What Does Liability Mean on Your Car Insurance?

Liability insurance is very important and most state auto insurance laws require that an individual maintain at least liability insurance on their automobile. What it does is protect you against costs that are associated with the damage and injury of another in an automobile accident in which you may be deemed at fault.

There are two parts to the policy. There is property damage liability and bodily injury liability. It is pretty easy to guess that property damage liability is going to protect you against any cost and damage that is associated with damaging another person’s physical property and that bodily injury liability is going to protect you against the personal injury inflicted on someone else as a result of the accident.

Usually, there are some numbers that a person may see on their policy. These numbers usually look like this: 50/100/25. Now what this means is that the policy is split up into three different amounts each policy can be different depending on what the individual chose when they opened the policy. In this case, 50/100/25 means that the insurance will pay for the bodily injury of an individual in an amount up to $50,000, will pay for the bodily injury costs on everyone in a vehicle in an amount up to $100,000, and will pay property damage costs up to $25,000.

Every vehicle requires its own level of liability insurance depending on what state you are located in. It is important to know what your state’s auto insurance requirements are so that you have an idea of what you would have to pay in your insurance premium.

The cost

Liability insurance is cheaper than full coverage insurance that also includes damages from theft, natural disaster, and vandalism. Liability only covers costs associated with an accident so that you do not lose your hard earned assets in a lawsuit. There are have been cases in which a person has been sued for more that what they have in coverage, but the liability insurance does lessen the blow. However, a person can pay for different levels of liability insurance to ensure that they will not be “taken for everything they’ve got.” Not having enough insurance can still have a heavy impact on a person’s life when an accident occurs.

No one intends on hurting another and they usually do not purposely engage in an auto accident because there is so much trouble involved, including the possible loss of the vehicle. That is why it is important to carefully assess how much car insurance you think you will need. Liability insurance is rather affordable. Some states have a minimum requirement of 20/40/10, but you could carry something such as a 50/100/50 if you think you need it. The cost is still not going to be much.

Just remember…

Don’t forget that if you set your limits too low you could be setting yourself up for financial disaster even though you have insurance. This is to be considered carefully. It is easy to make the decision to save money by paying the lowest premium possible, but paying the lowest premium possible could later result in the loss of your assets. It is also important to remember that liability just covers bodily injury and property damage. If a tree falls on your home during a wind storm, it is then time to assess your options. However, liability insurance will protect you from those nasty lawsuits that may come your way as a result of an accident. That in itself makes it more than worth the money because you have the peace of mind that most or all your assets are protected.

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The Advantages and Disadvantages of Travelling Alone

One of the main purposes of travel is to gain experiences that allow us to grow and develop as individuals and it is important that people travel the way that bests suits them at a particular time. For example, I like to go on adventure holidays and this invariably includes a small group and expert guide, and I frequently participate in writing retreats around the world with like-minded people. However for me, the real joy of travelling has always been to take off on my own and just ‘see’ what comes along the way. Of course this can sometimes be fraught with frustrations, difficulties and even dangers.

Advantages of travelling alone

  • Freedom
    Most people who travel alone generally cite freedom as the great motivating factor: freedom to please themselves, go where and when they want, change their plans on a whim when they hear about something that is a ‘must’ to see, and to accept spontaneous invitations by locals.
  • No compromises
    This is associated with the previous point. Even if travelling with one other person, be it friend, colleague, lover or spouse, there will always be some compromises required. Not everyone has the same interests or the same energy levels, some people need to be emotionally supported all the time, others are apathetic, some have different attitudes to time. With solo travel, there is no peer pressure over finances, the unspoken need to divide up restaurant bills equally, or guilt trips when you want to go off on your own for a while.
  • Meeting people
    Travelling solo does not mean that you will always be alone. In fact, it allows you to meet more people because other tourists and locals find an individual traveller more approachable than those in a tightly-knit group. Also, people in groups have very little need to reach out to others for communication. I have met more people, had more interesting conversations and invitations and made more long-term friends while eating alone in foreign restaurants or sitting alone at bars. But then I am gregarious. Travelling alone allows you to choose the people you wish to spend time with rather than having to face the day-after-day annoyances of the inevitable clowns and whingers found in any large group.
  • Discoveries
    There is a real sense of discovery involved in travelling on your own, and that includes self-discovery. You don’t have to rely on an often ill-informed guide to lead you around on a leash, and there’s the surprise and thrill when you find something you weren’t expecting, like the time I became lost and ended up in a small Bavarian village with a monastery that contained a library with tens of thousands of Medieval manuscripts. Travelling alone allows you to discover more about yourself as you overcome simple challenges such as missing a bus or boat and realizing there is no other for a day or a week. Then there is the sense of achievement when solving much more challenging problems like finding yourself lost in a strange town at midnight or running out of money on a holiday weekend with no ATM in sight and the banks closed.

Disadvantages of travelling alone

  • The single supplement
    For those who like to stay in decent hotels, there is the unfair single supplement that can add thousands to the cost of your trip.
  • Lack of help
    There is no one to watch your luggage while you go to the restrooms at airports or train stations, no one to help with persistent touts, no one to be there for you if you get sick or if you are being stalked or harassed by a determined male in the street.
  • Photos
    There are times when I would like to have had more taken of myself in certain places, but there again, there are always people willing to snap one or two for you.

I know there will be times in the future when I will travel as part of a group out of choice because I want to visit areas where it is just not possible or sensible for a woman alone, or because I wish to be with family or like-minded people. However, due to my particular personality traits, my preference is to travel alone. I guess it really doesn’t matter how people travel, but that they travel.

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Estate Liquidation – Pros and Cons of Tag Sales and Auctions

Executors faced with liquidating an estate’s personal property will quickly find that it is their most time-consuming administrative task. Executors who don’t perform their duties could be removed from office by the Probate Judge, so it is important that they single-mindedly pursue disposing of the estate’s property so that the bills can be paid and the estate settled.

What you’ll get from this article

Executors have three main liquidation options, and I will discuss the pros and cons of each in this article. Any company chosen to liquidate an estate should be vetted; I will tell you how to do this conscientiously, and I will also propose the best liquidation method. I assume that the twin liquidation goals of the Executor are to achieve the greatest cash benefit to the estate and to leave the house broom-clean so that it can be sold. Of course, there are ways to maximize the cash return for each type of sale, and I’ll tell you what they are.

Investing ten minutes into reading this article could save an Executor many hours of work.

Option 1: Have An Auction On-Site

Benefits of an On-Site Auction:

Auctioneers are very competitive lot. It should be an easy job for an executor to find an auction company willing to take the estate liquidation job, and commissions will be competitive. A strong argument for an on-site estate auction is that when the auction is over, there will be very little clean-up. If you like, the real estate can be auctioned as well, since auctioneers are licensed to auction the real estate and other titled property. In one day, the house, car, boat, RV, and all the household goods could be sold.

Negatives for an On-Site Auction:

Auctions are driven by competitive bidding. Consequently, it is necessary to have a lot of people at your auction. Big crowds require nice weather, plenty of parking, bathrooms, food, and refreshments to keep the people from leaving. Online bidding can be included to boost attendance, but it is the local crowd that builds excitement and drives the prices up. To attract a crowd, the estate must have collectibles and other quality goods. Run-of-the-mill goods that can be purchased at the local thrift store are insufficient to attract a good auction crowd.

Suggestions for an On-Site Auction:

If your estate has many large collectibles, like antique furniture or a piano, an on-site auction may be your best choice. Summer weekends, when the weather is warm and dry, are the best times to hold an on-site estate auction. The auction company you hire should be equipped with sound equipment, canopy tents, display tables, and plenty of help for fast checkout.

Option 2: Auction Gallery Consignment

Pros for Auction Gallery Consignment

If weather is a concern, you may want to consider consigning your items to an Auction Gallery. Consignments at an Auction Gallery are grouped according to the type of item in order to maximize turnout and get the best prices from their collectors. For example, there may be an auction dedicated to art and home decor, or musical instruments, or ceramics.

Cons for Auction Gallery Consignment

There are quite a few reasons for not consigning to an Auction Gallery. For starters, many Auction Galleries will take only the best items from the estate. Ninety percent of an estate is made up of items that are of little interest to the auctioneer, which leaves the Executor to deal with the remaining ninety percent of the estate property. Lastly, when an Auction Gallery spreads the merchandise out over several auctions, it can take months for all the items to sell, delaying the closing of the estate.

Tips for Auction Gallery Consignment

Before you consign to an Auction Gallery, ask the auctioneer how your merchandise will be distributed between auctions; get a guaranteed settlement date. You will also need a plan for disposing of all the remaining estate merchandise.

Option 3: Tag Sale On-Site

Pros for Tag Sale On-Site

Tag sales have several advantages over an on-site auction. For those that are not familiar with tag sales, the sale is held on the premises and in the house. Companies that specialize in tag sales are less common than auction companies. At a tag sale, everything in the house is priced, much like at a yard sale. Shoppers will browse through the house, and choose the items they wish to buy. When buyers arrive at the house, they take a number, and are admitted into the house when their number is called. Tag sales usually start on Friday evening and end Sunday evening, so there is no need to provide food or bathroom facilities. Tag sales can be held rain or shine and in any season

Cons for Tag Sale On-Site

The biggest disadvantage in hiring a tag sale company is that tag sale companies are not held to the same legal standards to which auction companies are held. Auctioneers and Realtors are bound by law to the estate by a fiduciary bond. A fiduciary relationship binds the agent by law to act at all times in the best interest of the estate. Fiduciaries are licensed by the state, must pass tests, be bonded, must hold all funds in an escrow account until distributed, and has to settle the account with the estate within a specific time frame.

Fiduciaries must also keep accurate records and follow certain protocols. Failure of a fiduciary to follow procedures can result in fines or loss of license. Tag sale companies are not held to the same legal standards, although they certainly have a moral obligation to the estate. Tag sale companies can handle the details of the sale and the distribution of the money any way they see fit.

Another problem with tag sales is that typically there is merchandise left over after the sale. Often, there is a LOT of merchandise left over. When a lot of items are left over, the executor then has a clean-out problem, because the house must be left “broom-clean” before a realtor will list the house for sale. Unlike an auction, where prices go up with each bid, tag sale shoppers want to negotiate a lower price for everything, which is not only time consuming but costs the estate money.

Tips for Tag Sale On-Site

When working with a tag sale company, read the contract thoroughly, make sure settlement dealines are included. the operator should have a solid pricing plan, adequate staff, and a solid track record.

What about Internet Sales and Retail consignment?

Internet sales work well for items that can be shipped easily, like small collectibles, books, and artwork. Before you decide to sell these items online, remember that having a nice assortment of collectibles at your auction or tag sale is what will attract the buyers to your event. If you sell all the good collectibles online, you won’t get very good attendance at your sale. Dont even consider a retail consignment; they will take too long to sell your items.

How do I know if I am dealing with a reputable company?

Unfortunately, asking for references doesn’t always work; no one gives a bad reference. The Better Business Bureau lists ratings for some, but not all, companies. With an auction company, most states have an occupational licensing board which can give you the status of an auctioneers license and tell you if they have any complaints on file. Checking up on a tag sale company is a lot harder, because there is no agency keeping track of complaints. One website that is helpful is http://www.ripoffreport.com. When at the site search the name of the company you wish to investigate; also type in the owners name to see what that brings up.

Hire a company with a solid internet presence

These days, it is imperative for a company to have an online network. A company that is well-connected in the online world is likely to be a company that is well-networked in the local area. It’s unlikely that a company with a poor or no website will be able to use the internet to generate sales for your event. Doing a Google search of the company’s name or web address is the best way to to see how well connected they are. Go to Googles search bar (not the address bar at the top of the page, but the search bar in the center of the page) and type in the companys web address starting with www. How many search results are returned that pertain directly to the company you are investigating?. If the company is a national franchise, disregard the results for the general franchise and only count the results where the local company is mentioned. Ranking well with the search engines doesn’t necessarily mean the company will be the best one for your needs, but it is a good indicator of the professionalism of the company. Typically, companies that have lots of returned results do so because other organizations want to associate with experts in their field, so they link to the experts website. A large number of linking companies is like a “vote” for the company being linked to. A company that displays lots of Google results is usually one that is recognized as being expert in their field.

So, what’s the best way to liquidate an estate?

The best type of sale for estate liquidation is to hire a licensed fiduciary to sell the estate property in one day, to the bare walls, any time of year. To achieve this would require an event that is part tag sale and part auction, run by an auctioneer. Since Tag Sale operators are generally not licensed auctioneers and auctioneers usually hate to do tag sales, that’s a tough solution to implement. There are auctioneers that combine these services, however. Finding such a company will give an executor the flexibility of having a sale any time of year, the ability to sell down to the bare walls with nothing left over, and the assurance of dealing with a state licensed and bonded fiduciary.

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A Brief Description Of Maui Island And Why You Need A Travel Agency Assistance

Would you like to travel to Maui? This is the second largest of the eight islands found in the Hawaii State. It possesses three big cities, including Lahaina, Kahului and Wailuku. The region lures many visitors because of its physical landmarks such as the highest volcanic mountain called Haleakala. Even the West Maui Mountains form very beautiful scenery. The western part of the island including Kaanapali, Lahaina and Kapalua has the most luxurious and elegant resorts.

This is a beautiful island and if you want to plan a getaway you cannot be wrong if you choose it. Although you can reach the region quickly by plane, cruising in a ship is more enjoyable. Besides, finding cheap Maui cruises is not a major problem. Since this landmass is a popular destination for tourists, you can expect to compete for cheaper cruise rates with very many people from your region.

How can you manage to overcome this competition for discounted cruise rates? If at all possible, you should look for a reliable travel agency that either has business branches in Hawaii or is based in this state. This is specifically true if you will be a first time visitor who plans to have a stress free trip to the island. A travel agent is therefore very useful when people are planning Maui vacations.

In the following few paragraphs you will find out more about the importance of using a travel agent and related information.

Reasons why you should use a Maui travel Agency

1. It provides guidance and direction through out the trip and is able to help people save money.

2. A travel operator boosts safety of new travelers throughout a whole week’s trip or even a longer one.

3. It keeps travelers from getting into trouble with the authorities in the Island

4. It recommends the best accommodation facilities as well as proper means of transportation in this wonderful island.

How you can locate a Maui Travel Agency

It is extremely easy to locate a good tour company if you know how to use the internet wisely. Look for Maui travel agents’ reviews, analyze them carefully and choose a few good companies. Go to the related forums and blogs and read prior visitors’ comments and articles. In short, you need to take your time to research carefully before making a decision about whom to hire among many tour operators that serve Maui. The best thing to do is to look for an agent that can give you a single package for the entire journey. The package should include the hotel accommodation, foods and drinks, transportation and other leisurely costs.

What your Maui tour guide should tell you in advance

An imperative detail that you want your guide to tell you about in advance is the requirements for entry in Maui, Hawaii. If you come from outside the U.S, you need to know about the passport, visas and other mandatory entry information before the travel day comes. Moreover, the agent should mention something about the climate, especially if you would be traveling with your family.

You want to avoid traveling with kids when hurricanes are common or when the weather is too wet. This is particularly important if you plan to participate in outdoor activities such as water sports and walking to the tourist landmarks. The guide should make you understand the available routes and the things you can see while cruising in a ship.

If you want cheaper rates, the planner of Maui vacations should be able to provide you an inexpensive bill without compromising the quality of your visit. You can also ask the travel guide about trip insurance, car rental services, traffic around the region and many other important issues.

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Land Trusts in California

In California, general trust law is found in the Probate Code §§15000-19403. There is no specific land trust statute in California, unlike Illinois land trust law, (765 ILCS 405/410/415/420), Massachusetts business trust (MBT) law (M.G.L.c.182, §2), and Virginia land trust law (Va. Code Sec. 55-17.1).

So, land trusts created in California for California property are based on general trust law in the aforesaid California Probate Code. But an out-of-state land trust may be formed that would hold title through the trustee of a California property, to take advantage of more beneficial statute and case law of another state. Indeed, the Virginia Supreme Court in Air Power, Inc v. Thompson, 244 Va. 534, 422 S.E. 2nd 786 (1992), has confirmed that Va. Code Sec. 55-17.1 gives the trustee of a land trust both legal and equitable power of the real property, which protects the privacy of the beneficiaries.

Indeed, since California does not have a specific land trust statute, there is no legislative history nor developed case law on it in this state, only California general trust law and case law. But a general trust law may have some advantages over a specific land trust statute with more requirements. Indeed, Illinois land trust statute (75 ILCS 435) requires that holders of power of direction owe fiduciary duties to holders of beneficial interests. California general trust law does not have a similar requirement.

In any event, the avoidance of probate over a real property in a land trust trumps all difficulties in its creation.

I. California General Trust Law:

A. Creation Of Trust:

California Probate § 15000 states that “(t)his division (Division 9 of the Probate Code) shall be known and may be cited as the Trust Law.” And § 15001(a) states that “(e)xcept as otherwise provided by statute: This division applies to all trusts regardless of whether that were created before, on, or after July 1, 1987.”

Among other methods of creating trust, a trust may be created by: “(b) (a) transfer of property by the owner during the owner’s lifetime to another person as trustee,” under § 15200(b) of the California Probate Code. And “a trust is created only if there is trust property,” under § 15202 thereof.

“A trust may be created for any purpose that is not illegal or against public policy,” under § 15203 thereof. A land trust is not for an illegal purpose, nor is it against public policy in California, although it is not widely used in this state.

And “a trust, other than a charitable trust, is created only if there is a beneficiary,” under § 15205 thereof.

B. Trust Of Real Property And Personal Property:

So as not to violate the Statute of Frauds, which requires a written instrument to be enforceable, §15206 states that “a trust is relation to real property is not valid unless evidenced by one of the following methods: (b) By a written instrument conveying the trust properly signed by the settlor, or by the settlor’s agent if authorized in writing to do so.”

And under § 15207 (a) thereof, “(t)he existence and terms of an oral trust of personal property may be established only by clear and convincing evidence.” Under § 1528 thereof, “consideration is not required to create a trust….”

Lastly, “a trust created pursuant to this chapter (1, part 2, Division 9 of the Probate Code) which relates to real property may be recorded in the office of the county recorder in the county where all or a portion of the real property is located,” under § 15210 thereof.

II. Mechanics Of A Land Trust:

A. Advantages And Benefits:

(1.) Privacy:

One of the much-heralded advantages of a land trust is that a grant deed-in-trust of a trust property in the name of a different trustee (private or institutional) may be recorded with the County Recorder, but the land trust agreement that states the names of the truster/settlor/investor and the beneficiaries is not recorded.

Thus, the creator/grantor of the land trust: the trustor/settlor who invests in real property can keep his/her/its name, as well as the names of the beneficiaries out of the County Recorder’s and County Assessor’s books, and to a certain extent hide the investment from public view.

But a judgment creditor of a trustor/settlor or of a beneficiary can subject the latter to answer written interrogatories on his/her/its assets, or to debtor’s examination under oath in court to determine assets, and not merely rely on County Recorder and Assessor asset searches.

The land trust agreement may also use a name for the land trust different from the name of the trustor/settlor who created it. This is another asset protection benefit. And if the beneficiary thereof is also the same trustor/settlor, the latter may designate his/her living trust or wholly-owned limited liability company as the beneficiary to hopefully avoid gift tax issues.

(2.) Avoidance Of Probate:

Moreover, just like successor trustees may be designated in the land trust agreement, successor beneficiaries may also be selected to avoid disruptions in distribution of trust assets at termination of the trust, outside of probate proceedings.

A land trust may be created as revocable (terms of the agreement may be changed) or irrevocable (cannot be changed), but the latter requires the filing of separate tax returns and is taxed at a higher rate than the trustor/settlor’s individual tax rate, unless considered a simple trust in which all incomes created are taxed to beneficiaries. For federal income tax implications, if the grantor/trustor is also the beneficiary, the Internal Revenue Service (IRS) classifies it as a grantor trust that has tax consequences that flow directly to the trustor’s Form 1040 and state return.

(B.)Disadvantages And Pitfalls:

(1.) Separtate Agreement For Each Property:

In order to preserve the privacy of the investment or transaction and the asset protection benefits of the land trust, only one real estate property can be listed as held in it. Thus, a different land trust agreement is created for each property. This could be cumbersome, although the same trustor/settlor, trustee, and beneficiary can be named in each agreement.

(a) Simpler Alternatives:

Simpler alternatives are to purchase investment or rental properties through a limited partnership (LP) or a limited liability company (LLC), or transfer such properties to a more flexible living trust that does not require the filing of separate tax returns, or transfer the ownership interests of an LLC (not title of the property) to a living trust.

An LLC may also create a land trust by conveying title of a property to the trustee, and designate itself (LLC) as the beneficiary for privacy of ownership. Sometimes less is more; for indeed, creditors can see through and have recourse against avoidance of execution of judgment on properties through asset protection schemes. And transfers of ownerships of properties may result in tax assessments.

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Realty Vs Real Estate Vs Real Property

Realty and personal property terms have often been confused as to what they exactly mean. Here we will clear that right up for you. We will look at the terms personal property, realty, land, real estate, and lastly real property.

Let’s begin with personal property. Personal property also known as chattel is everything that is not real property. Example couches, TVs things of this nature. Emblements pronounced (M-blee-ments) are things like crops, apples, oranges, and berries. Emblements are also personal property. So when you go to sell your house, flip, or wholesale deal, you sell or transfer ownership by a bill of sale with personal property.

Realty.

Realty is the broad definition for land, real estate, and real property.

Land

Land is everything mother nature gave to us like whats below the ground, above the ground and the airspace. Also called subsurface (underground), surface (the dirt) and airspace. So when you buy land that’s what you get, keep in mind our government owns a lot of our air space.

Real Estate

Real estate is defined as land plus its man made improvements added to it. You know things like fences, houses, and driveways. So when you buy real estate this is what you can expect to be getting.

Real property

Real property is land, real estate, and what’s call the bundle of rights. The bundle of rights consist of five rights, the right to possess, control, enjoy, exclude, and lastly dispose. So basically you can possess, take control, enjoy, exclude others, and then dispose of your real property as you wish as long as you do not break state and federal laws.

Lastly there are two other types of property we should mention.

Fixture

Fixture is personal property which has been attached realty and by that now is considered real property. So you would ask yourself upon selling to determine value “did you attach it to make it permanent?” The exceptions to this rule are the garage door opener and door key, these are not considered fixtures.

Trade Fixtures

Trade fixtures are those fixtures installed by say a commercial tenant or can be the property of the commercial tenant.

I hope this clears up some misconceptions about personal property, realty, land and real estate and now fixtures and trade fixtures!

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Top 7 Reasons New Insurance Agents Fail to Reach Success

I would like to offer some insights as to why I believe such a high percentage of Insurance Agents fail in their first couple years in the insurance business.

There can be multiple reasons that contribute to a new insurance agents failure. Here are the most common reasons I have found that lead to failure.

  • Most Insurance Agents have a Limited product portfolio and are unable to cross sell other insurance products.
  • Agents do not have a proven sales track or sales system to follow which most new insurance agents need to get results quickly.
  • They do not create consistent cash flow from insurance sales quick enough and must leave the insurance business to go back to an hourly paying job just to survive.
  • New Insurance Agents start out in the insurance business with little or no reserves to fall back on. Most businesses require some upfront capital or reserves to get started.
  • A lot of agents do not get enough training (Product or Sales) to give them a fair chance of making it in the insurance business.
  • Insurance Agents are not taught effective prospecting and marketing techniques that generate a consistent flow of sales prospects.
  • Some people simply do not have the drive, work habits, persistence, self motivation or ability to handle rejection that it's takes to survive in an insurance sales career.

From my experience of hiring and training insurance agents over the past 23 years, I have found the following items need to be present in order to maximize a new agent's chances for success long term in the insurance industry.

  • A quality multi-product portfolio to offer multiple insurance solutions when different needs are uncovered during the initial fact finding process with a potential client.
  • A proven sales track and presentation that can be taught and implemented very quickly. One that gets sales results but also generates a generous flow of new prospects and referrals.
  • An advance commission system that provides weekly cash flow so the new agent can focus on their training and sales, not their bills that are due.
  • Tools that make learning and growing in the insurance business fun and automatic. (Ie Archived Training Videos, Health and Life Quote Engines, Live Product and Sales Training Webinars, etc.)
  • Quality contracts that provide immediate 100% vesting rights and commission growth opportunities to General Agent commission levels.

At National Marketing Group we have learned over the years the essential pieces that new agents need to not only survive but thrive in the insurance industry. Our mission statement says it all. "First, to offer the Independent Insurance Agent a support system that provides a platform for success in Insurance Sales. Second, to build long term relationships through a foundation of trust and commitment."

We sincerely believe the 80% -90% failure rate of new insurance sales agents entering the insurance industry can be significantly reduced when the right agent support system is in place. We encourage you and invite you to join us in this very exciting and rewarding career opportunity. Hope to hear from you soon!

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5 Fundamental Principles of Insurance

Insurance is a contract, a risk transfer mechanism whereby a company (Underwriter) promised to compensate or indemnify another party (Policyholder) upon the payment of reasonable premium to the insurance company to cover the subject-matter of insurance. If you are well conversant with these principles, you will be in a better position in negotiating you insurance needs.

1. Insurable interest. This is the financial or monetary interest that the owner or possessor of property has in the subject-matter of insurance. The mere fact that it might be detrimental to him should a loss occurred because of his financial stake in that assets gives him the ability to insure the property. Castellin Vs Preston 1886.

2. Umberima fadei. It means utmost good faith, this principle stated that the parties to insurance contract must disclose accurately and fully all the facts material to the risk being proposed. That is to say that the insured must make known to the insurer all facts regarding the risk to be insured (Looker Vs Law Union and Rock 1928). Likewise, the underwriter must highlight and explain the terms, conditions and exceptions of the insurance policy. And the policy must be void of ‘small prints’.

3. Indemnity. It stated that following a loss, the insurer should ensure that they placed the insured in the exact financial position he enjoyed prior to the loss (Leppard Vs Excess 1930).

4. Contribution. In a situation where two or more insurers is covering a particular risk, if a loss occurred, the insurers must contribute towards the settlement of the claim in accordance with their rateable proportion.

5. Subrogation. It has often been said that contribution and subrogation are corollary of indemnity, which means that these two principles operates so that indemnity does not fail. Subrogation operates mainly on motor insurance. When an accident occurred involving two or more vehicles, there must be tortfeasor(s) who is responsible for accident. On this basis, the insurer covering the policyholder who was not at fault can recover their outlay from the underwriter of the policyholder who is responsible for the incidence.

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Cliches Associated With Insurance

Isn’t it funny how many cliches can be associated with insurance? I think when a couple of sayings and anecdotes were invented; the inventors had the term insurance in mind!

Have a look at a couple of the following sayings and tell me if you agree…

Nothing is certain, but death and taxes. This can be changed to – nothing is certain, but death and insurance. No matter who we are, what we do, how much money we have or which car we drive… we need insurance!

All is fair in love and war. Once again, this can be changed to “all is fair in love and insurance.” Don’t you agree that we are at the mercy of insurance companies? What they say is law and we have to just sign on the dotted line and accept the fact that we are paying tons of money each month on something that we do not really want. Do not accept the first quote that you are offered. Shop around until you find a policy that you are completely satisfied with. Do not allow any broker, agent or insurance company to force you into taking a policy that you are not happy with.

He has been taken for a ride – he has been taken for an insurance ride! It’s unfortunate to hear how many insurance companies take their clients and customers for a ride. This is usually by means of not wanting to pay out a claim, increasing premiums drastically, or other matters that we have no control over. Always read the fine print before signing any insurance document. By having a good understanding of what your insurance policy entails, a lot of this can be prevented.

A chain is only as strong as its weakest link – An insurance company is only as strong as its weakest link. When wanting to obtain insurance, make sure that you talk to an agent or a broker who knows what they are doing! The worst thing in the world is dealing with an insurance reseller who has only one thing on the mind and that is to meet their monthly sales targets. Insurance is a very important investment; therefore it is crucial that a qualified professional takes care of your needs and requirements.

A good beginning makes a good ending. Change this to “a good insurance company makes a good ending” and you will be one of the many individuals who are satisfied with the service received from their insurance companies. If a company offers outstanding service and handles queries and claims effortlessly, even a burglary or an accident can have a good ending.

After a storm comes a calm. If you can change this saying to “after an insurance claim, comes a calm” – congratulations! That means that you have recently put in a claim and that it was handled successfully, enabling you to relax after everything has been taken care of.

I hope you have enjoyed this tongue in the cheek look at insurance sayings – it might be a bit of useless information, but hopefully it managed to put a smile on your dial!

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Insurance Auto Auctions – Get Great Deals on Salvaged Cars and Trucks

Insurance auto auctions are a great way to get a great deal on salvaged cars and trucks. In fact, the company Insurance Auto Auctions is one of the most commonly used specialists in this area with auto auction locations throughout the United States. The company has been around since the early 1990s providing a variety of auto auction services for car owners, car buyers, and car sellers. If you are looking for a good way to get a car at a cheaper rate, insurance salvage deals are a great option!

Salvage vehicle auctions involve several elements – including a facilitation between buyer and seller as arranged by the Insurance Auto Auctions company. Although IAA is one of the more well known companies in this part of the automotive industry, many other companies exist with the same auto salvage specialty.

Automotive salvage occurs when an insurer considers a vehicle to be a "total loss" in insurance terminology. Essentially, this means that the vehicle is of no use to the insurance provider and the insurance carrier. When this happens, the salvaged vehicle can be sold or parted out. Many major insurance companies work with Insurance Auto Auctions, Inc. And similar companies. You will not be surprised to learn that Farmer's Insurance, and even GEICO are just some of the names on the IAA list of regular clients.

Percentage salvage auction sales are more common these days as such companies work hard to get a piece of the action! When a salvaged car is sold at rock-bottom prices, the insurance agency provider is very interested in obtaining rights to at least a small percentage of the insurance auto auction. Since this practice has become more common in recent years, more and more insurance agents and their representatives are seeking percentage shares with companies like Insurance Auto Auctions.

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