October 18th, 2009 by DieWolf

October 15th, 2009 by DieWolf

October 15th, 2009 by DieWolf

October 11th, 2009 by DieWolf

The seven Principles of insurance state the different groups that are insurable. They are classified both for the sake of organization, and so that insurance companies can decide which area of expertise they would like to specialize in as an organization.

The first of the Principles of insurance is dealing with a large amount of the same type of policy. This is commonly thought of in auto insurance. Over a hundred million drivers in the United States alone carry auto insurance, and they do so because the companies have discovered the way to balance the risk with the proper funds.

Five of the seven principles involve loss categories. Definite loss deals with loss that is a guarantee, such as life insurance. Accidental loss would be associated with renter’s or fire insurance. There is not a guarantee of theft or fire, so each individual case is evaluated before coverage is assigned. Large loss deals with coverages of items that are of great value to the buyer. Great care must be placed in these policies, as the amount of capital needed to replenish these losses may be great.

The fifth loss principle deals with limiting the amount of loss from a catastrophe, such as an act of God. Acts of God include floods, hurricanes, and many other meteorological events. The insurance company takes care to write into the policy that a total amount of capital can be distributed based on the number of policy holders affected. For instance, if a thousand people with the same coverage are hit by a tornado, the company can limit their risk through this principle.

The final principle is the affordable premium. A balance must be struck between the client and the company as to what is a sensible amount to pay for the term of the policy. This is crucial to the success of the company, and is assessed at the outlook of the policy.

These Principles of insurance are the foundation of a healthy insurance group. Using them is the key to offering smart insurance and making a sensible profit.

October 9th, 2009 by DieWolf

If you reside in an area prone to earthquakes, have equity in your home, and you couldn’t afford to rebuild it on your own, buying earthquake insurances makes financial sense. If you can afford it, the best way to protect the investment in your home is to retrofit your home and buy earthquake insurance. The more steps you take to retrofit and improve your home’s ability to resist the impact of an earthquake, the less likely you are to face expensive repairs. Retrofitting your home includes, bracing your water heater, installing “sheer” panels and bolting your foundation. If you decide that your home needs protection beyond retrofitting, then shopping for earthquake insurance is your next step. Several key factors you should consider and research as to whether you buy insurance or not are:

The amount of equity you have in your home.
Your current proximity to a fault zone.
The construction and age of your current home.

The satisfaction ratings and financial strength of the insurance companies that will potentially sell you an earthquake insurance policy Earthquake insurance policies are usually accompanied by high deductibles and premiums. When the time comes to receive any benefits under your insurance policy, your claim needs to exceed your set deductible. Most homeowners and auto insurance policies have a fixed dollar amount deductible. Earthquake policies are different, their deductible is a percentage figure based on the total policy amount. The damage to your home or structure must exceed your deductible to trigger a payment from your policy, and the payment will be the amount of repair costs above your deductible. So on a home with $500,000 of coverage, and a 15% deductible, the homeowner will be expected to cover the first $ 75,000 of repairs. Your carrier will determine your premium. Usually older homes cost more to insure than newer homes and retrofitting is required for homes built before 1955. Premiums should not be the only thing you take into consideration when you are purchasing an earthquake insurance policy. Often you can find policies with low premiums, but they are accompanied by poor coverage.

One important thing to keep in mind when shopping for earthquake insurance is that the insured value of your house is determined by your homeowners insurance. If you are under insured on your homeowner’s policy, you will also be underinsured on your earthquake policy. Purchasing earthquake insurance can be a difficult decision. People who live in the Bay Area of California have a 75% chance of a 6.0 magnitude or greater earthquake hitting them, but only about 14 % of CA residents carry earthquake insurance. If you decide to buy earthquake insurance, place your limit so that it is adequate to completely replace your property, any outbuildings, cover any engineering costs, and temporary living expenses that you may have.