Homeowner Hacks: Prevent Damage to Prevent Claims

Did you know that 1 in 15 insured homes will experience a property damage claim this year? Protect your home by following these 7 easy steps:

  1. Use smoke detectors - and don't forget to change the batteries!
  2. Clean dryer vents - not only will it make your clothes less linty, but failure to do so can be a fire hazard.
  3. Monitor appliances while in use - don't wander too far away while your toast is toasting!
  4. Annually review your insurance coverage - your agent will be happy to help, and it is important to check for any possible gaps. 
  5. Use a home security system - it will even get you a discount on your insurance! Other security options can be as simple as installing deadbolt locks to prevent break-ins. 
  6. Remove snow from your roof - by clearing the edges of your roof, you prevent snow from melting and then refreezing to block drains, causing seepage into your home. 
  7. Use water leak sensors - these little gadgets sound an alarm when they detect water, making it easy to detect a problem before it causes widespread damage. 

Hack your home today!

Read more at the original article on CNBC here. 

Hard times & Hardened Prices - The Aftermath of Natural Disasters

In the aftermath of the recent natural disasters, the insurance industry is facing monumental losses. Between hurricanes Harvey, Irma, Maria and recent earthquakes in Mexico, the expected losses total in the ballpark of $100 billion. According to industry executive Jonathan Reiss, group chief financial officer at Hamilton Insurance Group, insurance prices will need to harden in order to mitigate the damage. 

“There’s no question that rates are going to harden in some lines of business,” Reiss said during a speech at InsuranceERM’s Insurance Risk & Capital Conference. “Terms and conditions are going to tighten. You can call it what you will – a market turn, a hardening.”

Reiss says that the prolonged period or low-to-no interest rates and minimal natural disasters had previously kept prices low, not permitting much cushion for catastrophe. Combine this trend with the high frequency, high cost nature of the emerging hazards related to cybersecurity and climate change, and you have a recipe for disaster. As Reiss puts it, "This market cycle is forcing our industry to face some inconvenient truths."

Read the original article by Ryan Smith for Insurance Business Magazine, here

Photo source here

Trump Halts Cost-Sharing Reductions

On Thursday, October 12, 2017, the White House indicated that President Trump will end ACA cost-sharing reduction (“CSR”) payments to insurance companies effective immediately. This was followed up by a White House statement indicating that the payments had lacked appropriations and therefore the government could not lawfully continue making them. While the impact to insurance companies and individuals who obtain subsidized coverage in the Marketplace is expected to be significant, the direct impact to employers and employer sponsored health plans is expected to be minimal.

Implications for Employers

The direct impact of this decision is minimal. Applicable large employers (“ALE”) - those with 50 or more full time equivalent employees - are subject to ACA employer shared responsibility “A” or “B” penalties for failure to offer affordable and/or minimal value coverage to fulltime employees, if one or more of those employees obtain a subsidy or CSR in the exchange.

Even if CSRs are eliminated, since a prerequisite to an individual obtaining a CSR subsidy is to qualify for a premium reduction subsidy, there should be no change to an ALE’s “A” or “B” penalty exposure since premium reduction subsidies are not impacted by this White House decision.

Further, since an ALE must make an offer of affordable and minimum value coverage in order to avoid “A” or “B” penalties, we do not anticipate a significant increase in employees forgoing coverage in the Marketplace and enrolling in employer sponsored plans (since those individuals would generally have been ineligible for Marketplace subsidies due to the employer’s offer of affordable and MV coverage in the first place).

Additionally, if carriers exit the Marketplace or otherwise cancel plans in light of this change in policy, employers may see an increase in requests for special enrollment in their group health plans due to the loss of eligibility for Marketplace coverage.

The indirect implications are less clear. Stopping CSR payment will make individual insurance more expensive in the Marketplace. This may lead to carriers dropping out of the Marketplace, or if they remain, pricing plans beyond the reach of those individuals who previously benefited from CSR payments. This will likely result in an increase in the uninsured population. All payers in the health care system are affected by higher costs when there is a high uninsured population receiving uncompensated care.


Read more: http://www.capstonehealthreform.com/

New Executive Order and Insight on the Employer Mandate

President Trump signed an Executive Order (“EO”) on October 12, 2017, directing various federal agencies to take regulatory action that will “increase health care choices for millions of Americans.”

Employers should:

  • Be aware that we are likely to see new regulations addressing AHPs, HRAs, and STLDIs in the coming months. While changes to existing AHP and HRA rules are unlikely to affect 2018 plan years, such guidance may create challenges for 2019 and beyond.
  • As the Administration signaled its intent to enforce the Employer Mandate: • Plan for compliance with the 2017 ACA reporting. The final Form 1094-C, Form 1095-C and Instructions are available.
  • Prepare to address any notices issued by the IRS regarding Employer Mandate assessments for the 2015 and 2016 calendar year.

Read More: http://www.capstonehealthreform.com/

Tune In to Health Care: Exclusive Webinar

The Capstone Group's employee benefits team invites you to tune in to an exclusive webinar presented by Keystone Insurers Group and the National Association of Health Underwriters (NAHU).

The webinar will take place on Oct. 2nd   2PM - 4PM EDT, and will feature NAHU Vice President of Government Affairs Marcy M. Buckner. Marcy will break down the future of the ACA and health insurance politics and policy, including recent legislative and regulatory actions by Congress and the Trump Administration.

More specifically, the session will examine the legislative actions that have been taken so far and why, political barriers and their significance, the role of the NAHU and the agent/broker community, and what we can expect for the future of healthcare and employee benefits. 

Don't miss this opportunity to stay informed.

Register today at:   https://register.gotowebinar.com/register/7047014499363267586

Upon registration, you will be asked for your Organization Name. If none, list "Keystone."



Image Source and Additional Reading: https://insurancenewsnet.com/innarticle/agent-role-stable-marketplace-concerns-nahu

FEMA Could Run Out of Money by Friday

They say lightning doesn't strike twice, but what happens when hurricanes do? With the U.S. still dealing with the devastating effects of Hurricane Harvey on Texas, and Irma right around the corner on its way to Florida, a Senate aide has disclosed that the Federal Emergency Management Agency is expected to run out of money by Friday unless more funding is approved by Congress.

"As of 10 a.m. Tuesday morning, FEMA’s Disaster Relief Fund, which pays for the agency’s disaster response and recovery activity, had just $1.01 billion on hand. And of that, just $541 million was “immediately available” for response and recovery efforts related to Hurricane Harvey, according to a spokeswoman for FEMA who asked not to be identified by name."

At this rate, funding will run out by the time Irma hits Florida, and as a category 5 hurricane, it is expected to do significant damage. Nearly $8 billion has been requested in additional funding, awaiting approval from Congress. 

"The House is voting Wednesday on funding for Harvey. The Senate, which is expected to act this week as well, is considering whether to add a suspension of the federal debt limit to the measure. The legislation would then go back to the House."

For now, spending has been restricted to "lifesaving, life-sustaining efforts for Harvey and Irma." But more money will be needed, and very soon. And the most troublesome of all? It isn't even peak hurricane season yet.

To read more, check out the original article, written by Christopher Flavelle and Erik Wasson here.

Photo from ABC, Inc.: http://abc7chicago.com/weather/hurricane-harvey-2017-path-reaches-texas-makes-landfall-as-category-4-storm/2340504/

DOL Sues Macy's Inc. Health and Welfare Plan

Alleging SPD and Wellness Program Failures

On August 16, 2017, the Department of Labor (“DOL”) filed a lawsuit against Macy’s Inc. Health and Welfare plan (and its third party administrators) under ERISA Title I.

Specifically, the complaint alleges:

• The health plan and its fiduciaries failed to follow the written terms of the health plan’s Summary Plan Description (SPD) when reimbursing out-of-network claims; and

• The wellness program that includes a tobacco surcharge violated the HIPAA wellness program rules.

The complaint alleges breach of fiduciary duty and asks, in part, for readjudication of all out-of-network claims administered outside plan terms and for restitution of all the tobacco surcharges imposed.

Failure to Amend SPDs

According to the DOL’s complaint, Macy’s changed the reimbursement threshold for out-of-pocket claims from “the lesser of the provider’s normal charge for a similar service or supply or between 75%-80% of usual and customary charges” to the Medicare Allowable Rate when it is less than the provider’s normal charge for a similar service or supply. Allegedly, the SPD was not amended to include language describing that the reimbursement for out-ofnetwork claims would be the Medicare Allowable Rate when less than provider’s normal charge. Additionally, the health plan participants were not provided a copy of any summary of material modification reflecting the change in reimbursement.

To learn more, check out the rest of the article at http://www.capstonehealthreform.com/


Employer Penalty Update

Have you been keeping up with Capstone Compliance? Check out our recent update on the Employer Penalty.

Applicable large employers (“ALEs”) may be resting easy, having had no notification from the IRS of 2015 or 2016 assessments under the Employer Shared Responsibility Provisions (the Employer Penalty) and having reasonably expected that the Republican-led administration would limit or choose not to enforce this mandate.

However, the recent failure in the Senate to pass legislation to repeal and replace the Affordable Care Act (“ACA”) has left many employers wondering whether:

  • Penalties associated with the Employer Penalty will be enforced; and
  • Forms 1094-C and 1095-C will be required going forward

Recently, the IRS published draft versions of the 2017 Forms 1094-C (https://www.irs.gov/pub/irs-dft/f1094c--dft.pdf) and 1095-C (https://www.irs.gov/pub/irs-dft/f1095c--dft.pdf). These versions are substantially similar to past Forms. Notably though, the Form 1094-C has reserved areas once used to reflect available transition relief (Line 22 Certifications of Eligibility, Boxes “B” and “C”). Final versions of the Forms are expected in the fall. Draft instructions for the 2017 Forms have not yet been released.

To date there has been no guidance issued by the IRS that eliminates penalties for Employer Penalty violations or fines associated with failures to accurately complete, provide and/ or file Forms 1094-C and 1095-C. While some employers may think a Trump-led IRS will ignore these requirements, absent non-enforcement guidance from the agency, employers should continue to comply.

To read the full article, check out the Capstone Compliance website at http://www.capstonehealthreform.com/


Not Even Dragons Can Ward Off Cyber Attacks: HBO Hacked

This week, HBO received a video letter from hackers threatening to release confidential internal documents, including emails and Game of Thrones materials such as scripts, the cast's personal information and even alleged possession of unreleased episodes. The hackers demand a ransom of several million dollars in bitcoin to prevent further release of the stolen data. 

The hack is akin to the crack of Sony's network in 2014, leaking "thousands of embarrassing emails and released personal information, including salaries and social security numbers, of nearly 50,000 current and former Sony employees." Though the chaos inflicted to HBO falls short of this breach, though the risk of the information leaking would impose a large liability for the network. In its efforts to prevent further leaks, HBO has enlisted "round the clock outside cybersecurity firms and law enforcement resolve the incident," to prevent further breach and the public release of this stolen information. 

Cybersecurity is an evermore important subject. From small businesses to large TV networks, the risk of a data breach is stronger than ever and it is important to take cautionary measures when handling sensitive data (especially when it may contain details on the latest conquests of Queen Daenerys and the King in the North). 

"The global cyber market is estimated to be worth $3 billion to $3.5 billion, according to Lloyd’s. PricewaterhouseCoopers, on the other hand, forecasts a potential value of $7.5 billion by 2020."

You can read more about the hack of HBO's network here and here. (No spoilers on the show, we promise.)

Photo source: https://www.flickr.com/photos/142314069@N04/28291657225

Bon Voyage! Travel Safe with These Important Tips

“The first thing is to understand who’s in charge of your security when you travel; you are,” said Wesley Odom, president of the Ackermann Group LLC, a security and investigative firm. “You can’t deny that you’re at risk — all you can do is mitigate it.”

Mitigating that risk can be anything from monitoring travel warnings through the Department of State Website (which you can check out here.) to purchasing insurance to protect yourself and your belongings. While on your trip, it is important to keep in mind four basic tips:

Street Smarts

  • Dress down and blend in; avoid wearing expensive jewelry and flashing your cell phone. 

Airport Safety

  • "Spend as little time as possible in the public areas of the airport like check-in and baggage claim.” The gate area is actually more secure than the public areas because everyone has passed through security at that point. When arriving overseas, be cautious with how much information is shared with immigration and customs agents. Additionally, a prearranged driver is the safest way to go, but when travelling on the fly, make sure to use a legitimate, registered taxi. 

Hotel Room Security

  • Once in the room, check all of the locks, chains and u-bars. Make sure that the hotel room phone works in case of an emergency, and review the escape route from the room in the event of a fire. Use the in-room safes with caution. For more valuable, important items consider using the hotel's safe deposit boxes.

Traveling Around Town

  • “Always walk with purpose,” he advised, “and act like this is your town. Don’t put anything in your pockets you don’t want to lose, and don’t display any wealth.” Stay in well-traveled area and consider using money belts or hidden pockets to protect your money, credit cards and phone. 
  • Should any unrest or political stability occur, stay in your hotel and call your family and the American Embassy in that city or country to let them know where you are. 

The biggest tip: keeping a low profile. “The risk of kidnapping for ransom is not high for most travelers,” he explained, “it is usually higher for ex-patriots who are living abroad. Your anonymity is your best protection, so keep a low profile when you travel.

Don't let any of these tips discourage you: travel is generally safe for anywhere that is not a war zone. Using common sense and taking basic steps to secure your belongings goes a long way toward having a safe, and fun, vacation. 


To read more, check out the original article here. 

The Catastrophic Costs of Cyber Attacks

Research by Lloyd's of London has revealed has revealed that a catastrophic cyber attack could cost up to $120 Billion--equivalent to disasters Hurricanes Katrina and Sandy. The report compares various scenarios of cyber attacks, with average economic losses at a wide range. The report states: "Because of the uncertainty around aggregating cyber losses, this figure could be as high as $121 billion or as low as $15 billion." 

With such high potential losses and an economy dependent on digitization, ensuring cyber protection and security is of utmost importance.

Inga Beale, CEO of Lloyd's, says, "This report gives a real sense of the scale of damage a cyber-attack could cause the global economy. Just like some of the worst natural catastrophes, cyber events can cause a severe impact on businesses and economies, trigger multiple claims and dramatically increase insurers’ claims costs."

To read more, click here or here.

What the Senate Health Care Bill means for Medicaid

Among the many changes the Senate Health Care Bill would make to our health care system, the bill plans to make large cuts to Medicaid: $772 Billion in cuts to be exact. This figure will also cut approximately 15 million people from receiving Medicaid benefits by the year 2026. 

Here are the four main provisions that will affect Medicaid benefits:

1. Work Requirements

"States would be allowed to require Medicaid enrollees to have a job, look for work or participate in some kind of job training." This requirement grants exceptions for pregnant women, children, elderly, disabled, and adults caring for young children. 

2. Retroactive Eligibility

Previously, under Obamacare, once an individual were approved for Medicaid benefits, the previous 3 months of medical care would be reimbursed. This new bill would only allow for reimbursement for the calendar month in which they enrolled in Medicare. Considering how expensive hospitalization and other care can be, this had been a very important provision, especially for those with sudden onset disabilities. 

3. Presumptive Eligibility

Previously, certain health care providers were able to 'presume' Medicaid coverage and enroll individuals immediately; such as when being treated at a hospital. This prevented gaps of coverage and relieved stress of medical debt for patients while still allowing a secondary check on eligibility. 

4. Eligibility Re-determinations

Currently, eligibility is rechecked every year. The new bill will change the period of eligibility to 6 months. "This has a couple of consequences. First, it could more rapidly end the generous federal funding for Obamacare's Medicaid expansion; under the Senate plan, states lose that enhanced funding if a person cycles off the program for more than a month. More frequent eligibility checks are likely to lead to more people cycling on and off of Medicaid."

Additionally, "it risks more disruptions in a person's health coverage and a lapse in coverage if there is a paperwork problem."

You can read more about how the bill will affect Medicaid coverage from the original article here.

Insuring Ride Sharing

Ridesharing has completely changed the transportation industry. In just a few short years, companies like Uber and Lyft have developed ridesharing into a multi billion dollar industry. With such popularity of these businesses, insurers are facing the unprecedented challenge of providing appropriate coverage to both drivers and passengers.

If you are a driver, your regular auto policy most likely will not cover you for ridesharing activities, which could leave you, and your passengers, unprotected or underinsured in the event of an accident. In fact, most personal auto policies specifically exclude using the vehicle commercially as a ride service. 

Developing appropriate coverage is tricky, because there is no way to determine when the car is being used personally vs. as a rideshare vs. in storage. Generally, coverage can be determined based on the average commute of the owner/primary operator and where they live or operate the vehicle; but when transporting passengers a vehicle can be driving any matter of distance, crossing city or even state lines.

Mark Maucere, senior vice president for AmWins Transportation Underwriters, Inc., says, “Our rate [for transportation classes] is based on a point A to point B mechanism, and the problem with these operations is we don’t know when the car is out or in the garage, we don’t know the experience of the driver, car maintenance or in what other ways it is used.”

Companies are searching for a solution, but since the business is so new, there is very little information to use in the underwriting, rate development process. Maucere says: “There is an opportunity here, and we would be interested in potentially looking at these classes of business if we could properly underwrite and put the rate around it...But it’s very difficult until you can grab that data and verify some of the things we can’t verify now.”

Most ride sharing companies provide some form of coverage for drivers. Excess and surplus lines insurer James River currently provides coverage for Uber. The policy has three main parts: 

1. the "Core"--contingent on the driver having his/her own private passenger auto policy; has a $1 million limit that drops down and covers the driver from when he/she is picking up a passenger all the way until the passenger is delivered to the destination. 

2. a lower limit applies when the driver is waiting for a new rider.

3. separate coverage for physical damage to the driver's vehicle occurring while performing ridesharing duties.

For now, insurance is expected to follow this model and remain a surplus lines risk, as it gives flexibility until more accurate data can be collected to establish other provider options.

To read more, check out the original article HERE.

The Basics of Managing Risk with a Captive

Let's start with the basics: what is a captive? Captives are insurance companies that are wholly owned and controlled by the insureds. No one captive is exactly like another. They may vary on "coverages, retentions, limits, reinsurance, type of captive, type of ownership structure, domicile, service provider selection, stated goal of the captive, related or unrelated business," etc. 

When contemplating creating or buying into a captive, there are many decisions to be made. One of the most important factors is having senior management buy-in, as the captive is a long term decision and should have full support from upper level leadership. This buy-in is a commitment that is essential for being accepted into the captive.

The second important consideration is the company's corporate risk profile. Some captives may be more suitable for high-risk industries, others for low-risk, and some risk profiles are better handled by retention (self insurance) or purchasing coverage on the open market. Knowing your business' risk appetite is important when it comes to selecting the right captive for you. 

In the grand scheme of things, there are three dispositions to a risk exposure:

  1. Self-funding or financing through a captive arrangement,
  2. Purchasing insurance on the open market to cover any potential losses, or
  3. Avoidance.

("Using a Captive Insurance Company to Manage Risk," Jeff Kenneson)

Finally, there are "three Cs" of captive formation: control, cost, coverage. "With a captive arrangement you gain better control over your insurance-buying and risk-financing mechanisms, which should lower your costs. You’re able to select the various service providers who will assist you in operating the captive and in doing so, lower the cost of services. You have the ability to cover exposures that are uninsurable or too expensive to cover in the open market along with having the ability to manuscript policies if you so desire to plug any holes in your current coverage from the traditional carriers." Furthermore, as a part of a captive, you are more involved in claims management, which gives greater control over the decision process for claims handling.

Other important considerations include your company's loss experience, and tax issues. 

To read more, check out the rest of Jeff Kenneson's article here.


Preparing for the Road Ahead: Emerging Risk Trends

Yesterday, Swiss Re released a report highlighting six emerging trends in risk management. The data was collected from underwriters, client managers, risk experts and other insurance sector experts; their SONAR program utilized this information to compile the report, and the results may surprise you.

The biggest risk to property? Drought. 

To liability? Cloud computing.

Additionally, the report lists the threats that spin off of these risks. For example, "losses in agricultural, energy and forestry, risk of large-scale wildfires, drought-induced soil subsidence and water pollution events in the energy, mining and agricultural sectors are just some of the rising exposures related to drought."

Staying up to date on emerging risk trends is just as important as ever to make sure your business (and self) are protected, and to implement risk control measures to limit your exposure!

After all, it was best said by Swiss Re’s group chief risk officer Patrick Raaflaub, "Ignoring emerging risks is just not an option. We need to prepare for the risks of tomorrow.”

To read more, click here

Risky Business: Which Areas of the U.S. are Most Prone to Natural Disaster?

If you live or work in one of these zones and have any doubts about your coverage, you might want to consider speaking to your broker. A study conducted by RealtyTrac used data from over 3,000 counties to develop a color coded map of the riskiest areas in terms of natural disaster exposure. These exposures include losses caused by hurricanes, tornadoes, earthquakes and fires. 

Check out the map--It may be time to update your coverage!

Click here for more details and to view the interactive version.

'Avocado Hand', Brunch Injury on the Rise

Wait... this is a real thing? 

With the rise of avocado popularity, insurers have seen an influx of personal injury claims arising from the attempt to cut into this oddly shaped fruit. Many injuries require stitches, however, some can be severe enough to cause nerve damage and require surgery to fix, which can even rack up medical bills up to $20,000. Most reported injuries come in on Sunday afternoons, a typical brunch-time avocado toast craving.

'Avocado hand' has caused some publications to issue public service announcements on the safety hazards of cutting an avocado, with instructions on proper safe handling. In the UK, the British Association of Plastic, Reconstructive and Aesthetic Surgeons wants to alert people of the safety risk, perhaps with a warning label. 

In a Times of London article, Simon Eccles, secretary of the association and former president of the plastic surgery section of the Royal Society of Medicine, said: "People do not anticipate that the avocados they buy can be very ripe and there is minimal understanding of how to handle them. We don't want to put people off the fruit but I think warning labels are an effective way of dealing with this. It needs to be recognizable...Perhaps we could have a cartoon picture of an avocado with a knife, and a big red cross going through it?"

You can read more here, and here.

In the meantime, be careful what you slice and perhaps opt for the pre-made guacamole instead. 

Capstone launches site for real-time healthcare reform updates

Capstone Group is proud to announce the launch of a new webpage dedicated to keeping readers informed of recent compliance and health reform updates. Our Benefits Team is committed to providing the guidance needed to understand and make decisions based on the evolving future of our nation's healthcare legislation. 

Visit Capstone's Compliance page...

Trump's Proposal: Hefty HHS Budget Cuts

A new proposal by the Trump Administration for the fiscal 2018 budget will include two hefty cuts to the Office for Civil Rights (OCR) and the Office of the National Coordinator for Health Information Technology (ONC), both of which are agencies for the Department of Health and Human Services (HHS). These agencies are responsible for health data privacy and security issues, including HIPAA enforcement. 

The plan proposes a 36% cut for the ONC, and according to the plan's terminology, the ONC's privacy and security activities would be "closed out." It also proposes a 13% budget cut for the OCR. 

Although this plan is considered to be a rough draft of what will actually be passed (especially considering Congress' disagreement with these cuts), however, it does bring about concern for the future of health information security and HIPAA enforcement in the future. The proposed cut would severely limit the abilities of the OCR HIPAA audit program, and may place onsite audit plans on hold indefinitely. Other civil rights activities will be similarly affected. 

Meanwhile, the proposed budget cuts to ONC could impact the agency's assigned work related to health IT provisions of the 21st Century Cures Act, which was signed into law last December by President Obama. The act holds many privacy and security provisions meant to protect patient's health information. 

Kirk Nahra, a privacy attorney at Wiley Rein says the budget proposal, "places abstract political principles and tax cuts ahead of the business of government, even in defense of laws passed by Congress. While OCR, for example, is not generally changing its approach, cutting staff will force them to do things differently. That may have the result of being bad for both individuals and businesses."

Similarly, privacy attorney David Holtzman, vice president of compliance at security consulting firm CynergisTek, claims it would be "extremely challenging for federal agencies like OCR and ONC to carry out their mission if the president's proposed budget for HHS is passed by Congress."

Again, this proposal may end up being far from the eventual budget, but it brings about much speculation for the future of privacy regulations, and whether they will continue to be upheld. As Holtzman says, we will have to "wait-and-see."

To read more, click here

Important Insurance Terms You Should Be Familiar With

Finding affordable insurance can be difficult, especially if there are insurance terms you don't understand. Simply having the basic understanding of insurance definitions can make the difference between having a policy that will cover you for the majority of your expenses and one that leaves you paying thousands of dollars out of pocket. 

Listed below are some of the most important definitions that InsNerds has compiled to better help you navigate the sometimes confusing world of insurance. 

Basics of Insurance:

Insurance: Paying a company a little money for the promise they will pay a lot of money for things we break without meaning to.

Risk: Chance of something changing either for better or worse .

Pure Risk: An event that can only leave you worse off, but not better.

Speculative Risk: An event that could leave you better or worse.

Probability: The chance that an event will happen written as a number.

Physical Hazard: something real about a building, job or place that creates a larger chance of a poor ending

Moral Hazard: Something that might lead the owner to break his own stuff.

Morale Hazard: Something that might lead the owner to not care if his stuff breaks.

Liability: When the law says you have to pay for breaking something.

Premium: The little bit of money that the company asks you to pay for the promise that they will pay a lot of money if you break or lose something covered by their promise.

Claim: Asking somebody else to pay when something breaks or is lost.

Insurer/Carrier: A company who promised to pay for big things you break or lose if you pay them a little money before it happened.

Insured: The person who gets paid when something breaks or is lost.

Policy: A written paper that explains in long words the promise you have bought from the company and what is covered or not covered.

Contract: A written promise.


Click here to lookup more important insurance definitions