Insurance As a Device For Handling Risk

By Sarah Martin

The real nature of insurance is often confused. The word "insurance" is sometimes applied to a fund that is accumulated to meet uncertain losses. For example, a specialty shop dealing in seasonal goods must add to its price early in the season to build up a fund to cover the possibility of loss at the end of the season when the price must be reduced to clear the market. Similarly, life insurance quotes take into consideration the price the policy would cost after collecting premiums from other policyholders.

This method of meeting a risk is not insurance. It takes more than the mere accumulation of funds to meet uncertain losses to constitute insurance. A transfer of risk is sometimes spoken of as insurance. A store that sells television sets promises to service the set for one year free of charge and to replace the picture tube should the glories of television prove too much for its delicate wiring. The salesman may refer to this agreement as an "insurance policy." It is true that it does represent a transfer of risk, but it is not insurance.

An adequate definition of insurance must include both the building-up of a fund or the transference of risk and a combination of a large number of separate, independent exposures to loss. Only then is there true insurance. Insurance may be defined as a social device for reducing risk by combining a sufficient number of exposure units to make the loss predictable.

The predictable loss is then shared proportionately by all those in the combination. Not only is uncertainty reduced, but losses are shared. These are the important essentials of insurance. One man who owns 10,000 small dwellings, widely scattered, is in almost the same position from the standpoint of insurance as an insurance company with 10,000 policyholders who each own a small dwelling.

The former case may be a subject for self-insurance, whereas the latter represents commercial insurance. From the point of view of the individual insured, insurance is a device that makes it possible for him to substitute a small, definite loss for a large but uncertain loss under an arrangement whereby the fortunate many who escape loss will help to compensate the unfortunate few who suffer loss.

The Law of Large Numbers

To repeat, insurance reduces risk. Paying a premium on a home owners insurance policy will reduce the chance that an individual will lose their home. At first glance, it may seem strange that a combination of individual risks would result in the reduction of risk. The principle that explains this phenomenon is called in mathematics the "law of large numbers." It is sometimes loosely referred to as the "law of averages" or the "law of probability." Actually, it is but one portion of the subject of probability. The latter is not a law at all but merely a branch of mathematics.

In the seventeenth century, European mathematicians were constructing crude mortality tables. From these investigations, they discovered that the percentage of males and females among each year's births tended everywhere toward a certain constant if sufficient numbers of births were tabulated. In the nineteenth century, Simeon Denis Poisson gave to this principle the name "law of large numbers."

This law is based on the regularity of the occurrence of events, so that what seems random occurrence in the individual happening simply seems so because of insufficient or incomplete knowledge of what is expected to occur. For all practical purposes the law of large numbers may be stated as follows:

The greater the number of exposures, the more nearly will the actual results obtained approach the probable result expected with an infinite number of exposures. This means that, if you flip a coin a sufficiently large number of times, the results of your trials will approach one-half heads and one-half tails, the theoretical probability if the coin is flipped an infinite number of times.

Sarah Martin is a freelance marketing writer based out of San Diego, CA. She specializes in business, finance, and home owners insurance. For free life insurance quotes, please visit http://cheap-insurance-rates.com/.

Finding the Best Whole Life Insurance

By Kumar Balasingham

Now that you have finally decided to sit down and make sure that you have all of your final arrangements set in place, there is a lot that you need to consider when it comes to the best whole life insurance. The whole life insurance policy is one that is generally the best for people when it comes to the long-term outcome but it is something that people generally avoid because of the upfront money. Generally speaking, even the best whole life insurance plan will have you paying a pretty high premium.

This is to make sure that the best whole life insurance company has gained enough money from you upfront in order to pay out down line. Also, the best of the best whole life insurance companies will only have you pay a premium for about twenty years or so which means your monthly premiums will be on the higher side. It is better to pay the high monthly or yearly premiums now instead of later when you are retirement. Taking care of getting the best whole life insurance plan in place now is something that is extremely important to take care of.

Shopping Around

When it comes to trying to shop for the best whole life insurance it is extremely important to make sure that you are not taking the first policy that you come across. The reason is that you may very well come across truly the best whole life insurance policy and find that you are over paying. Now you can always stop the policy that you paid for and begin a new one with the better company but all of the money that you put into what you thought was the best whole life insurance plan is wasted and that is money that you are not going to see again.

Make sure that you are keeping good notes of all of the various companies that you come across and what the details are for the policies that they are offering. By taking notes and taking the right amount of time to compare it all, you will be able to truly find the best whole life insurance plan out there. Once you have found the best whole life insurance plan you will want to go ahead and take care of it and get it all started The sooner you sign up for the best whole life insurance plan then quicker you will be done paying for it all.

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Professional Indemnity (PI) Insurance Market

By Paul P Berg

Where are we now - and the future?

The Professional Indemnity (PI) market is currently in its soft phase, with insurers still placing emphasis on volume at the expense of profit.

And what of the future? It is certain that at some stage the market will enter harder conditions. There is uncertainty as to when the market might harden and by how much. Invariably the deeper and more prolonged the soft market the more pronounced the adjustment will be when it comes.

Events in insurance, as in life, are powerful and unpredictable. What future events might conspire, individually or collectively, to prompt a return to harder market conditions? The following is a list, by no means exhaustive, of the likely culprits:-

1) The Credit Crunch - will have three adverse effects on the insurance market. First, there is likely to be an increase in the cost of capital as its availability becomes scarce. Second, a reduction in the asset base of major insurers as sub-prime losses erode balance sheets - further reducing the capital available required to underwrite risks. Third, an increase in credit crunch liability claims as those who have suffered losses (home owners, shareholders etc) seek to recover from professional advisers, company directors etc.

2) Investment Income - a combination of increased stock market volatility and reducing interest rates could see insurer's ability to generate investment income curtailed.

3) Environmental Factors - after two relatively benign years of (insured) natural catastrophes, could 2008 see a return to more usual levels of claim - particularly in relation to the hurricane season?

4) Economic Factors - a downturn in the economy hits the insurance industry in two ways - invariably an increase in the cost of claims allied to a reduced pool of economic activity from which to collect premiums.

And finally - unforeseen events aside, our current prediction is that whilst the market is unlikely to harden during 2008, prices could well start to rise towards the start of 2009.

As ever, forewarned is, or should be, forearmed...

Griffiths & Armour Professional Risks acts as manager for the professional indemnity division of Griffiths & Armour.

Griffiths & Armour Professional Risks Ltd is an appointed representative of Griffiths & Armour which is authorised and regulated by the Financial Services Authority.

All rights reserved. This document does not present a complete or comprehensive statement of fact or the law, nor does it constitute legal advice. It is intended only to highlight issues that might be of interest to Griffiths & Armour clients; specialist legal advice may be required where appropriate. Where links to third party websites are provided, we accept no responsibility for their content.

Paul Berg is the owner of Griffiths & Armour, UK's leading independent indemnity insurance brokers, risk managers and financial advisers. We specialise in professional indemnity insurance and professional liability insurance for the construction and legal professions.

How a Surety Brings Peace of Mind

By John Bows

Surety Definition

The word Surety is a noun pronounced sur- e- ty. Surety is a guarantor, which will assume responsibility of another person (principal) obligations if the principal cannot, or does not meet them. The term Surety has existed for thousands of years.

Example of Surety

Have you ever heard the saying "don't ever be anyone's Surety", what exactly does it mean? You would be held liable to guarantee the obligations of the person you where acting as Surety for. If you were acting as a Surety for a particular obligation of another (Principal) and the obligations were not met, you would have to meet those obligations on the principals behave, this is known as Surety. Surety has been around for thousands of years and is the oldest form of insurance.

How a Surety brings peace of mind

Let us suppose for a moment that you were an owner of a large piece of land, and you wanted to develop it. After years of research, money and time, you decided you wanted to build a commercial building on that land. You hire a contractor to complete the project. At first, your contract is doing a great job and everything seems to be going smoothly. After six months of construction, the project starts running behind schedule and you have failed inspection. The inspector tells you that the foundation is not up to code and it needs to be completely redone.

On top of that, the contractor walks form the job because the project has become unprofitable. What do you do and where can you turn to? That is where a Surety would come into play. If you made that one of your requirements for the contractor to obtain? The Surety would do one of the following things they would hire a new contractor, reimburse you monetarily, or finish the project. The Surety would take up the obligations of the principal. After the Surety has settled the claim the Surety would than go after the principal for the loss caused to the Surety.

Surety Bond types can be confusing you can learn more about Surety Bonds with more up coming articles Thanks John Bows Integrity Bonds Inc

Filing an Insurance Claim? Expect to Fight Your Own Insurance Policy

By Jane Pytel

Unscrupulous insurance companies will use your insurance policy as a basis to deny claims rather than as a basis to pay them. Flawed, faulty, or unfair insurance policy interpretation is characteristic of the widespread and out of control tactics insurance companies will use to delay, reduce, or deny payment of your claim.

When you purchase insurance, you are entering into a contract between yourself and your insurance company. This contract, or policy, establishes all terms and conditions of your insurance coverage.

An insurance contract is considered a contract of adhesion. Simply put, this means that the carrier draws up the policy and presents it to the policyholder, the insured. Because the insured has no input to amend the terms of the policy the burden of ambiguity is placed on the insurance company. The benefit of doubt must be made to the favor of the insured.

But insurance companies successfully bank on the chances that the majority of policyholders do not understand their rights. To the contrary, insurance companies will assert that there is no flexibility beyond their interpretation of your policy. When you file a claim, these companies will seek to delay or deny your claim based on what it considers any perceived or contested policy ambiguities.

As an example, assume that you have filed a claim for damages to your vehicle caused by a traffic accident. In the course of your claim you are advised by your adjuster that your claim is under additional investigation because a specific portion of your policy excludes coverage for portable equipment which is not permanently installed on or in the vehicle. You counter that permanently installed is vague and that you presented your vehicle to your agent for inspection at the time the policy was purchased. Further, you disclosed all equipment installed on the vehicle when the policy was issued. You have a reasonable expectation that this equipment is covered under the terms of your contract.

In this instance your insurance company is delaying payment of your claim by redefining the language of the contract. You have adhered to your obligations of disclosure, and you have paid your premiums. What should you do?

You need to do your personal homework. Review your information. Have you studied the policy language? What would the prudent and reasonable person conclude? Is your argument valid? Did you adequately present all details relative to your vehicle at the time you insured it? Did you have a legitimate expectation that the subject equipment was covered?

If you believe the facts support you, continue to pursue your position. Your best weapon in protecting yourself against questionable claims practices is to know your policy.

• You must study and understand your insurance policy. Your insurance company assumes you will not do this.
• You have a duty to disclose all relevant facts at the time you apply for your policy or your policy can be declared void.
• Your insurance carrier likewise has a duty to fairly apply the terms of the contract.
• Be assertive in your demands to effect a satisfactory conclusion to your claim.
• Insurance companies will search for claims specific ambiguities in your policy to their benefit in order to avoid payment of your claim. They must be able to support their conclusions.

Jane Pytel is a former insurance investigator and author of an amazing new e-book, "Power to Profit" that will take you on an inside journey from the depths of insurance company bad practices to the glory of beating them at their own game. Visit Jane at http://solutionsforyourinsuranceclaim.com

Requirements For Obtaining Foreign Insurance

By Levi Quinn

Planning a trip to a foreign destination is an exciting and fun process. Of course, it can't all be fun and games. There are many important legal aspects that also need to be taken care of before you set out. Driving in a foreign country involves a valid driver's license and insurance. There are many things that may be required of you and those things can change depending which country you are going to. Be sure to find out what you need to take care of in advance so that there are no nasty last minute surprises.

In many foreign countries your own home country driver's license will not be good enough. You will be required to show an international driver's permit to prove that you are legally allowed to drive there. This involves an application process, so give yourself enough time to get all of this in to place. In fact, it may be better to book the rest of the trip after taking care of these issues.

Go to a reputable travel agent that you trust for assistance. By having help on your end it can do plenty to eliminate language barrier delays. A travel agent may also be able to give you some tips on saving money in a foreign country and alert you to legal issues that you need to be aware of.

Make sure that any car rental you get involved in has some kind of insurance in place. Most well known companies like Budget or Enterprise have this stuff taken care of. But you need to know it is there so ask for paperwork that states as much. Go over the insurance coverage as well to make sure there are no loopholes that will leave you stuck in the event of an accident.

Take out your own travel insurance that can also be applied to automobiles. This may be preferable to you if it is added security that you seek. Speak to travel insurance representatives to see what they can offer you in terms of cost and protection. An insurance company should always be working with you, not against you.

The statistics regarding accidents and fatalities abroad are substantial. An estimated two hundred Americans die each year from accidents that occur while they are visiting in a foreign country. This can be a result of everything from car jacking to traffic accidents. Do what you can to protect yourself at all times. This is a statistics list that nobody wants to end up on.

If you end up bringing your own car to a foreign country, make sure that it meets all legal requirements for that place. From insurance to registration and licensing, all legal aspects need to be up to date and legit. Make sure that any insurance coverage you receive matches what you have back home. Anything less may leave you unprotected. The first step to getting foreign car insurance is being aware of what is expected of you. Equip yourself with knowledge so there are no ugly surprises.

Find the best deal on the auto insurance coverage you need. Visit us today for money-saving tips, compare auto insurance quotes and helpful car insurance advice.

Landlord Insurance - Don't Forget to Protect Yourself With a Business Owners Policy

By John Mazzara

It is always important that you work to protect yourself, whether you are a landlord that is renting out a home or whether you are the tenant who is renting from a landlord. You never know what can go wrong on both ends of the deal, so having rental insurance is definitely a must. Of course you'll find that there are particular options for renters when it comes to renters insurance and then there is special rental property insurance for landlords available as well. Although many people may think that a landlord should be insured, they often forget to realize that it is so important that they have insurance while they are renting as well. So, let's take a look at both landlord rental insurance and renters insurance for tenants.

Landlord Rental Insurance

Having your own insurance as a landlord is very important if you are going to rent out properties. It is important that you are well protected when you are involved in renting property and good insurance can help to keep you protected if you lose income, if there are legal disputes, and if something bad happens to your property. There are a variety of different options available and coverage for many different situations that is available. However, there are some basics that you'll always want to make sure are included in your policy. Here are the fundamentals of a policy for a rental insurance policy for landlords.

- Property Coverage - First of all, you'll find that property coverage is going to be important if you own rental property. When you go with landlord rental insurance, you'll want to take a look at your policy to see what kind of property coverage you have. You'll want to make sure that your insurance policy covers the rental building itself, any other structures that you have on the property, such as the shed or a garage, and your own personal property that may be stored on the rental property should be covered as well.

- Protection from Lawsuits - Another important thing that you need to look for when it comes to your rental insurance as a landlord is protection from lawsuits. When you are renting out property, this is a huge risk that you will face. If people get injured while they are on your rental property, they could try to sue you. For this reason, having good insurance that will protect you against these lawsuits is important and will definitely come in handy if you every deal with this type of a problem.

- Protection in Case of Loss of Rental Income - Loss of rents coverage is also very important if you are a landlord. If for some reason you end up not getting the income that you are supposed to from your tenants, you still have to come up with the money to pay the mortgage. This type of insurance helps you to make sure that you'll be insured in case you do lose your rental income.

Renters Insurance for Tenants

Of course renters face many risks when they are renting as well and renters insurance is definitely an important purchase. If disasters strike, you'll be at the same risk as someone that owns their own home. While the landlord probably has their own insurance, it is not going to protect all of the things that you own. For this reason it is so important that you have good renters insurance that will provide you with the coverage that you need for all your goods when you are renting. So, let's take a look at some of the things your insurance will cover.

- General Coverage - First of all, let's take a look at the general coverage that you'll get with renters insurance. Your personal property will be protected by your insurance in the case of several different types of perils. Some of these perils that are covered include hail and windstorms, aircraft and vehicle damage, volcanoes, lighting, fires, riots, falling objects, theft, vandalism, smoke, explosions, weight of snow, accidental cracking of water heaters and air conditioners, water damage from appliances, sprinkler systems, air conditioning, and plumbing, freezing of the plumbing, and electrical current damage. Of course it is important to realize that earthquakes and floods are not included. If you think that you may have a problem with either of them, then consider a separate policy.

- Taking Inventory of Belongings - When you are purchasing renters insurance, you'll want to take the time to take inventory of your belongings. This is important, since you'll want to be reimbursed if something happens. You can do this by keeping receipts, documenting with photos or videos, and writing down all the items and serial numbers of valuables that are in your home.

- Other Benefits - There are other benefits to going with rental insurance as a tenant as well. Often your policy will provide you with liability coverage if some falls and sues you. Also, if you have to move out because of a problem in the rental, often the insurance will cover the expenses of living somewhere else if you have to.

John Mazzara CFP CLU CHFC CEBS CMB MBA MS is an independent financial planner in the Twin Cities, MN. Officing out of Edina, Minnesota-John is centrally located within the 7 county metropolitan area. John owns three separate businesses-a licensed real estate broker associate selling Minnesota Real Estate since 1986-affiliated with RE/MAX Associates Plus http://www.selling.mn - an independent CFP-certified financial planner since 1989 with an independent Minnesota financial planning firm-Financial Planning Associates and the owner of a Minnesota mortgage broker firm-Venture Development Inc-specializing ins residential, commercial and investment mortgages http://www.ventureloanapp.com John has a wealth of knowledge and experience that surpasses most other advisors. If you are looking for someone to help you in the areas of real estate sales/purchase, mortgages, or and/or financial planning and insurance you should call John for a free 1 hour consultation to see if he can meet your needs. 952-929-2577.

Choosing the Ideal Snowmobile Insurance Policy

By Arran James

You hold insurance on your home, vehicle, and personal effects. It also makes sense to ensure that you have a reliable insurance plan in force on the snowmobile. Laws related to snowmobile insurance are state dependent, but most states ask that at minimum liability coverage is held in the event of a accident. As the coverage varies, its important to check that the appropriate amount of cover is held.

If visiting an area on vacation but hold a snowmobile licence, registration, and insurance in anther state, there might be certain provisions that needed to be taken care of, such as the issue of a temporary license. Before setting off with a snowmobile, make sure to check the requirements of the individual state.

Irrespective of the set minimum amounts of snowmobile coverage, its always wise to obtain a snowmobile insurance plan that covers more than just the minimum stipulated by law. When in control of a vehicle that's operated at high speed and on rough terrain, you want to be certain that you're fully protected in the event of an accident or liability.

In addition, the modern snowmobile is a large investment with new models, such as the Polaris 600 Dragon SP costing $9,699. So, make certain to have a suitable insurance plan to cover replacement or repairs as they become necessary.

Most of the major insurance companies now provide insurance plans for recreational vehicles, such as snowmobiles. Before deciding on a policy, be sure to get a variety of quotes from different carries and compare the coverage, restrictions, exclusions, and the cost.

Have a chat with the representatives at the insurance companies if you want to check on the coverage on offer. Decide on a snowmobile insurance plan that suits your personal needs, your budget, and the requirements of your state.

If you're interested in getting a more detailed look at Snowmobile Insurance, including a variety of snowmobiling tips and ideas, take a look at http://www.snowmobileaccessories.org/

Why Consider Mortgage Unemployment Insurance?

By Sean Horton

With 2008 becoming the year of the 'credit crunch' and literally hundreds of thousands of people in the UK subsequently losing their jobs to redundancy, mortgage unemployment insurance is something that anyone who has a mortgage must have least considered.

And even in times when the economy is stable, redundancy is still a very real threat, so the idea of still being able to continue maintaining your mortgage repayments, even though you have lost your income due to involuntary redundancy, is invaluable. And, quite simply, this is what mortgage unemployment insurance does.

Should you be made unemployed through no fault of your own (and this does not mean should you get fired or dismissed due to misconduct or you elect to take voluntary redundancy) then the mortgage unemployment insurance - also known as mortgage payment protection insurance, or MPPI - will start to pay a tax free benefit. This monthly benefit can be used towards meeting your mortgage commitment every month as well as related costs such as life, critical illness and home insurance premiums, up to a provider's set limits.

By having this benefit, you will be able to still service your mortgage debt and not worry about getting in to arrears or even, in the worst case scenario, having your home repossessed. At a stressful time, having at least some of the financial worry taken away will mean you can focus on getting alternative employment and not be under pressure worrying how to pay your mortgage.

A typical mortgage unemployment insurance policy will start to provide an income from 30 to 90 days after you are made unemployed. This varies on the individual policy terms and conditions, as does the length of time you can receive the benefits (which can be for up to 12 to 24 months, or when you find new employment, whichever is the sooner).

How much you receive will have been agreed at the time you took out the mortgage payment protection insurance cover and this will be reflected in the premiums you will pay which will be x amount for every £100 worth of protection you require. By shopping around for your mortgage payment cover, you can often find it an affordable price, particularly among the independent brokers.

Also, for an additional fee, you can add on accident and sickness cover to the policy (that is why you may sometimes hear it called by the term Accident, Sickness and Unemployment Insurance - or ASU for short). That means that should you lose your income due to involuntary unemployment or due to recovering from an accident or a prolonged illness, the policy will start to pay out the benefit to give you financial assistance at a difficult time.

When choosing your mortgage unemployment insurance, do check that the terms and conditions very carefully, especially for any exclusions which would render the insurance useless. Typical exclusions will include the policyholder being in part time employment or of retirement age. If you are unsure as to whether you would be eligible to claim on your insurance, speak to your broker.

Sean Horton is a Director of Enhanced Wealth who offer competitive mortgage insurance cover for mortgage repayment insurance and mortgage unemployment insurance

Are Registered Massage Sessions Covered by OHIP?

By Amy Nutt

All different types of massage can be beneficial in helping with many different types of aches and ailments. Sports massage, deep tissue massage and therapeutic massage can reduce back and neck pain, relieve stress and speed up the recovery process after surgeries and injuries, but without medical coverage the burden of cost can be too much for some patients to be able to afford.

Will I be Covered?

This is a common question because of the fact that massages can be so beneficial, but also so expensive. Unfortunately, the short answer seems to be that most registered massage sessions will not be covered by OHIP.

There are potentially some cases where massage may be covered, but there are some very specific requirements that must be met in order for the patient to be eligible for coverage: factors like the age of the patient, the nature of the injury being treated and whether or not the clinic administering the massage is registered as a designated physiotherapy clinic.

What's the Difference between Physiotherapy and Massage?

A hundred years age there wasn't a great deal of difference between a physiotherapist and a licensed sports massage therapist - both provided an almost identical rehabilitant service, but today's licensed physiotherapist actually use very little, if any massage, techniques in their treatment and rehabilitation of injuries and ailments.

In the past, sessions with a licensed sports massage therapist would very likely have been covered in full, but with recent changes to coverage under OHIP, coverage only pertains to a limited number of sessions with a designated physiotherapy clinic under the guidelines of eligibility.

Who's Covered?

With the new rules of coverage in place, in most cases, any patient over the age of sixty five or under the age of nineteen that needs physiotherapy sessions will have coverage up to a predetermined number of sessions. All residents of long term care facilities or nursing homes, regardless of age, who require physiotherapy will have coverage up to a pre determined amount of sessions in a calendar year; and anyone needing physiotherapy sessions in their home after having been hospitalized, regardless of age, will be covered up to a pre determined number of sessions.

Under these new rules, anyone not currently living in a long term care facility or anyone not having been recently hospitalized, between the ages of nineteen and sixty four, will not be covered for any massage or physiotherapy sessions, even if the physiotherapy clinic is on the designated list on the OHIP website.

Therapeutic, sports, hot stone and shiatsu massage can all bring with them a host of benefits to the recipient, unfortunately very few if any of these sessions are eligible for coverage by the government under the news policies of the OHIP. Of course, residents are still more than welcome to participate in sessions by any licensed massage therapist, but in doing so they should be prepared to pay for the services out of their own pocket, without the hope of reimbursement from the government.

If you need to schedule a massage session for rehabilitation and are hoping that yours is one of the cases that will be eligible for coverage, make sure that your case meets the requirements above and also make sure that the clinic you are planning on visiting is on the designated list available on the OHIP website.

More detailed information regarding exact situations and types of services, answers to frequently asked questions regarding when and why the coverage was changed and the list of designated physiotherapy clinics that are part of the network can be found by visiting the OHIP website.

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