Articles

If you have ever read the insurance policy for your home or rental property, you probably ran head-first into the terms "hazard," "peril," or "cause of loss." These are events that are covered by your insurance. This three-part article explains these terms.

ID theft is a form of fraud that has been around for as long as there have been dishonest people. It is a high-profile problem because technology has created many more opportunities for this crime. Credit cards, funds transfer cards; ATMs, debit cards, smart cards, wireless payments, slipshod business practices and the Internet have all combined to make identity theft a major problem for individuals and businesses.

Insurance companies use different sources of information about a person that supplements an application. For auto coverage, motor vehicle reports are ordered. For home coverage, physical inspections may be needed. Another tool that is widely used for underwriting is credit-based scoring. While once controversial, this method has gained public acceptance. Its origin lies in the commercial use of credit histories.

Terrorism and military activity continues to be a major concern to us all; even affecting the, normally, mundane world of insurance. It would be natural for you to wonder about items such as:

• How do the events affect my insurance protection?
• Are war and terrorist acts the same?
• Exactly what is excluded by my policies?
• Do I have to buy special coverage to protect my belongings?

It is understandable to be concerned and confused over the above issues, especially since everyone is being inundated with news and advice.

An insurance policy is a promise to protect you against certain types of loss, but it can't follow-through unless it knows about a loss. Prompt notification is so important that it is a formal policy requirement. A policyholder that fails to meet this obligation could result in a claim being denied.

A policy typically requires you to do the following:

Whether an insurance policy covers your home, car, boat, life, airplane, jewelry or business, it is a legal contract that exchanges an insurance company’s obligation to pay for certain losses if the person covered by the policy pays a required premium. Yes, there other very important parts to an insurance contract, but the preceding states the essence of any insurance policy.

Blood may be thicker than water, but it is thinner than insurance contracts. An adult son or daughter may think that, when a loss happens, coverage is available from mom or dad's homeowners or auto policy. It usually isn't and finding this out after a loss makes matters much worse. Policies are typically clear. A relative is covered, but only if the relative is a full-time resident of the named insured's household. Even if a child lives next door, a parents' policy is not going to spread its coverage to take care of an adult child's belongings.

Liability protection, which is part of any typical car or home coverage, has two distinct obligations. First, it is designed to protect you against your legal obligation to pay others because you have hurt them and/or have damaged their property. Second, and equally as important, it provides a legal defense related to lawsuits filed against you. In other words, besides paying for claims or suits, a liability policy also pays for related legal costs and court fees.

Defense costs generally include:

The insurance business is complex and full of changes, so it's very important that persons who are active in the insurance sector maintain interested in continuing education.

An insurance policy is a contractual relationship. Paying a premium to an insurance company obligates it to provide coverage. However, disputes often arise over issues such as the following: