Health Insurance Reform Losing Steam

August 31, 2009 0 Comments

A poll was released over the weekend showing Americans are less concerned about health care costs than they used to be. Americans are less worried they will lose their health care insurance and less likely, they say, to postpone needed health care treatment. The public option has many Americans reconsidering their current health care situation and deciding that it is not that bad after all given the alternatives.

Insurance Companies

August 27, 2009 0 Comments

Don't think insurance companies are that important to the economy? AIG was the largest insurance company in the world and when it almost failed, it cost US Taxpayers over $85 Billion dollars. Its failure was predicted to bring down the US financial system. Now that the economy has stabalized somewhat, some insurance companies are leading the charge with storing stock prices. AIG's stock price, once the company that alsmot brought down the US financial system, is up about 500% since its low last March. Insurance Companies are huge and they can help drive the economic recovery.

Health Insurance War?

August 26, 2009 0 Comments

Town Hall meetings are turning into armed bar brawls...politicians are comparing each other to Hitler...other politicians are degraded American Citizens speaking their minds...the White House is strong arming Health insurance companies...and Health Insurance Companies are spending millions of dollars on lobbying to mold health insurance reforms to benefit them. With politicians warring with each other and even the public in some cases, will Health Insurance reform cause a class war? Just illustrates how important insurance can be in our society.

States likely to increase minimum car insurance requirements

August 26, 2009 0 Comments

Several states are considering raising the minimum amount of liability car insurance required. Most states currently require a minimum of $20,000 in liability insurance with some lower and some higher. Higher limits mean higher premiums. With the recession still in full swing and unemployment still rising, I think the states are making a big mistake. Their intent is to provide more insurance coverage to those injured in auto accidents. But I think it will do the opposite. If the state raise limits, the higher premiums required for those limits will cause some drivers to drop their insurance all together. Therefore, I think the end result of raising the minimum limits will be to increase the number of uninsured drivers.

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Like all industries, the Insurance Industry has its own unique set of terminology.  There are hundreds of terms that the insurance industry uses.  Some are unique to the insurance industry but others are terms you will see used in other industries but with different meanings.  That is why it is important to understand exactly what these terms mean.  Below we have listed basic definitions for the most commonly used terms that impact normal insurance consumers.  The list below is certainly not exhaustive, but it should allow you to understand the basics of insurance buying.
Glossary of Insurance Terms
Agent
An individual or agency who sells and services policies and products.  Agents can either be Independent or Direct agents.  An Independent agent sell insurance policies from from multiple insurance companies.  Independent Agents should gets quotes from multiple insurance companies to get you the best price and coverages available.  A Direct Agent sell insurance for just insurance company.  State Farm agents for example are direct agents as they sell insurance policies only for State Farm.  So if you go to a Direct Agent, understand that they agent will not get multiple quotes and search for the best deal but will only try to sell you his company's products.  Both Independent and Direct Agents work for the Insurance Companies and work on commission and get paid a percentage of the policy premium they sell you.

Brokers
Unlike Agents, Brokers work for the insurance buyer and search the marketplace for the best deal for the consumer.  Brokers are paid by the consumer in many cases.

Car Insurance
Also known as Automobile Insurance, Car Insurance providers insurance coverages for use of an automobile.  This generally includes coverage for damage to the vehicle as well as liability coverage for injury or property damage to third parties caused by the operation of a motor vehicle.

Claim
A demand made by the insured, or holder of an insurance policy, for payment for a loss as provided by the terms of an insurance policy.  For example, if you are in a car accident and your car is damaged, you would make a claim to your Car Insurance company for the amount of money it takes to repair your car less any deductibles or exclusions contained in the policy.

Coinsurance
In property insurance, the coinsurance clause requires the policyholder to carry insurance equal to a specified percentage of the value of property that is insured, normally 80%.  For example, if your home is worth $100,000, you must insure the property for $80,000 to receive full payment on a loss. This clause protects the insurance companies from homeowners insuring their homes for far less than they are worth and then trying to collect the full amount of damage during a total loss.

Collision Insurance
In car insurance, this coverage covers physical damage (other than comprehensive damage) to the insured automobile.  In other words, it covers repair costs to your car in the event of an accident.

Commission
Fee paid to an insurance agent by an insurance company as payment for selling an insurance policy.  Generally a commission is a percentage, around 10%, or the policy premium.

Comprehensive Insurance
In car insurance, this coverage covers physical damage to the insured's car not caused by an accident covered by collision insurance. Fire damage, collision involving an animal or glass breakage are the most common types of comprehensive losses.

Coverage
The types of losses that are covered by an insurance policy.  For example, a car insurance policy would provide coverage for collisions, while homeowners insurance would provide coverage for damage to your home.
Deductible
The amount of a claim the insured must pay before the insurance company pays.  If you have a $250 collision deductible on your car insurance policy and you are in an accident, you must pay $250 before the insurance company will pay anything.

Exclusions
Items or conditions of loss that will not be paid by an insurance company.  Exclusions are listed in each insurance policy and should be examined carefully before purchase.

Insurance Adjuster
A representative of the insurance company that settles claims on behalf of the insurance company in the event of a loss.  Insurance Adjusters work for the insurance companies, not the insured.  Therefore, in the event of a claim, you must always look out for your own interests when trying to settle a claim as it is the adjuster's job to look out for the interests of his company.

Liability Insurance
Insurance coverage that protects you from third party claims for injury or property damage that result from your or your business' actions or that occur on your property.

Medical Insurance
Also refered to as Health Insurance, Medical Insurance is insurance that pays for medical bills resulting from a covered illness or injury. 

Personal Injury Protection (PIP)
Pays medical expense and loss wages resulting from an auto accident in states with no fault laws.  The policyholder's own insurance pays regardless of who is at fault for the accident.  Ony some states require PIP insurance.

Policy
The written contract that outlines the terms, conditions, coverages and exclusions of an insurance agreement.

Premium
The price paid for a specific insurance policy for a specific period of time outlined by the policy.
Renewal Date
The pre-determined date that a policy of insurance will automatically renew.

Term Life Insurance
Life insurance that provides a death benefit for a specied period only.  For example, a term life policy may apply for 20 years.  If the policyholder dies during the 20 year term, the insurance company will pay the beneficary the proceeds of the policy.  If the policyholder is still alive after the 20 year term, the policy expires and no benefit is paid.

Umbrella Insurance Policy
A policy that covers losses of any kind above a certain limit.  Umbrella policies are on top of car insurance and liability policies.  Umbrella policies only paid when the underlying primary policy has been exhausted.

Underwriting
The process of examing and pricing certain risks.  For example, an when selling you a car insurance policy, the insurance company will evaulate the risk or probability that you will have a claim that results in them making a payment.  The insurance company will price the policy based on that risk.

Uninsured Motorist Coverage
Part of a Car Insurance policy.  This coverage steps in as the liability insurance coverage to cover the insured if the other party involved in an auto accident does not have insurance.

Variable Life Insurance
A type of Life Insurance policy whose death benefit flucuates depending on the value of the equity products supporting the underlying value of the policy.