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Each state has a guaranty fund. Their purpose is to minimize the loss to their citizen policyholders when an insurance company becomes financially impaired or insolvent. Various studies reveal that the following are among the most common reasons for insurance company failure:

Sometimes the concepts of insurance and risk management can become clouded and confused. Something is often lost among the mechanics of arranging for coverage, what should be covered, how it should be covered and what costs are involved. Many fail to appreciate the real value of these concepts and may get to the point where they are considered merely expenses and barriers to other, more important objectives.

Insurance policy deductibles serve a couple of very important objectives. First, deductibles allow insurance companies to save money by not having to respond to frequently occurring, minor losses. In other words, a million one-dollar losses still add up to a million dollars. Second, deductibles create an incentive for insurance consumers to make the effort to eliminate or mitigate losses. Deductibles, as used in property insurance, can come in different forms such as the following:

There are a number of ways that Nature is capable of completely hammering us. Winds, floods, hurricanes, tornadoes, and earthquakes are commonly viewed as catastrophes. One source that is garnering greater attention is fire. Yes, fires are typically seen as losses that are localized, affecting individual properties. However, fires can occur on a catastrophic level when they consist of flames that spread very quickly over large areas.

The only thing that remains constant over time is change. All forms of insurance policies have to deal with change. Most of them have to deal with how coverage is provided, including responding to developments from significant court cases and changes needed by parties covered by policies. But now, in the U.S., policy forms are facing changes in format and language and these are reflected by actions in various U.S. states. Specifically, different states are providing rules and laws regarding policies being offered in an electronic format and/or in other languages, typically Spanish.

Anti-Concurrent Causation. Yes, the term actually means something, even though it looks and sounds like something from the mind of Dr. Seuss or from out of Alice in Wonderland. Anti-Concurrent Causation is a policy provision that bolsters certain exclusions.

In recent years, major storms in the U.S. have created massive amounts of damage to property, particularly along coastal areas. Hurricanes Katrina and Sandy continue to affect the lives and economies of entire regions. In the future, whether due to historic trends or the effect of global warming, forecasts indicate that similar, huge and powerful storms may become fairly common. That means more catastrophes that will injure or kill residents and cause economic havoc.

An Industry Only A Mother Can Love

Years pass, decades pass and surveys are taken. The results are largely the same. Most folks don’t care much for insurance. Insurance is still seen, at best, as a necessary economic evil. It’s still common for many insurance consumers to believe that, unless their policies have paid out on a significant loss, the premiums they’ve paid for coverage has been wasted.

Insurance policies are meant to protect against accidental and, typically, spontaneous events. Intentional or deliberate actions that cause damage or injury do not usually qualify for coverage. While an insured having control over an act which causes loss or injury usually is grounds for exclusion, there are exceptions such as:

If you live in desert or tropical climes, this article is not for you. However, if you own either a business or residential property in an area that experiences frigid, winter weather, this season adds a burden that needs your attention…..snow removal.