What is Liability insurance?

Liability insurance is a part of the general insurance system of risk financing to protect the purchaser (the "insured") from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy. Originally, individuals or companies that faced a common peril, formed a group and created a self-help fund out of which to pay compensation should any member incur loss (in other words, a mutual insurance arrangement). 

The modern system relies on dedicated carriers, usually for-profit, to offer protection against specified perils in consideration of a premium. Liability insurance is designed to offer specific protection against third party insurance claims, i.e., payment is not typically made to the insured, but rather to someone suffering loss who is not a party to the insurance contract. In general, damage caused intentionally as well as contractual liability are not covered under liability insurance policies. When a claim is made, the insurance carrier has the duty (and right) to defend the insured. The legal costs of a defense normally do not affect policy limits unless the policy expressly states otherwise; this default rule is useful because defense costs tend to soar when cases go to trial.

What liability insurance provides

Liability insurers have two (or three, in some jurisdictions) major duties: 1) the duty to defend, 2) the duty to indemnify and (in some jurisdictions), 3) the duty to settle a reasonably clear claim.

To defend

The duty to defend is triggered when the insured is sued and in turn "tenders" defense of the claim to its liability insurer. Usually this is done by sending a copy of the complaint along with a cover letter referencing the relevant insurance policy or policies and demanding an immediate defense. At this point, the insurer has three options, to:(1) seek a declaratory judgment of no coverage; (2) defend; or (3) refuse either to defend or to seek a declaratory judgment.

If a declaratory judgment is sought, the issue of the insurer's duty to defend will be resolved.

If the insurer decides to defend, it has thus either waived its defense of no coverage (later estopped), or it must defend under a reservation of rights. The latter means that the insurer reserves the right to withdraw from defending in the event that it turns out the claim is not covered, and to recover from the insured any funds expended to date.

If the insurer chooses to defend, it may either defend the claim with its own in-house lawyers (where allowed), or give the claim to an outside law firm on a "panel" of preferred firms which have negotiated a standard fee schedule with the insurer in exchange for a regular flow of work. The decision to defend under a reservation of rights must be undertaken with extreme caution in jurisdictions where the insured has a right to Cumis counsel.

The choice to do nothing can be very risky because a later determination that the duty applied often leads to the tort of bad faith. (So, insurers often prefer to defend under a reservation of rights rather than simply do nothing.)

To indemnify

The duty to indemnify means the duty to pay "all sums" for which the insured is held liable, up to a set policy limit.

To settle reasonable claims

In some jurisdictions, there is a third duty, the duty to settle a reasonably clear claim against the insured. The duty is of greatest import during situations in which the settlement demand equals or exceeds the policy limits. In that case, the insurer has an incentive not to settle, since if it settles, it will certainly pay the policy limit. But this interest is at odds with the interest of its insured. The company has incentive not to settle since if the case goes to trial, there are only two possibilities: its insured loses and insurer pays the policy limits (nothing gained nothing lost), or its insured wins, leaving the insurer with no liability. But, if the insurer refuses to settle, and the case goes to trial, the insured might be held liable for a sum far exceeding the settlement offer. In turn, the plaintiff might then attempt to recover the difference between the policy limits and the actual judgment by obtaining writs of attachment or execution against the insured's assets.

This is where the duty to settle comes in. To avoid endangering an insured to gain a remote possibility of avoiding paying on the policy, the duty to defend obligates the insurance company to settle reasonably clear claims. The standard judicial test is that an insurer must settle a claim if a reasonable insurer, notwithstanding any policy limits, would have settled the claim.

Effects of breach

An insurer who breaches any of these three duties may be held liable for the tort of insurance bad faith in addition to breach of contract.

Occurrence v. claims-made policies

Traditionally, liability insurance was written on an occurrence basis, meaning that the insurer agreed to defend and indemnify against any loss which allegedly "occurred" as a result of an act or omission of the insured during the policy period. This was originally not a problem because it was thought that insureds' tort liability was predictably limited by doctrines like proximate cause and statutes of limitations. In other words, it was thought that no sane plaintiffs' lawyer would sue in 1978 for a tortious act that allegedly occurred in 1953, because the risk of dismissal was so obvious.

In the 1980s, a large number of major toxic tort scandals (primarily involving asbestos and diethylstilbestrol) resulted in numerous judicial decisions and statutes which radically extended the so-called "long tail" of potential liability chasing occurrence policies. The result was that insurers who had long-ago closed their books on policies written 20, 30, or 40 years earlier now found that their insureds were being hit with hundreds of thousands of lawsuits which implicated those old policies.

The insurance industry reacted in two ways to these developments. First, premiums on new occurrence policies skyrocketed, since the industry had learned the hard way to assume the worst as to those policies. Second, the industry began issuing claims-made policies, where the policy covers only those claims that are first "made" against the insured during the policy period. A related variation is the claims-made-and-reported policy, under which the policy covers only those claims that are first made against the insured and reported by the insured to the insurer during the policy period. (There is usually a 30-day grace period for reporting after the end of the policy period to protect insureds who are sued at the very end of the policy period.)

Claims-made policies enable insurers to again sharply limit their own long-term liability on each policy and in turn, to close their books on policies and record a profit. Hence, they are much more affordable than occurrence policies and are very popular for that reason. Of course, claims-made policies shift the burden to insureds to immediately report new claims to insurers. They also force insureds to become more proactive about risk management and finding ways to control their own long-tail liability.

Claims-made policies often include strict clauses that require insureds to report even potential claims and that combine an entire series of related acts into a single claim. This puts insureds to a Sophie's choice. They can timely report every "potential" claim (i.e., every slip-and-fall on their premises), even if those never ripen into actual lawsuits, and thereby protect their right to coverage, but at the expense of making themselves look more risky and driving up their own insurance premiums. Or they can wait until they actually get sued, but then they run the risk that the claim will be denied because it should have been reported back when the underlying accident first occurred.

Claims-made coverage also makes it harder for insureds to switch insurers, as well as to wind up and shut down their operations. It is possible to purchase "tail coverage" for such situations, but only at premiums much higher than for conventional claims-made policies, since the insurer is being asked to re-assume the kind of liabilities which claims-made policies were supposed to push to insureds to begin with.

Retained limits and SIRs

One way for businesses to cut down their liability insurance premiums is to negotiate a policy with a retained limit or self-insured retention (SIR), which is somewhat like a deductible. With such policies, the insured is essentially agreeing to self-insure and self-defend for smaller claims, and to tender only for liability claims that exceed a certain number. However, writing such insurance is itself risky for insurers. The California Courts of Appeal have held that primary insurers on policies with a SIR must still provide an "immediate, 'first dollar' defense" (subject, of course, to their right to later recover the SIR amount from the insured) unless the policy expressly imposes exhaustion of the SIR as a precondition to the duty to defend.

Types of liability insurance

In many countries, liability insurance is a compulsory form of insurance for those at risk of being sued by third parties for negligence. The most usual classes of mandatory policy cover the drivers of vehicles, those who offer professional services to the public, those who manufacture products that may be harmful, constructors and those who offer employment. The reason for such laws is that the classes of insured are deliberately engaging in activities that put others at risk of injury or loss. Public policy therefore requires that such individuals should carry insurance so that, if their activities do cause loss or damage to another, money will be available to pay compensation. In addition, there are a further range of perils that people insure against and, consequently, the number and range of liability policies has increased in line with the rise of contingency fee litigation offered by lawyers (sometimes on a class action basis). 

Such policies fall into three main classes:

Public liability

Industry and commerce are based on a range of processes and activities that have the potential to affect third parties (members of the public, visitors, trespassers, sub-contractors, etc. who may be physically injured or whose property may be damaged or both). It varies from state to state as to whether either or both employer's liability insurance and public liability insurance have been made compulsory by law. Regardless of compulsion, however, most organizations include public liability insurance in their insurance portfolio even though the conditions, exclusions, and warranties included within the standard policies can be a burden. A company owning an industrial facility, for instance, may buy pollution insurance to cover lawsuits resulting from environmental accidents.

Many small businesses do not secure general or professional liability insurance due to the high cost of premiums. However, in the event of a claim, out-of-pocket costs for a legal defense or settlement can far exceed premium costs. In some cases, the costs of a claim could be enough to shut down a small business.

Businesses must consider all potential risk exposures when deciding whether liability insurance is needed, and, if so, how much coverage is appropriate and cost-effective. Those with the greatest public liability risk exposure are occupiers of premises where large numbers of third parties frequent at leisure including shopping centers, pubs, clubs, theaters, sporting venues, markets, hotels and resorts. The risk increases dramatically when consumption of alcohol and sporting events are included. Certain industries such as security and cleaning are considered high risk by underwriters. In some cases underwriters even refuse to insure the liability of these industries or choose to apply a large deductible in order to minimize the potential compensations. Private individuals also occupy land and engage in potentially dangerous activities. 

For example, a rotten branch may fall from an old tree and injure a pedestrian, and many people ride bicycles and skateboards in public places. The majority of states require motorists to carry insurance and criminalise those who drive without a valid policy. Many also require insurance companies to provide a default fund to offer compensation to those physically injured in accidents where the driver did not have a valid policy.

In many countries claims are dealt with under common law principles established through a long history of case law and, if litigated, are made by way of civil actions in the relevant jurisdiction.

Product

Product liability insurance is not a compulsory class of insurance in all countries, but legislation such as the UK Consumer Protection Act 1987 and the EC Directive on Product Liability (25/7/85) require those manufacturing or supplying goods to carry some form of product liability insurance, usually as part of a combined liability policy. The scale of potential liability is illustrated by cases such as those involving Mercedes-Benz for unstable vehicles and Perrier for benzene contamination, but the full list covers pharmaceuticals and medical devices, asbestos, tobacco, recreational equipment, mechanical and electrical products, chemicals and pesticides, agricultural products and equipment, food contamination, and all other major product classes.

Employers

New policies have been developed to cover any liability that might be imposed on an employer if an employee is injured in the course of his or her employment. In many states in the US, the insurers are prohibited from including conditions within their policies that seek to impose any unreasonable conditions precedent to liability, or require the insured either to take reasonable precautions or to comply with current legislation and regulations. In those countries where such insurance is not compulsory, smaller organizations are often driven into bankruptcy when faced by claims not covered by insurance.

Note that in the United Kingdom Employers Liability Insurance is compulsory, unless the only employee is the owner of the company (who holds at least 50% of the shares) or the business is a family business which is not incorporated as a limited company. Workers' Compensation insurance in the United States is usually compulsory unless the employer can demonstrate the capability to self-insure by demonstrating sufficient financial capacity and risk management capabilities. Employers that self-insure may carry excess insurance for occurrences that generate unacceptably large losses for the employer.

Workers' compensation in the United States in most states operates through administrative adjudication outside of the federal and state courts; in turn, workers' comp insurance is regulated and underwritten separately from liability insurance. That is, separate policy forms are generated to underwrite Commercial General Liability policy Workers' Compensation. Since 1971 ISO has assisted the insurance industry in developing policy forms for Commercial General Liability. The National Council on Compensation Insurance (NCCI) and various state rating bureaus provide similar support for Workers' Compensation.

In the 1980s, the standard CGL forms were revised to exclude coverage for torts related to the employer-employee relationship like racial or gender discrimination in the workplace, as well as liability for negligent supervision of midlevel managers who committed such torts. However, it soon became obvious that employers were anxious to find some kind of liability coverage for such torts, which resulted in the development of Employment Practices Liability (EPL) insurance.

Third-party liability

Third-party liability is an insurance policy purchased for protection against the actions of another (a third) party. It is purchased by the insured (the first party) from an insurance company (the second party) for protection against damage from the actions of another party (a third party). For example, if your car is hit by someone without insurance, you can purchase coverage, third-party insurance, on their behalf. This is not to be confused with an accident you caused, which would be covered by first-party, or standard, liability insurance.

General liability

Many of the public and product liability risks are often covered together under a general liability policy. These risks may include bodily injury or property damage caused by direct or indirect actions of the insured.

In the United States, general liability insurance coverage most often appears in the Commercial General Liability policies obtained by businesses, and in homeowners' insurance policies obtained by individual homeowners.

Insurable risks

Generally, liability insurance covers only the risk of being sued for negligence or strict liability torts, but not any tort or crime with a higher level of mens rea. This is usually mandated either by the policy language itself or case law or statutes in the jurisdiction where the insured resides or does business.

In other words, liability insurance does not protect against liability resulting from crimes or intentional torts committed by the insured. This is intended to prevent criminals, particularly organized crime, from obtaining liability insurance to cover the costs of defending themselves in criminal actions brought by the state or civil actions brought by their victims. A contrary rule would encourage the commission of crime, and allow insurance companies to indirectly profit from it, by allowing criminals to insure themselves from adverse consequences of their own actions.

It should be noted that crime is not uninsurable per se. In contrast to liability insurance, it is possible to obtain loss insurance to compensate one's losses as the victim of a crime.

Evidentiary rules regarding liability insurance

In the United States, most states make only the carrying of auto insurance mandatory. Where the carrying of a policy is not mandatory and a third party makes a claim for injuries suffered, evidence that a party has liability insurance is generally inadmissible in a lawsuit on public policy grounds, because the courts do not want to discourage parties from carrying such insurance. There are two exceptions to this rule:

1. If the owner of the insurance policy disputes ownership or control of the property, evidence of liability insurance can be introduced to show that it is likely that the owner of the policy probably does own or control the property.

2. If a witness has an interest in the policy that gives the witness a motive or bias with respect to specific testimony, the existence of the policy can be introduced to show this motive or bias. Federal rules of civil procedure rule 26 was amended in 1993 to require that any insurance policy that may pay or may reimburse be made available for photocopying by the opposing litigants, although the policies are not normally information given to the jury. Federal Rules of Appellate Procedure rule 46 says that an appeal can be dismissed or affirmed if counsel does not update their notice of appearance to acknowledge insurance. The Cornell University Legal Institute web site includes congressional notes.

Liability insurance and the technology industry

Because technology companies represent a relatively new industry that deals largely with intangible yet highly valuable data, some definitions of legal liability may still be evolving in this field. Technology firms must carefully read and fully understand their policy limits to ensure coverage of all potential risks inherent in their work.

Typically, professional liability insurance protects technology firms from litigation resulting from charges of professional negligence or failure to perform professional duties. Covered incidents may include errors and omissions that result in the loss of client data, software or system failure, claims of non-performance, negligent overselling of services, contents of a forum post or email of an employee that are incorrect or cause harm to a reputation, getting rid of office equipment such as fax machines without properly clearing their internal memory, or failing to notify customers that their private data has been breached. For example, some client companies have won large settlements after technology subcontractors’ actions resulted in the loss of irreplaceable data. Professional liability insurance would generally cover such settlements and legal defense, within policy limits.

Additionally, client contracts often require technology subcontractors working on-site to provide proof of general liability and professional liability insurance.

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What Is Contents Insurance?

When you're considering insurance for your residence, there are lots of different terms you need to understand, such as "personal liability" and "actual value vs. replacement cost." But, the good news is that some of the terminology used, like contents insurance, is actually very easy to understand.

"Contents insurance" typically refers to coverage for property you own. Call it your stuff, your treasured belongings, your priceless valuables, or whatever you want. With personal property protection, you're basically covering the personal possessions that you keep in your home. It can include everything from your laptop computer to your wine collection, and from your refrigerator to your wardrobe.

What's the benefit of insuring your personal possessions? If you live in a rental home or an apartment and disaster strikes, your landlord is already covered for structural damages. But, what recourse do you have if everything inside your rental is destroyed or severely damaged? The insurance policy that your landlord has on his or her property won't cover these things. As a tenant, it's your responsibility to take out an insurance policy that will reimburse you for what you own if it were to suddenly go up in smoke or suffer severe damage as a result of a storm. Personal property protection even protects you against theft, and is an investment you should strongly consider if you're as attached to your belongings as the rest of us are.

Before you buy personal property insurance, take an inventory of your belongings. One of the simplest ways to perform a home inventory is to walk through your house or apartment with a video camera and give a brief description of the things you own that are the most valuable—like your big-screen TV, computer, antique furniture, major appliances and other pricey belongings. You can also use the Allstate Digital Locker tool to catalog the items you own. Once you have the list, it will be a lot easier for you to figure out how much coverage you need. And, it may help if you ever need to file a claim.

Next, you will need to decide between Actual Cash Value and Replacement Cost coverage. Both of these sound similar, but there's actually a big difference between the two. When you get personal property insurance, you may have the option to select one or the other. In the event of a claim, Actual Cash Value coverage factors in depreciation and pays what you'd expect to receive for your belongings if you sold them today. Replacement Cost coverage pays the cost to replace your item with one of the same kind. For example, you might have paid $500 for your stereo system 10 years ago, but if it gets destroyed as a result of a covered disaster, you'll be reimbursed for whatever it costs you to find a matching replacement. If you had Actual Cash Value coverage, you would only be paid what your stereo is worth today, which may not be much. Most of the time, Replacement Cost coverage comes with higher premiums, but you may find it to be well worth every penny.

You also may want to increase the coverage on your valuable belongings. If you own any precious jewelry, expensive electronics, rare coin collections or anything of high value, you may have the option to increase the amount of coverage so that you're adequately reimbursed if they're lost, stolen or destroyed. You can choose to get increased coverage for individual items, or you can choose to boost your level of coverage for groups of items. It all depends on what fits your needs.

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What is Landlords insurance?

Landlords insurance is an insurance policy that covers a property owner from financial losses connected with rental properties. The policy covers the building, with the option of insuring any contents that belong to the landlord that are inside. Landlords' insurance is often referred to as buy-to-let insurance, however buy-to-let insurance is a type of landlords' insurance. It is important to distinguish between buy-to-let insurance which generally covers one property that has been purchased with a buy-to-let mortgage, and multi-property insurance, which covers two or more properties. Each of these types of landlords' insurance covers different things.

The policy will normally cover standard perils such as fire, lightning, explosion, earthquake, storm, flood, escape of water/oil, subsidence, theft and malicious damage. Each insurance policy is different and may or may not include all these items. Optional coverage might include accidental damage, malicious damage by tenant, terrorism, legal protection, alternative accommodation costs, contents insurance, rent guarantee insurance, and liability insurance.

Landlords' insurance policies typically do not cover any personal property belonging to tenants, or otherwise protect the interest of tenants; although a liability policy protecting a landlord or property manager will be of benefit to tenants should they incur a loss for which the landlord is responsible.

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What is General insurance?

General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. General insurance typically comprises any insurance that is not determined to be life insurance. It is called property and casualty insurance in the U.S. and Canada and Non-Life Insurance in Continental Europe.

In the UK, insurance is broadly divided into three areas: personal lines, commercial lines and London market.

The London market insures large commercial risks such as supermarkets, football players and other very specific risks. It consists of a number of insurers, reinsurers, P&I Clubs, brokers and other companies that are typically physically located in the City of London. The Lloyd's of London is a big participant in this market. The London Market also participates in personal lines and commercial lines, domestic and foreign, through reinsurance.

Commercial lines products are usually designed for relatively small legal entities. These would include workers' comp (employers liability), public liability, product liability, commercial fleet and other general insurance products sold in a relatively standard fashion to many organisations. There are many companies that supply comprehensive commercial insurance packages for a wide range of different industries, including shops, restaurants and hotels.

Personal lines products are designed to be sold in large quantities. This would include autos (private car), homeowners (household), pet insurance, creditor insurance and others.

ACORD which is the insurance industry global standards organisation. ACORD has standards for personal and commercial lines and has been working with the Australian General Insurers to develop those XML standards, standard applications for insurance, and certificates of currency.

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What is Auto Insurance?

Nobody ever thinks it's going to happen to them. But the simple fact is that a car accident happens every 18 seconds in the United States. Even the most careful drivers can find themselves involved in one.

You cannot predict the future, but you can be prepared with auto insurance for the vehicles in your household.

In most states, it is mandatory that drivers have at least minimum coverage auto insurance, which is why it's important to find out your state's minimum requirements. But many drivers choose more than the minimum coverage requirements in order to protect themselves to a greater degree.

What is Auto Insurance? 

Simply put, auto insurance is a safety net. It is a contract that you have with an insurance company in which you agree to pay a premium, and in the event of an accident, the company agrees to pay for your covered damages, as outlined in your specific insurance auto policy.

It is important to familiarize yourself with the terms 'premium' and 'deductible' when shopping for auto insurance.

An insurance premium is the amount of money your insurance company charges you for a certain policy.

Your deductible is the amount of money that you are responsible for paying when damages occur as the result of an accident. For example, if you have $500 in damages as the result of an accident and a $100 deductible on your auto policy, you are responsible for paying $100 of the total damages.

If you are responsible for causing an accident or damage to other vehicles, your insurance generally covers the costs of repairs, legal fees and medical coverage for those who suffered injuries in the accident. Insurance policies also cover costs incurred when your car is stolen or vandalized.

Types of Auto Insurance Coverage 

Generally, auto policies include several different types of coverage, all of which may be priced differently. For instance, insurance may cover:

Bodily Injury Liability. This type of coverage pays for medical bills, lost wages or income, pain and suffering, and even funeral expenses for those injured in an accident where you were legally responsible for their injuries. This coverage also pays for the legal and court costs to defend you in a covered lawsuit. This type of coverage is required in most states.

Property Damage Liability. If you are responsible for causing an accident, you are legally held responsible for repairs to another person’s vehicle or property. Property damage coverage not only covers the cost to repair the other person’s car, but it also covers repair costs of anything you hit with your vehicle, such as a street lamp, fence or building. This type of coverage is required in most states.

Collision. This type of auto insurance coverage pays for damage to your car as the result of a collision with another vehicle. Even if you are at fault for causing an accident, this type of coverage will reimburse you for the cost of fixing your car once you have paid the out-of-pocket deductible amount. If you are not at fault, your insurance company can seek reimbursement from another driver to cover the cost of repairs to your vehicle. Collision coverage is optional in all states. However, if your automobile is financed, your bank or lending institution will require you to have this coverage.

Comprehensive. This coverage protects you for losses due to hazards not caused by a collision with another vehicle. This includes damages that are the result of theft, vandalism, fires, falling objects, earthquakes and storms, or contact with animals, such as deer. Comprehensive coverage is optional in all states. Though, like Collision coverage, if your vehicle is financed, your bank or lending institution will require you to have this coverage.

Uninsured and Underinsured Motorist Coverage. This policy protects you and other passengers in your automobile if you are injured in an accident by a motorist who is uninsured and held legally responsible for your injuries. It pays the medical expenses and related expenses you have incurred up to the coverage limits you select.

Auto insurance exists to protect you and your property. So be prepared by making sure that your vehicle is properly insured. Because the simple fact is - accidents do happen.

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What is Renters insurance?

Renters' insurance is an insurance policy which provides most of the benefits of homeowners' insurance. Renters' insurance does not include coverage for the dwelling, or structure, with the exception of small alterations that a tenant makes to the structure. This provides liability insurance. The tenant's personal property is covered against named perils such as fire, theft and vandalism. The owner of the building is responsible for insuring it, but bears no responsibility for the tenant's belongings.

General requirements

Many large and medium-sized rental properties include a requirement in their lease that tenants hold renters' insurance. If the tenant damages the premises, the landlord and other tenants can recover against the perpetrator's insurance. Renters' insurance also informs the tenant that the landlord is not responsible for their belongings and that the tenant has coverage for them. But it is important to know what type of damage your insurance covers. Basically, there are three types of coverage available: loss of use, personal property, and personal liability.

Tracking renters' insurance

Multiple companies track renters' insurance in apartment complexes, by requiring the tenant to purchase insurance and maintaining a database of expiration dates, cancellations and similar information for the property owner/manager to use to ensure coverage for all units.

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What is Motorcycle Insurance?

All motorcycles on the road are required by law to have motorcycle insurance. Motorcycle insurance protects a motorcycle and its owner in the event of a loss. The term motorcycle policy encompasses motorcycles, scooters, mopeds, snowmobiles, ATVs, and golf carts. A homeowner's policy never covers physical damage on a motorcycle; however, endorsements are available on some policies for ATV's and golf carts but you will have to check with your carrier to find out if it is available. Motorcycle insurance has your typical coverage plus it has some specialized coverage that you may not be familiar with.

Standard Motorcycle Coverages

Bodily injury & property damage liability

Uninsured Motorcyclist

Medical Pay

Comprehensive

Collision

Aside from the standard set of coverage on motorcycle policies, companies often offer specialized coverage. Specialized coverage can really come in handy at the time of loss. Things you may not think of prior to a claim such as accessory coverage and trip interruption can be costly if you do not have the coverage included on your motorcycle policy.

Specialized Coverages

Total loss replacement

Accessory coverage

Transport trailer coverage

Trip Interruption

Roadside Assistance

Rental vehicle coverage

Total loss replacement is usually only available on previously untitled motorcycles up to one model year old. Other motorcycles are insured for agreed value or actual cash value. A claim can be difficult enough, make sure you know how your motorcycle insurance policy reads so you are not surprised at the time of a loss.

Accessory coverage is important for those motorcycle enthusiasts who love to accessorize their bikes. A standard policy usually comes with $1000 to $3000 of coverage. With the high price of accessories, it is easy to go over that limit, make sure if you are customizing your bike to keep track of how much you invest in accessories.

Transport trailer coverage covers the trailer used to transport a motorcycle. The coverage is for a non- motorized trailer to be towed on public roads. Usually the coverage is capped at $10,000. Trip interruption coincides with roadside assistance. If you are 100 miles or more away from home and your bike breaks down, this coverage kicks in to provide relief. It covers lodging, alternative transportation, and food while your motorcycle is being repaired. Check your policy for limits of coverage.

Roadside assistance covers towing for a disabled motorcycle.

Rental vehicle coverage is typically automatically included on a motorcycle policy. As long as you have comprehensive and collision on your insured motorcycle, the coverage will extend to a rented bike under a rental agreement.

Specialized coverages are just that, specialized. Nothing is wrong with insuring just the bike and opting out of all the extras. Make what you want clear to your agent when purchasing the policy so you are not paying extra for all the bells and whistles, although several are often automatically included at no additional charge.

Since motorcycle insurance is mandatory, you had better take the time to understand what you are buying. Get your motorcycle insurance in place before taking the bike for a spin. If an accident ever does occur, you will know what to expect of your motorcycle insurance policy. The one feeling that is better than riding on the open road is riding on the open road with the peace of mind of proper insurance.

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What is Pet insurance?

Pet insurance pays, partly or in total, for veterinary treatment of the insured person's ill or injured pet. Some policies will pay out when the pet dies, or if it is lost or stolen.

As veterinary medicine is increasingly employing expensive medical techniques and drugs, and owners have higher expectations for their pets' health care and standard of living than previously, the market for pet insurance has increased.

History

The first pet insurance policy was written in 1890 by Claes Virgin. Virgin was the founder of Länsförsäkrings Alliance, at that time he focused on horses and livestock.[citation needed] In 1947 the first pet insurance policy was sold in Britain. As of 2009, Britain has the second-highest level of pet insurance in the world (23%),[2] behind only Sweden. In 1982, the first pet insurance policy was sold in the United States, and issued to television's Lassie by Veterinary Pet Insurance (VPI).

How policies work

Many pet owners believe pet insurance is a variation of human health insurance; however, pet insurance is actually a form of property insurance. As such, pet insurance reimburses the owner after the pet has received care and the owner submits a claim to the insurance company.

UK policies may pay 100% of vets fees, but this is not always the case. It is common for UK pet insurance companies to discount their policies by offering customers the chance to pay an "excess", just as with motor insurance. Excess fees can range from £40 to £100.

Policies in the United States and Canada either pay off a benefit schedule or pay a percentage of the vet costs (up to 90%), after reaching a deductible, depending on the company and the policy. The owner usually pays the amount due to the veterinarian and then sends in the claim form and receives reimbursement, which some companies and policies limit according to their own schedules of necessary and usual charges. For very high bills, some veterinarians allow the owner to put off payment until the insurance claim is processed. Some insurers pay veterinarians directly on behalf of customers. Most American and Canadian policies require the pet owner to submit a request for fees incurred.

Previously, most pet insurance plans did not pay for preventative care (such as vaccinations) or elective procedures (such as neutering). Recently, however, some companies in Canada, the United Kingdom, and the United States are offering routine-care coverage, sometimes called comprehensive coverage. Dental care, prescription drugs and alternative treatments, such as physiotherapy and acupuncture, are also covered by some providers.

There are two categories of insurance policies for pets: non-lifetime and lifetime. The first covers buyers for most conditions suffered by their pet during the course of a policy year but, on renewal in a following year, a condition that has been claimed for will be excluded. If that condition needs further treatment the pet owner will have to pay for that him/herself. The second category covers a pet for ongoing conditions throughout the pet’s lifetime so that, if a condition is claimed for in the first year, it will not be excluded in subsequent years.

However, lifetime policies also have limits: some have limits “per condition”, others have limits “per condition, per year”, and others have limits “per year”, all of which have different implications for a pet owner whose pet needs treatment year after year, so it is wise to be clear which type of lifetime policy you are considering.

In addition, companies often limit coverage for pre-existing conditions in order to eliminate fraudulent consumers, thus giving owners an incentive to insure even very young animals, who are not expected to incur high veterinary costs while they are still healthy. There is usually a short period after a pet insurance policy is bought when the holder will be unable to claim for sickness, often no more than 14 days from inception. This is to cover illnesses contracted before the pet was covered but whose symptoms appeared only after coverage has begun.

Some insurers offer options not directly related to pet health, including covering boarding costs for animals whose owners are hospitalized, or costs (such as rewards or posters) associated with retrieving lost animals. Some policies also include travel cancellation coverage if owners must remain with pets who need urgent treatment or are dying.

Some British policies for dogs also include third-party liability insurance. Thus, for example, if a dog causes a car accident that damages a vehicle, the insurer will pay to rectify the damage for which the owner is responsible under the Animals Act 1971.

The difference between companies

Pet insurance companies are beginning to offer the pet owner more of an ability to customize their coverage by allowing them to choose their own level of deductible or co-insurance. This allows the pet owner to control their monthly premium and choose the level of coverage that suits them the best.

Some of the differences in insurance coverage are:

Whether congenital and hereditary conditions (like hip dysplasia, heart defects, eye cataracts or diabetes) are covered;

How the reimbursement is calculated (based on the actual vet bill, a benefit schedule or usual and customary rates);

Whether the deductible is on a per-incident or an annual basis;

Whether there are any limits or caps applied (per incident, per year, age or over the pet’s lifetime); and

Whether there is an annual contract that determines anything diagnosed in the previous year of coverage is considered pre-existing the next year.

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