When you buy a house, you know that after paying the mortgage for 25 or 30 years, you’ve paid it off and you’re done making mortgage payments. Not so with life insurance. As a general rule, you pay the premiums for as long as you live. But there are exceptions to the general rule.

You may be able to buy certain insurance that only requires a limited number of payments. For example, the old government life insurance retirement for veterans that my father bought after World War II was a 20-year paid-up policy; after 20 years, you were finished making payments. (more…)

As individuals, your mortgage (including home equity lender) and auto lenders are the most common entities you will need to assure are added as insureds under your insurance policies. If, however, you run a business and have policies for your business, you may encounter circumstances in which you need to add other persons or companies to coverage as insureds under your policies. (more…)

Regardless of where in the United States you live, if you are leasing a car or a truck or are making payments on a vehicle purchase loan, the leasing company or auto loan or auto lease finance company will include as a contract provision the requirement that they be shown as an insured party on your automobile policy. Your auto lease or loan contract may even specify the minimum coverages you are obligated to maintain (typically collision and comprehensive coverages). (more…)

If you live in the eastern states, you recognize the former concept—mortgage. If you live in the western states, where there is a different legal usage, you recognize that the lender on your home is a holder of your mortgages trust deed as the security interest on your home loan. Either way, the fundamental concept is the same. You, the named insured under your homeowners policy, have a home loan. You want to insure your interest in your home. Your home loan lender, which holds a security interest in your home to the extent of the unpaid loan balance, wants you to assure that you insure your home so as to protect its security interest. Not only that, your lender requires that you do so and that you cause it to be named an additional insured in the loan documents of your home loan. (more…)

A good independent insurance agents is likely to be the best place for most insurance consumers to start. By employing an independent agent, you preserve the maximum number of options for yourself. And, you are less likely to find yourself in a situation in which you have insufficient limits or unexpected gaps in insurance coverage in the event of a major loss.

This is particularly true if you are the owner of a small business. The underwriting of commercial insurance policies is inherently more complex than is the underwriting of personal lines policies. Independent agents are much more likely than captive agents to have a substantial volume of commercial business in addition to their personal lines book of business. (more…)

Each state has an insurance guaranty fund. Each operates in substantially the same way. In the event of insolvency of an insurer whose policies are covered by the guaranty fund (i.e., an admitted insurer in that state), policyholders of that insolvent insurer are covered up to the statutory limit. This limit varies from state to state, but is sufficient to cover most anticipated property claims and all the genuinely catastrophic liability claims. In addition, the guaranty fund statutes provide for defense of liability claims in addition to paying judgments or settlements up to the amount of the statutory limit. (more…)

Many insurance consumers will never need to deal with the concept of retail brokers versus wholesale insurance brokers. An insurance broker is the agent of the insured and can submit applications for coverage to insurers for which the broker does not have an agency appointment. Some insurers will only accept applications from a broker with which they have an agency relationship. In addition, coverages can be placed with non-admitted insurers only through an excess or surplus lines broker. (more…)

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As our economy and markets have changed, other insurance marketing channels have developed. While these alternate marketing channels for insurance initially focused on motor vehicle insurance, more recently they have expanded to include homeowners insurance as well. (more…)

Captive agents represent only a single insurer. In some instances, they may even be employees of the insurer. Examples of captive agents are agents who sell State Farm, Allstate, Nationwide, and Farmers policies. A State Farm agent, for example, is limited to offering the policies offered by the State Farm companies. If a given customer seeks a type of insurance not offered by a captive agent insurer, the customer will end up having to go to another agent or broker to obtain a quote or a policy. (more…)

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An independent insurance agent is a person who is licensed by the department of insurance in the state (or states) where he or she conducts business. Licensure generally involves passing a written examination to show that the person meets minimum standards of knowledge regarding the business of insurance. (more…)