Covered perils (not covered pearls) are what you hope your car accident falls under when you file a claim.

Covered pearls make you pretty; covered perils help you when life isn't pretty.

Covered Perils. Sounds a little like a band name or even a type of jewelry.

If you don’t work in the insurance field, you most likely would be guessing things just like that if you were ever asked what the words “covered perils” meant. Covered perils are actually a much more serious topic than any band name or jewelry. If you are filing a claim with your insurance company it is something that you are hoping that your claim will be qualified as.

What Are Insurance Perils?

To understand the word “covered perils”, it is first important to understand what the word “perils” mean. Per the Merriam-Webster dictionary the definition of perils are “1. Serious and immediate danger” and “2. The dangers or difficulties that arise from a particular situation or activity”.

Your insurance policy is not going to be much help if you are in “serious and immediate danger” so definition number two is what applies in this case.

Perils in the world of insurance are situations or activities that cause difficulties in your life. For example, having your vehicle hit by another car, your car catching on fire or you running into a telephone pole are all perils. All of these situations are going to make your life difficult.

What is A Covered Peril

Now that we know what a peril is, let’s talk about a covered peril. Covered perils are the situations that are going to cause difficulty in your life that are covered by your insurance policy.

These covered perils are listed in the large legal documentation that you first received with your insurance policy. The legal documentation is different from company to company, but the general list of what situations your insurance will cover varies little between companies.

Insurance companies don’t send the legal documentation out at each renewal like they do with the declarations page. This is why it is important to keep the document when you first get it.

If you no longer have the legal documentation, contact your insurance company or your agent to get a copy.

What is Not a Covered Peril

Perils that are not covered by your insurance are the situations where the insurance company will deny your claim if your damages were caused by certain situations. Usually these situations are illegal acts or situations that happen frequently in your area.  The insurance company can decide not to offer coverage for certain situations to protect themselves financially.

A situation such as intentional damage done to your vehicle for financial gain is not a covered peril. Also a situation where you have intentionally damaged another person’s property with your vehicle is also not a covered peril.

A full list of perils that are not covered can be found in the legal documentation for your insurance policy. Having this list around in the case of a claim is very important to protect yourself if the claims adjuster denies your claim for not being a covered peril.

What indemnification is, how it works and how to recognize exclusions and policy language that may lessen its impact.

Indemnification is how this loss can be compensated.

Like any other professional field, insurance is full of terms that may be unfamiliar to the outsider. One of these is “indemnification.”

Aside from being a mouthful, what is indemnification? Well, it’s a very important insurance concept which deserves a closer look.

What is Indemnification?

Indemnification is a central concept of insurance in general, not just auto insurance. It’s a term that comes up in every form of insurance, be it homeowner’s, renter’s, life, commercial liability or what have you. Indemnification is, in the recent words of a major carrier, the means insurance companies use to “get you back to where you belong.”

The concept is simple: by definition insurance should replace or otherwise pay for exactly what you lost. There should neither be profit nor loss in an insurance claim. That’s the theory, anyway.

How Indemnification Works

Say you’re in an auto accident and the other driver is found at fault. For the sake of simplicity (and because we like you) we’ll say that you weren’t injured, but your car was totaled. We’ll also assume the other driver had adequate liability coverage on his vehicle.

Depending on the policy and your preference you may be able to do one of two things: get a new car comparable to the one you had, or take a cash payment equal to the value of your car at the time of loss. Either way, the insurance company indemnifies you for your loss.

In another example, assume you have full coverage on your vehicle and you accidentally hit a tree. The car isn’t totaled, but there is $3,000 worth of body work needed. After your pay your $500 deductible, the insurance company picks up the remaining $2,500. While the deductible isn’t covered per the terms of your insurance contract, the rest is. That $2,500 claim payment is indemnification for your loss. You would profit from any further payment, but lose out from any less.

Indemnification isn’t automatic. Your claim must go through the proper channels and be investigated by a claims adjuster, who determines the amount of loss and what the insurance company is responsible for. If you disagree with the amount, you can hire a third party adjuster to take another look, or in extreme cases take the insurance company to arbitration or court.

Pitfalls of Indemnification

One should bear in mind indemnification does not take into account exclusions such as depreciation. It is very important to know if an item is covered for “replacement cost” or “actual cash value.” If the latter, you’ll only be covered for what the item was worth at the time of loss, which may or may not be enough to replace it.

Aftermarket accessories on separate auto inland marine policies are often covered at actual cash value, for example. Many commercial policies also make wide use of actual cash value clauses in their contracts. Ask your agent to be sure.

What insurability is, how it’s determined for both the vehicle and the driver, and the differences in insurability from company to company.

Check with your agent to make sure this baby is insurable.

As part of the larger property and casualty line of insurance products, auto insurance shares some basic characteristics with other forms of insurance. One of these characteristics is insurability.

What is insurability, and how does it impact you the auto insurance consumer?

At a basic level, if an insurance company deems a certain risk to be acceptable to its business, it is considered insurable. Otherwise, the risk is considered uninsurable and therefore ineligible for coverage.

This is true regardless of whether you’re talking about auto insurance, homeowner’s insurance, life insurance or any other line of insurance you care to name.

When it comes to auto insurance, insurability is dependent on two factors: the auto and the driver. Both must be deemed insurable before an auto insurance policy can be written. This is accomplished in the underwriting process.

Insuring the Auto Itself

With most auto insurance companies, the auto meets insurability requirements if it is built by a recognized manufacturer and has a vehicle identification number, or VIN. This includes the vast majority of cars on the road today. Autos that do not meet insurability requirements with most standard companies typically include kit cars, exotic sport cars and models with particularly poor safety ratings. Your insurance agent will be able to tell you if your vehicle meets insurability requirements, but barring unusual circumstances you’re probably in good shape.

Model year does not have much of an effect on insurability itself, but it does have an impact on overall premium. For the most part, newer vehicles cost more to insure than older vehicles all other things equal.

Trailers and RVs are subject to similar insurability requirements, but remember that it is not possible to insure a trailer for full coverage. You can only get comprehensive and collision with them.

Insurability on the Driver

From an insurance carrier’s standpoint determining insurability on the vehicle itself is pretty easy. It’s either insurable or it’s not. Determining insurability on the driver, however, takes many variables into consideration. These include age, sex, marital status, driving history and past insurance history.

Further, if a vehicle is driven by multiple drivers then all drivers must be considered for insurability. Generally speaking, auto insurance on a vehicle is rated for the highest risk driver in any given group of drivers. This is why teenage drivers can cause their parents’ insurance premiums to dramatically increase.

Driver insurability is periodically reviewed by the company, and a driver may be dropped by the company if he or she no longer meets the company’s insurability requirements. Remember an insurance company can only drop a driver at renewal, so you may have time to shop around for a new policy if you find yourself uninsurable with your current company.

Driver insurability on commercial auto insurance policies takes into consideration a slightly different set of criteria. For example, drivers under 25 or over 74 are often deemed uninsurable on commercial policies regardless of other circumstances.

Insurability is Not Uniform

If your vehicle and/or you do not meet insurability requirements with one company, don’t fret. One company’s definition of insurability is always at least slightly different than another’s. Chances are there is a company out there that will take you. While many standard auto insurance companies shy away from kit cars and sports cars, there are other auto insurance carriers that specialize in them. Your agent may have access to one of these companies through a brokerage.

If a standard insurance company says you’re uninsurable, a non-standard or high risk company will probably take you instead. You might have to get an SR-22 or join an assigned risk pool to get insured, but auto insurance is available for just about anyone driving just about anything.

Known as many different names, driver’s safety courses help drivers learn to be safer behind the wheel and can offer some money saving perks as well.

Sometimes drivers need to take the exit off the main road into a driver's safety course.

Driver’s Safety courses, also known as defensive driving courses or traffic school, help drivers who may have forgotten the safe way to operate a vehicle. These courses are designed as a quick update of driver laws and techniques for the driver. They can be mandatory for bad drivers and voluntary for older drivers just looking for a car insurance discount.

Driver’s Safety Course Education

Basically  driver’s safety courses are a very summarized version of Driver’s Ed. Most courses are only for about 8 hours and can be broken up into a handful of small sessions or one full Saturday session.

What you will learn in your driver’s safety courses:

• Accident Avoidance Techniques
• Proper Lane Changing
• Stopping at Red Lights
• New Driving Laws for Your State
• Safety Restraints
• Post-Accident Tips
• Speeding Laws

These are just some of the subjects that your driving school instructor may go over. The final subject matter will depend on the state that you live in. They will present the information to you in the form of lectures, worksheets, and reading material.

If you are lucky there will be a comedy driver’s safety course for you to take in your area. This new form of traffic school offers everything that the regular course does, but is presented in a comedic fashion by the instructor.

The Perks of Driver’s Safety Courses

Driver’s safety courses not only make you a safer driver (yes, this is a perk), it also helps to decrease your insurance premium. If you have tickets and accidents on your driving record, this course could decrease the number of points that are charged on your record for these violations. The lower amount of points means that the insurance company won’t charge you so much for your premium.

Back to the becoming a safer driver. Safer drivers enjoy the perks of not having accident and ticket surcharges on their insurance policies. This means that they are paying less for the same insurance coverage that you have. By paying attention in this class and driving safer than you have been, after your tickets and accidents have fallen off your record, you also can enjoy this low premium perk.

Eligible driver’s safety courses can also add a discount to your insurance policy if you are an older driver. This discount will help to decrease the premium that the insurance company is charging you for your age. The driving classes for older drivers have nothing to do with traffic school and are not because of tickets or accidents.

Locations of Driver’s Safety Courses

The locations of driver’s safety courses vary by your state and even by the area of the state that you live in. In some states you can take your driver’s safety course online from the convenience of your home. To find out when and where the driver’s safety courses in your area are offered, contact your local Department of Motor Vehicles or local police department. You can also check online for the driver’s safety courses near you.

If your driving record is bad enough, the authorities will tell you where to go; you won’t have to ask. This is because your driver’s safety courses will be mandatory.

Fraud investigators are essential to the prevention of fraudulent insurance activity.

Insurance fraud is a fraud investigators main focus.

Insurance fraud is sometimes regarded as a victimless crime. This means that the crime is not directly violating the rights or endangering any particular person (victim).

This definition of insurance fraud does not exactly stand if you consider the repercussions of insurance fraud. The amount paid out to people that commit insurance fraud and the money that has to go into finding and persecuting these criminals are funneled out to all of us in increased insurance premiums.

This makes all of us victims of insurance fraud and is why fraud investigators are important to the industry and to all of us that have insurance.

What Are Fraud Investigators?

Fraud investigators work directly for insurance companies or for the state insurance commissioner’s office (or department of insurance) researching questionable insurance activity. This activity can be anything ranging from the most common fraud of fake insurance claims to premium being stolen. The concentration of a fraud investigators case can be a fellow employee of the insurance company, an agent, a claimant and even the insurance company’s own clients.

Why do we Need Fraud Investigators?

We need fraud investigators to help catch the criminals that commit insurance fraud and also to stop insurance fraud before it is too late. In the case of fraudulent claims, a fraud investigator can help prevent a fake claim from being paid out. They can also prevent too much from being paid out on an exaggerated claim.

If a fraud investigator can prevent the money from being paid out by the insurance company, the insurance company won’t have to raise premiums for the people insured with them to recoup the loss. The less that we have to pay out because of other people’s criminal activity should be good news for all of us that have to pay insurance premiums.

Fraud investigators also investigate fraud that may be happening with insurance premium. Situations like agents that are keeping premium instead of passing it on to the insurance company for their client’s coverage. They also investigate clients that lie about where they live to get cheaper insurance rates. Nothing in insurance is safe from fraud which is why insurance investigators work with just about every department of an insurance company.

A Dangerous Job

On June 7^th, 2011 two fraud investigators in the state of Louisiana were killed while trying to obtain documents from an agent that was the focus of a premium fraud investigation. The agent that was under investigation, for stealing his client’s insurance premiums, shot and killed both unarmed fraud investigators before killing himself.

Being the main focus of an insurance fraud investigation is as unwelcoming as being the main suspect of a police investigation. People that find themselves in this position act out defensively and sometimes cause injury to the investigators or damage to their vehicles. People show less restraint of their bad intentions with fraud investigators than they would a police officer and unfortunately fraud investigators have to do their job unarmed…..at this time.