What happens if I don’t sign up for Medicare on time?

Delayed enrollment in Medicare Parts B and D can lead to lifetime penalties. Part B penalties increase by 10% for each 12-month period of delay, and Part D penalties are based on the time without credible drug coverage. Special Enrollment Periods may apply in some cases.

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Can moral hazard exist in auto insurance?

Yes, moral hazard exists in auto insurance when insured drivers take more risks, such as driving recklessly or neglecting vehicle maintenance, because they know any damages or accidents will be covered by their insurance policy.

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How do insurers use waiting periods to combat adverse selection?

Waiting periods delay coverage for specific conditions, discouraging high-risk individuals from immediately buying insurance only when they need medical treatment.

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How do regulatory authorities handle insurance company failures?

They intervene by enforcing corrective measures, facilitating mergers, or overseeing liquidation processes. Policyholder protection schemes, such as guarantee funds, may be activated to cover claims if an insurer collapses.

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What types of risks are covered under Marine Liability Insurance?

Risks covered include collisions, cargo damage, pollution, bodily injuries to crew or passengers, environmental damage, towage and salvage, and legal defense costs in case of lawsuits.

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How can I lower my liability insurance premium?

Maintain a clean driving record, increase deductibles, bundle policies, take defensive driving courses, and shop for competitive insurance quotes.

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How do changes in claim trends affect reserves?

Shifts in claim trends, such as increased claim frequency or higher settlement costs, can impact reserve adequacy. Insurers must continuously analyze trends and adjust reserves to ensure they align with actual claim developments.

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Can an insurer cancel a policy without notice?

No, consumer protection laws mandate that insurers provide advance notice before canceling policies, usually due to non-payment, fraud, or misrepresentation, ensuring policyholders have time to respond.

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