What is a deductible in renters insurance?

A deductible is the amount you pay out of pocket before your insurance covers a claim. For example, if your deductible is $500 and you file a $2,000 claim, your insurer will pay $1,500. Choosing a higher deductible can lower your premium, but it increases your financial responsibility in a claim.

Can an insurance company operate without reinsurance?

While some insurers can operate without reinsurance, it is risky. Without reinsurance, insurers bear the full financial burden of claims, which can be devastating during disasters or large-scale events, potentially leading to insolvency.

What is comprehensive coverage in insurance?

Comprehensive coverage is an auto or property insurance policy that covers various perils like theft, vandalism, fire, and natural disasters, excluding only specific policy exclusions.

What industries commonly use parametric insurance?

Industries such as agriculture, energy, tourism, logistics, and construction frequently use parametric insurance to mitigate risks from climate change, supply chain disruptions, and catastrophic events. Governments and humanitarian organizations also utilize parametric coverage to support disaster relief and recovery efforts.

Can a minor be a beneficiary on an insurance policy?

Yes, a minor can be named as a beneficiary, but the insurance company may require a legal guardian to manage the funds on behalf of the minor until they reach the legal age.

What is business property insurance?

Business property insurance protects a company’s physical assets, including buildings, equipment, and inventory, against risks like fire, theft, and natural disasters.

What fees are associated with Universal Life Insurance?

UL policies include various fees such as administrative costs, mortality charges, investment management fees, and surrender charges for early withdrawals. These costs can impact cash value growth, so understanding the fee structure is essential before purchasing a policy.

How do insurers assess hazards when underwriting policies?

Insurers evaluate hazards by conducting inspections, reviewing claim history, analyzing risk factors, and determining whether additional precautions or higher premiums are necessary to cover potential losses.