The first thing, probably the most important thing, an insurance company have to do in underwriting process is determining the insurance risk profile. Insurance companies make "groups" or categorize individuals that have similar characteristics. These groups or category will be used to determine the risk when the company writing a new policy and determine the premium that will be charged for insured's coverage. It is true that no individuals are having exact same characteristics, but some people showing similarities in particular category. This is not apply only to individuals or person but also companies or business venture. Why the insurance company need to categorize their applicant? The reason is company's profit, underwriting new policy determine company's profit. If the company make a right calculation, they can gain profit from the policyholder's premium. Even if insured file a claim, it won't hurt the company's financial state. However, it is not good idea in taking several hundred dollars a year as premium but the policyholder end up creating thousand of dollars in claims because insurance company make miscalculation. 

I take auto insurance as example because the case is common and the risk class is easier to classified than any other insurance. As explained in previous article, insurance company use several measurement in examine their applicants. The age of the vehicle, driver's age, history of driver, the amount of coverage requested and the area that the vehicle operated are the basic information they need. These information will create a profile of driver's type which can determine how the drivers act on the road. This actuarial analysis can determine actual risk of the drivers might have. The amount of coverage needed and how much the coverage should cost also are determined by the insurance risk profile. Insurance company then make risk classes for individuals and companies with the similar characteristics. The risk classes are preferred, standard and substandard.  

Many Insurance companies will combine their premium earnings by balancing the low premiums (which means low revenue) with policyholder which have bigger premiums (most likely preferred risk classes) associated with more risky drivers. They take this measurement to limit the risk between 

policies' portfolio and the amount of premiums from all the policies they bring in. 

Standard auto insurance means that auto insurance company considered the drivers to fall into an average risk profile. The company charged the premium based on actuarial information compiled from similar drivers in the past. Insurance company need to be able to estimate the risk in underwriting new policy, or else it can break or make the company. It can be profitable or they can wind up paying out more benefits that receiving premiums if they do not understand the risk effectively. 

Insurance companies, in this case auto insurance, will consider driver's age, driving record, car usage, credit history, and location. They also will compare the driver's characteristics with actuarial information. The actuarial information helps the insurance company to determine the time frame of the driver "will getting into an accident". The company use this information to set the premium that charged to the insurer as well. That's why insurance company have to fully understand and pay close attention to individuals and business when underwriting a new policy.

There are three categories the insurers use to divide the drivers: preferred, standard, and substandard. Preferred is usually the least risky drivers based on their driving history and vehicle usage characteristic, so that the drivers offered the lower premium. Standard drivers are average in term of risk and get regular premium. The most risky is substandard; they are either pay highest premium or denied in getting coverage.

Standard drivers do not mean they have perfect driving record. They are most likely have long driving experience, good credit history, do not own sports car and use their vehicle for commuting short distance (relatively).

Unlike life insurance, permanent life insurance do not have expired time and also combine death benefit with savings portion. It accumulates a cash value, the policy owner can withdrawing money, borrowing cash value or cancelling the policy and receive the surrender value. The insurer usually apply waiting period after policy purchase to accumulate sufficient cash value when insured want to borrow saving portions of the permanent insurance. Permanent life insurance policy holder get tax-deferred benefit which means they won't pay taxes on any earnings in the policy as long as the policy still active. Policy loans generally are not considered as a taxable income. Permanent insurance have three basic types: whole life, universal life and endowment.

Whole Life

Whole life is a life insurance policy which is guaranteed to remain in force for the insured's entire lifetime, provided required premiums are paid, or to the maturity date. Since whole life policies are guaranteed to remain in force, the premiums usually much higher than those life insurance where the premium is fixed only for a limited term. The premiums are fixed, based on age of issue and do not increase with age. 

Whole life insurance have both pros and cons depends on each individuals. People think that whole life insurance is worthwhile due to indeterminate length of time and also including funeral expenses, estate planning, surviving spouse income and supplemental retirement income as the benefits. On 

the other side, people think whole life insurance is too expensive because of relatively high premiums, making them having large debts. Families with large needs and limited income also find this whole life insurance very expensive. 

Universal Life

Universal life insurance combine permanent insurance coverage with premium payment flexibility and potential cash value. Interest-sensitive (traditional fixed universal life insurance), variable universal life, guaranteed death benefit, and equity-indexed universal life insurance are several type of universal life insurance policies. It also have cash values, both premium and death benefit are flexible. 

Flexible death benefit means the insured can choose to decrease or increasing the death benefit. Increasing require new underwriting. Another feature is the ability to choose option A or option B. Option A referred to level death benefit; death benefits remain level for the life of the insured and premiums are lower. Option B is the insured pay the policy's cash value; a face amount plus earnings or interest. The cash value growth give impact to the death benefits. Option B have higher premium than option A. 

Endowment

Endowment policy is a life insurance contract designed to pay a lump sum after a specific term (maturity) or on death. Endowment life insurance policy often dressed up as a college savings plan. Typical maturities are ten, fifteen, twenty years or up to certain age limit. After certain monthly contributions, you are guaranteed a certain endowment (payout) when the policy mature. If the policy owners die before the policy mature, the beneficiaries will receive death benefit and will have the anticipated money. 

Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of an insured person (source: Wikipedia). Life insurance means to provide financial security for family after the policy holder die. In some cases, funeral expenses can be included in insurance benefits. Cause of death such as terminal illness or critical illness (natural death) can trigger the payment. The insurer also mention certain exclusions in the contract such as suicide, fraud, war or commotion. These exclusions aims to limit the liability of the insurer. 

There are three main components in life insurance contract:

Life insurance have been used to facilitate exploitation and fraud although the application process is not easy. There is possible motive, if the face value is a huge sum, the beneficiaries can murder the insured in order to receive the claim. The larger the claim and more serious the cause of death, the larger and intense the investigation which including police and insurer investigation. However, the insurer can also commit fraud by not paying the benefit to the beneficiaries. 

Deductibles, premiums and limits are the most frequently terms that appear in insurance policy. These concepts determine your payment for your insurance and how much you receive after a covered loss. You need to understand the meaning of each terms.

Deductible

Deductible is the amount you pay out of pocket before insurer pay for the expense. The amount of coverage depends on the limit you choose. For example, you have $400 deductible and have $10,000 of expense after damage caused in your home, car or something else, you have to pay for $400 before the insurer pay the remaining $9,600. Deductible for any types of insurance generally apply each time you have a claim, except for health insurance. Health insurance mostly have a single deductible for a full year. 

Insurance companies usually set deductibles for certain policies, however many insurance companies also let the insured choose their deductible. If you want a lower premium, you need to set your deductible higher. You have to understand your need in order to adjust your amount of deductible. Check your policies and talk with your insurance agent, if needed.

Premium

Premium is the amount you pay regularly to your insurer. Premium can be paid monthly, quarterly, every six months or annually depend on the insurance company and specific policy. 

Insurance Limit

Limit is the maximum amount of cover that your insurance company will pay for claims. Typically, the higher your coverage limit, the higher your premium will be. On auto insurance, insurance company will apply separate limits for different types of coverage. The state might require minimum limits for certain coverage. 

It is important to talk with your insurance agent before you purchase any coverage. Make sure your insurance suitable with your financial state. Purchase insurance which make sense for you.  

There are two components in vehicle liability insurance, bodily injury  coverage and property damage coverage. These components always included together. In US, some states don't require the vehicle owner to carry car insurance, they may be paid to the state instead, such as Virginia. Meanwhile, New Hampshire and Mississippi offers the vehicle owners to post cash bonds. Insurance premium is usually determined by the type of covered vehicle, driver's age and gender, driving history, and vehicle storage. Vehicle liability insurance is necessary for anyone who owns and drives vehicle(s), it's also required by law in most situations. 

Liability coverage have different limits in the policy, which are:

You have to make sure to meet the state's minimum required limits. The higher the limits, the better you get protected. The reason is, if you accidentally cause damage that exceeds the limits of your coverage, you have to pay the rest expenses. Don't hesitate to talk with an insurance agent about liability coverage limits that suits for you. 

Comprehensive coverage is a type of auto insurance that covers damage on your car that is not caused by collision. You might think that comprehensive means full coverage but it's not true. Theft, vandalism, fire, natural disasters, animal strike, civil disturbance and falling objects are example items covered by comprehensive insurance. As long as you didn't collide your car with another car, comprehensive coverage will pay to repair the damage. It seems like "not-so-important" insurance, but you can't predict when those accident will occur. It's better to have coverage rather than having unexpected expense, and we know that auto repair can costly. 

Collision coverage covers damage to your vehicle caused by collision with another vehicle or object. The insurance company covers your vehicle regardless who is at fault. For example, you hit a tree or a pole, crash with a building, bump into another car, rolling your car, or being hit by another car. Collision coverage comes with a deductible. Let say another car hit your car, but you use your coverage, you still owe your deductible. Your insurance company should try to recover your repair costs from the fault party. If it's successful, then your deductible may be refunded. 

Both types of coverage are optional, it pay for damage to your car and come with deductibles as well. They have different items to cover and it's not futile to purchase both coverage for solid protection. Since collision claims are likely caused by "human error", the insurance rates expect to rise. Meanwhile, comprehensive claims are coming from something you can't control, the rates should not rise. Furthermore, some state laws against rate increases related to comprehensive auto insurance claims. 

Insurance claim adjusters, claim specialist, claim representatives or independent claims analyst are basically same (they're just came with different title). They all do the same job. If you file a claim, they will contact you, gather the information about the accident, investigate and so on. Keep in mind that insurance claim adjusters work for the insurance company not the insured. They will try to settle the claim as soon and inexpensively as possible. Therefore, what would you say to claim adjusters will be so important to the success of your claim.

I already talk about what kind of information you need to submit to claim adjusters, in this case auto claim adjusters, you can read in here. It is important to understand that you need to be very careful about anything you say to the claim adjusters. Do not exaggerating your injuries or acting tough as you might not want to appear like a cry baby. This can affect your settlement value of your claim as your insurance company think that your injuries are not that bad while your injuries were indeed serious or you exaggerating your injuries while in fact you only have minor injuries. In this case, you can politely tell the claim adjusters that you want to speak with an attorney before you say anything. This also apply when the adjusters ask if they can record your conversation. The claim adjusters will use the conversation record to examine your testimony, they can suggest you are exaggerating or giving misleading information regarding your accident. 

Another helpful tip is please be careful when signing settlement agreement and claim release. In case you were injured, speak to an attorney before talking to the other driver's insurer to avoid saying or signing the wrong thing. Seeking advice from an attorney may prevent you from personal injury claim losses or not getting paid what you deserve. There are plenty attorneys who offer free consultations and only charge fee if they are successful in handling your case. Receiving advice from a reputable attorney could be invaluable in case you got a serious accident with serious injury or even death.

Nobody wants to involved in car accident and sometimes filing insurance claim could be exhausting and involving long process. According your car insurance type, you need to file a claim to your insurance company when your car collide with another vehicle, being vandalism victim, stolen or damaged from weather, animal or fire. Make sure you prepare your personal data, such as policy number, your policy's duration, date and time of incident, and so on. Your insurance company might ask further question in the process to complete your statement. The more detailed information and evidence you can collect, the better. 

Information You will Need

Pass all of these information to your claim adjuster and make sure you also have the copy for yourself. You also need to contact your insurer as soon as possible. It will be easier for them to get accurate data. If possible, call them from the scene of accident. Even if you ask for your claim adjuster to proceed the claim, you need to be cooperative and prompt. Good communication is the key to speed up your claim process. And last but not least, be honest. Even if you are at fault in the accident, don't try to get out with lies. Insurance fraud could cost you a lot more money than the premium itself. 

You are young, under 25 years old. And have sports car. Perfect? Not yet. No matter how good you drive, protect your car (and your self, of course) by purchasing performance car insurance. But isn't it expensive? Yes, it is. Performance car insurance is commonly more expensive than standard vehicle insurance. And it will be more expensive if the insured is under 25 years old because they tend to be riskier to insure. But it doesn't mean that you can't get cheap insurance quote. 

There are several way to get cheaper performance car insurance for youngster. Options number one, get comprehensive insurance. Comprehensive insurance will covers accidental damage to your car or another vehicle or property. Options number two, third party fire and theft. This insurance will only cover your car from fire and theft as well as damage to other vehicle or property. Options number three, third party insurance. It covers only damage to other vehicle or property. You can also listed as a driver on your parent's existing insurance plan to reduce the cost of premiums. But you have to make sure that you're aware of the policy's fine print. You need to understand exactly what it covers and the excess cost involved when you make a claim.

How can I reduce my premiums?

Don't be reckless, drive safely, and be protected by performance car insurance.

If you own business or a professional, you might want to know about indemnity insurance. And many people probably never heard about this type of insurance before or unfamiliar with this term. So, what is indemnity insurance? Indemnity insurance is a protection type of insurance for professionals and business owners for their particular loss or fault. The indemnity itself means an obligation by a person (indemnitor) to provide compensation for a particular loss suffered by another person (indemnitee). Malpractice insurance and errors and omissions insurance are typical examples of indemnity insurance. 

Let say you have design related business then you are alleged to have provided inadequate service or designs to your client; violating copyright or confidentiality, your professional indemnity insurance will provide cover for legal costs (if your client take legal action against you) and expenses as well as compensation payable to your client to amend your mistake. It sounds trivial but you might suffer huge financial loss from client's complaint.

The reasons why you need Professional Indemnity Insurance:

Generally, professional indemnity insurance company gives wide range covers, including:

Professionals involved in financial and legal services generally carried indemnity insurance, such as financial advisors, insurance agents, accountants, mortgage brokers and attorneys. Many medical practitioners also carry malpractice insurance to protects them from civil claims from professional negligence resulting in physical or mental harm to patients. Another professions, such as contractors, consultants and maintenance professionals carry this insurance as well because of their "performance failure" claims.