What is parametric insurance?

Parametric insurance is a type of insurance that pays out a predefined amount based on the occurrence of a specific event, such as a natural disaster, rather than reimbursing actual losses. It relies on measurable triggers like earthquake magnitude or rainfall levels.

---

What factors do underwriters consider when assessing risk?

Underwriters evaluate age, health, lifestyle, occupation, financial status, claims history, and other risk-related factors depending on the type of insurance being applied for.

---

How much does long-term disability insurance pay?

LTD policies typically replace 50-70% of your pre-disability income. The exact amount depends on your policy, employer coverage, and any additional private insurance. Some policies may also have benefit caps, limiting the maximum monthly amount you can receive. Benefits are usually tax-free if you pay the premiums yourself.

---

What is underwriting in insurance?

Underwriting is the process insurers use to assess the risk of insuring a person, business, or asset. It involves evaluating various factors, such as age, health, occupation, claims history, and financial status, to determine eligibility and premium rates.

---

How does improper wiring pose a hazard in home insurance?

Faulty wiring increases the likelihood of electrical fires, making homes riskier for insurers, potentially leading to higher premiums or required repairs.

---

How does depreciation impact ACV?

Depreciation lowers the value of an insured item based on age, wear, and obsolescence. For example, a five-year-old laptop will have significantly less value than a brand-new one. Insurers use depreciation tables, market research, and item condition to determine an item’s ACV payout.

---

What is the National Association of Insurance Commissioners (NAIC)?

The NAIC is a U.S. regulatory body that establishes insurance standards, provides regulatory support, and ensures consumer protection by coordinating oversight across state insurance departments.

---

Does pet insurance cover emergency treatments for sudden illnesses?

Yes, emergency treatments for covered illnesses are included, but policyholders must meet deductibles and reimbursement limits.

---