What Is Reinsurance Litigation And When Is It Applied?

Whether or not you think that insurance is the devil’s work, it’s a fundamental component of business in the real world. Without it we’d be lost, and some of us would find ourselves in financial turmoil. Insurance provides us with an added layer of security for situations in which we risk liability, such as owning a car or a home, by transferring the greater share of responsibility to the company if something goes terribly wrong.

But what is reinsurance?

Well, it’s the same principle. That’s the short answer. When an insurance company decides to go through with an especially risky venture, it might want more protection for your policy.

The policyholder pays a premium in order to buy insurance, that premium usually representing either a small fraction of the risk, or something that will add up to a large portion of the risk when paid over years and years. Normally the insurer takes 100 percent of the risk outside of that premium. On occasion an insurer will not be comfortable with that level of risk.

It’s on these occasions that an insurance company will opt to “reinsure” the original policy through an outside reinsurer. The reinsurer will be given part of the premium paid by the policyholder in direct proportion to the amount of risk the insurer wants to take, whether it’s 30 percent, 50 percent, 70 percent, etc.

If the worst happens, and the claim costs must be paid to the policyholder, then the insurer pays 100 percent. After the claim is paid, the insurer can follow up by requesting reimbursement in the percentage agreed upon with the reinsurer. Reinsurance is just insurance for your insurer. It’s that simple.

One type of reinsurance is called facultative coverage. This policy is an added layer of protection when an insurance provider covers an individual for a single risk in a single contract. Additional risks require additional contracts.

Another common type is called a reinsurance treaty. This policy covers any number of risks based on a period of elapsed time. An example of this is when life insurance isn’t calculated when someone is estate planning.

An excess-of-loss reinsurance policy is considered non-proportional coverage, and this type of policy is put into place when the reinsurer agrees to cover costs only when they go beyond whatever the original insurance company’s retained limit was set at. This coverage mostly applies to acts of god during substantially costly events.

Flood Insurance In The Wake of Hurricane Florence

The good news is that South Carolina is the second-highest insured state in regards to flood insurance with 65% of properties in a flood zone having insurance. The bad news North Carolina, the state the suffered the most flooding, only 35% of the homes in a flood zone have insurance.

Hurricane Florance parked itself on North Carolina bringing 90mph winds, storm surges, and flash floods.

The one thing that Hurricane Harvey taught residents of the United States is that flood insurance is important. Since the devastation in Midland and Odessa, Texas and Louisianna, over 145,000 new policies were written. But federal officials state that there are too many Americans that do not have flood insurance simply because most property insurance doesn’t offer it. Floor insurance is run by the Federal Emergency Management Agency aka FEMA.

The issue is that many Americans who should have flood insurance aren’t in a flood zone and aren’t mandated to have it. And who would opt for extra insurance when they aren’t mandated by FEMA, especially when the area they lived in hasn’t been flooded in several years.

Data has shown in the past 5 years that North Carolina and South Carolina that residents with insurance have dropped 3% and 6% respectively.

Fortunately for FEMA, when Hurricane Florence hit it was downgraded to a Category 1 Hurricane the amount of damage is less severe than originally thought. Since Hurricane Katrina, FEMA has been shelling out billions of above what they collect in premiums. In fact, Hurricane Harvey and Irma caused FEMA to reach it’s max borrowing limit at $30.5 billion. In order to renew the flood insurance program, Congress forgave FEMA’s $16 billion in debt.

What Is Uninsured Motorist Coverage?

It seems silly to pay even more for car insurance than you already do, but sometimes a small monetary increase to your bill can ultimately help you save thousands. If you are involved in a car accident have you wondered what would happen to you if the other car owner doesn’t have insurance? This is where uninsured motorist coverage comes into play, according to http://thompsonlawtx.com/

Uninsured motorist coverage is only used when the at-fault driver doesn’t have enough liability coverage or doesn’t have any.

In every state except New Hampshire for some reason and in Washington DC, it’s illegal to operate a car without insurance but surprisingly 1 out of 8 drivers were uninsured in 2012. And just because a driver has insurance doesn’t mean they have liability insurance. If you are involved in a car accident and you don’t have uninsured motorist coverage and the person at fault doesn’t have insurance, you will need to pay out of your own pocket for property damage and medical expenses.

There are two types of uninsured motorist coverage:

  • UMBI: uninsured motorist bodily injury coverage covers medical expenses, lost wages and injury-related expenses for you and your passengers
  • UMPD: uninsured motorist property damage covers exactly what it sounds like property damage to your car

There are twenty-two states/districts that require you to have uninsured motorist coverage:

  1. Connecticut
  2. District of Columbia
  3. Illinois
  4. Kansas
  5. Maine
  6. Maryland
  7. Massachusettes
  8. Minnesota
  9. Missouri
  10. Nebraska
  11. New Hampshire
  12. New Jersey
  13. New York
  14. North Carolina
  15. North Dakota
  16. Oregon
  17. South Carolina
  18. South Dakota
  19. Vermont
  20. Virginia
  21. West Virginia
  22. Wisconsin

If you do not live in any of these states it is still highly recommended to purchase this insurance to make sure that you are protected in the event of an accident.

Why Is Car Insurance So Expensive For Teens?

Driving is perhaps the most ubiquitous adult skill, yet it is learned much later on in life than most other skills. Naturally, as a child cannot be trusted to safely drive a motor vehicle. Thus, in most states, teenagers obtain a drivers permit at the age of 16. This permit allows them to drive with another legal adult in the car. In this case, a legal adult is anyone holding a driver’s license that is over the age of 21. Then, at the age of 17, the teen becomes eligible to take a driver’s road test. If they fail, they can try again. If they pass, that permit is upgraded to a license — allowing them to travel anywhere on their own. For many, this entails purchasing a car, or using a relatives vehicle to commute. Although this is an exciting time, it can come with many unforeseen difficulties. Car insurance is one such difficulty for many.

Teen Car Insurance

Although it is common knowledge that car insurance is pricier for teen drivers, many don’t realize just how much more it costs. On average, for the teen driver car insurance costs $2,267 a year. For adults, this figure is less than half, priced at just $815 per yer. There are a variety of reasons for this astronomical difference in price. To insurance companies, these reasons seem entirely justified. However, teens and their parents may feel differently on this issue.

Why So Expensive?

There are a multitude of reasons that teen car insurance is more expensive than car insurance for adults. Primarily, these have to do with safety and risk analysis. Below is a list of reasons of why car insurance is so expensive for teens:

  • Young drivers have no record
  • Young drivers have less experience
  • Young drivers are more likely to become distracted
  • Young drivers are more likely to be reckless
  • Young drivers are more likely to be involved in an accident
  • Young drivers pose a financial risk

Although most of these reasons are relatively self-explanatory, let’s take a bit more of an in-depth look at the ones that aren’t. Insurance companies use your driving record to see how safe a driver you are, and adjust your quote based on past accidents/claims. Without a record, their quote will have to be on the higher end. Furthermore, young drivers are likely to become distracted by cell phones, loud music, and other things while driving. This poses a danger to the driver and a risk to the insurance company. Lastly, according to years of statistical analysis, younger drivers are more likely to get in an accident. This may be due to inexperience, distraction, speeding, or simply poor choices. Thus, the above reasons all contribute to higher insurance costs for teen drivers. If you stay safe and responsible, in a few years these costs should drastically decrease!

 

 

What Is Liquor Liability Insurance?

Liquor Liability Insurance otherwise known as dram shop liability insurance is an insurance policy that business who sell/serve alcohol are required to obtain.

When a business decides to serve or sell alcohol there are associated risks involved:

  • selling alcohol to an already intoxicated customer
  • contributing to the over-toxication of a customer
  • serving alcohol to a minor

What is Covered Under Liquor Liability Insurance?

In the event that any of these things occur, that is not sufficient to file a liquor liability claim. However, if any accidents or injuries to the consumer, minor or an unrelated third party that caused by the aforementioned three events then the business might be held liable. This is the reason why these businesses are required to have this type of insurance to protect their business from these claims.

Claims can include bodily harm, mental harm, legal defense costs, property damage, and coverage over misdemeanors and felonies like assault and battery, and sexual assault.

What does Liquor Liability Cost?

Liquor liability insurance can be extremely expensive depending on what state the business is located.

The following factors are taken into consideration when determining the cost of your liquor liability insurance:

  • Types of alcohol sold
  • Hours of operation and closing time
  • Food versus alcohol receipts (if applicable)
  • Square footage of bar or restaurant
  • Average price of drinks
  • Happy hours and drink specials
  • Entertainment venue, live music, and karaoke
  • Bouncers and Door Keepers
  • State where business is located
  • Server training and certifications

There are reports that in some states, such as Iowa, where they are calling for reform to help lower the price of insurance because a lot of business have trouble finding carriers to take on such a liability without having to pay a high premium per month.

Each state has their liquor liability laws so it’s very important to know what they are. Here’s a directory on where you can find the laws mandated by your state: https://www.legalbeer.com/liquor-laws-by-state

Life Insurance After Suicide

Generally speaking, life insurance is rather easy to interpret as far as its name goes. A policy is meant to ensure the financial security of loved ones upon a person’s passing. However, while the literal definition is rather easy to understand, the ability to collect life insurance can actually be a tedious and exhausting process. Depending on the circumstances of a loved one’s death, investigations could tie up a beneficiary’s money for some time. We’ve all seen the news stories (or even television shows) featuring heinous murders that occurred due to a want of money through a life insurance policy. Life insurance policies surrounded by suicide cases could have similar complications, though even in matters that involve no underhanded schemes, receiving your money as a beneficiary could still prove difficult under certain circumstances.

There are two specific clauses that need to be taken into consideration when dealing with life insurance policies, specifically as they pertain to suicide cases. The first one aptly named the “suicide clause,” states that no insurer will pay benefits out to beneficiaries if it is proven that the insured committed suicide within two years after taking out the policy. This clause also states that should the insured individual replace an old policy with a new one – regardless of how much time has passed in the interim – the effective time frame for the suicide clause resets to zero and another two-year cycle begins for the new policy.

Obviously, this is meant to protect insurers from paying out massive insurance policies to beneficiaries of those who commit suicide in so short a time after the policy is taken out. Much like the life insurance fraud schemes that are sensationalized even more through various Hollywood films, there are very likely existing cases of desperate parents looking for an easy way to set their kids up for a better life than they may already have, among other conditions.

The other clause that ties into suicides and the life insurance policies potentially attached to them is the “contestability clause.” This clause concerns the non-disclosure of certain conditions of hopeful policyholders, predominantly the likes of smoking, drinking and other health conditions. Generally speaking, this does not exclude mental health. With depression (and mental health in general) being as serious of an issue as it is in today’s world and mental health concerns leading to several thousand cases of suicide each year, the contestability clause applies just as strongly as the suicide clause. If non-disclosure can be proven in an attempt to collect on a life insurance policy, the insurer will not likely pay benefits. Of course, being honest about your conditions is noble and preferred, but the bottom line, unfortunately, is that it will hurt your chances of being eligible for a life insurance policy as well.

As serious as the entire concept of suicide is in modern society, the bitter reality is that, despite whatever reasons may have applied to such tragedy, it could very well extend past an individual’s death. However, this is hardly the norm regarding even suicide cases involving a life insurance policy. According to a statistic from insurancequotes.org, 99% of all (yes, all) life insurance policies end with full benefits paid out.

Life Insurance As A Part Of Estate Planning

We all like to fantasize about immortality: we’re invincible in those dreams, and every once in awhile we act the part in our daily lives. Although this remains the truth for most of us, the responsible ones have still put considerable time and money into planning for the future. Who will have control over the estate when you’re not able to do so yourself? What will happen to your assets after you’re gone? In order to retain control while you have the chance, now is the time to answer these questions–even if you’re still young.

Estate planning in the event of your death is not an easy process, nor should it be one. This is about your life and everything you’ve built. While your estate planning attorney goes over the ins and outs of the documents you might consider drawing up, and explains the probate process that you’re helping prepare your family for, he or she might also suggest obtaining a life insurance policy if that’s something you haven’t done already.

Even if you haven’t procured the services of an estate planning lawyer already, you’ve probably been offered the benefit of life insurance at some point in your life. Did you take it when you were first offered? The answer is all too often a resounding “no.” If that’s the case, then a good lawyer might be able to persuade you on behalf of your family. Because you now have the proper legal advice to act upon, you’ll have the added benefit of knowing exactly how much money your family can expect to see based on specific policies, and you’ll know how it might be used in the event of your death.

Without this advice, most of us decide whether or not to buy life insurance as if we were flipping a coin. After all, why spend the money if the benefit isn’t something we’ll ever experience ourselves? Most people who’ve lost a loved one without any financial support can answer that question easily enough, and hopefully you’ll never have to do the same.

When you purchase a policy, there are only a few things to keep in mind. Your lawyer will help you with everything. Who are your beneficiaries? Where are the relevant documents and policies held? These are questions that should be asked during the estate planning phase. Be sure that your potential heirs have as much information as is appropriate. Let them know that you have a policy under which they’re listed. They might also benefit from knowing specific details about the policy, such as the number, the insurer, the value, and any possible date of expiration.

Contact information is also important in order for an insurer to get in touch with a beneficiary in the event that the beneficiary either wasn’t aware of your death, or didn’t know who to contact on their own. With access to this information, your beneficiaries will likely have access to the benefit funds sooner than they would otherwise.

There are a number of circumstances that can change in life, and these can all have an effect on estate planning. Did you get divorced? Did you get married? Did you receive an inheritance of your own? Did you win the lotto? All of these factors are important when considering how to manage your affairs. Be sure that your financial and legal advisors are kept aware and up to date of these key life events.

What Is Renters’ Insurance?

Renters are often under the impression that the landlord’s insurance policy covers their belongings, which it unfortunately doesn’t. The landlord’s policy generally covers the building itself, but might not cover injuries sustained within the structure or even personal belongings. It is why renters’ insurance is so important.

Renters’ insurance covers your personal property in a rented condo, apartment, or home from unexpected circumstances like fire, theft, or sewer backup damage and actually pays for damaged or lost possessions. It can even help protect you from liability in case somebody is injured on your property.

Renters insurance has similar scope to homeowners insurance with the only exception being that it doesn’t offer coverage for the structure itself.

What Does It Cover?

Renters’ insurance provides coverage for the destruction or loss of personal belongings in case of a covered peril including: fire, vandalism, frozen plumbing system, hail, lightning, impact by a vehicle, theft, and windstorms.

Renters insurance may also provide coverage if:

You are temporarily forced to move out of your property: If your property becomes inhabitable due to damage caused by a covered peril like vandalism or fire, renters’ insurance helps cover the cost of alternative living arrangements while repairs are underway.

A person is injured in the property and is in need of medical attention: Personal liability coverage is for protecting you and other people that visit your property in case an accident occurs. It helps pay for legal fees and medical costs you might end up incurring.

Items stored inside your vehicle are lost or damaged: Depending on your specific renters’ insurance policy, you could be covered for the belongings you keep inside your vehicle. However, the coverage does not extend to system or equipment installed in the vehicle.

What Does It Not Cover?

Now that you understand the basics of what renters’ insurance covers, it is also important to understand what it does not cover so that you are adequately prepared. Whether you live in Hollywood or Macomb County, here are some basics that are not covered?:

Home Business: If you operate a small business out of your home, it does not necessarily mean that your renters’ insurance policy will cover it. You need to check with your insurance provider whether your specific policy covers your home business of whether you will require additional coverage.

Valuables: Valuables and expensive collectables like jewelry may not necessarily be covered under your basic renters’ insurance policy and might require additional coverage.

Motorized Vehicles: Ownership or use of a motor vehicle is not covered by the renters’ insurance policy even if it is parked on your property. However, personal belongings kept inside the vehicle are usually covered.

It is important to note that these are not the only things not covered by a renters’ insurance policy. So, ensure that you read through your policy thoroughly to have a better understanding of what is and isn’t covered.

The Bottom Line

It is important to understand exactly what renters’ insurance is so that you are able to decide whether it is something you want. This has been a discussion of what renters’ insurance is, what it covers, and what it does not, so that you can make an informed decision. To learn more about this type of insurance, you should get in touch with a reputable insurance provider today.

Here’s Why Dental Insurance Is Important

If you’re currently weighing up the pros and cons of investing in dental insurance, then this guide is for you. Specifically, we’re going to explore a few reasons why dental insurance is important, so you’ll soon understand why you’re making a smart decision by investing in it.

First of all, it’s safe to say that dental health care can become incredibly expensive, especially if you need to have a lot of work done on your teeth. In fact, having dental implants is one of most expensive procedures you could ever have, but the price of crowns and fillings can soon add up, particularly if you need to have several of them at one time.

Fortunately, dental insurance covers you against these incredibly large costs, so you can simply pay a monthly or annual premium that will cover you for these eventualities.

Additionally, there’s no denying the peace of mind that you will receive when you know you are protected against these big costs, because having to pay a huge dental bill can be very punishing financially if you do not have the cash available when it is needed.

Another excellent reason to invest in dental insurance will be the discounts you will often receive for routine check-ups and preventative treatments. In general, many people avoid visiting the dentist because they’re afraid of what they may find, but by having the dental insurance plan in place, you can visit your dentist knowing that you can cover any large costs that may be required for your ongoing treatment.

Ultimately, this could mean you need less work performed anyway, as your dentist will be able to keep your teeth clean and provide frequent checkups that allow your dental hygiene to be monitored.

At the end of the day, it’s clear to see that investing in a quality dental insurance plan is a very smart thing to do.

Do College Students Need Renters Insurance?

One of the things that we usually don’t think enough about when we shuffle our kids off to college is the atmosphere in which they’re placed. Sure, we know about all the trouble they’re going to get into and we’re certainly going to be worried about the consequences (since we know they won’t be), but how safe is their living space from those who would do it harm? Do they have any protections in place in case of fire or theft or anything else on a long list of things that could go wrong in a college environment? The answer might surprise you. The dorm itself probably isn’t going to provide your children with any protections.

First of all, know the stats: Out of 100,000 college students, about 800 will report a theft overall. That’s an average. If your student is enrolled at The University of California in San Francisco, then the rate balloons to over 13,000 for every 100,000 of its students–but that’s at the high end. If your student is enrolled at another college, the rate might be much smaller.

Most students who report a crime at college report theft. Stolen goods account for 41 percent of all claims. Another 12 percent of lost goods are taken by electrical failure, while 12 percent are destroyed by water. 6 percent of lost goods mysteriously disappear. It is college after all.

It’s also worth mentioning that these are only reported thefts. Your kids might not feel inclined to report any wrongdoing on campus for a number of reasons. Let’s say they’re smoking marijuana in the dorm–they might not feel like chancing a visit from the police. If they’re keeping fluffy the kitten in the dorm against college policy, then no one’s getting past that door without breaking in (again). Then again, if your kids don’t even know their valuables are protected by renters insurance, then they’ll be less likely to report a crime.

That’s why you might consider making sure your child is insured while in college. If you do decide to insure, however, then make sure you tell them about it. Otherwise it might not even matter.

You’ll also be happy to know that even at college your child might already be covered by your own homeowners or renters insurance policy. Your policy could cover a child living on-campus, but chances are it won’t cover a child living off-campus. If your kid gets his or her own place, then they’ll probably need a separate policy. Be sure to check. Insurance agencies are only willing to extend coverage so much, and surprise surprise: most people are less likely to consider filing for insurance if a student is living on-campus.

You should also take into consideration the worth of everything that your child brings to college. Computers, media, cash, jewelry, clothing, etc. It might not seem like much when you pack it into the car every semester, but the monetary value of those things can add up surprisingly fast. Is a renters insurance policy worth the added cost? It just might be. If you’re not sure, you can always research the statistics specific to your child’s school and make the decision for yourselves.