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Originally posted by TheVrk Imagine one? lol i LIVE in one No one has any form of insurance on their homes in Croatia... the only insurance anyone has is on their car since it's law. But i do gotta say that we're not quite hunter-gatherers here...and i don't make my own clothing But point well taken

Chem's looking big picture. Without insurance financial institutions wouldn't write mortgages or loans, credit card companies wouldn't extend credit, commercial property developers wouldn't build malls/skyscrapers/appartment buildings, mass manufacturing would largely shut down, etc. because those with capital would not be willing to take on the risk of unlimited liability or total financial ruin in the case of a large scale loss. Of course there would be some fabulously wealthy individuals that would take the risks but very few. The industrialized society requires insurance to function as it does. Property and automobile insurance are only a tiny fraction of the insurance industry.

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Originally posted by RickyM you're just a shit version of Moral Hazard. At least he knows what he's talking about.

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Originally posted by pkcRAISTLIN lol, i love it when moral feels the need to lay the smack down

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Originally posted by Cro_Addict Serious question. One time our street flooded and most of the basements flooded with water. Most people had no problem with filing the claim and getting it paid. However, a lot of the companies denied to insure the homes after paying out the claim. Why is this? Too much risk so they say no?

Yes, it would have been based on a change in the risk rating for the properties. I suspect that the flooding highlighted problems with the storm water management in the area that were not rectified; subsequently, the actuarial calculations on the probability of another such event were changed and the properties became riskier to insure. In such cases the insurers will either a) increase premiums to account for the increased risk, b) decline to offer sewer back up coverage (assuming the losses were due to back up), c) decline to write the property all together. Also possible but less likely is that one insurance company (note; many companies operate multiple brands so one may not think it's the same company but it really is... Aviva for example operates as Aviva, Pilot, PC, Traders General, Elite, OTIP, and probably a few more I'm forgetting), realized from this event that they insure more properties in a small area then they would like. Having more properties in a small area increases the probability of suffering a large cumulative loss due to local events. Since insurance is based on spreading risk across a large area and group of people this sort of over representation in one area is a big problem for insurers. If that was the case then that insurer would likely look to reduce the number of properties they insure in the area. TDI and Chubb did this with Woodbridge and Maple after the tornadoes a few years back... because those two insurers tend to write a lot of university alumni and professional groups they found themselves over-represented in upper middle class neighbourhoods so they have been trying to lower that representation in the years since.

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Originally posted by RickyM you're just a shit version of Moral Hazard. At least he knows what he's talking about.

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Originally posted by pkcRAISTLIN lol, i love it when moral feels the need to lay the smack down

Just out of curiosity, who makes the ultimate decisions after the evaluators (or whatever the correct term is) make their assessment and initiate the next phase of the claim process?

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"The function of music is to release us from the tyranny of conscious thought." — Sir Thomas Beecham

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Originally posted by The Ear Just out of curiosity, who makes the ultimate decisions after the evaluators (or whatever the correct term is) make their assessment and initiate the next phase of the claim process?

If by evaluators you mean appraisers/estimators then they don't make any decisions; rather, they make recommendations to adjusters.

Claims adjusters working for an insurance company have a set authority limit (usually): meaning they have autonomy to make decisions on any claims where the probable ultimate value is less then that authority. Generally, they will need to go to their supervisor or manager for approval on decisions for claims beyond that authority level. The supervisor will also have a set limit of authority, beyond that limit they have to go to their manager... the manager to the VP claims, VP claims to the CEO if a claim gets big enough.

Independent claims adjusters (those hired by an insurer on a single claim as opposed to being staff members) can either have a set authority or zero authority. In either event, they need to seek instructions from a claims examiner at the insurance company for any decisions on claims beyond their authority (if they have any).

In addition; most insurers have an oversight proceedure for the denial of claims. Usually, this involves the adjuster making a recommendation to their supervisor. The supervisor will then review the file and in some cases be able to make the decision, in others it needs to go further... either to a manager or a "claims committee" which is often a manager or two, the VP claims, VP of underwriting and the president of the company.

For my team (we are independent adjusters working for a small group of insurers); they have authority levels ranging from 30-50K, I have authority of 100K, and then I report to my principals (that's what we call the insurers) for anything beyond that. I used to work at an insurer where I had $75K, my manager had $150K, the director of claims had $500K, and the VP of claims had $10million authority... beyond that it went to the board of directors.

So, to answer the question of who makes the ultimate decisions... that depends on the structure of the insurer's authority system and the value of the claim.

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quote:

Originally posted by RickyM you're just a shit version of Moral Hazard. At least he knows what he's talking about.

quote:

Originally posted by pkcRAISTLIN lol, i love it when moral feels the need to lay the smack down

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Originally posted by Moral Hazard If by evaluators you mean appraisers/estimators then they don't make any decisions; rather, they make recommendations to adjusters. Claims adjusters working for an insurance company have a set authority limit (usually): meaning they have autonomy to make decisions on any claims where the probable ultimate value is less then that authority. Generally, they will need to go to their supervisor or manager for approval on decisions for claims beyond that authority level. The supervisor will also have a set limit of authority, beyond that limit they have to go to their manager... the manager to the VP claims, VP claims to the CEO if a claim gets big enough. Independent claims adjusters (those hired by an insurer on a single claim as opposed to being staff members) can either have a set authority or zero authority. In either event, they need to seek instructions from a claims examiner at the insurance company for any decisions on claims beyond their authority (if they have any). In addition; most insurers have an oversight proceedure for the denial of claims. Usually, this involves the adjuster making a recommendation to their supervisor. The supervisor will then review the file and in some cases be able to make the decision, in others it needs to go further... either to a manager or a "claims committee" which is often a manager or two, the VP claims, VP of underwriting and the president of the company. For my team (we are independent adjusters working for a small group of insurers); they have authority levels ranging from 30-50K, I have authority of 100K, and then I report to my principals (that's what we call the insurers) for anything beyond that. I used to work at an insurer where I had $75K, my manager had $150K, the director of claims had $500K, and the VP of claims had $10million authority... beyond that it went to the board of directors. So, to answer the question of who makes the ultimate decisions... that depends on the structure of the insurer's authority system and the value of the claim.

Thanks. I've always wondered about the procedures and structure. I've been fortunate enough to not need t omake a claim yet on anything. But it's always good to know the way things work in advance.

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"The function of music is to release us from the tyranny of conscious thought." — Sir Thomas Beecham