What role do regulatory bodies play in insurance contracts?

Regulatory bodies oversee insurance contracts to protect policyholders, ensure fair practices, and maintain industry stability. They enforce licensing requirements, review policy terms, handle consumer complaints, and ensure compliance with laws governing insurance contracts.

Does product liability insurance cover all products?

Not all products are automatically covered under product liability insurance. Policies may exclude certain high-risk products, such as pharmaceuticals or certain machinery, and some industries may require specialized coverage tailored to their specific products.

What is the difference between comprehensive and collision insurance?

Comprehensive insurance covers damages from non-collision incidents like theft, vandalism, and weather-related events. Collision insurance covers damage from accidents involving another vehicle or object. Both are optional but can be bundled for full coverage.

What are named peril policies?

Named peril policies provide coverage only for risks specifically listed in the policy, such as fire, vandalism, or lightning. If a peril is not explicitly mentioned, the insurer will not cover the loss, making these policies more restrictive than open peril policies.

What are the risks of owning a captive insurance company?

Risks include regulatory compliance challenges, potential tax scrutiny, insufficient risk diversification, financial mismanagement, and exposure to large claims without adequate reinsurance.

How did life insurance evolve in the 19th century?

The 19th century saw rapid growth in life insurance due to industrialization and economic expansion. Companies like New York Life and Prudential emerged, offering more structured policies with actuarial calculations, leading to the modern life insurance industry.

Why do insurance companies use treaty reinsurance?

Insurers use treaty reinsurance to reduce risk exposure, stabilize financial performance, increase underwriting capacity, and ensure they can pay large claims without financial strain.

How can I lower my homeowners insurance premium?

Homeowners can lower premiums by bundling policies, increasing deductibles, improving security, installing safety features, and maintaining a good claims history.