How does a captive insurance company differ from traditional insurance?

A captive insurance company is owned by the insured business and primarily covers the parent company’s risks. Traditional insurance involves purchasing coverage from third-party insurers who manage multiple clients. Captives allow companies to control premiums, coverage options, and claims, unlike traditional insurers, which operate for profit.

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What are the consequences of committing insurance fraud?

Insurance fraud can lead to denied claims, policy cancellations, fines, civil lawsuits, and criminal charges that may result in imprisonment.

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What is the difference between "proportional" and "non-proportional" reinsurance?

Proportional reinsurance shares both premiums and claims proportionally between the ceding company and the reinsurer. In contrast, non-proportional reinsurance (such as excess of loss) provides coverage for claims exceeding a certain threshold, with the reinsurer covering only the amount above that limit.

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Does Uninsured Motorist coverage cover passengers in my vehicle?

Yes, in most cases, UM coverage will extend to passengers in your vehicle who are injured in an accident with an uninsured or underinsured driver.

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What is reimbursement in insurance?

Reimbursement is the compensation an insurer provides to a policyholder after a covered loss or expense, based on the terms and limits of the insurance policy.

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How do deductibles work in health insurance?

In health insurance, the deductible is the amount you must pay before your insurance starts covering medical expenses. Some plans have separate deductibles for different types of care, such as in-network and out-of-network services. Once you meet your deductible, you may still need to pay copayments or coinsurance for services.

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How does blockchain enable smart contracts?

Smart contracts are self-executing contracts with terms directly written into code. Blockchain ensures that these contracts are tamper-proof and automatically enforced when conditions are met, without the need for intermediaries. This reduces the risk of disputes and offers greater efficiency, as the contract is executed autonomously, ensuring trust between parties.

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What is an insurance deductible?

An insurance deductible is the amount you must pay out-of-pocket before your insurance provider covers the remaining claim costs.

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