1. Insurance -  Who Needs It ... ?
  2. Accident-Prone in Someone Else's Home
  3. Tenants and Condominiums
  4. They Cheat. You Pay.
  5. Terms of Insurance
  6. After the accident
  7. Drive Safely and Save
  8. Can Atheists Insure Against Acts of God?
  9. Some Perils of Wisdom For Homeowners of God?

Insurance - Who Needs It  ?

Insurance has a long and progressive history. Through many centuries to the present day, as market and technology have evolved, new forms of insurance have been created. Without insurance, there would be no advance in any field -- not in space exploration, not in medical science, not in the automotive industry, not in publishing, not even in the corner convenience store. 

Historians believe that a rudimentary form of insurance may have existed in China as early as 5000 BC.  There, boat operators found it advantageous to redistribute their cargoes to several boats as they approached treacherous rapids on their rivers.  If one boat was lost, all the boat owners shared the loss and no one was wiped out.

The code of Hammurabi, written around 2000 BC by the Babylonian  emperor, gave the world the principle of  indemnity.  The Code said that the merchant who borrowed money to finance his trip, and was subsequently robbed, would be relieved of his debt.  Here, the risk of loss was thus transferred from the trader or borrower to the money lender of financier.

In 1310, the first commercial insurance company was chartered by the Duke of Flanders and formed to sell policies insuring merchandise against perils of transportation by land and sea.

Today there are more than 2000 property and casualty or general insurance companies in North America offering auto insurance, tenant and homeowners insurance and a variety of commercial or business-oriented lines of insurance such as liability and business interruption.

They both work with three basic principles.  First, the premiums of many policy holders who do not suffer insured losses, reimburse the insured losses of the few who do.  Second, it is important to note that the only dividend is financial peace of mind.  Unlike a whole life insurance policy, you can't "cash in" your homeowners insurance.  Finally, premiums, within reasonable limits, reflect the degree of risk.

Insurance is designed  to stabilize the life of the policyholder by allowing the individual or business to engage in many ventures without having to set aside reserves to meet the financial requirements that could arise from future losses.  Imagine how differently you would drive your car if there were no insurance.  Would a lawyer give advice or a surgeon pick up a scalpel without insurance?  Would you risk the highway?

Policyholders who escape losses help compensate those who don't.  While we may not be able to predict the future, we can remove the anxiety of uncertainty with insurance.

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Accident-Prone in Someone Else's Home

If you're accident-prone, you may be relieved to find your homeowners insurance applies anywhere in the world you may unintentionally inflict bodily injury upon another person or damage to their property.  You are covered by liability insurance as detailed in section II of your homeowners policy. 

Liability insurance works in the following way.  Imagine it's the middle of winter and the snow is piling up on your roof.  You're nervous about the extra weight so you hire someone to have the snow removed.  The snow remover accidentally falls off your roof and claims against you for injuries suffered.  What happens next?

Your liability insurance will work to protect your interests by determining the validity of the claim.  The insurer can deny the claim all together, make an offer to settle, or defend you in court.  If you are found liable by the court, your policy will provide coverage for any compensatory damages you are legally obligated to pay with respect to injuries sustained by the snow remover.  There are two important limitations to this coverage.  Firstly, it does not apply to injuries sustained by you or members of your immediate household.  Secondly, your liability insurance will not cover punitive damages assessed by a court as punishment for your actions.

Deductibles are not applicable to liability coverage.  Your policy will also cover legal defense costs should the third party - in this case, the snow remover - file suit against you.

Would you know how to respond responsibly in the aftermath of an accident?

If you are involved in an accident in which someone is injured or their property is damaged, offer assistance and ensure proper medical attention is arranged.  Be sure to write down any information you think might be essential to the incident and notify your insurer.  Your insurer will want to know the date, time, place and circumstances surrounding the event.  Furthermore, take the time to record the names and addresses of witnesses and anyone you think might make a claim against you.  Like most people, you probably won't think much about liability insurance until you need it.  Common occurrences include the child who accidentally hits a foul ball - right through a neighbor's pricey picture window or the neighbor who slips and falls on your icy front steps.

Insurance helps you meet ant potential legal obligations to others in the event of an unintentional incident.  If you're unsure about your coverage, talk to your insurance representative.

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Tenants and Condominiums

If you're living in your first apartment, you may think you don't own anything of value.  However, what  little furniture you do have may break your budget if you should have to replace it.  Even in a furnished apartment, imagine the cost of replacing a closet full of clothing and shoes.

When it comes to compensation for loss or damage, your landlord has a few legal obligations.  Tenants are solely responsible for the replacement of personal possessions if they are damaged, destroyed or stolen.  Your landlord may have to replace a damaged lock after a break-in but not your missing stereo and CD collection.

As a tenant, you may be held accountable for damage to any part of the building in which you live or injury to others.  If you accidentally leave the bathtub running while you take a phone call, clean-up costs to your neighbor one floor below may be your responsibility.  Tenant insurance under Section II provides coverage for such events.  As a condominium owner, you have purchased your unit and share in the corporation that runs the whole building.  With that comes responsibility for the building.

The structure is insured through a policy taken by the corporation in everyone's name.  Damage to your unit is covered under that policy.  Beyond that, a condominium owner/occupier's insurance needs are similar to tenants'.

Condo unit owners often add improvements to suit their own taste such as broadloom or the addition of built-in cabinets or sound systems.  The additional value is not included in the corporation's policy.  If the standard amount is not enough, it may be increased for an extra premium.

Unit owners may have to pay a special assessment (in addition to normal maintenance fees) to cover the cost of repairs to common elements if there is no insurance or it doesn't pay in full.  Unit owners policies usually include coverage for theses assessments, up to a stated amount.  If the assessment is because of a deductible, some policies may not cover it, or only pay for part of it.

Lastly, you may wish to invest in Supplemental coverage for your condo separate from insurance for improvements.  Supplemental coverage means insuring your condominium unit to protect yourself in the invent that the corporation's insurance does not fully cover a loss to your unit.

Insurance is complicated.  If you're unsure about your coverage, talk to your insurance representative.

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They Cheat. You Pay.

Property and casualty insurance fraud in North America costs millions a year in fabricated and exaggerated claims.  Everyone pays that cost in the form of higher premiums-10% to 15% higher premiums.  It is a crime that picks not only the pockets of insurance companies and it's clients, but drains the coffers of organizations that must deal with the consequences.  The added cost of fire and police services, courts, corrections, medical resources and legal aid and insurance fraud rings up billions of dollars of additional expenses that everyone ends up paying.

Research shows that while consumers make the link between fraud and higher premiums, many still find the justification for committing insurance fraud.  Why do normally law abiding people commit insurance fraud?  One answer is ignorance - many consumers are not aware that insurance fraud is a crime.  Another answer is attitude - a great number of people don't consider insurance fraud a serious breach of the law, or they pass it off as something "everyone" is doing, so it's ok.  Attitude is especially relevant to what is called opportunistic fraud: the inflating of a claim a little to "cover the deductible" or a lot to recoup the premium.

Half of the survey respondents believed their fellow citizens often exaggerated claims, and 40% figure that it's common for people to misrepresent information on an application for insurance.  While the national average for admitting to insurance fraud is 5%, some (more candid?) sectors readily concede that they've committed it.  Of people polled who were earning more than $75,000 a year, 18% admitted to committing insurance fraud.  Across the country,10% of young people, 18-24, conceded they had committed insurance fraud, twice the combined average for all ages.

You can help too.  Insurance fraud is now a reportable crime through Crime Stoppers.  If you suspect someone of cheating on an insurance claim, call Crime Stoppers with the details.  You'll remain anonymous and investigators will check out the facts.

The campaign slogan "They Cheat.  You Pay."  is a reminder that when people cheat on their insurance policies, everyone else pays for it.  All types of insurance frauds are reportable, ranging from lying on an application for an insurance policy, to exaggerating a genuine claim, to making an insurance claim that's completely false.

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Terms of Insurance

Acts of God: natural and inevitable occurrences that are beyond the control of humankind.  These natural events include: tornado, floods, storms and earthquakes.  Many acts of God are covered in your policy under the "named perils".

Adjuster: individual responsible for loss or damage assessment for the purpose of an insurance claim settlement.  The adjuster evaluates the insured's claim on behalf of the insurance company and provides the company with recommendations.  A policyholder may also hire an adjuster to assess a complicated loss.

Broker: negotiates insurance policies on behalf of insured.

Claim: an insured's formal request for compensation with respect to losses incurred from an insured peril.

Crime Stoppers: an international non-profit program created to assist police in solving crimes through tips reported by citizens who have knowledge or a suspicion that a crime, such as making fraudulent insurance claim, has taken place.  Tipsters may be eligible or cash rewards and anonymity is guaranteed. 

DRLs: Daytime Running Lights on automobiles.

Direct Loss: damage or loss to an insured property caused directly by the insured peril.  For example, a policy may replace an item destroyed in a fire but may not indemnify the policyholder for other loss or the inconveniences resulting from the loss of the use of the property.

Dwelling: term in homeowners policy used to refer to the coverage applicable to your home and "attached structures" such as a garage or carport.  Dwelling usually includes permanent outdoor equipment, installed on the premises, such as a swimming pool.  Building materials for use in construction, alteration or repair of the insured dwelling or related structures on the premises are covered as well, provided they are on  the site or adjacent to it.

Fraud: is criminal deception.  Any time someone makes an insurance claim that is false, or one that is for more than the value of the goods actually lost, stolen, or destroyed, they are committing fraud.  Fraud also includes lying or falsifying information on an application for an insurance policy.

Indemnity: a principle of insurance according to which an individual is compensated for incurred losses resulting from insured perils so as to enjoy the same financial status prior to the loss.

Insurance: a contractual mechanism designed to share the losses of the few by pooling them among the many who are exposed to the same chances of suffering losses.

Liability: legal responsibility or obligation to either partake in or abstain from an act.

Named perils: those events for which you are covered by virtue of their listing in your policy.

Premium: the price for which the insurer accepts the risk of the insured, determined by the expectation of the insured's potential loss.

Risk: any chance of loss to the insured or the property to which the insurance policy relates.

SIU: Special Investigations Unit

Underwriter: insurance company or group that underwrites a particular  risk.  To underwrite is to literally accept the risk in writing and thus accept the liability that may arise from the insurance contract.

Utmost God Faith: uberrima fides is Latin for the governing principle of insurance.  Both the insurer and the insured must act in an honest and efficient manner.  Full discloser and proper representation of material facts are the premises upon which an insurance contract is established.  Parties are both ethically and legally bound to act in good faith as their agreement must be honored.

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After the accident

What to do when the accident involves you

The best way to deal with an accident is to prevent one from happening.  As a general rule, leave at least two seconds traveling distance between you and the car ahead.  Measure the distance by picking a fixed marked and counting two Mississippi.  If you pass the marker before you've finished counting, you're probably traveling too close.  In poor weather conditions increase the distance to give yourself more time to stop.

In the event that you are involved in an accident, respond decisively and immediately to remove any further risk of danger.  Above all else, keep a clear head.

Take charge and make the best of a bad situation.  Turn the engine off.  Be aware of your environment.  Watch for electrical wires, hazardous chemicals, gases, and spilled gasoline that could result in a fire.  Protect yourself and others from additional injury, then call the police or 9-1-1 if emergency assistance is necessary.

Look underneath and around cars for victims who might have been thrown during the accident.  Don't move an injured person unless they're at risk of drowning or burning.  If you are qualified to do so, treat for severe bleeding and unconsciousness.  If you're injured, stay put. 

If no one is hurt and the vehicles involved are safe to drive, encourage the drivers to move them to the side of the road to avoid disrupting the flow of traffic.  Next gather as much of the following information as you can.

Record the date, time and place of the accident.  Document your speed and that of the other vehicles involved as well as weather and road conditions.  Take down the names, addresses, phone numbers, vehicle license numbers, insurance companies, passenger names, makes, models and every year of every vehicle and driver involved in the accident.

Be sure to note the damage done to all vehicles involved.  If you have a spare camera or even a disposable, keep it in the car as a recording tool.  Write down the names and addresses of any witnesses and/or injured parties.  Don't forget to get the name, badge number and detachment of the investigating officer. 

Sketch the accident on a piece of paper, complete with street names, traffic signals and any objects which may have been involved in the collision. 

Even in situations where there appears to be no visible damage, it's a good idea to take down the driver's name and license number as well as establish that no harm has been done.  This will help to protect you from those who may try to file a claim against you a few months later. 

Now that you know what to do, here's what not to do.  Don't authorize anyone to repair your vehicle.  Don't let a tow truck driver take off with your car before negotiating the fee.  Towing can be expensive - know the price up front.  Finally, never admit liability.  You only know what happened to you. Once you've done all of this you've only two calls left to make.  Call your family, then contact your insurance agent or broker.

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Drive Safely and Save

While we kick the tires in the showroom and imagine ourselves cruising down the highway in a brand new car, not many of us stop to consider how we will insure the new beauty or what it will cost.

Car insurance premiums are set according to your driving record, insurance record, the make and model of car you own, as well as the purposes for which it is used and where and how far you drive.  Because insurance systems and the benefits attached to them vary widely from area to area, where you live will also affect how much you pay.

You can help control the cost of your own insurance through the choices you make.  Before buying a car, you may want to ask yourself some questions.  How well will the car protect the occupants in a crash?  How well will it assist the driver in avoiding a crash?  How much will it cost to maintain?  Will it hold it's value in the resale market?  Is it likely to be broken into our stolen?

Each year, car insurance companies gather information about car accidents, theft and other incidents that lead to insurance claims.

In addition to choosing your vehicle, you can help to control costs by driving responsibly.  Check your own driving habits.  Do you always use your mirrors to be aware of traffic around you, watch other vehicles to better anticipate their movements, and allow time to stop if the car ahead has to break suddenly?  Good drivers enjoy reduced premiums.  Those who have collisions or convictions tend to pay more.  A conviction for drinking and driving or even a "charge" will make life difficult until resolved.  Don't do it.

Be careful who uses your car.  If you lend your car to others and they cause an accident, your premium may be affected. 

Protect your car from thieves and vandals.  Where possible, park in busy, well-lit areas.  Try not to be obvious about putting valuable items in the car or trunk and then leaving it unattended.  Thieves appreciate clues about which car to break into - even in busy streets and in parking lots.  There's no shame in double-checking the doors when you consider they're left unlocked in  more than 80 percent of cases involving stolen cars.  A code number or identifying mark could help police recover your vehicle faster.  Engrave in your car a discreet inscription on the edge of the windshield or side window.  Identifiable parts are more difficult for thieves to sell, and may stop them from targeting your car.

Deterring thieves means more time to spend on the road.  Daytime Running Lights (DRLs) increase your visibility.  Nearly half of all collisions occur when drivers fail to see one another or misjudge the speed of an on-coming vehicle.  If your car does not have DRLs, make it a habit to turn low beams on every time you start the car.  Wear your seatbelt properly and ensure everyone in your car does the same. 

If you can't prevent a collision, at least be prepared

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Can Atheists Insure Against Acts of God?

A stormy night can leave a path of destruction and thousands of dollars worth of damage for individuals.  Convinced that "acts of God" are not covered by insurance policies, some people worry that the cost of the repairs to their property will come out of their own pockets.  In many cases, their insurance will assist in the clean-up. 

Short of sorting out when God acts and why, insurers define an act of God as a direct, violent, sudden and irresistible act of nature, such as could not have been foreseen or, if foreseen, its effect could not have been prevented.  In short, an act of God is an inevitable event. 

The term has become a bit of a misnomer.  Sure, rain, wind and hail are acts of God to the layperson, but the insured needs to know them as perils.

Named or insured perils can include theft, riot, vandalism or glass breakage in a building that is normally occupied.  Falling objects or impact by an aircraft or vehicle are generally included as well.  Most people expect coverage for these events.  What we have a tendency to to forget or overlook, is that damage from fire, lighting, and wind is also insured.

A sudden release of smoke from a furnace is covered for instance, but not from fireplaces.  An explosion of any kind is covered.  Water escape from a plumbing, heating, sprinkler or air-conditioning system or domestic appliance is covered, as is the rupture or freezing of one of these items, but reasonable precautions are required.

Of course there are those who would like to believe that all unfortunate events are acts of God. They tell their insurers it was God's will that their car collided with a fire hydrant.  Other theologically-challenged homeowners will claim God rusted their pipes, rotted the fence, or overstuffed the washing machine.

That said, there is still room for prevention and protection in the event of bad weather.  Remember to batten down the hatches before a storm.  If high winds are called for, secure the lawn furniture.  Hail in the forecast?  Put the car in the garage.  And if a tornado warning is issued, protect yourself by moving into the basement or into an inner hallway away from windows.  Once the storm has passed, board up broken windows, cover leaky roofs and otherwise protect your home from further damage.  Then call your insurance representative to report the losses. 

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Some Perils of Wisdom For Homeowners

Although most homeowners never need to submit an insurance claim, home insurance is a necessary means of guarding against misfortune.  It protects you from financial loss resulting from "sudden and accidental" mishaps.

Once you are the legal owner or tenant of your home, you should be covered by insurance.  This holds true even if your home is still under construction.  If you're moving to a different home, talk to your insurance representative to see if your current policy covers your belongings at both the old and new locations, and throughout the transportation process as well.

Because there is no "standard" homeowner policy, you're best to shop around for the one most suitable to your needs.  Compare quotations, coverage and services.  Have your insurance representative talk through the policy with you before you sign it.

A policy is divided into two sections.  The first describes the insurance on your property, the second details your liability coverage in case you accidentally cause bodily harm to others or damage their property.  Homeowners policies cover the building and it's contents for direct loss or damage caused by insured perils.  Perils may be stated individually or be described as "all risks".  There are four categories of homeowners insurance policies t choose from.

A comprehensive policy covers the building, its contents, and detached private structures for all risks that are not specifically excluded.  It also provides coverage for "Additional Living Expenses".  For example, if you have to move temporarily as a result of damages caused directly by an insured peril, your insurer will cover the increased cost in your living expenses provided you are maintaining your household's normal standard of living while repairs are made.

The broad policy provides "all risks" coverage on the really big ticket items like buildings, and named perils coverage on the contents.  For example, your dwelling may be insured for damages sustained from your roof collapsing under the weight of the winter snow, but the objects in your home may not.

A basic or named perils policy may be appropriate if broader coverage isn't available to you.  With this kind of policy you carry more of the financial risk yourself.  The basic policy only covers the perils that are specifically listed.  Insured perils commonly covered in basic policies include fire, lighting, theft, water damage, and vandalism.

Each of these policies includes many other features.  For instance, food spoiled in your freezer during a power outage would be covered as would your children's possessions while they are away at university.  Losses from a stolen credit card, or ATM card would also be covered.

If you're having difficulty meeting an insurer's underwriting requirements, you may want to consider a very basic policy without the extra features.  If, however, the only thing standing between you and more extensive coverage is a few minor physical problems with your home, why not address those problems right away?  Fixing up your home in the short run, may allow you to qualify for broader coverage and may even save you money further down the road.  You'll also be making your home a safer place.

Cottagers can either insure their rural hide-aways separately or have them insured in their homeowners policy.  In general, cottage coverage will be less extensive than home coverage, given that most people don't live in them all year around.  Because you are away for long periods of time, theft coverage is likely to be limited to where there are signs of forcible entry.

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