Auto insurance rates vary in regards to several things such as people's profession, age, gender, marital status and locality in which they live. Most people have to pay less than $1,000 barring some unfavorable circumstances in the past such as a DUI conviction. Unfortunately, business people also fall under the category of large premium payers often paying more than $1,400 a month.
Factors Determining Auto Insurance Rates:
Auto Insurance rates vary considerably from one firm to another. Several factors determine a person's auto insurance rates.
Driving Record: Primarily, the driving record of a person plays a vital role in payment of premiums of an auto insurance policy. If a person is involved in an accident that is determined to be his or her fault then their rates are going to go up. Usually, this is because statistics suggest that, such drivers have repeat violations or accidents within 3 years.
For Drivers who have poor records and cannot find insurance coverage there are certain state regulated insurance plans known as 'shared markets' or 'assigned risk pools'. In these insurance plans, the state specifies a firm to offer insurance coverage for the high risk drivers. However, not all states have such plans and you will have to check with your home state's department of insurance.
Marital Status: It influences an auto insurance policy rate to some extent. Statistically, newly wed drivers have smaller numbers of accidents than young drivers. Hence, newly wed drivers pay lower premium amounts.
Location: Auto insurance rates vary in respect to locations as well. For instance, auto insurance rates in California differ from Texas Auto insurance rates. This is because of the risks involved, such as the risks of theft, accidents and weather. Rates also differ from one group of people to another. For instance, people who live in smaller towns, usually have fewer accidents than those people who live in large cities. Hence, they pay less for their auto insurance.
Age: It also influences auto insurance rates. As a rule, drivers who are below 25 years of age are more accident prone than older drivers, thus resulting in higher premium payments. Drivers between the age of 50 and 65 have the lowest accident rates and hence, they receive discounts.
Gender: It is quite common in most countries, that young males below the age of 25 pay higher premium amounts than females of a similar age. This is because, young men are involved in more accidents than young female drivers.
Family Members: Age, gender, martial status and driving records are not the only essential influencing factors. Other licensed drivers in family may have an impact as well. A young son, who drives the car, or a spouse with a poor driving record, is likely to increase the insurance rates of the whole family if they all use the same car.
Conclusion:
Auto insurance policies and the coverage options that a person chooses, affect the insurance rates and premiums paid. To avoid this, people can increase the deductible or eliminate a few frivolous options that are of no use.
Additionally, it is better to obtain and compare auto insurances companies' rates. Gather six or more online quotes. Make a comparative study and finalize one quote that best fits your own needs as a driver. Get started right now with either of the sites listed below.
Ian Wright can help you save money on your auto insurance premiums. The easiest way is to visit his sites about getting an [http://www.quick-online-insurance-quote.com/auto-insurance-company-quote-online.html]Auto Insurance Company Quote Online and how to get a free [http://www.quick-online-insurance-quote.com/auto-insurance-quote-online.html]Auto Insurance Quote Online.
Article Source: [http://EzineArticles.com/?How-Can-I-Save-Money-On-My-Auto-Insurance-Rates?&id=1030352] How Can I Save Money On My Auto Insurance Rates?
Saturday 16 July 2011
Thursday 7 July 2011
Best Deals on Auto Insurance - 2 Reasons You May Have a High Auto Insurance Premium
It is a fact. Money is tight. Some of us have overextended ourselves during the good times and now that the recession is in full force, many of us are having a hard time paying our bills. So now is the time to do whatever you can to lessen your financial burden and one simple way is to find the best deals on auto insurance, thus possibly lowering your monthly payment.
Just like all insurances, you hate to pay that monthly car insurance premium but if you are ever in need of it, you are sure glad it is there. Plus each state requires that you carry insurance on your car or else you could pay a hefty fine or have your license revoked. And nobody wants that.
But did you know that each car insurance company has their own set criteria when deciding how much your insurance is going to cost you? The most general guideline that insurance companies look at is what kind of car you drive. And if you want the best deals on auto insurance, then you may want to avoid driving a brand new Mustang GT, which will likely cost you more in monthly premiums, than say a Kia Sportage. And there area couple of reasons for that.
One thing that companies look at is how likely the car is to be stolen. If you car falls on the list of most stolen vehicles, then you will pay a higher monthly premium. Another reason why the type of car you drive matters to your insurance company is that some cars are notorious for being in accidents. These are usually the high performance type sports cars as those who drive these types of automobiles like to drive faster than those who drive other types of cars, thus putting them into a higher number of accident category. So driving a flashy sports car may not be your best option when trying to acquire the best deals on auto insurance.
But even two people of the exact same age driving the exact same car will sometimes pay a different premium depending on things such as their credit score and where they are located. So if you are looking for less expensive auto insurance, you may want to be sure that your credit score is also above average. And the reason that insurance coverage can be more costly for someone with a lower credit score, is that they are felt a higher risk and less responsible than someone whose credit score is in the higher range. Even though this may not be true, this is a criteria commonly used by some auto insurance companies.
So the easiest way for you to find out if you are getting the best [http://edharperinsurance.com]deals on auto insurance is to get multiple quotes from a variety of insurance companies. And if you are in the market for car insurance and want to get quotes from multiple companies fast and easy, then just visit [http://edharperinsurance.com]Ed Harper Insurance.
Article Source: [http://EzineArticles.com/?Best-Deals-on-Auto-Insurance---2-Reasons-You-May-Have-a-High-Auto-Insurance-Premium&id=3946359] Best Deals on Auto Insurance - 2 Reasons You May Have a High Auto Insurance Premium
Just like all insurances, you hate to pay that monthly car insurance premium but if you are ever in need of it, you are sure glad it is there. Plus each state requires that you carry insurance on your car or else you could pay a hefty fine or have your license revoked. And nobody wants that.
But did you know that each car insurance company has their own set criteria when deciding how much your insurance is going to cost you? The most general guideline that insurance companies look at is what kind of car you drive. And if you want the best deals on auto insurance, then you may want to avoid driving a brand new Mustang GT, which will likely cost you more in monthly premiums, than say a Kia Sportage. And there area couple of reasons for that.
One thing that companies look at is how likely the car is to be stolen. If you car falls on the list of most stolen vehicles, then you will pay a higher monthly premium. Another reason why the type of car you drive matters to your insurance company is that some cars are notorious for being in accidents. These are usually the high performance type sports cars as those who drive these types of automobiles like to drive faster than those who drive other types of cars, thus putting them into a higher number of accident category. So driving a flashy sports car may not be your best option when trying to acquire the best deals on auto insurance.
But even two people of the exact same age driving the exact same car will sometimes pay a different premium depending on things such as their credit score and where they are located. So if you are looking for less expensive auto insurance, you may want to be sure that your credit score is also above average. And the reason that insurance coverage can be more costly for someone with a lower credit score, is that they are felt a higher risk and less responsible than someone whose credit score is in the higher range. Even though this may not be true, this is a criteria commonly used by some auto insurance companies.
So the easiest way for you to find out if you are getting the best [http://edharperinsurance.com]deals on auto insurance is to get multiple quotes from a variety of insurance companies. And if you are in the market for car insurance and want to get quotes from multiple companies fast and easy, then just visit [http://edharperinsurance.com]Ed Harper Insurance.
Article Source: [http://EzineArticles.com/?Best-Deals-on-Auto-Insurance---2-Reasons-You-May-Have-a-High-Auto-Insurance-Premium&id=3946359] Best Deals on Auto Insurance - 2 Reasons You May Have a High Auto Insurance Premium
Wednesday 22 June 2011
What to Do to Get the Best Auto Insurance Rates
You don't have to spend an incredibly exorbitant amount of money on your auto insurance. You can easily get the best auto insurance rates for your car no matter what you drive or where you live. You will need to do some things in order to make this possible. A good thing to do is to make sure that you are a safer driver for a longer period of time. This is a necessity in that if you are a safe driver you will not be interpreted as a liability to other people on the road. Therefore the risk of you having to make a claim will be seen as one that is low and therefore you will not have to deal with spending too much on your insurance.
If you are a member of an organization like ASRP you might be able to qualify for some special discounts. This comes from how many different auto insurance companies have special partnerships with different organizations that allow them to give special discounts to drivers who are members of these groups.
If you have any type of policy that relates to something else with a particular insurance company you might be able to qualify for a discount if you insure your car with that same company. This comes from how many companies give their best auto insurance rates to loyal customers as a form of thanks to them for their loyalty.
Finally you will need to see that you are making your car as safe as possible. Special discounts are available to people who install security on their devices that work to keep people from being able to steal a vehicle. This is done because of how you will be less likely to have a concern about a vehicle that you have stolen by someone.
You can save up to 60% of your [http://www.autoinsuranceforcheap.com/quote/]Auto Insurance by clicking [http://www.autoinsuranceforcheap.com/quote/]here Today!
Article Source: [http://EzineArticles.com/?What-to-Do-to-Get-the-Best-Auto-Insurance-Rates&id=4172116] What to Do to Get the Best Auto Insurance Rates
If you are a member of an organization like ASRP you might be able to qualify for some special discounts. This comes from how many different auto insurance companies have special partnerships with different organizations that allow them to give special discounts to drivers who are members of these groups.
If you have any type of policy that relates to something else with a particular insurance company you might be able to qualify for a discount if you insure your car with that same company. This comes from how many companies give their best auto insurance rates to loyal customers as a form of thanks to them for their loyalty.
Finally you will need to see that you are making your car as safe as possible. Special discounts are available to people who install security on their devices that work to keep people from being able to steal a vehicle. This is done because of how you will be less likely to have a concern about a vehicle that you have stolen by someone.
You can save up to 60% of your [http://www.autoinsuranceforcheap.com/quote/]Auto Insurance by clicking [http://www.autoinsuranceforcheap.com/quote/]here Today!
Article Source: [http://EzineArticles.com/?What-to-Do-to-Get-the-Best-Auto-Insurance-Rates&id=4172116] What to Do to Get the Best Auto Insurance Rates
Thursday 16 June 2011
21+ Useful Insurance Terms You Should Know
INSURED - A person or a corporation who contracts for an insurance policy that indemnifies (protects) him against loss or damage to property or, in the case of a liability policy, defend him against a claim from a third party.
NAMED INSURED - Any person, firm or corporation specifically designated by name as an insured(s) in a policy as distinguished from others who, though unnamed, are protected under some circumstances. For example, a common application of this latter principle is in auto liability policies wherein by a definition of "insured", coverage is extended to other drivers using the car with the permission of the named insured. Other parties can also be afforded protection of an insurance policy by being named an "additional insured" in the policy or endorsement.
ADDITIONAL INSURED - An individual or entity that is not automatically included as an insured under the policy of another, but for whom the named insureds policy provides a certain degree of protection. An endorsement is typically required to effect additional insured status. The named insureds impetus for providing additional insured status to others may be a desire to protect the other party because of a close relationship with that party (e.g., employees or members of an insured club) or to comply with a contractual agreement requiring the named insured to do so (e.g., customers or owners of property leased by the named insured).
CO-INSURANCE - The sharing of one insurance policy or risk between two or more insurance companies. This usually entails each insurer paying directly to the insured their respective share of the loss. Co-insurance can also be the arrangement by which the insured, in consideration of a reduced rate, agrees to carry an amount of insurance equal to a percentage of the total value of the property insured. An example is if you have guaranteed to carry insurance up to 80% or 90% of the value of your building and/or contents, whatever the case may be. If you don't, the company pays claims only in proportion to the amount of coverage you do carry.
The following equation is used to determine what amount may be collected for partial loss:
Amount of Insurance Carried x Loss
Amount of Insurance that = Payment
Should be Carried
Example A Mr. Right has an 80% co-insurance clause and the following situation:
$100,000 building value
$ 80,000 insurance carried
$ 10,000 building loss
By applying the equation for determining payment for partial loss, the following amount may be collected:
$80,000 x $10,000 = $10,000
$80,000
Mr. Right recovers the full amount of his loss because he carried the coverage specified in his co-insurance clause.
Example B Mr. Wrong has an 80% co-insurance clause and the following situation:
$100,000 building value
$ 70,000 insurance carried
$ 10,000 building loss
By applying the equation for determining payment for partial loss, the following amount may be collected:
$70,000 x $10,000 = $8,750
$80,000
Mr. Wrong's loss of $10,000 is greater than the company's limit of liability under his co-insurance clause. Therefore, Mr. Wrong becomes a self-insurer for the balance of the loss-- $1,250.
PREMIUM - The amount of money paid by an insured to an insurer for insurance coverage.
DEDUCTIBLE - The first dollar amount of a loss for which the insured is responsible before benefits are paid by the insurer; similar to a self-insured retention (SIR). The insurer's liability begins when the deductible is exhausted.
SELF INSURED RETENTION - Acts the same way as a deductible but the insured is responsible for all legal fees incurred in relation to the amount of the SIR.
POLICY LIMIT - The maximum monetary amount an insurance company is responsible for to the insured under its policy of insurance.
FIRST PARTY INSURANCE - Insurance that applies to coverage for an insureds own property or a person. Traditionally it covers damage to insureds property from whatever causes are covered in the policy. It is property insurance coverage. An example of first party insurance is BUILDERS RISK INSURANCE which is insurance against loss to the rigs or vessels in the course of their construction. It only involves the insurance company and the owner of the rig and/or the contractor who has a financial interest in the rig.
THIRD PARTY INSURANCE - Liability insurance covering the negligent acts of the insured against claims from a third party (i.e., not the insured or the insurance company - a third party to the insurance policy). An example of this insurance would be SHIP REPAIRER'S LEGAL LIABILITY (SRLL) - provides protection for contractors repairing or altering a customer's vessel at their shipyard, other locations or at sea; also covers the insured while the customer's property is under the "Care, Custody and Control" of the insured. A Commercial General Liability policy is needed for other coverages, such as slip-and-fall situations.
INSURABLE INTEREST - Any interest in something that is the subject of an insurance policy or any legal relationship to that subject that will trigger a certain event causing monetary loss to the insured. Example of insurable interest - ownership of a piece of property or an interest in that piece of property, e.g., a shipyard constructing a rig or vessel. (See BUILDERS RISK above)
LIABILITY INSURANCE - Insurance coverage that protects an insured against claims made by third parties for damage to their property or person. These losses usually come about as a result of negligence of the insured. In marine construction this policy is referred to an MGL, marine general liability policy. In non marine circumstances the policy is referred to as a CGL, commercial general liability policy. Insurance policies can be divided into two broad categories:
First party insurance covers the property of the person who purchases the insurance policy. For example, a home owner's policy promising to pay for fire damage to the home owner's home is a first party policy. Liability insurance, sometimes called third party insurance, covers the policy holder's liability to other people. For example, a homeowners' policy might cover liability if someone trips and falls on the home owner's property. Sometimes one policy, such as in these examples, may have both first and third party coverage.
Liability insurance provides two separate benefits. First, the policy will cover the damage incurred by the third party. Sometimes this is called providing "indemnity" for the loss. Second, most liability policies provide a duty to defend. The duty to defend requires the insurance company to pay for lawyers, expert witnesses, and court costs to defend the third party's claim. These costs can sometimes be substantial and should not be ignored when facing a liability claim.
UMBRELLA LIABILITY COVERAGE - This type of liability insurance provides excess liability protection. Your business needs this coverage for the following three reasons:
It provides excess coverage over the "underlying" liability insurance you carry.
It provides coverage for all other liability exposures, excepting a few specifically excluded exposures. This subject to a large deductible of about $10,000 to $25,000.
It provides automatic replacement coverage for underlying policies that have been reduced or exhausted by loss.
NEGLIGENCE - The failure to use reasonable care. The doing of something which a reasonably prudent person would not do, or the failure to do something which a reasonably prudent person would do under like circumstances. Negligence is a 'legal cause' of damage if it directly and in natural and continuous sequence produces or contributes substantially to producing such damage, so it can reasonably be said that if not for the negligence, the loss, injury or damage would not have occurred.
GROSS NEGLIGENCE - A carelessness and reckless disregard for the safety or lives of others, which is so great it appears to be almost a conscious violation of other people's rights to safety. It is more than simple negligence, but it is just short of being willful misconduct. If gross negligence is found by the trier of fact (judge or jury), it can result in the award of punitive damages on top of general and special damages, in certain jurisdictions.
WILLFUL MISCONDUCT - An intentional action with knowledge of its potential to cause serious injury or with a reckless disregard for the consequences of such act.
PRODUCT LIABILITY - Liability which results when a product is negligently manufactured and sent into the stream of commence. A liability that arises from the failure of a manufacturer to properly manufacture, test or warn about a manufactured object.
MANUFACTURING DEFECTS - When the product departs from its intended design, even if all possible care was exercised.
DESIGN DEFECTS - When the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design, and failure to use the alternative design renders the product not reasonably safe.
INADEQUATE INSTRUCTIONS OR WARNINGS DEFECTS - When the foreseeable risks of harm posed by the product could have been reduced or avoided by reasonable instructions or warnings, and their omission renders the product not reasonably safe.
PROFESSIONAL LIABILITY INSURANCE - Liability insurance to indemnify professionals, (doctors, lawyers, architects, engineers, etc.,) for loss or expense which the insured professional shall become legally obliged to pay as damages arising out of any professional negligent act, error or omission in rendering or failing to render professional services by the insured. Same as malpractice insurance.
Professional Liability has expanded over the years to include those occupations in which special knowledge, skills and close client relationships are paramount. More and more occupations are considered professional occupations, as the trend in business continues to grow from a manufacturing-based economy to a service-oriented economy. Coupled with the litigious nature of our society, the companies and staff in the service economy are subject to greater exposure to malpractice claims than ever before.
ERRORS AND OMISSIONS - Same as malpractice or professional liability insurance.
HOLD HARMLESS AGREEMENT - A contractual arrangement whereby one party assumes the liability inherent in the situation, thereby relieving the other party of responsibility. For example, a lease of premises may provide that the lessee must "hold harmless" the lessor for any liability from accidents arising out of the premises.
INDEMNIFY - To restore the victim of a loss, in whole or in part, by payment, repair, or replacement.
INDEMNITY AGREEMENTS - Contract clauses that identify who is to be responsible if liabilities arise and often transfer one party's liability for his or her wrongful acts to the other party.
WARRANTY - An agreement between a buyer and a seller of goods or services detailing the conditions under which the seller will make repairs or fix problems without cost to the buyer.
Warranties can be either expressed or implied. An EXPRESS WARRANTY is a guarantee made by the seller of the goods which expressly states one of the conditions attached to the sale e.g.,"This item is guaranteed against defects in construction for one year".
An IMPLIED WARRANTY is usual in common law jurisdictions and attached to the sale of goods by operation of law made on behalf of the manufacturer. These warranties are not usually in writing. Common implied warranties are a warranty of fitness for use (implied by law that if a seller knows the particular purpose for which the item is purchased certain guarantees are implied) and a warranty of merchantability (a warranty implied by law that the goods are reasonably fit for the general purpose for which they are sold).
DAMAGES OR LOSS - The monetary consequence which results from injury to a thing or a person.
CONSEQUENTIAL DAMAGES - As opposed to direct loss or damage -- is indirect loss or damage resulting from loss or damage caused by a covered peril, such as fire or windstorm. In the case of loss caused where windstorm is a covered peril, if a tree is blown down and cuts electricity used to power a freezer and the food in the freezer spoils, if the insurance policy extends coverage for consequential loss or damage then the food spoilage would be a covered loss. Business Interruption insurance, extends consequential loss or damage coverage for such items as extra expenses, rental value, profits and commissions, etc.
LIQUIDATED DAMAGES - Are a payment agreed to by the parties of a contract to satisfy portions of the agreement which were not performed. In some cases liquidated damages may be the forfeiture of a deposit or a down payment, or liquidated damages may be a percentage of the value of the contract, based on the percentage of work uncompleted. Liquidated damages are often paid in lieu of a lawsuit, although court action may be required in many cases where liquidated damages are sought. Liquidated damages, as opposed to a penalty, are sometimes paid when there is uncertainty as to the actual monetary loss involved. The payment of liquidated damages relieves the party in breech of a contract of the obligation to perform the balance of the contract.
SUBROGATION - "To stand in the place of" Usually found in property policies (first party) when an insurance company pays a loss to an insured or damaged to the insureds property, the insurer stands in the shoes of the insured and may pursue any third party who might be responsible for the loss. For example, if a defective component is sold to a manufacturer to be used in his product and that product is damaged due to the defective component. The insurance company who pays the loss to the manufacturer of the product may sue the manufacturer of the defective component.
Subrogation has a number of sub-principles namely:
The insurer cannot be subrogated to the insureds right of action until it has paid the insured and made good the loss.
The insurer can be subrogated only to actions which the insured would have brought himself.
The insured must not prejudice the insurer's right of subrogation. Thus, the insured may not compromise or renounce any right of action he has against the third party if by doing so he could diminish the insurer's right of recovery.
Subrogation against the insurer. Just as the insured cannot profit from his loss the insurer may not make a profit from the subrogation rights. The insurer is only entitled to recover the exact amount they paid as indemnity, and nothing more. If they recover more, the balance should be given to the insured.
Subrogation gives the insurer the right of salvage.
In its history of providing insurance services to its clients for over thirty years, [http://www.freebase.com/view/guid/9202a8c04000641f800000000861ae56]Nausch Hogan & Murray has provided coverage for all areas of liability - both on land and at sea.
Over the years [http://www.nhmurray.com/home.html]Nausch Hogan & Murray has found it helpful to draft a glossary of useful insurance terms that come up time and again in discussions with an insured concerning their coverage needs. We hope these help you as well.
Article Source: [http://EzineArticles.com/?21+-Useful-Insurance-Terms-You-Should-Know&id=1198395] 21+ Useful Insurance Terms You Should Know
NAMED INSURED - Any person, firm or corporation specifically designated by name as an insured(s) in a policy as distinguished from others who, though unnamed, are protected under some circumstances. For example, a common application of this latter principle is in auto liability policies wherein by a definition of "insured", coverage is extended to other drivers using the car with the permission of the named insured. Other parties can also be afforded protection of an insurance policy by being named an "additional insured" in the policy or endorsement.
ADDITIONAL INSURED - An individual or entity that is not automatically included as an insured under the policy of another, but for whom the named insureds policy provides a certain degree of protection. An endorsement is typically required to effect additional insured status. The named insureds impetus for providing additional insured status to others may be a desire to protect the other party because of a close relationship with that party (e.g., employees or members of an insured club) or to comply with a contractual agreement requiring the named insured to do so (e.g., customers or owners of property leased by the named insured).
CO-INSURANCE - The sharing of one insurance policy or risk between two or more insurance companies. This usually entails each insurer paying directly to the insured their respective share of the loss. Co-insurance can also be the arrangement by which the insured, in consideration of a reduced rate, agrees to carry an amount of insurance equal to a percentage of the total value of the property insured. An example is if you have guaranteed to carry insurance up to 80% or 90% of the value of your building and/or contents, whatever the case may be. If you don't, the company pays claims only in proportion to the amount of coverage you do carry.
The following equation is used to determine what amount may be collected for partial loss:
Amount of Insurance Carried x Loss
Amount of Insurance that = Payment
Should be Carried
Example A Mr. Right has an 80% co-insurance clause and the following situation:
$100,000 building value
$ 80,000 insurance carried
$ 10,000 building loss
By applying the equation for determining payment for partial loss, the following amount may be collected:
$80,000 x $10,000 = $10,000
$80,000
Mr. Right recovers the full amount of his loss because he carried the coverage specified in his co-insurance clause.
Example B Mr. Wrong has an 80% co-insurance clause and the following situation:
$100,000 building value
$ 70,000 insurance carried
$ 10,000 building loss
By applying the equation for determining payment for partial loss, the following amount may be collected:
$70,000 x $10,000 = $8,750
$80,000
Mr. Wrong's loss of $10,000 is greater than the company's limit of liability under his co-insurance clause. Therefore, Mr. Wrong becomes a self-insurer for the balance of the loss-- $1,250.
PREMIUM - The amount of money paid by an insured to an insurer for insurance coverage.
DEDUCTIBLE - The first dollar amount of a loss for which the insured is responsible before benefits are paid by the insurer; similar to a self-insured retention (SIR). The insurer's liability begins when the deductible is exhausted.
SELF INSURED RETENTION - Acts the same way as a deductible but the insured is responsible for all legal fees incurred in relation to the amount of the SIR.
POLICY LIMIT - The maximum monetary amount an insurance company is responsible for to the insured under its policy of insurance.
FIRST PARTY INSURANCE - Insurance that applies to coverage for an insureds own property or a person. Traditionally it covers damage to insureds property from whatever causes are covered in the policy. It is property insurance coverage. An example of first party insurance is BUILDERS RISK INSURANCE which is insurance against loss to the rigs or vessels in the course of their construction. It only involves the insurance company and the owner of the rig and/or the contractor who has a financial interest in the rig.
THIRD PARTY INSURANCE - Liability insurance covering the negligent acts of the insured against claims from a third party (i.e., not the insured or the insurance company - a third party to the insurance policy). An example of this insurance would be SHIP REPAIRER'S LEGAL LIABILITY (SRLL) - provides protection for contractors repairing or altering a customer's vessel at their shipyard, other locations or at sea; also covers the insured while the customer's property is under the "Care, Custody and Control" of the insured. A Commercial General Liability policy is needed for other coverages, such as slip-and-fall situations.
INSURABLE INTEREST - Any interest in something that is the subject of an insurance policy or any legal relationship to that subject that will trigger a certain event causing monetary loss to the insured. Example of insurable interest - ownership of a piece of property or an interest in that piece of property, e.g., a shipyard constructing a rig or vessel. (See BUILDERS RISK above)
LIABILITY INSURANCE - Insurance coverage that protects an insured against claims made by third parties for damage to their property or person. These losses usually come about as a result of negligence of the insured. In marine construction this policy is referred to an MGL, marine general liability policy. In non marine circumstances the policy is referred to as a CGL, commercial general liability policy. Insurance policies can be divided into two broad categories:
First party insurance covers the property of the person who purchases the insurance policy. For example, a home owner's policy promising to pay for fire damage to the home owner's home is a first party policy. Liability insurance, sometimes called third party insurance, covers the policy holder's liability to other people. For example, a homeowners' policy might cover liability if someone trips and falls on the home owner's property. Sometimes one policy, such as in these examples, may have both first and third party coverage.
Liability insurance provides two separate benefits. First, the policy will cover the damage incurred by the third party. Sometimes this is called providing "indemnity" for the loss. Second, most liability policies provide a duty to defend. The duty to defend requires the insurance company to pay for lawyers, expert witnesses, and court costs to defend the third party's claim. These costs can sometimes be substantial and should not be ignored when facing a liability claim.
UMBRELLA LIABILITY COVERAGE - This type of liability insurance provides excess liability protection. Your business needs this coverage for the following three reasons:
It provides excess coverage over the "underlying" liability insurance you carry.
It provides coverage for all other liability exposures, excepting a few specifically excluded exposures. This subject to a large deductible of about $10,000 to $25,000.
It provides automatic replacement coverage for underlying policies that have been reduced or exhausted by loss.
NEGLIGENCE - The failure to use reasonable care. The doing of something which a reasonably prudent person would not do, or the failure to do something which a reasonably prudent person would do under like circumstances. Negligence is a 'legal cause' of damage if it directly and in natural and continuous sequence produces or contributes substantially to producing such damage, so it can reasonably be said that if not for the negligence, the loss, injury or damage would not have occurred.
GROSS NEGLIGENCE - A carelessness and reckless disregard for the safety or lives of others, which is so great it appears to be almost a conscious violation of other people's rights to safety. It is more than simple negligence, but it is just short of being willful misconduct. If gross negligence is found by the trier of fact (judge or jury), it can result in the award of punitive damages on top of general and special damages, in certain jurisdictions.
WILLFUL MISCONDUCT - An intentional action with knowledge of its potential to cause serious injury or with a reckless disregard for the consequences of such act.
PRODUCT LIABILITY - Liability which results when a product is negligently manufactured and sent into the stream of commence. A liability that arises from the failure of a manufacturer to properly manufacture, test or warn about a manufactured object.
MANUFACTURING DEFECTS - When the product departs from its intended design, even if all possible care was exercised.
DESIGN DEFECTS - When the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design, and failure to use the alternative design renders the product not reasonably safe.
INADEQUATE INSTRUCTIONS OR WARNINGS DEFECTS - When the foreseeable risks of harm posed by the product could have been reduced or avoided by reasonable instructions or warnings, and their omission renders the product not reasonably safe.
PROFESSIONAL LIABILITY INSURANCE - Liability insurance to indemnify professionals, (doctors, lawyers, architects, engineers, etc.,) for loss or expense which the insured professional shall become legally obliged to pay as damages arising out of any professional negligent act, error or omission in rendering or failing to render professional services by the insured. Same as malpractice insurance.
Professional Liability has expanded over the years to include those occupations in which special knowledge, skills and close client relationships are paramount. More and more occupations are considered professional occupations, as the trend in business continues to grow from a manufacturing-based economy to a service-oriented economy. Coupled with the litigious nature of our society, the companies and staff in the service economy are subject to greater exposure to malpractice claims than ever before.
ERRORS AND OMISSIONS - Same as malpractice or professional liability insurance.
HOLD HARMLESS AGREEMENT - A contractual arrangement whereby one party assumes the liability inherent in the situation, thereby relieving the other party of responsibility. For example, a lease of premises may provide that the lessee must "hold harmless" the lessor for any liability from accidents arising out of the premises.
INDEMNIFY - To restore the victim of a loss, in whole or in part, by payment, repair, or replacement.
INDEMNITY AGREEMENTS - Contract clauses that identify who is to be responsible if liabilities arise and often transfer one party's liability for his or her wrongful acts to the other party.
WARRANTY - An agreement between a buyer and a seller of goods or services detailing the conditions under which the seller will make repairs or fix problems without cost to the buyer.
Warranties can be either expressed or implied. An EXPRESS WARRANTY is a guarantee made by the seller of the goods which expressly states one of the conditions attached to the sale e.g.,"This item is guaranteed against defects in construction for one year".
An IMPLIED WARRANTY is usual in common law jurisdictions and attached to the sale of goods by operation of law made on behalf of the manufacturer. These warranties are not usually in writing. Common implied warranties are a warranty of fitness for use (implied by law that if a seller knows the particular purpose for which the item is purchased certain guarantees are implied) and a warranty of merchantability (a warranty implied by law that the goods are reasonably fit for the general purpose for which they are sold).
DAMAGES OR LOSS - The monetary consequence which results from injury to a thing or a person.
CONSEQUENTIAL DAMAGES - As opposed to direct loss or damage -- is indirect loss or damage resulting from loss or damage caused by a covered peril, such as fire or windstorm. In the case of loss caused where windstorm is a covered peril, if a tree is blown down and cuts electricity used to power a freezer and the food in the freezer spoils, if the insurance policy extends coverage for consequential loss or damage then the food spoilage would be a covered loss. Business Interruption insurance, extends consequential loss or damage coverage for such items as extra expenses, rental value, profits and commissions, etc.
LIQUIDATED DAMAGES - Are a payment agreed to by the parties of a contract to satisfy portions of the agreement which were not performed. In some cases liquidated damages may be the forfeiture of a deposit or a down payment, or liquidated damages may be a percentage of the value of the contract, based on the percentage of work uncompleted. Liquidated damages are often paid in lieu of a lawsuit, although court action may be required in many cases where liquidated damages are sought. Liquidated damages, as opposed to a penalty, are sometimes paid when there is uncertainty as to the actual monetary loss involved. The payment of liquidated damages relieves the party in breech of a contract of the obligation to perform the balance of the contract.
SUBROGATION - "To stand in the place of" Usually found in property policies (first party) when an insurance company pays a loss to an insured or damaged to the insureds property, the insurer stands in the shoes of the insured and may pursue any third party who might be responsible for the loss. For example, if a defective component is sold to a manufacturer to be used in his product and that product is damaged due to the defective component. The insurance company who pays the loss to the manufacturer of the product may sue the manufacturer of the defective component.
Subrogation has a number of sub-principles namely:
The insurer cannot be subrogated to the insureds right of action until it has paid the insured and made good the loss.
The insurer can be subrogated only to actions which the insured would have brought himself.
The insured must not prejudice the insurer's right of subrogation. Thus, the insured may not compromise or renounce any right of action he has against the third party if by doing so he could diminish the insurer's right of recovery.
Subrogation against the insurer. Just as the insured cannot profit from his loss the insurer may not make a profit from the subrogation rights. The insurer is only entitled to recover the exact amount they paid as indemnity, and nothing more. If they recover more, the balance should be given to the insured.
Subrogation gives the insurer the right of salvage.
In its history of providing insurance services to its clients for over thirty years, [http://www.freebase.com/view/guid/9202a8c04000641f800000000861ae56]Nausch Hogan & Murray has provided coverage for all areas of liability - both on land and at sea.
Over the years [http://www.nhmurray.com/home.html]Nausch Hogan & Murray has found it helpful to draft a glossary of useful insurance terms that come up time and again in discussions with an insured concerning their coverage needs. We hope these help you as well.
Article Source: [http://EzineArticles.com/?21+-Useful-Insurance-Terms-You-Should-Know&id=1198395] 21+ Useful Insurance Terms You Should Know
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