The Role of Insurance Companies in Personal Insurance Lawsuits

Personal injury lawsuits are normally contentious issues. Sometimes they are clear in terms of negligence and responsibility, but that is not always the case. Tort cases are actions between primary parties. In most cases the defendant, which is called the respondent in a tort claim, will have a common insurance carrier depending on the facts of the case. In some cases the petitioner has insurance coverage also, so the material facts of the case can be confusing.

EVALUATION OF COVERAGE

The first role of the insurance company in a possible negligence case is to assess the parameters of coverage. This can be problematic if the company has a responsibility caveat. Insurance policies are always subject to scrutiny in terms of coverage. And insurance companies have those stipulations in place for this reason. If they can reasonably avoid compensating the injured party, then rest assured that they will.

The first meeting with the insurance company will be with the adjuster. Settling the case as cheaply as possible is the adjuster’s goal. Assessing the injuries before hand in terms of damages is always a good practice for the injured party. This will help the victim not undersell. The adjuster is also concerned with a quick settlement if the petitioner will settle for a minimal amount. Patience is clearly an advantage at this stage of a potential court claim.

EVALUATION OF EVIDENCE

The insurance company will then evaluate the merits of the case. There should be copies of all medical records on file, including diagnosis and status of the injury. A prognosis is always important also because it can establish the inevitability of future medical problems resulting from the injury. Very often the insurance company will want to avoid any future claims and a validation of coverage liability can be limited to the cap of the policy.

It is important to understand that the insurance company’s involvement in the matter stops at the point that they pay the maximum on the policy. Any additional claims will need to be pursued against the primary respondent in the event that negligence is established. The fact that an insurance company will pay a claim before court does not preclude a court decision in the respondent’s favor. The insurance carrier should not longer be involved or have a recourse.

REPRESENTATION

When a case goes to court the insurance company will be represented well with professional counsel. The victim should do the same, preferably with solid experienced legal counsel. When cases actually go to trial the parties both need effective counsel to determine both compensatory and punitive damages, as well as establish materials facts and merits of the litigation. A reputable personal injury lawyer is always essential in negligence cases that actually move to court.

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Buy Personal Insurance to Get Protection Against Financial Losses

It is not only important to purchase insurance policies, but also necessary to buy adequate coverage so that you and your family members are protected from unforeseen circumstances. If you’re the bread earner of your family, then it’s your responsibility to afford the right medical treatment for your family members or to ensure that they don’t experience financial crunch in your absence. Read this article to know about different types of insurance policies that will provide you with the required coverage.

Personal insurance policies that you should purchase

4 Types of personal insurance policies are discussed below.

1. Health insurance – Purchasing adequate health insurance coverage will help you to afford the right medical treatment even it is expensive. Medical costs are rising day by day; so, consult with an insurance agent and purchase right amount of coverage for you and the other members of your family.

2. Life insurance – This policy pays cash benefits to the beneficiary/beneficiaries in the event of the policyholder’s death. So, by purchasing this policy, you can ensure that your family members can continue their present lifestyle and stay in the home as they can pay off the outstanding mortgage balance along with other debts with the policy proceeds.

3. Car insurance – A car insurance policy provides compensation for the loss when your car gets damaged in an accident. In addition, the policy also covers liability claims when your car is responsible for someone’s injury or the vehicle causes damage to any property.

4. Homeowners insurance – You make a huge financial investment when your purchase a home. So, you should buy homeowners insurance policy in order to get coverage against theft or damage. You can also cover your expensive items through a home insurance policy.

Apart from purchasing the types of insurance policies discussed above, you can also buy travel insurance when you go for a vacation. This policy will cover certain financial losses that may incur during your trip, such as, a travel delay, a trip cancellation, loss of baggage, etc. In addition to this, this policy will also cover medical expenses if you suddenly fall sick on your tour.

You can purchase sub insurance policies along with the basic types of insurance policies. The primary purpose of purchasing sub insurance is to get additional coverage. For example, an insurance floater (a sub insurance policy) may offer additional coverage to easily movable properties, such as, an expensive piece of jewelry. You can also get an insurance rider for covering critical illness which may not be listed in your health insurance policy.

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Personal Insurance Reviews Benefit The Customer and Agent

A personal insurance review is simply reviewing your insurance policies with your agent. This can be done by phone or in person. I feel it is always nice to do these in person. Meeting in person makes the review more personal and builds rapport with your agent. I recommend completing a personal insurance review every one to two years. There are several benefits to having a regular insurance review.

One benefit is that you may uncover discounts that you are eligible to receive. Insurance companies offer a variety of discounts to their policyholders, so you want to see that you are receiving all discounts available to you. One example of a discount that may be overlooked is the Good Student Discount. Most companies offer this discount, but the agent may not be aware that a child qualifies for the discount until an insurance review is done. Updating the electrical, heating, or plumbing on your home may provide you a discount on your home insurance; but your agent may not know that these updates have been done to your home until you have an insurance review. Personal insurance reviews are a great opportunity for you to discuss all discounts available with your agent.

A second benefit is to review the coverage on existing policies. Your situation may have changed since the policy was written and you may not need the same coverage as you did previously. One common situation is people that have vehicles on their policies for several years. Sometimes these vehicles still have full coverage, but the customer does not realize it. The age or condition of the vehicle may not warrant the additional premium for full coverage. Another common situation is people that still have very low deductibles on their home insurance. It was not uncommon to have $50, $100, or $250 deductible 15 to 20 years ago, but many times there is a significant savings in premium to raise the deductible. A personal insurance review is a great time to remove any coverage that may no longer be needed.

A third benefit is to locate any gaps in coverage. There are many areas where gaps can occur in your insurance program without you realizing it. Your life changes frequently and many of the changes may seem minor, but can have an effect on your insurance coverage. Some common changes that affect your insurance are updating a home can increase its value; having children may increase the need for life insurance; purchasing an expensive television or jewelry may require additional endorsements be added to your home insurance. Having an annual or bi-annual review helps to uncover areas where gaps in coverage may exist.

People are often hesitant to have an insurance review because they feel the sole purpose is for the agent to sell more insurance. However, the purpose of the insurance review is to make sure that the individual has the proper coverage in place for their situation. This is a benefit to the agent and the customer. The customer benefits by gaining a knowledge of their coverage and receiving the peace of mind that they are properly insured. The agent benefits by knowing their customers will have no gaps in coverage if a loss occurs.

It is important to have regular insurance reviews with your agent. The reviews make sure proper coverage is in place before a loss occurs and that you are paying the proper premium by taking full advantage of all discounts available.

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Key Person Insurance

Business owners seldom think twice about the need for insuring the physical assets of their business, but often overlook or struggle with the concept of insuring their key personnel. Key personnel could be defined as;
o Someone with specialised skills or knowledge in your business
o The founder or public face of the company
o The creator of unique intellectual property – software, key adviser, major account/sales person
o Someone with responsibility for a significant portion of revenue/profit

The death or disablement of a key person can affect a business in a number of ways:
o Lost profits otherwise generated by the key person
o Additional costs to secure and integrate a replacement
o Loss of contracts and customers
o Loss of market share as competitors “fill the void”
o Ability to stay solvent, potentially breaching The Company’s Act
o Ongoing stress for the remaining proprietors/staff
o Loss of company value

Key Person cover is designed to inject cash into the business to provide funds to secure a replacement, replace or reduce lost profits, reassure customers and creditors that the business is financially secure and to meet contractual obligations. Without Key person cover the business may be forced to wind up or face a significant reduction in its value. Statistics tell us that;

o 1 in 5 businesses have to be wound up or cashed up if there is an event which affects a key employee.
o In a forced sale business assets realise approximately 35% of the owner’s perceived value.

Debt cover may have been effected on the life of the key person by the business, once a claim has been made and debts repaid this may make funds previously used to service debt available to meet key person needs that may have arisen.

As any sole trader will be the key person in their business, their death or disability invariably means the business will not continue. In the event of premature death it would be important to ensure sufficient funds were available to compensate dependants who needed it and in the event of a disability, income protection would be important to secure a replacement cash flow.

Key person policies are normally owned by and paid for by the company. The generally accepted view for limited companies is that the premium is tax deductible and the benefit is assessable. However, if all funds are used within the tax year of receivables for deductible expenses, no tax is payable. Each company must seek advice from their tax adviser on their specific circumstances.

Written by Gerard Tilleyshort

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Personal Insurances – Who Would Pay Your Expenses If You Are Unwell?

When you enlist the help of a Financial Adviser, you’re assured peace of mind that if an accident or illness should happen, you have Income Protection in place so that your bad health won’t financially cripple you as well as physically.

If you’ve never thought about what would happen to you and the people you care about, if you were to suffer an accident or illness, then you need to start planning right now. The cost of medical bills alone can be in the thousands, the weeks or months spent off work where money won’t be flowing in also provides grave concern. – How can you afford to live somewhere if you’re not able to pay for it?

If you’re renting, you could ask your landlord for an extension or grace period, if it’s Christmas they might even let you have it. The banks will offer you even less of a chance to extend your debts, but if you don’t inform them that you’re unwell and unable to work, they’ll never know your situation in the first place, which can cause even more troubles.

Insurance aims to make all of this avoidable, check out the relevant information on insurances to protect you and your family. Planning ahead is an essential skill to surviving and expecting the unexpected will also help you stay afloat in the world. If you’re single you still have just as much to think about as those with loved ones. Although you don’t have anyone at present, you still count as a person and need to ensure that for your own peace of mind and safety, you’re insured for the future with some form of income to keep the debt collectors at bay.

You never know what’s around the corner, but that doesn’t mean you should close your eyes like a stunned rabbit and hope that it’s nothing big and scary. People can too quickly dismiss the claims made here, thinking it will never happen to them – Accidents and serious illness happen every day, they’re unavoidable. At least if you can’t avoid them, you can avoid suffering damage from your absence at work and unforseen, sudden lack of income. By getting income protection you’re looking after yourself and the financial future of your family.

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Personal Insurance Cover to Help You Stay on the Safe Side

There comes a time when you get hurt and just don’t have the money to take care of the problem. This could be either at work or in your own home but either way, what you need is a personal injury insurance cover. There are many places to go for this kind of cover but not all of them are reliable. Here you learn how you can get the best personal injury insurance, saving money and still getting the best.

There are many ways you get this kind of cover. You could try asking one of your relatives or friends who currently has an insurance plan or has had one before that worked out well for them. This is however not guaranteed to work as they might be working with a plan which is not suitable for your situation.

Another good way to go about this is by visiting the internet. The internet is full of websites that are more than wiling to work with you as far as giving you these covers is concerned. You get the chance to choose from a wide range of insurance companies who will give you very friendly rates just to attract you and do business with.

Personal injuries are unpredictable and can happen anywhere no matter how careful you are. This is why you ought to have this type of cover. For this reason, you want to get something that is cheap yet reliable. One of doing this is by taking all your covers from one company. If you have insured your car, house and other factors, and then take the personal injury insurance with the same company, you will actually get a chance to deduct the premiums you pay and before you know it, you will have the chance to save some money.

If you work with a company where accidents happen often, for instance, a construction company, your employer is likely to have you covered. There is however other companies which don’t do this and it is usually up to you to take the move and insure yourself. You will be saving yourself a lot of trouble incase an accident were to happen as the insurance will take care of all the expenses that you will be required from the hospital. Some insurance covers go as far as covering your prescriptions and other factors that will see you taken care of all the way to your health.

There are those who ignore the fact that accidents happen at any place and time and thus don’t bother taking these kinds of insurances. This goes bad on them when they are forced to pay huge sums on medical bill and other things for them to get better. A wise option would be to go for the covers as they are much cheaper compared to the alternative which is paying for all the expenses asked by the hospital.
You don’t want to gamble with your life and thus better go for this kind of cover

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Personal Insurance Content – How to Write Articles on Insurance Topics For Consumers

Everyone knows they need insurance in case of a catastrophic event, something that could set them back, burn up their life savings, or force them into bankruptcy. Still, people realize that they pay too much on insurance, and that the insurance companies do not always pay the claims. This is a big dilemma for folks, and few people really understand the insurance policies they have, exactly what the coverage involves, and why they are paying so much.

Consumers need more information on insurance, merely so they can ask the right questions of their insurance agent or broker. It will also help them to decide which insurances they need, and which policies make more sense for their budgets, family income, and their assets. All too often, people have too much insurance, which is costing them a pretty penny, rather than too little insurance which is leaving them at risk for exactly what I described above.

As an online article writer of Insurance Topics, you can help consumers by explaining the personal insurance they need in their lives. Insurances such as:

  • Disability Insurance
  • Auto Insurance
  • Renters Insurance
  • Umbrella Policies
  • Homeowners Insurance
  • Health Insurance
  • Dental Plans
  • Etc..

Over the years I’ve written nearly 100 articles on this topic, and I am always amazed when readers e-mail me back and tell me of their insurance problems, or ask me questions; some of which I am not even qualified to answer, and I daresay many insurance agents, brokers, and even some insurance underwriters can’t answer.

Still, if you are going to write insurance articles on the Internet, I hope you will consider what I’ve said here today, because there is a definite need in the market place for this type of online content. Please consider all this.

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Key Person Insurance

We all know how crucial can one single person become for a company. Many businesses have been built around the strengths and skills of a few individuals whose capital, energy, knowledge and attitude makes them very valuable to the organization. Key person insurance can help to preserve the value of your business and its continuation in the event of the death of a key stakeholder in the company. Replacing the routine and knowledge of an individual can take time and can jeopardize the continuity of the business. Key person life insurance policies have been developed precisely to cover these recovery costs and offer the following benefits:

  • It helps heirs to meet estate tax obligations without compromising or dissolving a family business.
  • Keep the business running and assure creditors and customers that the company will operate as usual.
  • Reduce the financial impacts of the untimely death of a key individual by covering the expense of finding and training a proper replacement.

So how does key insurance work? The employer is the owner and beneficiary of the policy. The key employee would be the life insured, but would receive no benefit from the existence of the policy. Under the “Income Tax Act” no deduction can be claimed by the employer for premiums paid under a key person policy. However, any death benefit proceeds would be received tax free by the employer and would provide the liquidity needed to find, hire and train new skilled individuals for the organization during tough times.

Example: Alan Gregor is the owner of a growing software company that employs 20 full-time workers. He relies heavily on Thomas, his manager, to look after the everyday operations of the organization while he is out dealing with clients and looking for new business. Thomas dies suddenly of a massive heart attack. Obviously this has a significant emotional impact on the company but it also has a serious financial impact as well.

The “key person” life insurance policy that Alan has purchased on Thomas’s life provides the company with a tax free lump-sum payment, enabling him to overcome the obstacles which might have been a deadly blow to his business. The insurance provides immediate cash to cope with reduced profitability, resulting from his manager’s absence. There will also be funds available to pay an employment agency to find a substitute and reassure creditors that the company is on solid foundations. Similar type programs can be set up to protect against a critical illness or the disability of a key employee as well. But that’s for another article…

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Key Man or Key Person Insurance – Do I Need It?

An article that explains the need for Key Man/person insurance in a small or medium company and what this type of cover protects. If you are wondering what this type of cover is and if it will help you with your company please read on.

Key Man or Key Person Insurance – Do I need it?

As a small or medium business owner, there are many issues you will face and overcome each day in your business if you were to lose a key member of staff to a serious illness or even death?

Would your company be able to survive?

There is something you can do to protect your business from such an event and it is called Key Man or Key Person insurance. This article will explain this type of cover and help you to decide whether it is something that will benefit you and your business partners.

What is Key Man/Person insurance?

‘Key Man or Key Person insurance’ is the term used to denote a life cover policy taken out by a company on the life of one of its employees or directors.

Key Man insurance protects businesses against the financial loss it would incur from the death or extended incapacity of a key individual within the business, and in turn would ensure the continuity of the business.

Key Man insurance policies compensate with a fixed monetary sum as specified in the policy.

Why do I need Key Man/person insurance?

You need this type of cover if you are the owner or part owner of a company.

In many small, privately owned businesses it is the case that the owner or shareholders would have the greatest financial impact should something happen to them. Key Man or Key Person Insurance can protect your company from this. A good way to decide whether you should look into Key Man or Key Person insurance is to look firstly at your business. If you or one of your business partners were to die or become seriously incapacitated for an extended period of time, could your company continue to run and produce the same level of profits as it currently is? If the answer to this question is ‘NO’ then it is strongly recommended that you speak with a professional about the possibility of taking out a Key Man or Key Person Insurance.

Once a policy is set up and put in place you can work safe in the knowledge that should the unthinkable happen, your company can still continue to run and generate profits.

How do I decide who my Key People are?

A Key Person is anyone who would have an impact on the finance of the company should something happen to them. This person or people could be, directors, shareholders, managers or anyone who has a specific skill or knowledge which is especially important to the running and financial stability of the company.

Key Person insurance is designed to protect the net, pre-tax profits of small and medium companies in the event of loss or serious illness of one of its Key People.

It is really important to speak with a professional about your company and its need for Key Person Insurance as there are many companies who do not realise this kind of cover exists.

After reading this article, I hope you are now clearer on what Key Man or Key Person Insurance is and I hope it has helped you to decide whether you will pursue this type of cover for your business. It is very important for this type of cover to speak with a professional person who is qualified and can give you the correct quotes for your companies individual needs.

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Personal Insurance For Property Investors

Are you an employee or a self-employed business person dependent on income derived by sweat of the brow? Do you carry any personal debt or debt over your principal place of residence or investment properties? Do you have dependents that rely on you to provide for their financial security, today and in the future? Chances are for most of us the answer to at least one of these questions is a definite yes.

You are then left to make a choice. Do you accept the risk and hope that you will never become sick or disabled and have to stop working or that you will not die prematurely leaving your dependents with substantial amounts of debt and inadequate financial resources. Or, do you plan for and manage the risk by taking out appropriate insurance.

For most of us the prospect of losing our ability to earn income and dying prematurely may seem a little unlikely to give it due consideration. After all it is human tendency to waiver on the side of optimism on such issues and assume that ‘it will never happen to me’. But the reality is that it does happen to people just like you every day of the week. So, how can you plan for and manage these risks? Well, there are a range of different insurances specifically designed to meet these specific risks, the combination of which can provide a comprehensive risk protection plan. Below is a brief overview of the most important personal insurances for property investors.

Income Protection Insurance

Income protection insurance can provide you with an income in the event that you become totally or partially disabled and are unable to work. Income protection insurance provides up to 75% of your pre-disability income. Benefits are payable after the expiry of a selected waiting period and apply for a predetermined period (the benefit period) providing you remain totally or partially disabled.

If you are dependent on earning a salary or wage to support your current lifestyle and to create wealth for you and your defendant’s future than income protection insurance is a must. If you own negatively geared investment property then your need to protect your income is even greater than for most other individuals. Whilst negative gearing is an appropriate strategy for certain investors its success as a strategy revolves solely around your ability to continue earning income. If you lose that ability and do not have income protection insurance then chances are you will be flat out supporting you and your dependent’s lifestyle without your usual income, let alone supporting a negatively geared property portfolio.

Life Insurance

Life insurance won’t do much for you as the insured but it will do a lot for those dependents you leave behind. Life insurance provides your dependents with a lump sum that may be used to pay off any debts you have (e.g. credit card, home loan, personal loans, investment loans etc.), pay for funeral expenses, and to provide an investment amount sufficient to generate enough ongoing income to support your dependents.

If you carry debt (like most property investors) and do not yet have enough financial resources to support your dependents if you were to prematurely die, then life insurance is absolutely critical for you. Losing someone close can be one of the most traumatic experiences in life and one additional pressure that your dependents could do without is that of servicing debt without your income and facing the prospect of going to the market with your investment properties to free up some money to meet living expenses. Given the relative illiquidity of property it may very well take several months before your dependents can liquidate your properties and retire the debt. All of this during a period that should otherwise be spent grieving, not scratching around for money to meet living expenses or dealing with real estate agents and creditors.

Total and Permanent Disability Insurance (TPD)

TPD insurance provides you with a lump sum payment in the event that you become totally incapacitated through injury or illness and satisfy the policy’s definition of TPD. TPD insurance can be used to pay off existing debts, to pay for any medical costs not covered by your health insurance, to pay for any necessary modifications to your home or vehicle, and to provide you with an investment amount sufficient to generate ongoing income to compensate for your lost income.

Once again, if you carry debt and do not yet have enough financial resources to support yourself and your dependants if you were to become disabled than TPD is an absolute necessity, even if you have income protection insurance. Remember, income protection insurance only provides up to 75% of you pre-disability income which for most people is insufficient to support both their existing lifestyle and wealth creation objectives, let alone their increased cost of living as a result of their disability.

Conclusion

When making a decision on personal insurance there is a lot to consider including the types of insurance you require, the amount of insurance you require, the price of the insurance, policy ownership, whether to purchase inside superannuation or outside superannuation etc. Discussion of these issues is beyond the scope of this article but hopefully you now have an appreciation of the importance of personal insurance, particularly as a property investor.

If you don’t have an adequate risk protection plan in place and would like assistance in creating one then seek professional financial advice. With a bit of luck you will never be on the receiving end of a personal insurance benefit, but if the unthinkable does occur, your financial responsibility and wise forethought will make an otherwise difficult time that little bit more tolerable for you and your dependents.

By Luke Andersen

Partner of Positive Property Strategies and co-author of ‘Residential Real Estate Development: A Practical Guide For Beginners To Experts.’

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