Insurance Assign

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INTRODUCTION

The Indian insurance law is the product of various legislations made on the basis

of the English law of insurance. The expansion of the insurance business in different

fields prompted the enactment of Indian Life Assurance Companies Act, 1912 based on

the English Act of 1909 to deal with life insurance business. In other words, in the initial

stages, the insurance business was governed by the provision of the Companies Law.

Later a draft bill was introduced with an aim to consolidate the laws of insurance,

applicable to all the types of insurance business. But, the bill was not passed for various

reasons. The Insurance Companies Act 1928 was drafted on the guidelines of the bill that

was tabled earlier in England. But, it did not have sufficient regulations and provisions to

meet the needs and control the insurance business. The ever increasing nature of the

insurance business, particularly the life insurance and some general insurance fields, were

warranted. The need to have one comprehensive Act, to govern all the multifarious

insurance forms of business.

The general insurance business is fundamentally covered by the provision of the

Insurance Act, 1938, and some special contracts are governed by different acts such as

Marine Insurance Act, 1963, Public Liability Act, 1991, and Motor Vehicle Act, 1988.

Most of the provisions of the Insurance Act, 1938 are applicable to the Life InsuranceContract and in addition to those provisions the provisions of the Life Insurance Act,

1956 are also applicable to the life insurance business.

INSURANCE CONTRACT

The insurance mechanism has two fundamental characteristics; shifting or

transferring of risk of loss or damage, from owners and thereby sharing of losses by all

the members of the group. Thus a contract of insurance is a contract by which one party

undertakes to make good the loss of another, in consideration of a sum of money, on the

happening of specified event. For example, fire accident or death.

The offer acceptance communication and consideration are very important

elements of the contract. Apart from this the other important elements are the intention of

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the party to create the legal relationship, the capacity of the parties to enter into a

contract, free consent of the parties who enter into such legally binding contract

(consensus ad idem), its certainty and possibility of performance and lastly the said

contractual agreement entered into by both the parties. Both the parties should not be

declared void under the act and also should not have been forbidden by any law of the

land.

All agreements are contracts if they are made by free consent of the parties,

competent to contract, for a lawful consideration and with a lawful object and which are

not hereby declared to be void.

The insurance contract involves

a) The element of general contract,

b) The elements of special contract relating to insurance.

a) The element of general contract

i. Agreement (offer & acceptance):

ii. Legal consideration.

iii. Competent to make contract.

iv. Free consent.

v. Legal object.

b) The elements of special contract of insurance involves principles:

1) Insurable Interest.

2) Utmost Good Faith.

3) Indemnity.

4) Subrogation

5) Proximate Cause

6) Contribution

7) Warranties.

1. INSURABLE INTEREST: For an insurance contract to be valid, the insured

must posses an insurable interest in the subject matter of insurance. The insurable interest

is the pecuniary interest whereby the policy-holder is benefited by the existence of the

subject-matter and is prejudiced by the death or damage of the subject-matter.

The essential of a valid insurable interest are the following:

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There must be a subject-matter to be insured.

The policy-holder should have monetary relationship with the subject-matter.

The relationship between the policy-holders and the subject-matter should be

recognized by law.

The financial relationship between the policy-holders and subject-matter be

such that the policy0holder is economically benefited by the survival or existence of the

subject-matter and/or will suffer economic loss at the death or existence of the subject-

matter.

When a person fulfils the above criteria or when a person has such a relationship

with the subject-matter, it is said that he has insurable interest and it is only then that he

can insure.

WHEN INSURABLE INTEREST EXISTS

Insurable interest exists in the following cases:

I. Owners: Owners have got insurable interest to the extent of full value.

II. Part owners or joint owners: They have insurable interest to the extent of their

part or financial interest.

III. Mortgagor/Mortgagee: Mortgagor, being the owner of the property, has got

insurable interest. Mortgagee though not owner, has got insurable interest to the extent of

the money advanced, plus interest and an amount to cover up insurance premium.

IV. Ballees: They have got insurable interest because of a potential liability being

created if goods belonging to others get lost or damaged whilst in their custody.

V. Carries: Like bailees, carries have also got insurable interest in view of

potential liability that might devolve on them for any mishap to the goods belonging to

others, but whilst in their custody.

VI. Administrator, Executors & Trustee: They have insurable interest in view of

responsibility put on them by law.

VII. Life: A person has got insurable interest in his own life. A husband has also

got insurable interest in the life of his wife and vice-versa. No other relationship as such

merits existence of insurable interest. However, insurable interest has been created up to

$30 on the lives or parents, step-parents and grand-parents, under the Industrial

Assurance & Friendly Societies Act, 1984 & 1958 of U.K., for funeral expenses.

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VIII. Debtors and Creditors: A debtor has insurable interest in his own life, but he

has no insurable interest in the life of his Creditor. A creditor on the other hand has

insurable interest in his own life and he has also insurable interest in the life of his debtor

to the extent of the loan, interest and something to cover up premium. This is because of

the financial interest being created by advancing money.

IX. Insurers: They have got insurable interest because of a potential liability

undertaken from the insured under a policy, and this justifies taking out a reinsurance

policy.

X. Liability: The creation of a potential liability justifies existence of insurable

interest. The best examples are third party motor insurance, public liability insurance etc.

It should be remembered that a person in the lawful possession of goods of another has

got insurable interest so long responsible for goods. More possession without

responsibility does not carry any insurable interest. Similarly a person having illegal

possession of goods has got no insurable interest, e.g., thieve. One important point with

regard to insurable interest is that it must be capable of being valued in terms of money.

Sentimental value is co criteria.

WHEN INSURABLE INTERST MUST EXIST

When insurable interest must exist varies depending on the type of insurance. The

position is as follows:

Marine: Insurable interest must exist at the time of claim although. It need not

exist at the time of effecting the policy.

Fire: Insurable interest must exist both at the time of affecting the policy and at

the time of claim.

Life: Insurable interest must exist at the time of affecting the policy and it may not

exist at the time of claim.

Accident: Like fire, insurable interest must exist both at the time of affecting the

policy and the time of claim.

2. UTMOST GOOD FAITH: The doctrine of disclosing all material facts in

embodied in the important principle utmost good faith which applies to all forms of

insurance. Both parties of the insurance contract must be of the same mind (ad item) at

the time of contract. There should not be any misrepresentation, non-disclosure or fraud

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concerning the material facts. An insurance contract is a contract of uberrimae fidei, i.e.,

of absolute good faith where both parties of the contract must disclose all the material

facts truly and fully.

Material Facts A material fact is one which affects the judgment or decision of

both parties in entering to the contract. Facts which count materially are those which

knowledge influences a party in deciding whether or not to offer or to accept such risk

and if the risk is acceptable, on what terms and conditions the risk should be accepted. In

case of life insurance, the material facts or factors affecting the risk will be age,

residence, occupation, health, income etc, and in case of property insurance, it would be

use, design, owner and situation of the property.

Full and True Disclosure The utmost Good Faith says that all the material facts

should be disclosed in true and full form. It means that the facts should be disclosed in

that form in which they really exist. There should be no concealment, misrepresentation,

mistake or fraud about the material facts. There should be no false statement and no half

truth nor any silence on the material facts.

Duty of Both the Parties The duty to disclose the material facts lies on both the

parties, the insured as well as the insurer.

FACTS WHICH ARE REQUIRED TO BE DISCLOSED

The following facts are required to be disclosed:

(a) Facts which would render a risk greater than normal. In the absence of this

information the insuree would consider the risk as normal and deceived.

(b) Facts which would suggest some special motive behind insurance, e.g.,

excessive over-insurance.

(c) Facts which suggest the abnormality of the proposer himself e.g., making

frequent claims.

(d) Facts explaining the exceptional nature of the risk.

FACTS NEED NOT BE DISCLOSED BY THE INSURED

The following facts, however, are not required to be disclosed by the insured:

I. Facts which tend to lessen the risk.

II. Facts of public knowledge.

III. Facts which could be inferred from the information disclosed.

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IV. Facts waived by the insurer.

V. Facts government by the conditions of the policy.

3. PRINCIPLE OF INDEMNITY: Insurance is usually a contract of indemnity.

The insurer agrees to pay for actual loss suffered by the insured, and no more. The

purpose of the contact is to shift the burden of risk from the insured to the insurer. So,

according to this principle, the insurer undertakes to put the insured, in the event of loss,

in the same position that oct45grcupied immediately before the happening of the event

insured again.

USES: To avoid intentional loss: According to the principle of indemnity insurer

will pay the actual loss suffered by the insured. If there is any intentional loss created by

the insured the insurers is not bound to pay. The insurers will pay only the actual loss

and not the assured sum (higher is higher in over-insurance).

To avoid an Anti-social Act: If the assured is allowed to gain more than the actual

loss, which us against the principle of indemnity, he will be tempted to gain by

destruction of his own property after it insured against a risk. So, the principle of

indemnity has been applied where only the cash-value of his loss and nothing more than

this, through he might have insured for a greater amount, will be compensated.

To maintain the Premium at Low-level: If the principle of indemnity is not

applied, larger amount will be paid for a smaller loss and this will increase the cost of

insurance and the premium of insurance will have to be raised.

If premium in raised two things may happen

First, persons may not be inclined to insure and

Second, unscrupulous persons would get insurance to destroy he property to

gain from such act.

CONDITIONS OF INDEMNITY PRINCIPLE: The following conditions should

be fulfilled in full application of principle of indemnity.

The insured has to prove that he will suffer loss on the insured matter at the

time of happening the event and the loss is actual monetary loss.

The amount of compensation will be the amount of insurance. Indemnification

cannot be more than the amount insured.

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If the insured gets more amount then the actual loss; the insurer has right to get

the extra amount back.

If the insured gets more amount then from third party after being fully

indemnified by insurer, the insurer will have right to receive all the amount paid by the

third party.

The principle of indemnity does not apply to personal insurance because the

amount of loss is not easily calculable there.

METHODS OF PROVIDING INDEMNITY: There are various ways through

which indemnity may be provided. These are:

Cash payment: This is the usual way of making payment of a claim. This method

is simpler, easier and less cumbersome.

Repair: This is also another way of providing compensation. Rather than making

cash payment, the insurers will get the loss repaired to pre-loss condition as practicable.

Replacement: Usually in case of total loss the insurers may replace the subject-

matter by another one of the same standard, age & quantity.

Reinstatement: The insurers may also reinstate the property by option. This is

usually considered with regard to buildings damaged or destroyed by fire.

4. DOCTRINE OF SUBROGATION: The principle of indemnity is also

implemented by the principles of subrogation. This principle gives the insurance

company whatever right against third parties the insured may have as a result of the loss

for which the insurer paid him. So, the doctrine of subrogation refers to the right of the

insurer to stand in the place of the insured, after settlement of a claim, in so far as the

insureds right of recovery from an alternative source is involved.

ESSENTIALS OF DOCTRINE OF SUBROGATION

Corollary to the Principle of Indemnity: If the damaged property has any value

left, or any right against a third party the insurer can subrogate the left property or right of

the property because it the insured is allowed to retain, he shall have realized more than

the actual loss, which is contrary to principle of indemnity.

Subrogation is the Substitution The insurer, according to this principle, becomes

entitled to all the rights of insured subject-matter after payment because he has paid the

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actual loss of the property. He is substituted in place of other persons who act on the right

and claim of the property insured.

Subrogation only up to the amount of payment The insurer is subrogated all the

rights, claim, remedies and securities of the damaged insured property after

indemnification, but he is entitled to get these benefits only to the extent of his payment.

The Subrogation may be applied before payment If the assured got certain

compensation from third party before being fully indemnified by the insurer can pay only

the balance of the loss.

Personal Insurance The doctrine of subrogation does not apply to personal

insurance because the doctrine of indemnity is not applicable to such insurance. The

insurer has no right of action against the third party in respect of the damages.

HOW THIS RIGHT OF SUBROGATION ARISES As already indicated, right of

subrogation arises in the following ways:

Under tort This is a wrongdoing to another. A person cannot be wrong to another

thereby causing damage to anothers property of inflicting injury to the person of that

another. If it is so done then a right of action accrues in favor of the wronged and to the

determent of the wrong-doer.

Under contract A contract may put some obligation on the person making breach

of the contract to compensate the person who has been aggrieved as a result of the breach.

As for example, obligation under contract of afferightment and contract of bailment etc.

Under statute Statutes may also create liability, for making compensation, arising

out of a breach thereof. Examples are, Factories Act, Occupies Liability Act, The Riot

Act, and Carriage of Goods by Sea Act etc.

5. PROXIMATE CAUSE The rule is than immediate and not the remote cause in

to be regarded. The maxim is sed causa proxima non-remote spectature i.e., see the

proximate cause and not the distant cause. The real cause must be seen while payments of

the loss. If the real cause of loss is insured, the insurer is liable to compensate the loss;

otherwise the insurer may not be responsible for loss. So, Proximate cause means the

active efficient cause that acts in motion a rain of events which brings about result,

without intervention of any force started and working activity from a new and

independent source.

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DETERMINATION OF PROXIMATE CAUSE

The determination of real cause depends upon the working and practice of

insurance & circumstances to loss. Also-

1. If there is a single cause of the loss, the cause will be the proximate cause and

further if the peril (cause of loss) was insured insurer will have to indemnify the loss.

2. If there are concurrent causes, the insured perils and excepted perils have to be

segregated. The concurrent causes may be first, separable and second, inseparable.

Separable causes as those which can be separated from each other. The loss occurred due

to a particular cause may be distinguishing known. If the circumstances are such that the

perils are inseparable, then the insurers are not liable at all when there exists any excepted

peril

3. If the causes occurred in form of chain, they have to be observed seriously--

a) If there is unbroken chain the excepted and insured perils have to be separated.

If an excepted peril precedes the operation of the insured peril so that the loss cause by

the latter is the direct and natural consequences of the excepted peril, there is no liability.

b) If there is a broken chain of events with no excepted peril involved, it is

possible to separate the losses. The insurer is liable only for that loss which caused by an

insured peril; where there is an excepted peril, the subsequent loss caused by an insured

peril will be a new and indirect cause because of the interruption in the chain of events.

6. PRINCIPLE OF CONTRIBUTION: Contribution is a right that an insurer has,

who has paid under a policy, of calling other interested insurers in the loss to pay or

contribute ratably to the payment. This means that if at the time of loss it is found that

there is more than one policy covering the same loss then all policies should pay the loss

proportionately to the extent of their respective liabilities so that the insured does not get

more than one whole loss from all these sources. If a particular insurer pays the full loss

than that insurers shall have the right to call all the interested insurers to pay him back to

the extent of their individual liabilities, whether equally or otherwise.

CONDITIONS/WHEN CONTRIBUTION OPERATES Before contribution can

operate the following conditions must be fulfilled: There must be more then one policy

involved and all policies covering the loss must be in force.

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II. All the policies must cover the same subject-matter. If all the policies cover the

same insured but different subject-matters altogether then the question of contribution

would not arise.

III. All the policies must cover the same peril causing the loss. If the policies

cover different perils, some common and some uncommon, and if the loss is not caused

by a common peril, the question of contribution would not arise.

IV. All the policies must cover the same interest of the same insured. It should be

remembered that if any of the above four factors is not fulfilled, contribution will not

apply.

7. WARRANTIES: There are certain conditions and promises in the insurance

contract which are called warranties. A warranty is that by which the assured undertakes

that some particulars thing shall or shall not be done, or that some conditions shall be

fulfilled, or whereby he affirms or negatives the existence of a particular state of facts.

Warranties which are mentioned in the policy are called express warranties. There are

certain warranties which are not mentioned in the policy. These warranties are called

express warranties.

TYPES OF INSURANCE

Any risk that can be quantified probably has a type of insurance to protect it.

Among the different types of insurance are:

1. Life Insurance: This is a contract by which the insurer in consideration at

a certain premium either in a gross sum or periodical payments undertakes to pay the

person for whose benefit the insurance is made, stipulated sum, of annuity equivalent,

upon the death of the person whose life is insured. Life insurance provides a cash benefit

to a decedent's family or other designated beneficiary, and may specifically provide for

burial and other final expenses.

2. General Insurance: With the awareness in the general insurance, the

insurance business has developed by leaps and bounds after independence. The growth

of a general insurance is also directly proportional to the economic growth of the country.

As a result, after independence, a number of companies have come into the business of

general insurance with an objective to earn profits.

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3. Fire insurance: The fire insurance contracts are the contracts covering the

risk of the fire. They insure that risk of laws caused either by fire or incidental to fire.

Thus fire insurance policies cover the insurance business in which the risk to the asset is

from fire or incidental to fire.

4. Marine Insurance: The law of marine insurance was enacted in the year

1963, in India. The Act is based on the English Marine Insurance Act. The Marine

Insurance law developed in its full form from that date and removed some of the

difficulties faced by the courts, while defining insurable interest, over good faith and

other important concepts of the insurance business. It is an agreement whereby the insurer

undertakes to indemnify the assured, in the manner and to the extent thereby agreed,

against marine losses, that is to say, the losses incidental to marine adventure section (3).

It also includes liability to a third party included by the owner of the ship or other person

interested in the property assured on happening of the maritime event. These maritime

peril or event of risk is consequent on or incidental to, the navigation of the sea, that is to

say perils of the seas, fire, war perils, pirates, and rovers thieves, capturers, seizures,

restraints, and detainments of princes and peoples, jettison, barratry, and any other perils

which are either of the like kind or may be designed.

Other types are as follows:

1. Automobile insurance: This is also known as auto insurance, car insurance

and in the UK as motor insurance, is probably the most common form of insurance

and may cover both legal liability claims against the driver and loss of or damage to

the vehicle itself. Over most of the United States purchasing an auto insurance policy

is required to legally operate a motor vehicle on public roads. Recommendations for

which policy limits should be used are specified in a number of books. In some

jurisdictions, bodily injury compensation for automobile accident victims has been

changed to No Fault systems, which reduce or eliminate the ability to sue for

compensation but provide automatic eligibility for benefits.

2. Boiler insurance (also known as Boiler and Machinery insurance or

Equipment Breakdown Insurance) Casualty insurance insures against accidents, not

necessarily tied to any specific property.

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3. Credit insurance pays some or all of a loan back when certain things happen

to the borrower such as unemployment, disability, or death. Financial loss insurance

protects individuals and companies against various financial risks. For example, a

business might purchase cover to protect it from loss of sales if a fire in a factory

prevented it from carrying out its business for a time. Insurance might also cover

failure of a creditor to pay money it owes to the insured. Fidelity bonds and surety

bonds are included in this category.

4. Health insurance covers medical bills incurred because of sickness or

accidents.

5. Liability insurance covers legal claims against the insured. For example, a

homeowner's insurance policy provides the insured with protection in the event of a

claim brought by someone who slips and falls on the property, and brings a lawsuit

for her injuries. Similarly, a doctor may purchase liability insurance to cover any legal

claims against him if his negligence (carelessness) in treating a patient caused the

patient injury and/or monetary harm. The protection offered by a liability insurance

policy is two-fold: a legal defense in the event of a lawsuit commenced against the

policyholder, plus indemnification (payment on behalf of the insured) with respect to

a settlement or court verdict.

6. Annuities provide a stream of payments and are generally classified as

insurance because they are issued by insurance companies and regulated as insurance.

Annuities and pensions that pay a benefit for life are sometimes regarded as insurance

against the possibility that a retiree will outlive his or her financial resources. In that

sense, they are the complement of life insurance.

7. Total permanent disability insurance provides benefits when a person is

permanently disabled and can no longer work in their profession, often taken as an

adjunct to life insurance.

8. Locked Funds Insurance is a little known hybrid insurance policy jointly

issued by governments and banks. It is used to protect public funds from tamper by

unauthorised parties. In special cases, a government may authorize its use in

protecting semi-private funds which are liable to tamper. Terms of this type of

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insurance are usually very strict. As such it is only used in extreme cases where

maximum security of funds is required.

9. Nuclear incident insurance - damages resulting from an incident involving

radioactive materials is generally arranged at the national level. (For the United

States, see Price-Anderson Nuclear Industries Indemnity Act.).

10. Political risk insurance can be taken out by businesses with operations in

countries in which there is a risk that revolution or other political conditions will

result in a loss.

11. Professional Indemnity Insurance is normally a mandatory requirement for

professional practitioners such as Architects, Lawyers, Doctors and Accountants to

provide insurance cover against potential negligence claims. Non licensed

professionals may also purchase malpractice insurance, it is commonly called Errors

and Omissions Insurance and covers a service provider for claims made against them

that arise out of the performance of specified professional services. For instance, a

web site designer can obtain E&O insurance to cover them for certain claims made by

third parties that arise out of negligent performance of web site development services.

12. Property insurance provides protection against risks to property, such as fire, theft

or weather damage. This includes specialized forms of insurance such as fire

insurance, flood insurance, earthquake insurance, home insurance, inland marine

insurance or boiler insurance.

13. Terrorism insurance: Title insurance provides a guarantee that title to real

property is vested in the purchaser and/or mortgagee, free and clear of liens or

encumbrances. It is usually issued in conjunction with a search of the public records

done at the time of a real estate transaction.

14. Travel insurance is an insurance cover taken by those who travel abroad,

which covers certain losses such as medical expenses, lost of personal belongings,

travel delay, personal liabilities, etc.

15. Workers' compensation insurance replaces all or part of a worker's wages

lost and accompanying medical expense incurred due to a job-related injury.

KINDS OF INSURANCE.

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Permanent life insurance: Permanent life insurance is a form of life

insurance such as whole life or endowment, where the policy is for the life of the

insured, the payout is assured at the end of the policy (assuming the policy is kept

current) and the policy accrues cash value. This is compared with Term life

insurance where insurance is purchased for a specified period (typically a year, or

for level periods such as 5, 10, 15, 20 even 25 and 30 years) where a death benefit is

only paid to the beneficiary if the insured dies during the specified period.

Permanent life insurance originally was offered as a fixed premium fixed return

product known as whole life insurance also known as cash surrender life insurance.

This offered consumers guaranteed cash value accumulation and a consistent

premium. Consumers later wanted more flexibility which was offered in the form of

universal life insurance. Universal life insurance allows consumers flexibility in

when premiums are to be paid and the amount that they would be. Universal life

policies also allowed consumers to permanently withdraw cash from the policy

without the interest associated with the loan provisions in whole life policies.

Universal life policies retained the fixed investment performance of whole life

policies. Variable life insurance follows the mold of whole or universal life, but it

shifts the investment risk to the consumer along with the potential for greater

returns. Variable universal life insurance combines this with the flexibility in

premium structure of universal life to create the most free form option for

consumers to manage their own money (at their own risk). Variable universal life

insurance policies are considered more favorable to other permanent life insurance

alternatives due to the favorable tax treatment of all permanent life insurance

policies and their potential for greater returns than other permanent life insurance

products.

Whole life insurance/ Ordinary life insurance) Whole Life Insurance, or

Whole of Life Assurance (in the Commonwealth), is a life insurance policy that

remains in force for the insured's whole life and requires (in most cases) premiums

to be paid every year into the policy.

Health insurance :The term health insurance is generally used to describe a

form of insurance that pays for medical expenses. It is sometimes used more broadly

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to include insurance covering disability or long-term nursing or custodial care

needs. It may be provided through a government-sponsored social insurance

program, or from private insurance companies. It may be purchased on a group

basis (e.g., by a firm to cover its employees) or purchased by individual consumers.

In each case, the covered groups or individuals pay premiums or taxes to help

protect themselves from high or unexpected healthcare expenses. Similar benefits

paying for medical expenses may also be provided through social welfare programs

funded by the government. By estimating the overall risk of healthcare expenses, a

routine finance structure (such as a monthly premium or annual tax) can be

developed, ensuring that money is available to pay for the healthcare benefits

specified in the insurance agreement. The benefit is administered by a central

organization, most often either a government agency or a private or not-for-profit

entity operating a health plan.

Group insurance: Group insurance is an insurance that covers a group of

people, usually who are the members of societies, employees of a common employer,

or professionals in a common group. Group insurance may or may not be converted

to individual coverage. As group insurance gets big business for an insurance

company with minimum operational expenses (under one master policy issued to an

employer, union or any recognised group), it is usually less expensive than individual

policies. Group coverage can help reduce the problem of adverse selection by

creating a pool of people eligible to purchase insurance who belong to the group for

reasons other than for the purposes of obtaining insurance. In other words, people

belong to the group not because they possess some high-risk factor which makes

them more apt to purchase insurance (thus increasing adverse selection); instead

they are in the group for reasons unrelated to insurance, such as all working for a

particular employer.

Accidental death and dismemberment insurance: Accidental death and

dismemberment insurance (also known as AD&D) is a form of insurance covering

death or specific types of injury as a result of an accident. In the event of accidental

death, this insurance will pay benefits in addition to any life insurance held. Death

by illness, suicide, or natural causes is generally not covered by AD&D. Additionally,

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AD&D generally pays benefits for the loss of limbs, fingers, sight and permanent

paralysis. The types of injuries covered and the amount paid vary by insurer and

package, and are explicitly enumerated in the insurance policy.

Dental insurance: Dental Insurance in the United States is insurance

designed to pay the costs associated with dental care. Dental insurance pays a

portion of the bills from dentists, and other providers of dental services. By doing so,

dental insurance protects people from financial hardship caused by unexpected

dental expenses. Not all dentists are pleased about participating in any type of dental

plan. It means more work for them (and especially more paperwork), and less pay.

It is also important to have adequate coverage for your situation, so you can access

the features you need and are not paying for something you will not use. Most group

dental insurance plans do not have restrictions, such as pre-existing conditions but

do have annual maximum payments.

Pet insurance: Pet Insurance pays the veterinary costs if one's pet becomes ill

or is injured in an accident. Some policies will also pay out when the pet dies, or if

it's lost or stolen. The purpose of pet insurance is to mitigate the risk of incurring

significant expense to treat ill or injured pets. As veterinary medicine is increasingly

employing expensive medical techniques and drugs, and owners have higher

expectations for their pets' health care and standard of living than previously, the

market for pet insurance has increased.

Terrorism insurance Terrorism insurance is insurance purchased by property

owners to cover their potential losses and liabilities that might occur due to terrorist

activities. It is considered to be a difficult product for insurance companies, as the

odds of terrorist attacks are very difficult to predict and the potential liability

enormous. For example the September 11, 2001 attacks resulted in an estimated

$31.7 billion loss. This combination of uncertainty and potentially huge losses makes

the setting of premiums a difficult matter. Most insurance companies therefore

exclude terrorism from coverage in Casualty and Property insurance, or else require

endorsements to provide coverage.

Crop insurance: Crop insurance is purchased by agricultural producers,

including farmers, ranchers, and others to protect themselves against either the loss

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of their crops due to natural disasters, such as hail, drought, and floods, or the loss

of revenue due to declines in the prices of agricultural commodities. The two general

categories of crop insurance are called crop-yield insurance and crop-revenue

insurance.

Home insurance: Home insurance, also commonly called hazard insurance

or homeowners insurance (often abbreviated in the real estate industry as HOI), is

the type of property insurance that covers private homes. It is an insurance policy

that combines various personal insurance protections, which can include losses

occurring to one's home, its contents, loss of its use (additional living expenses), or

loss of other personal possessions of the homeowner, as well as liability insurance for

accidents that may happen at the home. It requires that at least one of the named

insured occupies the home. The dwelling policy (DP) is similar, but used for

residences which don't qualify for various reasons, such as non-occupancy or age. It

is a multiple line insurance, meaning that it includes both property and casualty

coverage, with an indivisible premium, meaning that a single premium is paid for all

risks. Standard forms divide coverage into several categories, and the coverage

provided is typically a percentage of Coverage A, which is coverage for the main

dwelling.

Property insurance: Property insurance provides protection against most

risks to property, such as fire, theft and some weather damage. This includes

specialized forms of insurance such as fire insurance, flood insurance, earthquake

insurance, home insurance or boiler insurance. Property is insured in two main

ways - open perils and named perils. Open perils cover all the causes of loss not

specifically excluded in the policy. Common exclusions on open peril policies include

damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism and

war. Named perils require the actual cause of loss to be listed in the policy for

insurance to be provided. The more common named perils include such damage-

causing events as fire, lightning, explosion and theft.

Vehicle insurance: Vehicle insurance (also known as auto insurance, car

insurance, or motor insurance) is insurance purchased for cars, trucks, and other

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vehicles. Its primary use is to provide protection against losses incurred as a result of

traffic accidents and against liability that could be incurred in an accident.

Wage insurance: Wage insurance is a form of proposed insurance that would

provide workers with compensation if they are forced to move to a job with a lower

salary. The idea is usually proposed as a response to outsourcing and the effects of

globalization, although it could equally be proposed as a response to job

displacement due to increasingly productive technology (e.g. factories, or

computers). Economic consensus generally holds that in both cases -- the integration

of the global economy through free trade, on one hand, and greater technological

efficiencies, on the other -- the changes will have a net benefit across the world.

However, economic theory also indicates that, while people over the aggregate will

be better off, many individuals will not be able to keep their current job at their

current wages. Those individuals may be able to retrain and move to more highly

paid wages, and the reduced cost of goods (which is likely to result from either case

under consideration) may offset at least some of the wage loss. These compensating

effects are likely to take several years to come about, however, and some people

might never be fully compensated by normal market mechanisms. Wage insurance

would offer compensation in these situations.

Mortgage insurance: It's more expensive than it's worth. Besides, you could

do better with another policy -- one that you might already have. These policies are

designed to make your mortgage payments if you die or become disabled. If you're

worried about burdening your heirs with mortgage payments, you'd be better off

buying straight life insurance. Adding on to your existing life insurance policy is less

expensive than mortgage life.

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Documents

Insurance Assign