Does ACV cover sentimental value?

No, ACV is based on tangible value and does not account for sentimental or emotional worth. If a family heirloom is lost, an ACV policy will only reimburse its material worth, not its sentimental significance. Additional riders or scheduled personal property coverage may help cover valuable items.

What is the NAIC Model Law?

The NAIC Model Law provides standardized regulatory frameworks that states can adopt to ensure consistent insurance laws, covering areas such as solvency, consumer rights, and market conduct.

Does pet insurance cover dental illnesses?

Some plans cover dental illnesses like infections and tooth extractions, but routine dental cleanings usually require additional coverage.

Does a PPO plan cover emergency care?

Yes, PPO plans cover emergency care at any hospital, even if it’s out of network. However, follow-up care at that hospital may not be covered at in-network rates unless the facility is part of your PPO network.

Can moral hazard lead to higher insurance claims?

Yes, moral hazard can lead to higher insurance claims because it encourages policyholders to take more risks, knowing they will not bear the full cost of a loss. For example, if a person with car insurance drives recklessly, they may be more likely to cause an accident, resulting in higher claims. The more a policyholder feels shielded from the financial impact, the more likely they are to engage in risky behavior.

How does adverse selection impact disability insurance?

If only high-risk individuals buy disability insurance, insurers may face higher-than-expected claims, resulting in premium increases or policy restrictions.

How do insurance regulatory bodies monitor insurers' financial health?

Regulators conduct financial audits, require regular solvency reports, and perform stress tests to assess how insurers would cope with economic downturns or large-scale claims. They intervene when insurers show signs of financial instability.

What happens if my goods are underinsured in marine freight insurance?

If goods are underinsured, the policyholder may receive only a proportional amount of the claim payout based on the insured value versus actual value.