concentrate on life benefits rather than death benefits and they have to emphasize on Medical Supplement and long term care sectors as the overall population is aging."

Japanese life insurers are actively pursuing greater segmentation, while seeking to establish unique strategies both in traditional life and non-life businesses. In late 2000, the sector witnessed the emergence of several business partnerships and cross-border alliances involving large domestic life insurers. Anticipating increased market consolidation, heated competition, and full liberalization of third-sector businesses, the companies are reviewing their involvement through subsidiaries in the non-life side of the business, which was first allowed in 1996.

Over the long term, Japanese insurers are likely to forge business alliances based on demutualization. Widespread consolidation in Japan's financial markets over the near term will bring about an overhaul of the life insurance sector as well. Although domestic life insurers announced various business strategies in the latter half of 2000 to respond to this sea change, the actual benefit of various planned alliances for each insurer remains uncertain. Further market consolidation should add value for policyholders, at least, making available a wider range of products and services. To succeed, life insurers will have to be more sensitive to diverse customers needs, while at the same time establishing new business models to secure their earning base. Long term prospects seem to be good considering the high saving rate of Japanese population. But in the short term, Japan is poised to see a few more insurers succumb before the sector tightens its bottom line with sweeping reforms and prudent investment and disclosure norms.

Insurance Cancellation Letter

A letter requesting the termination of an insurance policy is called an insurance cancellation letter. You are free to cancel your insurance policy at any time during the policy period. Now, some might wonder why can't we cancel it over the phone or simply walk into the office of the insurance company and inform one of the executives to cancel it for you. To clear that doubt, one must understand that an insurance policy is a contract (remember signing the papers!) and to withdraw from the contract, a written notice of cancellation needs to be sent to the insurer. Cancellation letter sample for a home, life or a car insurance remains the same, only the body of the letter varies depending on the type of insurance.

A couple of very important things that one needs to remember before writing the letter. Firstly, only the policyholder reserves the right to cancel the policy which means that the policyholder is the only entity who can make a written request. The insurance policy cancellation letter must be addressed and signed by the policyholder only, or else the request will be rejected. Many a times, more than one person is insured under a policy, so do any of them reserve the right to cancel the insurance policy if need be? No, not everyone has the right to do so, so then who does in such cases? An example would make it more clear. If you and your sister are insured on the same policy and the policy is in your name, then it's you who holds the right to cancel the policy and not your sister. Secondly, you must go through the terms and conditions of your policy to determine when are you eligible to cancel the policy. Usually, you have up to 14 days from the policy effective date to cancel the insurance without penalty.

How to Write an Insurance Cancellation Letter?
Given below are the points to remember when writing an insurance cancellation request letter:

• Call the insurer to confirm the address where you need to mail the letter and double check the policy number.
• Inquire if you are entitled for a refund or if there is any balance that you owe on the policy based on the cancellation date. For any unused premiums that you already paid for, request a refund and if you owe a balance on the account then, enclose a check with the letter (mention the amount in the letter as well).
• Begin your letter with the date, address of the insurance company and the policy account number.
• Use polite but firm language to notify your insurance company of your decision to cancel the policy.
• Request a correspondence from the company confirming that the cancellation is accepted and has been put into effect.
• The insurer is no longer authorized to charge your bank or credit card for monthly premiums after the expiration date; this must be stated in the letter.

Insurance Cancellation Letter Template
You'll now see how simple letter writing is. Given below is an insurance cancellation letter template and it could be used for any sort of insurance cancellation.

Date Name of the Dept. Head/Cancellation Dept. Name of Insurance Company Company's Mailing Address City, State, Zip Code To, Name of the Person/Whom it May Concern Subject: Cancellation of Insurance (Policy No.) Mention that you are making a request to cancel the policy with effect from (date). Request for a confirmation of cancellation. Request for a refund of unused portion of the policy (if any). State that the insurer must stop charging the bank for any further payments. Thank the insurer for considering the request. Sincerely, (Your Signature) (Your Full Name) (Your Mailing Address) (City, State, Zip Code)

Insurance Cancellation Letter Sample
Given below is an insurance cancellation letter sample wherein a specific life insurance policy is being canceled.

14th September, 2010 Cancellation Department Alliance Insurance Inc. 1145 Vermont Avenue New Orleans LA 70152 To, Peter Mason Subject: Cancellation of Life Insurance Policy (Policy No. : 75892735) This is to inform you of my decision to cancel my life insurance policy with effect from 18th November, 2010. I would appreciate if you could send me a written confirmation within 30 days, confirming that the cancellation has been accepted and put into effect. I also request you to refund the unused portion of my policy premium and stop charging my bank account for payments of monthly premiums. Thank you and I hope you will consider this request and put it into effect as soon as possible. Sincerely, (Signature) Steve Watson 114 Salisbury Avenue Endicott Washington WA 99125

That was all about how to format and draft an insurance cancellation letter. Just make sure you use the letter etiquettes as this is a strictly formal letter. You could use the aforementioned insurance cancellation letter format and sample as a general format and alter the body of content if required, depending on the information you'd like give and take from the insurance company. With such a simplified format you shouldn't find yourself wasting or spending much time on writing an insurance cancellation letter.

Importance of Insurance

The insurance industry communicates through codes and check-off boxes. If there's no check-off box for you, you don't exist. - Jack Anderson

There are many times when we have to go through bad times, which may involve physical injuries or financial losses. And in such times, insurance seems to be our only hope. If you are not insured against uncertain risks, we have to bear the losses involved therein.

The Basic Concept of Insurance

In simple words, insurance is a concept which involves two parties; namely the insurer and the insured, also referred to as the policyholder. The insurer is the insurance company, whereas, the policyholder is the one who avails the service. In the insurance process, the policyholder has to pay certain amount of fees at prescribed time intervals to the insurance company. And in turn, the insurer agrees to bear the financial losses and expenses of the policyholder. Therefore, the risk of financial losses completely falls on the insurance company. The importance of insurance is considered in property loss in business, loss of life, substantial medical expenses, damage to automobiles in case of accidents, etc. Let us new get to know about the importance of insurance in general.

What is the Importance of Insurance?

Importance of Insurance in Business
If you are thinking about the importance of insurance in risk management, it protects the business from shutting down due to any kind of property loss. The losses can be incurred by any means of destruction such as fire, floods, storms, and many other natural calamities. Financial losses can be covered that may arise due to a major theft. In addition to the property losses, business insurance is significant as it also may cover a part of the amount to be paid in case of losing to a lawsuit. Business insurance is no doubt the best way to protect the organizations from major losses.

Importance of Life Insurance
In the working of a life insurance policy, you keep paying the premium periodically, and in case of your death, the insurer has to pay a particular amount to the nominees who are primarily your family members and those dependent on your financial support. The amount to be received by your family in case of your death depends on the policy you choose. Even if you are covered with a life insurance policy that is provided by your employer, it is always better to have your own policy. The life insurance policy of the employer may just include an amount of two times the annual pay, however, other policies may allow up to ten times the yearly pay.

Importance of Health Insurance
Health insurance plays a very important role in covering the prescribed medical expenses. In health insurance, you do have to pay the premium, for which the expenses on your medical bills are paid by the insurance company. Remember that the expenses will only be covered if the insured becomes ill due to the causes covered in the policy or in an accident. As the costs for medical treatments are rising, it is suggested to avail a good health insurance plan.

Importance of Auto Insurance
Auto insurance or car insurance is nothing but the cover for the damages incurred due to car accidents. Car insurance is the best option to stop worrying about the expenses to be paid in case of a car crash. In USA alone, more than 1200 road accidents take place. There are many types of car insurance policies which have a cover for specifics in the accidents. Some types of auto insurance policies may cover damages caused by vandalism, fire, robbery, and natural disasters. Before deciding on an auto insurance policy, understand all the aspects that are covered.

I hope by now you might have got a good idea about the importance of insurance. Health, life and car insurance are few types of insurance that will help you to be safe against the losses incurred in uncertain events.

Accident Insurance Settlement

Accident insurance also called personal accident insurance is a kind of insurance policy, wherein, the policy holder receives cash cover from an insurance company, in case he or she meets with an accident. Accident insurance helps you in paying your hospital bills and in case an unfortunate incident befalls, wherein, the policy holder dies, the family receives cash benefits. Even though death of your near and dear ones can't be replaced by money, it at least gives you something to fall back on in times of need. You need to claim your accident insurance settlement as soon as you possibly can, as different states and companies have varying rules of the time limit within which you need to apply.

In case you meet with a car accident and you are thinking of an accident insurance settlement, there are a few things that you need to do. You first need to report this unfortunate incident to your insurance company and file an auto insurance claim. Once your claim is submitted a claims adjuster will get in touch with you either by calling you, through email or through post. A claims adjuster is an employee of the insurance company and he or she is exclusively responsible for dealing with accident insurance claims. The person then goes through your policy, to decide the coverage types you are entitled to, coverage limits and deductibles applicable. More on auto insurance companies.

If the car insurance claim is not complicated, i.e., there is minimal damage and very little or no medical treatment required, the adjuster calculates the estimates and sends you a check. No doubt you will have to fill up some documents before you can en-cash your check, but you don't need to meet the claims adjuster in person. On the other hand if the claim is complicated i.e., the coverage of your policy is not enough or you disagree with the amount offered, it will take longer for the whole process to be complete.

Estimation of Insurance Claim
If the accident claim is highly complex, claim adjusters investigate the claim, so that, they can assess the liability of the insurance company. They would not only go through your policy, but they would also get in touch with accident witness, go through the report prepared by the police, consider the view of the other party in the accident, take pictures of the accident site and your vehicle and get a detailed report of your medical expenses. In case, you want to cover the medical bills, the adjuster would give you a medical authorization form, which you need to fill up and send back to the claims adjuster. Once all these are taken into consideration, the claims adjuster will make an estimate, after which a car accident insurance settlement offer is sent. You may like to know more on how to buy auto insurance.

Offer of Settlement
The accident insurance settlement offer would typically have a figure, which they will offer to pay. The amount may be equal to the amount you claimed or it could be a part of that. It is up to you to decide to accept it or not. Usually, the settlement offer which is sent for the first time is lower than the amount you claim. After all it is the job of the adjuster to save as much money as possible for the company and at the same time offer you a good insurance settlement for car accident. As such, he or she offers an amount which leaves room for negotiation.

Letter of Demand
In case, the accident insurance settlement offer is way below your expectation and you think that the amount you claimed is worth it, you can send him or her a letter of demand. In this letter, you can make a counter claim and give details of your proposal. The demand letter should give an outline of the damages you seek and should give a figure of your claim.

Negotiations
Once you have sent the letter of demand, you have started the negotiation process. Keep in mind, that the settlement offer made for the first time is always on the lower side, and think if the amount offered is reasonable or not. If you still accept the initial offer, it's settled, you will get a check or bank draft soon after.

On the other hand, if you don't agree with the amount offered, you can negotiate, either by your own or with the help of an attorney specializing in car accident claims. Here are some tips which you can use while negotiating:

• It's always better to hire an attorney if you can't come to an agreement after negotiating yourself and if you think the settlement amount is reasonable.
• If you still want to negotiate yourself, write a detailed letter to the insurance company giving them figures to support your claim. You can try to provide additional documents, which you may have not provided till now.
• Contact the higher ups in the hierarchy. Speak with the manager or supervisor.
• You may also ask for other methods of dispute resolution, be it arbitration or mediation.
• Alternatively, you can also take the help of the department of insurance.

If your attorney is also convinced that you are entitled to a higher amount; then you can file a lawsuit against the insurance company to claim your auto insurance.


Thus, if you meet with a car accident, accident insurance settlement is an excellent option available, whereby, you can get back all the money you spent while repairing your car. Moreover, in case of an unfortunate incident of death in a car crash, the family of a policy holder receives cash benefits. So, go ahead and buy an accident insurance, so that you always remain protected.

Accident Insurance Claims

Deciding on which insurance policy to purchase is not easy, as it involves going through numerous documents with umpteen inbuilt clauses in each of them . Most of us buy insurance policies based upon all frivolous reasons, such as if our friends have bought this policy so it must be good, or if the insurance advisor seems nice and friendly, we buy the policy. The problem arises when we are in an accident situation and have no clue about how to go about filing accident insurance claims. If you find yourself in such a situation, do not get disheartened. Here are some suggestions regarding insurance policies and claims, which are sure to help you.

Understand the Policy
When undertaking a car insurance policy, make sure that you have fully understood the extent of coverage your policy provides, in the case of an accident. Thoroughly read the insurance policy and ask either of your insurance broker and insurance agent, to explain to you any clause which you might not have been able to understand. This will ensure that if any untoward incident, like a car accident or injury happens, you know what and how much to claim for.

Things to Remember at the Accident Site
If you have had an accident, immediately contact your insurance agent. If possible, take the pictures of the accident or related injuries, as they might be handy for the accident insurance claims. Try to collect as many details about the accident as possible, such as taking down the contact details of the eyewitness, as all these things will help you when making car accident insurance claims. If there are other people or vehicles involved in the accident, make sure of taking down their insurance details too. Read more on cheap auto insurance.

Things to do Post the Accident
File for the accident insurance claims as soon as possible, without any delay after the accident. This is because of the fact that the insurance companies have a particular time period within which the insurer has to file the claims. If that time period expires, for any reason, the insurer will not be eligible for making any accident insurance claims.

Once the accident insurance claim procedure has begun, remember to make written notes of all the dealings that you might have with the insurance company in the future. Be very honest in your dealings with the insurance agents, as lying when making accident insurance claims can be considered very negative and you may be even denied the claims. Also, retain all the bills of expenses incurred on account of the accident, such as bills pertaining to the repair of the damaged vehicle or bills of the various medical treatments that have been undertaken on account of accident injuries.

In all accident cases, it is the the insurance companies which assesses the losses and accordingly makes an offer to the policy holder with regards to the value of his claim. However, be very careful while accepting such offers. This is because the insurance companies would want to settle the claims for a much lower amount. They often provide lesser estimates of the losses occurred than what have actually been incurred. So, it is suggested that you hire an accident lawyer and seek car accident insurance claims advice from him with regards to the settlement amount. A lawyer will assess whether the amount pertaining to the claims, offered by the insurance company is fair. You may seek his advice too while making a counter offer to the car insurance company with regards to your accident insurance claims. The lawyer will be in a better position to negotiate with the insurance company on your behalf.

These are a few guidelines which should be followed when filling for accident insurance claims. Another thing to remember when dealing with any insurance company is not to sign on any document which you have not completely understood, whether at the time of purchasing an insurance policy or when filing for accident insurance claims. Also, when the process of negotiation for accident insurance claims with an insurance company is going on, do not accept any payments from them which are referred to as full and final payments. Here's hoping that with the above information, you will be in a better position to deal with the insurance company and seek accident insurance claims.

What is Mortgage Insurance

In most cases it has been seen that, borrowers commit default when it comes to paying back the loan. Mortgage Insurance (MI) is also known as mortgage guarantee and it increases the risk between the lender and the insurance company. Loans with less than 20% equity requires mortgage insurance. For example, home buyers who have loans with less than 20% equity or are refinancing to more than 80% of their home's value, are liable to pay mortgage insurance. For varied needs and benefits, there are several types of mortgage insurance available for borrowers. After having a brief idea about what is mortgage insurance, let's have a look on other aspects of this process.

Why Mortgage Insurance?
Most people have this query as to what is the need of mortgage insurance and what is in it for them? Well, without having 20% equity, lenders would not be able or willing to accept the risk of lending loans to borrowers. Without paying the mortgage insurance, home owners will find it difficult to purchase a home or utilize their home equity for debt consolidation or make an addition to their home. So, what the borrowers consider as a disadvantage about paying the mortgage insurance, is actually the approval factor for their loans.

What is the Period for Payment?
Depending on the mortgage terms, the borrower would have an idea as to when he would have to stop paying the insurance. A conventional mortgage requires the borrower to pay the insurance for at least the first year of the loan period. Most people are able to pay off the balance below 80% of the original price. In such a case, the lender can be sent a written request so that the insurance can be removed. According to most contracts, if the balance gets to around 78%, the lenders can remove the mortgage insurance. Some mortgage lenders also allow the borrowers to pay for an appraisal. In case the mortgage amount decreases to 80% or less than the home's original value; in short if the home has risen in value to give you the twenty percent equity, then also the MI coverage can be canceled or taken off. Some loans are FHA (The federal agency in the Department of Housing and Urban Development that insures residential mortgages) guaranteed. For such loans, the borrowers are liable to pay a monthly mortgage insurance for at least five years of the loan. When the loan balance goes down to 80% of the original purchase price, the mortgage can be removed.

Mortgage insurance is not something that should be seen as an unnecessary cost to home buyers. Infact, this very thing lets people become homeowners sooner. It also increases their buying power. First time home buyers can afford the price using a low down payment or it can also help them to purchase a costlier home sooner. Due to mortgage insurance, repeat home buyers can put less money down. This is an important tax benefit, as they will have more deductible interest to claim and can enjoy other benefits. Requirements and restrictions may vary in a mortgage insurance. The above description is just a simplified and brief explanation of what is mortgage insurance? It is related to several underlying factors that would be cumbersome to be put down in 'black and white', and then get a clear understanding from it. So the smartest way to get a pocket full of information about this process is from mortgage loans servicer.

General Liability Insurance Coverage

Understanding Commercial General Liability Insurance

A company, that purchases Commercial General Liability Insurance, is covered for the cost of defending and settling real or fraudulent claims pertaining to bodily injury, that may be faced by a customer at the place of business or injuries sustained by employees at the client's workplace; property damages; personal injury as a result of defamation; operations liability and advertising injury up to a maximum amount as stated in the contract. Commercial General Liability Insurance is the most basic business insurance. As a rule, the deductible, or the percentage of the insurance claim that has to be borne by the insured, and the premium, that is paid for the coverage provided by the insurance company, are inversely related. Companies also purchase umbrella liability to cover payments exceeding the General Liability Insurance Policy limits.

General Liability and Property Insurance for Businesses

Commercial General Liability Insurance (CGL) is bundled with Property Insurance and sold as a package that is referred to as the Business Owner's Policy (BOP). Property Insurance protects the assets of the business against accidents that may occur on or off business premises. The main disadvantage of purchasing a Business Owner's Policy, is that the coverage limits for commercial general liability and property are low. This is because the insurance company aims at providing comprehensive coverage at a reasonable cost. Hence, it's best if firms purchase Commercial General Liability Insurance coverage as a separate package. Although, for a small business, General Liability Insurance can be purchased as a part of a broader package.

Commercial General Liability Insurance provides coverage for the following: the cost of medical care claimed by the injured party; restitution for death and loss of services; compensation for physical damage to other people's property and loss of use of the same; compensation to consumers for loss on account of using company manufactured products and retribution for loss due to services rendered by the company. Contractual liability coverage for any liability is assumed by entering into contracts like lease agreements for the building, elevator maintenance agreements or indemnity agreements. It also provides protection to business firms in case they are held liable for liquor-related accidents as long as the company is not engaged in liquor manufacturing or distributing business. Coverage for hired and non-owned auto, the cost of legal defense; coverage for advertising injuries as a result of publishing inaccurate information; protection for violation of someone's right to privacy and infringing on another company's copyright, title or slogan is also provided by General Liability Insurance coverage.

General Liability and Property Insurance does not protect the business from professional errors or negligence that is covered under professional liability insurance or Errors & Omissions (E&O) Liability Insurance policy. Professionals as well as companies providing services to clients, in lieu of a fee, should purchase this policy since it protects the insured parties from legal hassles such as claims arising from negligence or omissions relating to the discharge of professional duties or the rendering of services. The coverage for this policy starts at $1 million. The insurance deductible, that is defined as the money required to be paid by the insured, per claim, works out to $1,000 to $25,000. The deductible is determined on the basis of the premium that is paid in exchange for the coverage provided by the insurance policy. As mentioned earlier, a lower deductible would mean a higher premium since the insurance company is required to pay a greater portion of the claim.

Every company should try and protect itself from legal hassles that may arise in the course of operations by availing insurance that is appropriate for the business. This is especially true if a business is operating in a state that has a history of awarding huge compensation for damages, to consumers and employees, for which the company is held liable.

Types of Insurance

Life, today, is full of risks and adventures on every step. As man has started playing with nature, natural disasters have frequented. The speedy and stressful life in this competitive world of today has become a cause of the decline in the overall health of individuals. Loss of life and property has become a commonly occurring incidence today. With the changing times, the need of risk management has increased, thus elevating the requirement for the insurance of life and property and other needful resources.

Insurance is an effective way of risk management and is defined as an equitable transfer of the risk of a loss in exchange of a premium. Every quantifiable risk can be insured. Here is a look at the different types of insurance.

Basic Types of Insurance

Health: Health insurance policies cover the costs of medical treatments for various types of diseases that threaten human life. Disability insurance is considered as a different type of insurance that aims at providing financial support to the physically disabled individuals in society. Casualty insurance policies cover accidents.

Life: Life is priceless! However, there are measures to ‘insure’ it. Life insurance policies provide a monetary benefit to the descendants of the deceased individual. They also aim at providing the insured person’s family with burial and funeral expenses.

Property: Property insurance insures property, thus protecting it against threats like fire, theft or damage due to harsh weather conditions.

Credit: Credit insurance policies are meant for the repayment of loans in case of death, disability or unemployment of the borrower.

Take a look at the list of the different types of insurance.

Accidental death and dismemberment insurance: This insurance covers death and injury that results from accidents. Death that results from illness, suicide or natural reasons is not covered under this type of insurance.

Automobile insurance: Vehicle insurance as it is also called, is an insurance that covers the risk borne in traffic accidents and liabilities that can result from accidents.

• Guaranteed Asset Protection insurance (GAP) comes supplemented with automobile insurance policies. The losses that vehicle insurance policies do not cover are handled by the accompanying GAP insurances.
• Public auto insurance is an automobile insurance scheme owned by the government. It predominantly operates in British Colombia, Manitoba and Quebec.

Boiler insurance: It indemnifies the insured against the expenses that may have to be borne for the repair or replacement of home boilers as well as the plumbing, heating and electric systems of the household.

Bond insurance: In this insurance service, the bond issuers can pay the premiums to a third party in case of failure on part of the issuer. In such cases, the third party provides the interest and capital repayments prescribed by the bond.

Business overhead expense disability insurance: The person who is insured by this type of insurance manages the risk of his/her disability by arranging the insurance authority to bear the business overhead expenses in case of the business entrepreneur’s disability. Business insurance is an excellent way to insure a business.

Casualty insurance: It covers the loss that results from an accident. It may bear the expenses of the vehicle loss or the costs incurred in restoring the damages resulting from accident. Casualty insurance policies do not cover life, health and property losses.

Catastrophe bond: These bonds are meant to transfer the responsibility of a certain set of risks from the shoulders of the sponsors to the investors.

Chargeback insurance: This insurance is meant for the business merchants who accept credit cards. When accepting credit cards for purchases involving large money transactions, merchants risk their business. Fraudulent behavior on part of the credit cardholder or the use of unauthorized or invalid credit cards puts the merchant’s money at stake. Chargeback insurance policies protect the merchants from these risks.

Contents insurance: It covers the loss or damage to the personal possessions of an individual while they are located in one’s home. The insurance might also cover the possessions kept in the exterior of one’s household, such as things kept in one’s garden area. These insurance policies find utility for people renting houses. It is generally purchased in collaboration with a home insurance policy.

Corporate-owned life insurance: The employing companies hold this insurance for covering the sudden losses of their employees. Originally, these insurances were held by companies to cover the risk of the death of their key employees. This insurance insures the cost incurred on the recruitment and training arrangements that have to be made in case of an unexpected death of any of the company employees.

Credit insurance: Credit insurance policies are designed to compensate for credit risks in business.

Crime insurance: Employee thefts and offenses causing financial losses to a business are covered under crime insurance policies. Crime insurance can be used to cover the damage caused by crimes such as murders and rapes.

Critical illness insurance: Critical illness insurance policies prescribe a list of diseases to be grouped under the class of critical ones. The policyholders are insured in case of being afflicted by any of the diseases enlisted as critical in the policy. The policy may be structured to provide the insured individual with regular payments or a lump sum amount on being diagnosed for one of the critical illnesses.

Crop insurance: Agricultural producers purchase this insurance to protect themselves against a loss or damage to their crops on account of natural disasters or revenue losses.

Dental insurance: It is categorized under the class of health insurances and is meant to pay the costs incurred on dental care. Considering the increasingly expensive dental treatments, dental insurance policies form an important section of health insurances today.

Deposit insurance: These insurances protect the deposits in event of bank runs. A bank run is said to occur when a large number of customers of a bank withdraw their deposits from a bank. Deposit insurance aims at covering the risk of running into this kind of financial crisis.

Disability insurance: Disability insurance covers the insured individual’s earnings against the risk that a disability can make working impossible for him/her. Disability insurance policies are arrangements to secure one’s future in case the individual is unable to work and earn. Learn about Short Term Disability Insurance.

Earthquake insurance: It is a type of property insurance, which covers the risks borne by houses on account of frequently occurring earthquakes. It insures the damage caused to property as a result of earthquakes. It is widely used in Japan and California.

Expatriate insurance: This insurance covers the losses that one may have to suffer from, while residing and working in a non-native country. An expatriate insurance policy has to be purchased before one relocates to another country. It covers the period of stay in the non-native country.

Fidelity bond: These bonds serve as a protection for businesses from the fraudulent behaviors of their employees.

Flood insurance: It covers the damages to property that result from floods. Around 20% of the households in the United States are insured for flood, as they are susceptible to them.

General insurance: General insurance schemes include policies for automobiles, homeowners and precisely any insurance that does not fall under life insurance. General insurance policies cover losses resulting from certain financial events.

Group Insurance: It covers the risks borne by a group of people. Group insurance policies are generally purchased for a group of members of a society or a group of professionals in an organization. It is less expensive than individual insurance policies.

Health insurance: The expenses incurred on treating physical disabilities, long-term nursing and custodial care are covered under health insurance schemes. Health insurance policies insure the payments for medical care.

Home insurance: It insures the losses incurred on restoring the damages resulting from hazards to households. Home insurance policies cover the losses of the personal possessions of the homeowners. 

Injury cover: It includes the compensations for work-related injuries. It can be used along with health insurance, workers’ compensation or personal injury services.

Keyman insurance: Keyman insurance policy is the one purchased by a businessman to secure the potential losses of his resources and cover the incapacity or death of a key employee. Keyman insurance protects you from the greatest of business risks.

Landlords insurance: It is designed to cover the property owners from threats like fire, earthquake, and floods as also thefts that are potential dangers to their property.

Lenders mortgage insurance: It compensates for the losses incurred by the lender when the mortgager is unable to repay the loan or when the lender in unable to compensate for the lent amount even after sale of the mortgaged property. Know all about private mortgage insurance.

Liability insurance: It can be called a part of the general insurance system that deals with risk financing. It typically involves the payment to the third party suffering from a loss and not to the insured party.

Life insurance: Under life insurance schemes, the policyholder and the policy owner contract according to which the insurer is liable to pay a certain amount of money in case of death or terminal illness of the insured individual.

• Whole life insurance is a life insurance policy that remains in force throughout the life of the insured individual and requires him/her to pay premiums every year. More Whole Life Insurance explanation
• Pension term insurance is a type of life insurance that is popular is the United Kingdom. After 2006, when the policyholders were offered tax benefits on the premiums they paid, pension term insurance policies gained wide popularity.
• Permanent life insurance refers to a life insurance policy, which is for the life of the insured individual.
• Term life insurance policy is purchased for a specific period and the policy amount is paid to the beneficiary in event of the death of the insured during the specific period.
• Return of premium life insurance is a kind of term life insurance policy wherein the premiums are returned after a stipulated period of time in case the policyholder does not use the coverage during that period.
• Stranger originated life insurance is initiated by a person who bears no relation with the person for whom the policy is being taken out. The stranger offers to pay the premiums against the insured person’s life.
• Universal life insurance is a permanent life insurance that is based on cash value. It can be used for tax benefits. Variable Universal life insurance is a similar insurance scheme that builds cash value. It allows the policyholder to invest in different accounts.

Loan protection insurance: It secures an individual in terms of his/her loan payments in case the individual has to go through a period of unemployment during the time of the payment of his dues.

Locked funds insurance: Banks and governments issue locked fund insurance policies in collaboration with each other. These policies protect public funds from being manipulated by unauthorized parties.

Long-term care insurance: It aims at providing the insured individuals for a long-term care and covers the expenses, which are not covered by health insurance policies or Medicare.

Marine insurance: It covers the losses incurred in damage to ships, terminals and any property that is transported through cargo. Inland marine insurance, which is closely associated with marine insurance, secures the moving or movable property of an individual.

Medigap: It comprises of private supplemental health insurance plans, which are purchased by people of the United States. It covers the expenses beyond those borne by Medicare.

Mortgage life insurance: This covers repayment mortgage, referring to a mortgage in which monthly repayments imply the repayment of the capital along with the accumulated interest.

Mutual insurance: The mutual insurance policyholders have a certain amount of ownership rights in the organization. Those protected by the insurance possess the rights to elect the organization management and take part in the distribution of net assets in case the organization stops doing business.

No-fault insurance: In this form of an insurance contract, the insurance covers the losses by the insurance company irrespective of the party responsible for the losses.

Parametric insurance: Parametric insurance policies define a contract between the policyholder and the issuer according to which the issuer agrees to pay a certain amount of money to the insured in the event of a natural disaster.

Payment protection insurance: These policies insure the repayment of debts in case the insured suffers from unemployment on account of an accident or illness and fails to repay his/her loan.

Pet insurance: Pet insurance policies cover the costs incurred in treating a pet’s illness. Some of the pet insurance policies also cover the losses borne by the pet owner in event of the death or the theft of the pet.

Political risk insurance: Political risk insurance policies cover the political risks to businesses. Political violence like riots, terrorism and war and governmental arrogation are classified as political risks to business.

Pre-paid legal services: It refers to a scheme wherein a person pays a monthly fee and is entitled to access a number of legal services on call. Individuals are charged for certain services like monthly legal advice and consultation. As the insurance commission looks after the pre-paid legal services, they are classified under the different types of insurance.

Professional indemnity insurance: It secures the policyholder against losses incurred as a result of a negligent act in the policyholder’s business. Professional indemnity insurance also covers the loss that can result from claims for the policyholder’s breach of duty and also indemnifies the policyholder against the policyholder’s civil liability. It is also known as professional liability insurance.

Property insurance: It indemnifies the policyholder against the risks to his/her property. Insurances covering fire, flood and earthquake threats as also home insurances are special forms of property insurance.

Protection and indemnity insurance: It is a marine insurance that protects the insured from third party liabilities arising from owning ships.

Reinsurance: Reinsurance is not exactly a type of insurance but is rather a means by which insurance companies safeguard themselves from the risk of losses with other insurance companies. Reinsurers provide the insurance companies with insurance. Even insurances need to be insured!

Rent guarantee: Landlord rent guarantee insurance and legal assistance insurance together cover the costs incurred by the landlords in recovering their rent or in taking legal action against the tenants failing to pay their rents.

Self-insurance: It is a way of risk management wherein a certain amount of money is set aside to safeguard one’s future. Self-insurance involves setting aside an amount that can cover for the unexpected losses in future.

• Self-funded health care refers to a self-insurance that is provided by an employer to his/her employees in assumption of a risk in paying their claims for benefits.

Terrorism insurance: The potential looses that can be caused as a result of terrorist activities are covered under terrorism insurance. Terrorist attacks are almost unpredictable and perilous. This has led the people in some parts of the world to secure themselves against terrorism.

Title insurance in the United States: It indemnifies a person against financial losses that may result from defects in title to real property. The losses incurred from invalid mortgages are also covered under title insurance policies. Title insurance is a type of insurance that protects the owner or lender. Commonly associated with closing costs on the settlement of a house or piece of property, real estate title insurance consists of two distinct phases. During the first phase, the title company works to define the boundaries of the real estate being purchased and also conducts a search that determines the status of the property in terms of unpaid real estate taxes and other claims. In the second phase, during the term of the mortgage, the title company protects both the owner and the lender from financial loss resulting from problems with the title that may arise due to unexpected property claims that are not excluded by the policy.

Travel insurance: Long journeys are accompanied by a certain amount of risk. The insurance purchased to compensate for the losses during a travel is known as travel insurance. It covers medical expenses and financial losses and applies to journeys within one’s country and abroad. Read info on Traveler's Insurance and Trip Cancellation Insurance.

Vision insurance: On lines similar to dental insurance, vision insurance covers the expenses one may have to bear in eye treatments and services given by ophthalmologists.

Wage insurance: This is a proposed form of insurance, which is intended to provide workers with compensation in case they are compelled to move to jobs with lower salaries.

War risk insurance: War risk insurance policies cover the losses one may have to incur in the event of war. The war risks include invasion, rebellion, hijacking and may also include the threats from weapons that cause massive destruction of life and property.

Workers’ compensation: It is intended to provide the company employees with monetary compensations in case they are injured at the workplace. Workers’ compensation can be given in the form of reimbursement of medical bills, weekly wages or benefits to the employee’s dependents.

Insurance is after all an attempt to compensate for grave losses in and of life. But can anything be ‘insured’ in the real sense? Can compensations heal the grief of loss? Surely, compensations cannot substitute life.

How to Get an Insurance Quote Without Personal Information

When you just want to get quotes for insurance, sometimes you don't want to give out more personal information than what is required of you. This is why it is important to know the tricks in how to get an insurance quote without personal information.

The main reason behind why people do not like to give out personal information online is that it can possibly be intercepted by third parties. Once this happens, personal information can be used for purposes of defrauding or committing online crimes.

However, with the comfort, efficiency and ease of online transactions, more and more people are attracted to do their transactions online, such as getting insurance quotes. With this in mind, it is important that they follow these words of advice to help them get the quotes they need without revealing too much personal data.

The internet is filled with a wealth of info and services you can avail of for your insurance needs. Hundreds of insurance companies are competing online and make their service of providing quotes to people online a major service.

Get quotes from the insurance companies that you are interested in, but don't get detailed quotes that would require you to share more detailed data like your social security number or your license number.

You will find that the general quotes that good insurance companies will give you will only require you to share basic data about yourself like your contact numbers, your name, some basic automobile facts, your date of birth, and maybe your email address.

Always be sure that you are getting quotes from insurance companies based in your state. Choosing these companies would make the quotes more relevant to your state rules and regulations.

Generally, it is just important to note that a legitimate insurance company that releases an insurance quote without personal information will not ask for social security numbers of license numbers. These are things that they will ask if you want a more detailed quotation that specifically addresses your personal situation.

How Does the General Insurance Code of Practice Work in Australia?

The new general insurance code of practice came into force on 18 July 2006, replacing the 1995 code. The new general insurance code aims to raise the standards of insurers in consumer areas like training of employees and service providers, buying insurance, financial hardship, insurance claims and complaints handling. There was a life insurance code of practice with the same names but it has been superseded by the changes to the corporations legislation brought about by the financial services reform legislation which promote confidence and inform decision-making by consumers.

The general insurance code of practice parallels the code of banking practice and addresses many of the same issues: improve product disclosure policy documentation, so that consumers can make informed choices. Improved standards of service including minimum standards on claims handling procedures. Dispute resolution according to the code and the financial services reform legislation requiring each insurance have an internal dispute resolution system in place, and they require insurer which cannot settle a complaint to refer it to a recognised external dispute resolution provider.

If you have any further questions you can contact David Coleman who is a lawyer based in Sydney Australia with over 10 years experience in the legal industry.

The Changing Face of Nursery Insurance

The world in which our children grow up in and we do business in has changed beyond belief in what seems like an extremely short space of time. Less than a decade ago, if the owner or manager of a children's day nursery wanted to purchase nursery insurance for their setting, they would have either walked up and down their local high street to visit their friendly insurance broker who advertised the fact that they offered insurance quotations totally free of charge.

Alternatively, if you were the person responsible for buying insurance for your nursery, you could have searched through their local Yellow Pages where a handful of insurance brokers in your area would offer their services to all types of business without any mention at all of nurseries and your specific and quite unique needs.

But now, as we are well over 10 years into a new century, nursery owners are all now faced with a multitude of options when it comes to purchasing nursery insurance. Perhaps the most significant change has been the way in which the internet can now be used to source insurance providers. A simple search for a phrase such as children's day nursery insurance using a search engine like Google, MSN or Yahoo will produce a list of insurance brokers and providers of insurance for nurseries.

Another dramatic change in the way day nursery insurance is purchased is that insurance providers will now approach you directly rather than the other way around. The historic route of walking up and down the high street has now been replaced with receiving letters and phone calls from insurance brokers all offering their services. And whilst this new approach could save your nursery time, it can also sometimes be an inconvenience.

The last way in which the purchase of nursery insurance has changed is that where you and the insurance providers is based is seemingly no longer a barrier. Traditionally a nursery would deal with a broker who was local to them. Whilst for many nurseries this is still the preferred option, you only have to look in your local Yellow Pages Insurance section to discover that few of the companies advertising within it are now actually local.

For nurseries who want to combine a personal service that the traditional local broker offered with the most competitive of premiums, there is still a chance to do both as some nursery insurance brokers will offer both and help answer any questions you have. From helping you in the event of a loss occurring and you having to make a claim to helping you secure the best value nursery insurance.

The way in which nurseries get a nursery insurance quote or purchase a policy may have changed but fundamentally, the needs of a nursery has not. You want great service, you want cover tailored to your specialist needs and you want great value.

Do not let the changing face of nursery insurance distract you from these key points as an expert and friendly service combined with the right levels of cover and premium are still available.

The Right to Control Proceedings - Dominus Litis - Part II

In Commercial Union Assurance Co. v. Lister (1874) 9 Ch App 483 the owner of a building insured it against fire, but unfortunately not to its full value. Following a fire caused by the negligence of a third party, the court stated that the presence of any uninsured loss entitled the owner to conduct the action without any interference from insurers:

"[The insurers] assert that in such a case the insured person, though entitled to bring an action for the loss he has sustained, is not entitled to be master of that action; and they assert that, though he is bringing it bona fide, and is acting bona fide, he is not entitled to compromise that action, or to do anything else, without their assent.

I can find no ground whatever for such a suggestion. He is entitled to bring an action against the corporation for the injury to himself. He is entitled and is bound, and has agreed as there is one cause of action, to bring the action for the whole loss to himself, including that part of the loss against which he is indemnified by the insurance company."

However, where different types of loss are suffered by the insured, e.g. property damage and personal injury, which give rise to two separate causes of action, then two sets of proceedings could be instituted against the party responsible, with the insurer in charge of one and the insured in charge of the other.

Willis J. Watson is a freelance writer since 2006, living in United States and he writes about he enjoys the most...insurance policies. If you want to read more informations about Commercial Insurance Agents, you can check out his websites.

Insurance

Insurance Definition and Terminology
Insurance can be defined an assurance of a compensation for specific losses in the future, against a set of payments called insurance premiums. Insurance, regardless of the specific type, is an essential economic tool meant to reduce financial risks and to ensure that financial losses are kept to a minimum. Insurance policies are the contract agreements done between the insurance companies and the insured subject. Below you'll find glossary of insurance terms where you can know more about insurance terminology and different types of insurance.

Insurance Industry
Insurance as a business originated with the great civilizations of mankind, when merchants would ship orders in several sea-faring vessels with the hope of minimizing losses in the event of a shipwreck. Then it was thought of only in the aftermath of great tragedy, as in the 1666 fire in London. Extraordinary disasters, such as London's Great Fire, gave birth to some insurance types such as property, casualty, and fire insurance. Insurance became popular in the middle of the 19th century, only two hundred years after its small beginning in England.

Since then the industry has become much more complex and benefits more valuable. However, the obvious benefit of insurance is still based on the basic principle that losses should be kept to a minimum. Modern insurance entails payments to an insurance company in exchange for the promise to pay for damages, health procedures, etc. in the event of an accident or basic need. In today’s culture, insurance coverage is considered a necessity. Its presence in a 21st century industry is proven by the massive intake of yearly premiums totaling sums in the billions, and its holdings valued in the trillions.

In modern times, the evolution of the insurance industry has transformed most of the world's view on disaster prevention and protection. Life and health insurance have experienced the biggest growths for the insurance business in the past century. The insurance industry has grown to become a veritable institution, with thousands of insurance companies worldwide collecting billions in premiums each year and holding assets with an estimated value of trillions. Among the various insurance companies are those that offer general insurance coverage, including health, automobile, homeowners, life and disability, etc., and those who specialize in one or more of the aforementioned types of insurance. With the deregulation of the banking and brokerage industries, large conglomerates have been formed that offer every imaginable financial service. It is now common for these large corporations to offer a variety of insurance benefit plans and services.