How do I know if my insurance company is financially stable?

You can check an insurer’s financial strength through rating agencies like A.M. Best, Moody’s, or Standard & Poor’s. Additionally, state insurance regulators monitor solvency and may issue warnings or take preventive actions if a company shows signs of financial distress.

How does climate change affect business insurance?

Businesses face higher insurance costs due to increased disaster risks, supply chain disruptions, and property damage, making risk management and contingency planning essential for financial stability.

What types of risks do insurance companies face?

Insurance companies face underwriting risks, operational risks, market risks, liquidity risks, legal risks, and catastrophic event risks that can affect their solvency and profitability.

Can I purchase short-term disability insurance after an injury or illness?

Most policies do not cover pre-existing conditions immediately. If you apply after an injury or illness, your insurer may exclude that condition from coverage or impose a waiting period before you can claim benefits for related disabilities.

Why do insurance policies have waiting periods?

Insurers use waiting periods to prevent adverse selection, ensure financial stability, and discourage individuals from buying policies only when they anticipate an immediate claim.

Can NCB be transferred to a new insurer?

Yes, NCB is transferable when switching insurers, provided the policyholder maintains a claim-free record and follows the required documentation process.

How does reinsurance help insurers manage adverse selection?

Reinsurance allows primary insurers to transfer part of their risk to another company. By spreading financial exposure across multiple entities, insurers can maintain stability even if they experience a high number of claims due to adverse selection.

What role does the FCA play in the insurance industry?

The FCA regulates insurance firms to ensure they follow ethical practices, treat customers fairly, and maintain financial stability to protect policyholders.