Rideshare drivers have insurance options

 Uber Rideshare drivers are covered by Uber insurance. While the app is turned off, you are covered by your personal insurance.  While the app is on, however, and you are waiting for a client, you are covered by neither.

In some cases, personal auto insurance policies are being cancelled. This happens when the insurance companies become aware that the driver works for Uber or Lyft. Therefore they are left with no personal auto coverage.

Consider this:

A person pulls up an app on their phone, types in the position where they are and need to be taken and orders your car. You drive to fetch them.

While you are driving you look at your phone to ensure that you are driving in the right direction. You hit a car whilst your attention is on your phone. It is not a big accident however bad enough that the other driver calls the police. You have to cancel your pick-up.

The police arrive.  You were driving for Uber. The police record your details. You submit your claim.

Your insurance company calls you. You drive in “rideshare”. As a result, your claim is denied. You are responsible for your own car repairs.  Furthermore, you must pay for the damage caused to the other driver’s car. Fortunately, nobody was injured.

The car insurance company then cancels your policy.

You contact Uber to find out if their insurance policy is going to cover the damage. Unfortunately not, says the receiver of your call. They state that as you did not have a passenger in the car, they are not liable for damages.

Lyft, Uber and Sidecar would prefer that you think of them as technology companies. Uber wrote in a legal finding with the CPUC (California Public Utilities Commission):-

Uber operates no vehicles and does not hold itself out or advertise itself as a transportation service provider. In fact and law, Uber does not provide transportation services of any kind and does not own, lease or charter any vehicles for the transportation of passengers. On the contrary, Uber is a technology company that licenses the Uber App to transportation service providers. The transportation service providers pay a fee to Uber to use its software technology; the passenger of the transportation service provider pays the transportation service provider for transportation received.”


Residents will pay a large proportion of the catastrophe caused by Hurricane Irma. The Consumer Federation of America made this statement.

Insurers have therefore developed higher wind coverage deductibles.  Paperwork obscures payouts.  However, many consumers do not read or do not understand the documentation.

There will be about 300,000 claims for wind damage and 150,000 flood damage claims in the future.  These claims could reach more than $40 billion.

There are “anti-concurrent causation” clauses in policies.  Wind damage is excluded. This is the case if an “uninsured flood” occurs simultaneously.  Wind coverage disappears through a hidden backdoor in a policy.
The National Flood Insurance Program has $1.5 billion to assist in paying claims, as well as $5.8 billion in borrowing authority. $250,000 is offered for structural damage and $100,000 for damaged or lost contents. The residents need to survey damages as soon as possible. The policy of the NFIP is first to come, first served.

Insurance companies will use drones to assess damage as the use of insurance adjusters is very costly. Furthermore, this will speed up the payment to the Irma hurricane victims.

Two percent is the usual deductible of the insured value of a residence. Therefore on a $300,000 home, the deductible would be $6,000.  This amount is payable before an insurance company will pay out any amount to the insured.

Victims of Irma need to know that the comprehensive section of their auto insurance also covers flooding.

President Trump issued the following for Florida i. e. to provide temporary housing and give financial housing for home repairs.  grants to be made available to assist with medical, dental and funeral transportation.  Furthermore, relief to be provided regarding unemployment for up to 26 weeks for state benefits.
Loans at low-interest rates to cover losses not covered by insurance.
Crisis counselling is available.

Business Owner’s Policy

Business Owner’s Policy

A Business Owner’s Policy (BOP) is a special type of commercial insurance. It is designed for small and medium-sized businesses.  It combines general liability insurance and property insurance into a single policy.  A Business Owner’s policy typically offers a reduced premium, often making it a more cost-effective option than separately purchased policies. Specific coverage included in a business owner’s policy varies among insurance providers.   Most policies require that businesses meet eligibility criteria to qualify.

Just as you would protect your home and its contents, you should also cover your business assets against a loss.  Ensure that the coverage is adequate.  The most common is to insure for replacement value.  That way, if you do suffer a loss, you will not be out of pocket to get back to business as soon as possible.  You will have to adjust your coverage periodically as you acquire or dispose of property.  You should also be careful to update the replacement values as time goes by.

Insurance companies evaluate potential customers by looking at the risks inherent in their businesses.  Fire risk is one of the main factors in determining the cost of property insurance.  Building or leasing a fire-resistant building should reduce premiums significantly.  You should also make it a point to keep your premises neat and tidy.  A location with piles of boxes and debris is a much higher fire risk.

Ways to reduce risks

1.  Check smoke detectors on a semi-annual basis and maintain written records.

2.  Maintain all fire safety equipment.

3.  Maintain emergency lighting and illuminated exit signs in proper working order.

4.  Develop a daily inspection routine of the premises, taking immediate steps to correct any hazards.

5.  Avoid overloading electrical outlets.

6.  If you live in a flood-prone zone area, determine whether your property is above or below the flood-stage water level.

7.  Know the history of flooding in your region, the warning signs of flooding, and the items you need to be prepared.

8.  Keep disaster supplies on hand.

Standard Coverage

A typical business owner’s policy includes property and liability insurance.  The property insurance portion of a Business Owner’s policy is available most often as named-peril coverage. This provides compensation only for damage caused by events specifically listed in the policy (typically fire, explosion, wind damage, vandalism, smoke damage etc)

Some BOPs offer open-peril or “all-risk” coverage;  this option is available from the “special” BOP form rather than the “standard”.

Types of property covered by a Business Owner’s policy usually include:

Buildings:  Owned or rented business premises, additions and additions in progress, outside fixtures.

Personal business property:  Any items owned by the business or business owner or owned by a third party but kept temporarily in the care, custody or control of the business or business owner.  To be covered by a Business Owner’s policy, business property must be stored or kept in specified proximity of business premises (e. g. within 100 feet of the premises).

In addition, many business owner’s policies include business interruption insurance as part of their property coverage.  Business interruption insurance provides up to 12 month’s income for covered businesses when they are forced to shut down operations because of a covered property event.

The liability portion of a business owner’s policy offers coverage for third parties who suffer bodily injury, property damages, advertising injury or personal injury on a covered business premises or caused by the business’s owner or employees.  This coverage typically takes the form of compensation for legal fees related to third-party lawsuits over such incidents (including lawyer’s fees, settlements and court costs).  In addition, BOP liability coverage may include compensation for medical expenses that result from an injury to a third party on a covered business’s premises for up to one year after the incident occurs.  In addition to standard coverages, most insurance providers offer optional additions or endorsements on business owner’s policies that business owners can use to tailor a policy to their specific needs.

Exclusions and Optional Coverages

Business owner’s policies do not include the following types of insurance:

Liquor Liability insurance for businesses that sell or manufacture alcohol

Professional liability insurance

Worker’s Compensation

Health Insurance

Disability Insurance

Auto Insurance

Often commercial fleet insurance is not covered in a Business Owners Policy, and needs a separate policy.  Another exclusion often seen in a business owners’s policy is equipment breakdown or mechanical equipment breakdown insurance, which also may be known as boiler and machinery insurance.  This type of coverage will cover repair or replacement of equipment and some revenue loss in the event of a loss as it impacts your business and its day to day operations.  Furthermore, take a look at debris removal.  You may have flood insurance, but not debris removal, or only a small coverage limit.  Imagine the cost of removing a total loss before having to rebuild.

Many insurance companies offer businesses the option to customise a BOP based on specific coverage needs.  Optional property endorsements that can be added to a BOP include coverage for certain crimes, spoilage of merchandise, computer equipment, mechanical breakdown, forgery and fidelity bond, but the coverage limits for these inclusions are typically low.


Business owner’s policies are not available to every business.  Eligibility requirements vary among insurance providers, but typically include limitations to:

Class of business (eligible classes include small restaurants, retail stores, apartments, office-or service based businesses, wholesale distributors and contractors).

Location of the majority of business operations (most BOPs require businesses to complete primarily on-premise business).

Size (area) of a business’s primary location.

Revenue :  Less than $5 million sales per annum.

Employees:  Less than 100 employees in the business.





Hypothetical hacking of a cloud service provider, as well as cyber attacks on computer operating systems worldwide, could result in losses of $120 billion. This is a report by Lloyds of London in conjunction with Cyence, a risk modelling company. Cyence has raised $40 million to help insurers understand the impact of cyber risk.

Insurers are struggling to obtain accurate estimates, however, the problem is that they lack historical data. Many companies have yet to purchase cyber policies. By October 2016 only 29 percent of U. S. businesses had done so.

Cyence allows the insurance industry to figure out the impact of cyber risk in terms of dollars and likely incidents. The available platform combines risk modelling, cyber risks and big data. It assists the insurance industry in devising transformational insurance products. Cyber risk accountability and hazards are basic in comparison to other insurance options.

The software community accepts that code is not released without error. It is estimated that for every 1000 lines of code, there will be approximately 15 – 20 bugs. (McConnell 2004). These bugs lead to weaknesses through which malicious actors bypass safeguards or misuse systems.

Code volume and complexity is growing. The original Apollo 11 mission, i. e. the mission that landed people on the moon, consisted of 145,000 lines of code (Johnson 2012). Today’s cars run more than 100 million lines of code.

The ageing of software over time is another problem. Companies run risks by running older operating systems. Not only are they at risk but also companies they deal with outside the network.

The recent “Wannacry” attack showed that the longer software is out in the market, the more vulnerable it becomes. Cyence wants to assist the insurance industry in this regard when the company is promoting cyber risk insurance products.

Netcraft reported that “More than 600,000 web-facing computers which host millions of websites are still running Windows Server 2003, despite it no longer being supported.

Cyence is bringing these facts to the attention of the cyber risk insurance community.



Private Health Insurance

Private Health Insurance may be obtained on a group basis.  A company may choose to cover its employees.  On the other hand private health insurance may be purchased by individuals for their own account. According to the United States Census Bureau, about 60% of Americans are covered through an employer.   Approximately 9% purchase private health insurance directly.


As part of an employee’s benefit package, employers pay for private health insurance on behalf of their employees. Most private health insurance in the United States is therefore employment-based.  Employers in general pay about 85% of the insurance premium for their employees and 75% for their employees’ dependents. The employee pays the remaining part of the private health insurance premium due.

Regarding private health insurance in the United States, the range of products is similar to those provided through employers. However, average out-of-pocket spending is higher in the individual market. Examples are higher deductibles, co payments and other cost-sharing provisions. A major medical health insurance policy is the most commonly purchased form of individual health insurance.  It is primarily a catastrophic plan. However, qualified preventive benefits are still covered at 100% without any waiting period or copayment.

Most consumers in the individual market do not receive any tax benefits. Self-employed individuals receive a tax deduction for their private health insurance for additional tax benefits.

Age and health status affect premiums significantly in states that allow individual medical plan underwriting. The Patient Protection and Affordable Care Act, which came into effect in 2014, prohibits any discrimination against or charging higher rates for individuals based on pre-existing medical conditions.

The Hartford Courant, the largest daily newspaper in the U. S. state of Connecticut, reported in August 2008 that competition was increasing in the individual health insurance market. More insurers were entering the market with an increased variety of products as well as a broader spread of prices.

New Types of Private Health Insurance

High-deductible health plan (HDHP)

These plans primarily provide for catastrophic illness.  They thus have higher deductibles than traditional health plans. Very little coverage is provided for everyday expenses.  Therefore they have potentially high out-of-pocket expenses. Various forms of savings plans are coupled with these plans.

Tax-preferenced health care spending account

In 2003 President George W. Bush signed into law the Medicare Prescription Drug Improvement and Modernisation Act.

This law created:

Health Savings Accounts (HSAs) which are tax-deductible. In order to deposit pre-tax funds in an HSA, a consumer must be enrolled in a high-deductible insurance plan. There are a number of restrictions on benefit design. The minimum deductible is $1200 for individuals and $2400 for families.

Untaxed private bank accounts for medical expenses, which can be established by those who already have private health insurance. Withdrawals from HSAs are only penalised if the money is spent on non-medical items or service. In order to deposit pre-tax funds in an HSA, a consumer must be enrolled in a high-deductible insurance plan.

There are a number of restrictions on benefit design. The minimum deductible is $1200 for individuals and $2400 for families. In order to deposit pre-tax funds in an HSA, a consumer must be enrolled in a high-deductible insurance plan. There are a number of restrictions on benefit design.
To deposit pre-tax funds in an HSA, a consumer must be enrolled in a high-deductible insurance plan. There are a number of restrictions on benefit design.

Limited benefit plan

These plans pay for routine care and especially relevant do not pay for catastrophic care.

Discount Medical Card

This option is becoming more popular. These cards are not insurance plans but provide access to discounts from participating healthcare providers. While some offer a degree of value, there are serious potential drawbacks for the consumer.

Due to the higher prices of and limited access to private health insurance, discount medical cards are growing in popularity. After private health insurance price hikes, some small businesses and individuals drop their private health insurance.  They then obtain discount medical cards.

A person with a pre-existing condition may find the card attractive as the pre-existing condition may make them only eligible for high-priced policies. No medical examinations are required. All people regardless of age or pre-existing condition pay the same cost.

Unfortunately there are consumers who are under the wrong impression.  They believe that the cards are insurance policies. There is no data on how many people have a discount medical card. Promoters of discount cards are generally not regulated or licensed. This results in few standards that apply to sales or sales methods. Marketing materials that are used include scare tactics, misleading information and exaggeration to attract buyers.

Short Term Health Insurance

These plans have a short policy period (typically months) and are intended for people who only need private health insurance for a short time period.  Temporary health plans offer individuals and families an affordable solution.  The application process is quick and easy.   There is peace of mind that comes with knowing you have health insurance should an accident or unexpected illness occur.

This type of coverage helps protect your health and finances when you are in between major medical insurance plans. Because temporary health insurance plans are not intended for the long term, their benefits are less robust than major medical plans. They are not considered qualified plans under Obamacare and, therefore, do not include the essential health benefits. A temporary health insurance plan will not prevent you from owing a tax penalty for going without minimum essential coverage. Additionally, temporary plans may still deny applicants or limit coverage based on pre-existing conditions.

Health Care Sharing

A health care sharing ministry is an organisation that facilitates sharing of healthcare costs between individual members who have common ethical or religious beliefs in the United States. Twenty eight states have laws that recognise health care ministries as distinct from health insurance organisations.  240, 000 Americans participate in health care sharing. Among those 240, 000 participants, more than $180 million are shared per year to pay for one another’s medical bills.

Perpetual Home Insurance

Perpetual Home Insurance is quite a rare option that a homeowner would choose over and above traditional home insurance. This policy is written to have no term, or date, when the policy expires. From the effective start date, the coverage exists for perpetuity.

The insured deposits money, called a deposit premium, with the insurer.  It is many times larger than the cost of a non-refundable annual premium for a traditional home insurance policy. When you no longer need the coverage, the deposit premium is returned to you.

The deposit required for perpetual home insurance is usually 15 – 20 times the annual cost of a traditional insurance. The perpetual home insurance company invests the deposit.  It uses the proceeds of investments (interest and dividends) to cover claims, administrative costs and of course profits. Since the insurance company has your deposit, you lose the ability to invest in alternatives like stocks bonds and savings accounts.

The best reason to choose a perpetual home insurance policy is for the tax benefits.

Payments for traditional home insurance are not deductible. That is to say, if you pay $1000 per year for insurance and you are in a 25% marginal tax bracket, you must earn $1, 333 to pay the insurance plan. (25% of $1, 333 is $333 – the portion that is taken by the government). The non-cash insurance benefit from a perpetual home insurance company is, however, not taxed as income to the recipient.

All things being equal, a perpetual home insurance plan is the fixed rate? $1000 of insurance that often accompanies a perpetual home insurance policy. This allows you to purchase additional insurance as your property value increases at a predefined purchase rate.


While it may at first seem that the $15, 000 deposit premium is the most significant component of the risk, it is not. As with any insurance decisions, the most important question is whether the company is prepared to pay in the event of a substantial claim.

This is the question that should be asked of all insurance companies, both traditional and perpetual. It would serve a purchaser well to investigate the company as well as its financial performance before signing up. Fortunately, in the United States, there are considerable capital retention regulations placed on most insurance companies where you are only at risk in the event of a claim. With a perpetual company you constantly have the deposit premium at risk.

Essentially you are gaining the tax and fixed purchase-rate benefits at the expense of increased risk.


If we assume perpetual home insurance costs 16 times an annual insurance policy, that means an average tax-free return of 6.25%. If you are in the 25% tax bracket, this is equivalent to an 8.31% return.

You can then compare this with other taxed and tax-free options (like mutual bonds) to determine whether the investment makes sense. Of course, the 16 x assumption is important. If the number rises, say to 25 X, it may be better to invest in something else and simply buy the traditional annual option.


Given that you are investing a sizeable lump sum of money into a single company, we think perpetual insurance makes sense only for the people who have:

More than $100, 000 in non-home, non-retirement investment assets;

Are in a tax bracket at least 25% (the higher the bracket, the bigger the advantage);

View their perpetual policy as a component of an overall coordinated investment strategy;

Have no high interest credit card or other debt;

Are willing to put in the effort to evaluate the insurance company.

An example:

As of the end of 2013, Baltimore equitable had assets of $156, 000 million, nearly all of it liquid, and liabilities of $47, 000 million in the form of deposits. It means they could refund every dollar of deposit they hold 3.3. times.

A few companies that offer the coverage:

Mutual Assurance
Cincinnati Equitable
Baltimore Equitable
Philadelphia Equitable

Casualty Insurance Part 2

Part 2 of Casualty Insurance covers five important categories:

Umbrella Liability
Excess Liability
Workers’ Compensation
Professional Liability (Medical malpractice)
Environmental liability


There is a distinct difference between an Umbrella and Excess Liability policy.  They come under the heading of casualty insurance.

Umbrella Liability provides excess limits of liability above your underlying policies.  It may also provide protection when no underlying insurance applies. This also broadens your businesses’ insurance program in order to help close gaps in coverage.


In 1855 Georgia and Alabama passed Employer Liability Acts; 26 other states passed similar acts between 1855 and 1907. These acts permitted injured employees to sue the employer.  They then  had to prove a negligent act or omission.

Workers’ Compensation is a form of casualty insurance. It provides  wage restoration and medical benefits to injured employees.

Almost every business whether large or small in the United States that has employees has to handle the problem of Workers’ Compensation. Most states essentially require employers to buy a casualty insurance policy. The purpose is to manage their obligations to workers who are injured or become ill as a result of workplace hazards.

Beginning in 1911, an historic compromise solution was devised by the various states. Wisconsin was the first.   Other states quickly followed, enacting a “no fault” system. This was intended to make sure workers received fair and speedy medical treatment and financial remuneration for injuries and illness at work. The compromise system also established limits on the obligations of employees for these workplace exposures.

Today, modern Workers’ Compensation laws provide fairly broad and specific benefits to workers who suffer workplace injuries and illnesses.

These compensations include lost income, medical expenses, death benefits and job-related rehabilitation. Employers who do not carry workers’ compensation insurance and comply with a state’s requirements, leave themselves vulnerable to paying these benefits out of their own pockets as well as facing penalty charges by the states.

The states differ in that most jurisdictions employers can meet their obligations by purchasing a casualty insurance policy from an insurance company. However, five states and two U. S. Territories (North Dakota, Ohio, Puerto Rico, the U. S. Virgin Islands, Washington, West Virginia, or Wyoming) require employers to get coverage exclusively through state-operated funds. If you are an employer doing business in any of those jurisdictions, you need to obtain coverage from the specified government-run fund. These are commonly called monopoly state funds. A business cannot meet its workers’ compensation obligations in these jurisdictions with private insurance.


Medical malpractice insurance covers doctors and other professionals in the medical field. It is for liability claims arising from their treatment of patients.

The cost of medical malpractice insurance began to rise in the early 2000s after a period of essentially flat prices. Rate increases were due in part to the growing size of claims, particularly in urban areas. Among the other factors driving up prices was a reduced supply of available coverage.  Several major insurers exited the medical malpractice business because of the difficulty of making a profit.

The frequency of claims has fluctuated. In the 1980s, the number of medical malpractice claims filed appeared to increase. Reasons for the increase are not entirely clear, but several contributing factors have been suggested. In addition to the fact that people became more litigious than in the past, the crisis of the 1970s which was extensively reported by the media, may have made people more aware of the possibility of suing for damages. Other factors were the loss of an intimate relationship between families and their doctors and the use of medical experts to testify in malpractice cases. Physicians have also accused lawyers of being excessively eager to bring malpractice suits because of the high fees the lawyers can collect when their clients win.

The cost of defending a medical malpractice lawsuit continues to climb, as does the cost of liability insurance premiums for some specialists according to a report by the American Medical Association (AMA). The average expense of defending a physician against a medical liability claim in 2010 was $47, 158 – an increase of 62.7% since 2001.

In 2010, 63.7% of closed claims against physicians were dropped, withdrawn, or dismissed without any payment. Each of these claims costs an average of $26, 851 to defend, accounting for more than one third of the total annual defense expenses.

Of the claims that reached a jury verdict, 8% were in favour of the physician or other medical provider and 0.6% were in favour of the plaintiff.

The average medical liability indemnity payment to the plaintiff in 2010 was $331, 947 – an increase of 11.5% since 2001. The portion of medical liability insurance policies with limits exceeding $1million has increased from 28% to 41% since 2001.


If a company has never in their area of business considered environmental risk mitigation, it is likely that their insurance cover excludes environmental liability. Insurers commonly exclude Environmental Liabilities, also called “Pollution Insurance”. It is cover that is specifically requested. Once in place, environmental liability insurance helps to create peace of mind for all concerned.

Deepwater Horizon created what was said to be the largest, man made oil release into the Gulf of Mexico in April 2010. Called the BP oil Spill, the oil flowed for 87 days and discharged approximately 4.9 million barrels of oil. The well was sealed on 19th September 2010. Experts said that had environmental liability insurance been in place, the accident would never have taken place, due to insurance requirements for robust risk protection measures.

Oil drilling is a risky business, but we need oil to sustain world infrastructure. Mandating environmental insurance could make energy exploration at sea unaffordable due to the high cost of putting precautionary measures in place, in order to meet the safety requirements of the insurer.


Chargeback Insurance

In the event that a business has to pay for charges related to a credit card chargeback, there is a chargeback insurance coverage a company can purchase to cover such an eventuality.

When an acquirer (bank) or Independent Sales Organisation (ISO) signs a business up for a merchant account, they are taking on the risk that the merchant will stay solvent and not owe money to various card issuers due to chargebacks, not shipping goods or other reasons.

A merchant may not be fraudulent, but they may have a poor product that results in a lot of refunds. Some merchants may receive a lot of chargebacks from third party fraud.  Some merchants may be fraudsters themselves. There are many risks an acquirer takes on when they underwrite a merchant.

In case a merchant cannot cover the cost of their chargebacks, a Chargeback Insurance policy protects that acquiring bank or ISO.

If a business is unexpectedly hit by many chargebacks in a short period of time and the charges are immediately deducted, a business could become severely cash strapped, while trying to locate documentation. Banks and other financial businesses such as PayPal often charge merchants a penalty or a processing fee per chargeback, to discourage bad business practices.

Additionally, credit card companies such as Visa and Mastercard issue steep penalties to banks that continue to service merchants with frequent chargebacks.   This penalty is usually passed on to the merchant involved. It is not uncommon for merchants that continue to frequently incur chargebacks to be charged in excess of $100 per chargeback. If chargeback frequency continues, the merchant’s bank may discontinue service altogether. A business should check if their bank requires a reserve to cover any future chargebacks. Some banks can demand a reserve as high as $5, 000.


Often the merchants themselves cause chargebacks. Hidden system errors could be the problem. Two common merchant errors are:

Recurring payment chargebacks may be filed against specific types of merchants that have a recurring payment system for on-going services such as gym or magazine subscriptions. A cardholder cancels a recurring payment or claims to have done so. Such a chargeback can be filed against merchants that allow for payments in instalments, particularly if the payment plan is not clearly defined at the time of the purchase.  In such a situation, chargeback insurance would be well worth having.

Authorisation errors can occur when the merchant tries to override a declined transaction, particularly if the override is done with voice authorisation. Multiple deposits made to complete a single authorisation can result in chargebacks.


This type of chargeback may be true criminal fraud and it is one of the most common types of chargeback. The cardholder claims that a charge was made on their card without their permission. It sometimes happens that a family member has used the card without the cardholder’s knowledge or permission.


There is a type of fraud known as friendly fraud. A consumer makes an online shopping purchase with their own credit card. After receiving the goods the consumer asks for a chargeback from the issuing bank. Once approved, the chargeback cancels the financial transaction and the consumer receives a refund of the money they spent. When a chargeback occurs, the merchant is accountable, regardless of whatever measures they took to verify the transaction.

Although chargebacks cannot be completely avoided, steps can be taken to reduce their occurrence.

The business name provided to financial institutions should be a name which customizers recognize. Sometimes customizers do not recognize a business name next to the purchase on their credit card and then think it is a fraudulent transaction.

Receipt signatures on credit and debit cards should be checked against the signature on the back of the card.

If a credit card is declined, one should not continue to run the transaction.

The authorisation obtained should be for a total amount and not broken in several smaller amounts.

If a purchase is made online or by phone, the Address Verification System should be used to ensure that the customer is providing a correct billing address.

A shipper must provide proof of delivery and a customer’s signature if the item is expensive.

A business can get chargeback insurance that reimburses the cost of a product or service and the loss of profit if a chargeback stems from a stolen or counterfeit credit card, signature mismatches or post-purchase shipping address charges.

There are banks which offer sophisticated chargeback defense systems as part of their merchant services. These electronic dispute systems can allow you to manage chargebacks more efficiently and speed resolution. They also provide online reporting tools that will notify a business quickly of chargeback and retrieval requests.

Casualty Insurance Part 1 of 2

The lines of coverage addressed by casualty insurance are:

Automotive liability
general liability
products liability
umbrella liability
excess liability
workers’ compensation
professional liability (medical malpractice)
environmental products liability

Casualty Insurance is often equated to liability insurance of an individual or organisation for negligent acts or omissions.

The term has also been used for property insurance as well as aviation insurance.  Boiler,  machinery,  insurance, glass and crime insurance falls under this category.  It can include marine insurance for shipwrecks or losses at sea.  Also included may be earthquake, political risk insurance, terrorism insurance, fidelity and surety bonds.

One of the most common kinds of casualty insurance today is automobile insurance. In its most basic form, automobile insurance provides liability coverage in the event that a driver is found “at fault” in an accident. This can cover medical expenses of individuals involved in the accident.  Furthermore it can be for  restitution or repair of damaged property.

GENERAL LIABILITY (Under Casualty Insurance)

The number of lawsuits being filed against businesses is both surprising and alarming. General liability is the first line of defense. A business can be sued for almost any reason. Negligence, personal injury, libel, slander, errors, omissions, faulty products, advertising misprints and more.

It can cover things like bodily injury, property damage, contractual liability, damages to property you rent or occupy.  Data Breach is offered as an optional coverage that can help you comply with regulatory requirements.  It can provide guidance on how to prevent and handle a breach.  This can also cover response and liability expenses to quickly restore confidence in your practice or business.

PRODUCT LIABILITY (Under Casualty Insurance)

This is the area of law in which manufacturers, distributors, suppliers, retailers and others who make products available to the public are held responsible for the injuries those products cause.

In the United States, the claims most commonly associated with product liability are negligence, strict liability, breach of warranty and various consumer protection claims. The majority of product liability laws are determined at the state level and vary widely from state to state. Each type of product liability claim requires different elements to be proven to present a successful claim.

There are three major types of product liability claims:
Manufacturing defect
Design defect
A failure to warn (also known as marketing defects)

However, in most states these are not legal claims in and of themselves, but are pleaded in terms of the theories mentioned above. For example, a plaintiff might plead negligent failure to warn or strict liability for defective design.
Manufacturing defects are also those that occur in the manufacturing process and usually involve poor quality materials or shoddy workmanship.

Design defects occur where the product design is inherently dangerous or useless no matter how carefully manufactured.

Failure- to- warn defects arise in products that carry inherent non-obvious dangers which could be mitigated through adequate warnings to the user, and these dangers are present regardless of how well the product is manufactured and designed for its intended purpose.

However, in most states these are not legal claims in and of themselves, but are pleaded in terms of the theories mentioned above. For example, a plaintiff might plead negligent failure to warn of liability for defective design. Manufacturing defect are those that occur in the manufacturing process and usually involve poor quality materials or shoddy workmanship. Design defects occur where the product design is inherently dangerous or useless no matter how carefully manufactured.

A basic negligence claim consists of:-

a duty owed
a breach of that duty
the breach was the cause in fact of the plaintiff’s injury (actual cause)
the breach proximately caused the plaintiff’s injury
and the plaintiff suffered actual quantifiable injury (damages)

Rather than focus on the behaviour of the manufacturer (as in negligence), strict liability claims focus on the product itself. Under strict liability, the manufacturer is liable if the product is defective, even if the manufacturer was not negligent in making that product defective.

UMBRELLA INSURANCE (Under Casualty Insurance)

Umbrella insurance refers to liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by the other policies.

Excess insurance is similar in that it pays after an underlying primary policy is exhausted. Umbrella policies tend to provide broader coverage over one or more primary policies. An umbrella policy may cover certain risks from the first dollar of loss or liability incurred, which were never covered under the primary policies. As your wealth increases, so does your attractiveness as a target for lawsuits.  Examples of liability that an umbrella policy may cover that a homeowner’s policy often excludes include:
False arrest
Invasion of privacy

Liability settlements and verdicts can exceed $10 million, $20 million and higher. While trusts and other techniques can shield some assets from the court’s reach, prudence suggests choosing coverage at least equal to your current net worth and present value of your employment income stream.

It is also worth considering the moral obligation to be able to fully compensate someone who has perhaps suffered a lifelong debilitating injury for which you are responsible e. g. in a car accident where the driver was at fault.
Umbrella coverage typically costs a few hundred dollars in premium per million dollars of coverage and furthermore the cost per million decreases as the amount of coverage increases.

Wellness vs non wellness insurance

Companies who manufacture and market devices like the Fitbit or Jawbone Up are gearing themselves to play a big role in how individual and group health insurance premiums are decided. This could therefore mean that health insurance premiums could change daily and furthermore not annually, as is the current trend. Wellness could mean lower life insurance premiums.

One in every ten American adults owns a fitness tracker and it is expected that fitness devices will become more widespread over the next decade. Other programs similar to this are available in other parts of the world. People who get up in the morning and jog for miles will get rebates. Individuals who are couch potatoes and can barely make it to the kitchen to fetch a soda will be paying more.

When it all comes to the push, people with higher incomes are hence going to find that they are fitter. They therefore benefit from higher rebates as they are more likely to be in a favourable position to purchase better quality wellness devices. These devices monitor steps, breathing rate, apps that can sense the onset of chronic illnesses or stress.

In addition, some companies are even considering punishment for non wellness behaviour being recorded by a wearable. Fitness wearables would go beyond giving doctors deeper access to your data.

These tracking gadgets play a major role in car insurance for some Americans. Progressive offers drivers a small device that they plug into their dashboards.  The company can monitor driving habits over a 30 day period. Safe drivers are then eligible for a discount.

Insurers could do the same with health care as the $2.6 trillion health care bill is driven by behaviours and bad decisions.  Obesity and diabetes could result in increased insurance premiums. Data points such as BMI (body mass index) are already used by insurers to detect the level of wellness.

Microsoft is working on a smart watch that will measure continuous heart rate over days and weeks. Temperature and blood-glucose monitoring is on the table for wearables as well. Last year Apple lured data scientists from the now defunct company C8 MediSensors.  They had regulatory approval for a non-invasive optical glucose monitor. That raised suspicions that Apple wanted to put a glucose monitor in its forthcoming iWatch.

One large insurer, Cigna, launched a program where it distributed armbands made by bodymedia to thousands of the employees at one of its corporate customers. Early results showed that a number of employees were on the verge of developing diabetes. These employees hence made lifestyle changes and improved their risk profiles.

Autodesk bought fitbit trackers and sold them to their employees at a discount. BP with 14, 000 employees chose to wear a free Fitbit Zip. In exchange they thus let the company track their wellness.  Furthermore, if they crossed one million steps, they gained points that could go towards lower insurance premiums.

Wyoming Medicaid launched a smartphone app for pregnant women in partnership with mobile wellness engagement platform developer Wildflower Health. Wildflower is an app for pregnant women that measures data such as weight gain and other pregnancy milestones. This app helps women keep track of their pregnancy.

It has reminders, weekly ultrasound videos that show how the baby is supposed to look at each stage of the pregnancy. Furthermore it give daily advice. If women have a more immediate question, the app is connected to a free 24-7 nurse line, so they can talk to Wy Health staff. A lite version exists for any woman to use this app, but this version does not have a nurse hotline.

A brief overview of wearable technology:

Pebble Steel: Equal parts fashionable as well as functionable, the Pebble Steel leaps to the top of the smart watch heap, but does so by improving existing tech rather than adding something totally new. ‘
Price: $184.28 – $229.99

Jawbone Up 24: If having a screen is not a priority, the Jawbone Up24’s superb app, clever advice and comfy fit are hard to resist.
Price: $55.99 – $149.99

Garmin Forerunner 15:
Its lack of Bluetooth notwithstanding, the affordable Garmin Forerunner 15 is otherwise a great health tracking wristwatch for runners.
Price: $163.99 – $170.00

Fitbit Charge HR:
Fitbit Charge HR adds heart rate tracking to an already solid fitness band at a great price, but all the kinks however do not feel fully ironed out yet.
Price: $149.95 – $149.99

Samsung Gear VR:
The Gear VR Innovation Edition is a cool and very promising entry ticket for early wellness adopters looking for an affordable taste of virtual reality.
Price: $270.00

Pebble Watch:
New apps and software give the original Pebble a welcome boost.
Price: $149.99

Misfit Flash:
The Misfit Flash is a versatile, easy-to-use and extremely affordable fitness tracker that can be worn swimming, too, and it even kind of works as a watch.
Price: $32.99 – $49.99

LG G Water R:
Although its stark design and beautiful face makes this the first smart watch you might actually be happy to be seen wearing, its Android Wear Software has a long way to go before its anything more than a passing novelty.
Price: $299.99 – $314.99

Samsung Gear 2 Neo:
The Gear 2 Neo offers the best balance of features and price among Samsung’s three 2014 smart watches, but it falls short of must-have status.
Price: $168.99 – $199.99

Catastrophe Bonds

In the aftermath of Hurricane Andrew and the Northridge earthquake catastrophe bonds were first created. These are risk-linked securities that transfer a set of risks from a sponsor to investors.

Insurance companies needed help in alleviating some of the risks they would face if a major catastrophe occurred. A catastrophe that would not be covered by premiums received. An insurance company issues catastrophic bonds through an investment bank which are then sold to investors. These catastrophe bonds have maturities of less than 3 years. If no catastrophe occurred, the insurance company would pay a coupon to the investors, who made a healthy return.

On the contrary, if a catastrophe did occur, then the principal would be forgiven (deferred) and the insurance company would use this money to pay their claim-holders.

Investors include hedge funds, catastrophe-oriented funds and asset managers.  If triggered the principal is paid to the sponsor. The triggers are linked to major natural catastrophes. Catastrophe bonds are typically used by insurers as an alternative to traditional reinsurance.

For example, if an insurer has built up a portfolio of risks by insuring properties in Florida, then it might wish to pass some of this risk on so that it can remain solvent after a large hurricane. It could simply purchase traditional catastrophe bonds, which would pass the risk on to reinsurers.

Or it could sponsor a catastrophic bond, which would pass the risk on to investors. In consultation with an investment bank, it would create a special purpose entity that would issue the cat bond. Investors would buy the bond, which might pay them a coupon or LIBOR (London Interbank Offered Rate) plus a spread, generally (but not always) between 3 and 20%.

If no hurricane hits Florida, then the investors would make a healthy return on their investment. But if a hurricane were to hit Florida and trigger the catastrophe bonds, then the principal initially paid by the investors would be forgiven (deferred), and instead used by the sponsor to pay its claims to policyholders.

Since Hurricane Andrew, which blew through Florida and other southern states in 1992, left insurance firms licking their wounds. Reinsurers were particularly badly hit; capital markets swooped in to provide capacity. Since then each major catastrophe has boosted catastrophe bonds further, from Hurricane Katrina in 2005 to the 2011 Japanese earthquake and tsunami.

Over $40 billion in cat bonds have been issued in the past decade with $19 billion now outstanding. This is a small fraction of the $300 billion in catastrophe-related payouts that insurers are theoretically on the look out for. But it is up from $4 billion a decade ago and the market could quadruple in the next 10 years.

Investor demand is strong. Pension funds and other institutional investors are on the hunt for assets generating decent yields, particularly if the returns are uncorrelated to stock markets. Large institutional investors buying cat bonds directly or via specialist funds now account for perhaps 80% of the market.


Also known as cat modeling, this is the process using computer-assisted calculations to estimate the losses that could be sustained due to a catastrophic event such as a hurricane or earthquake. Cat modeling is especially applicable to analyzing risks in the insurance industry and is at the confluence of actuarial science, engineering, meteorology and seismology.
The input into a typical cat modeling software package is information on the exposures being analyzed that are vulnerable to catastrophic risk. The exposure data can be categorized into three basic groups:

Site location information, referred to as geocoding data (street address, postal code, county)

The physical characteristics of the exposures (construction, occupation/occupancy, year built, number of stories, number of employees).

information on the financial terms of the insurance coverage (coverage value, limit, deductible)

Insurers and risk managers use catastrophe bond modelling to assess the risk in a portfolio of exposures. This might help guide an insurer’s underwriting strategy or help them decide how much reinsurance to purchase.

Insurance – Ride share drivers

Ride share services are increasing in popularity. As a result,  insurance policies  to cover these drivers are beginning to hit the market.

A ride share driver has major stress. You have to find your way around town. You deal with drunk passengers. Furthermore, the work hours are not ideal. Being in an accident could cause a loss of income.

Ride share policies can assist in reducing stress. A  driver’s mind can be put at rest by having full insurance coverage while out on the streets.

However, these policies are not available in all states. There is a lack of competition amongst insurance providers. In several states,  drivers have little choice but to accept the price of coverage levels on offer.

Ride sharing is divided into timelines.

Period 1: The app is off. This is the driver’s personal driving time.
Period 2: Driver accepts bid, en route to pickup location.
Period 3: Passenger in vehicle.

Ride share drivers receive significant liability coverage from Uber or Lyft as long as a passenger has been assigned.

However, low limits and coverage gaps are applicable during the rest of the drive.

Collision and Comprehensive are offered during periods 2 and 3, but the coverage is contingent. Therefore these should be covered by a personal policy. Furthermore, the deductible can be very high. $2500 if you drive for Lyft.

The policies vary in price, covered periods and even ride share company. An endorsement is the only way to ensure that you are fully covered while working as a ride share driver.

Some insurance companies offer ride share policies that cover all phases of the driving. Companies like Farmers, offer only a Period 1 endorsement. In comparison to commercial policies for taxis, ride sharing policies are less expensive. However, taxi coverage is usually more comprehensive.

5 Top insurance companies for Uber and Lyft drivers:

Geico :  You have a uniform policy whether you are driving for personal or business reasons.

Erie Insurance:  This policy covers you for the entire trip.

Farmers:  This policy has a constraint on the extent of your personal coverage.  For example, if you logged into the app at 10.00 am but did not accept a ride until 10.30 am, for that half hour you would still be covered under personal insurance.

Allstate:  You are NOT guaranteed continuous coverage when signed into the app.

State Farm:  They do not cover the driver for liabilities while signed into the app.





Car safety features lower insurance rates

 Car safety features guarantee lower insurance rates.

Since 1999 inflatable air bags in the front of the driver and passenger have been compulsory. Insurers base discounts on the number of airbags in a vehicle.

Some insurance companies offer about 2% for a driver’s side airbag. Reductions in premiums can rise up to 30% for curtain bags and seat belt inflatables.

Anti-lock brakes were introduced in the 1970s. Many insurers offer discounts for drivers with ABS on their vehicles.

Automatic seat belts connect to the door and fasten automatically when the door is closed. However, major concerns are safety as well as proof of outright danger resulted in a short lifespan for these belts.

Insurance companies like to track how likely your car is to be stolen. The area you live in determines how likely your vehicle is to get stolen.

An alarm reduces the risk of car theft. Insurers are happy to thus offer a discount for an alarm installation.

Adaptive cruise control, collision avoidance systems and lane departure warnings are helping to change the industry.

Electronic stability control is a technology feature that helps prevent sideways skidding. A system of sensors and a microcomputer also prevents spin-out and loss of control. Auto insurance collision losses for cars equipped with this technology are 15% lower than for vehicles without it.

There are additional safety features which will increase your chances of an insurance premium discount.

Dashboards that provide night vision to drivers.

Drowsy driver warning systems which are usually found in high-end cars.

Daytime running lights make you more visible to other drivers as well as pedestrians.

A Blind Spot Detection System lets you know when an object is in your blind spot.

Rearview cameras help you see other vehicles or objects you might not catch in your rear and side-vision mirrors.

The insurance industry takes years to see which safety features provide a safer driver environment. New discounts are thus introduced slowly.

Lemonade App

The Lemonade app is a new way of insuring.

The company disclosed that it raised $34 million in new venture funding to assist in broadening its operations.  General Catalyst led the round with assistance from GV (formerly Google Ventures), Thrive Capital and Tusk Ventures.

This funding was in addition to $13 million in seed funding from Sequoia and Aleph.

This app is not only involved in the insuring of autos and household goods but is committed to social good. It is part of their business model.

Insurers should fear geeks alert to insurers’ business inefficiencies.

Daniel Schreiber and Shai Wininger, the founders of Lemonade, do not come from an insurance background. They realised that the industry is worth $4.6 trillion in global premiums.

These two guys regarded the current state of the insurance industry as frustrating and outdated.  Insurance is one of the least trusted sectors of the economy.  It ranks very low in customer satisfaction.

The insurance industry has a poor reputation for trust and customer service with its complex rules, fine print and lengthy processes.

The New York based start-up hired Dan Ariely as its chief behavioural officer.  Ariely is a professor of psychology and behavioural economics at Duke University.

In the first 48 hours after it opened for business in New York, Lemonade reported that it sold 142 policies.

They generated $14, 300 in gross written premiums.

Lemonade takes a flat fee for insurance and gives back money to causes which policy holders care about.

Shai Wininger believes that behavioral economics  together with Lemonade’s unique technology will decrease fraud.  It will also get rid of bureacracy and lower costs for its clients.

Lemonade employs 30 people and uses algorithms to process claims. The company says they can make decisions quicker than regular insurance companies. This can furthermore be done at a lower cost. The have a bot called Maya instead of brokers and an app instead of paperwork. Insurance can be done in seconds. Claims can be made in minutes. They set the world record for a claim paid in just 3 seconds.

The site has a feature which is called “switching”.  It allows users to cancel other policies they may have, receive a refund and purchase a new policy from Lemonade with a click of a button.  New customers came from State Farm, AllState, GEICO and Liberty Mutual.

When you sign up with Lemonade you are asked to pick a charity. At the end of each year, if you and other supporters of the same cause don’t make too many claims, then a portion of the money you have paid is then passed on to the chosen non-profit.

Last year a customer made a claim for a stolen coat. He answered a few questions on the app and recorded a report on his iPhone. 3 Seconds later his claim was paid. In these 3 seconds “A. I. Jim” the firm’s claim bot reviewed the claim, cross-checked it with the policy, ran 18 anti-fraud algorithms, approved it, sent payment instructions to the bank and hence informed the client.

Studies of EY or Accenture show that clients do not trust their insurance companies to pay claims. A new product such as Lemonade could cause customers to switch in large numbers to a product that they can trust.

The disruptive possibilities of Lemonade lies in their beautiful user interfaces, artificial intelligence and use of big data.

Unmanned Cargo Ships

The thought of unmanned cargo ships sounds like a ghost story. Wrong! This is actually the future of shipping.

Rolls Royce is working with groups backed by governments across northern Europe. Rolls Royce aims to launch crewless ships by 2020.

Sea transport costs could thus be cut by about 20%.

Major shipping firms are expected to adopt this technology hoping that it will boost profits.

The U. S. Coast Guard estimated that human error is responsible for about 96 percent of all marine casualties. Piracy is a reality so crews remain vulnerable. Furthermore there is a shortage of skilled workers who want a career at sea.

44 per cent of a ship’s costs is made up of carrying sailors. This includes not only salaries but crews’ quarters and air-conditioning units. Other amenities take up space which could be used for cargo.

25 per cent of greenhouse gas emissions are a result of maritime shipping. Rolls Royce predicts that unmanned cargo ships will be 5 per cent lighter and burn 15 per cent less fuel.

Unmanned cargo ships will therefore present challenges for insurers. They will have to consider new types of risks. The demand for guards protecting ships from piracy will be reduced. This is an industry that has been booming in the last few years. However, there would be a need for increased cyber security insurance.

Marine insurers have approximately 5 years to work out the costs of covering unmanned cargo  ships for risks that can occur at sea. Without historical data to fall back on will complicate the process of underwriting the risks of unmanned ships.

A drone vessel that is being operated remotely from onshore will create unique challenges. These threats include pirates, a fire at sea and the time it takes to reach a ship if a computer malfunctions. There would n’t be anyone if there was a breakdown. Help for a ship in the Atlantic could be done in one week, but in the Pacific that would take a three week voyage.

Fracking – Pros and Cons

Hydraulic fracturing or “fracking” has caused strife across the United States.  For some it promises increased energy independence.  For others, it means environmental catastrophe.

Fracking means drilling down several thousand feet into a rock formation that holds natural gas.  This rock is then cracked.  Pathways are created for gas to flow out of the well.  Natural gas and wastewater result from this exercise.  There are however a number of wastewater disposal methods.  The water is put into a lined pond. It then evaporates.   It can also be treated or injected underground. 

Opponents to fracking argue that the environmental impacts of fracking includes the risks of infecting ground water.   Earthquakes could be triggered. Fracking causes noise pollution as well as surface pollution.  There are furthermore the hazards to public health and the environment. 

Fracking requires an enormous amount of water – as much as 5 million gallons per well. Needless to say it requires numerous toxic chemicals.   About 25 percent of fracking chemicals could cause cancer.   Evidence is mounting throughout the country that these chemicals are making their way into drinking water.

Water quality can also be threatened by methane contamination.  This problem has been highlighted by footage of people in fracked areas accidentally setting fire to methane-laced water from kitchen faucets.

People are exposed to harm from lead and arsenic. This is brought back to the surface of the land with fracking flowback fluid.  In fact, fracking waste water is so dangerous that it can’t be reused for other purposes.

Fracking can release dangerous petroleum hydrocarbons.   It can also increase ground-level ozone.  This is a key risk factor for asthma and other respiratory illness.  The pollutants in fracking water and flowback fluid can enter our air. This happens when waste water is dumped into pits and then evaporates.

Today’s fracking techniques pose new dangers.  Directional drilling is a new technique that has greatly expanded access to rock formations.  Companies also employ high fluid volumes to fill horizontal “well bores”.  These sometimes extend for miles.  Oil and gas producers are using new chemical concoctions called “slick water”.  This allows injection fluid to flow rapidly enough to generate the high pressure needed to break rock apart.

Scientists believe a recent upsurge in earthquake activity is related to fracking.  The United States Geological Survey has linked fracking wastewater injection to a 5.6 magnitude earthquake in Oklahoma, which is seismically stable. 

Earthquakes are not the only possible consequences of fracking.  350.org, an environmental advocacy group said that some people have had difficulty staying in their homes because of methane buildup related to fracking.  Not only is it difficult to get homeowner’s insurance for properties with or near a gas well, it is also difficult to get a mortgage. 

The Insurance Information Institute stated that all homeowner’s insurance policies exclude damage from environmental contamination.  Homeowners with an earthquake endorsement can get coverage for earthquake damage, even if the quake is linked to fracking.  For people who have leased their land which in effect makes it a business, insurance is more complicated.  Liabilities arising from a business are not covered by a homeowner’s policy. 

Between the years 2010 and 2013, central and eastern United States had an average of five times as many quakes per year as between 1970 and 2000. 

Standard homeowners, renters and business insurance policies do not cover damage from earthquakes.  Coverage is available either in the form of an endorsement or as a separate policy for homeowners, renters and small business owners. 

Earthquake insurance provides protection from the shaking and cracking that can destroy buildings and personal possessions.  Coverage for other kinds of damage is provided by standard home and business insurance policies.

Cars and other vehicles are covered for earthquake damage by comprehensive insurance which also provides protection against flood and hurricane damage as well as theft. 


Crash Test

A Crash Test is a form of destructive testing. It is usually performed in order to insure safe design standards.

A crashworthy design reduces death and injury risk. Structure and restraints (safety belts and airbags) are the main aspects of a vehicle’s design. This determines its crashworthiness. Good structure means a strong occupant compartment.  Also there should be crumple zones to absorb the force of a serious crash.  Side structures manage the force of a striking vehicle . A strong roof ensures it does not collapse in a rollover.

Structure/Safety Cage:
Vehicle’s structural performance engineers measure the amount of intrusion into the occupant compartment after the crash. In the moderate overlap test, measurements are taken at nine places around the driver’s seat. In the small overlap test, 16 locations on the driver side interior and exterior are measured. The amount and pattern of intrusion shows how well the front-end crush zone managed the crash energy and how well the safety cage held up.

Injury Measures:

 Sensors in the head, neck, chest, legs and feet of the dummy indicate the level of stress and strain on that part of the body.

Restraints/Dummy movement:
Even if injury measures are low, it’s important to consider the dummy’s movement during the crash,  This is because not all drivers are the same size as the dummy or seated exactly the same way. A close call for the dummy could be an actual injury for a person.
Before each crash test, technicians put greasepaint on the dummy’s head, knees and lower legs. After the test, the paint shows what parts of the vehicle came into contact with those parts of the dummy. The paint, combined with high-speed film footage of the crash, allows engineers to evaluate the dummy’s movement.

There are various types of tests:

Frontal impact tests which is what most people initially think of when asked about a crash test. These are usually impacts upon a solid concrete wall at a specified speed, but can also be vehicle-vehicle test. SUVs have been singled out in these tests for a while, due to the high ride-height that they often have.

Offset Tests:

in which only part of the front of the car impacts with a barrier (vehicle). These are important, as impact forces (approximately) remain the same as with a frontal impact test, but a smaller fraction of the car is required to absorb all of the force. These tests are often realized by cars turning into oncoming traffic. This type of testing is done by the USA Insurance for Highway Safety (IIHS), Euro NCAP Australasian New Car Assessment Program and ASEAN NCAP.

Small overlap tests:

This is where only a small portion of the car’s structure strikes an object such as a pole or a tree.  This is the most demanding test as it loads the most force onto the car’s structure at any given speed. These are usually conducted at 15-20% of the front vehicle structure.

Side Impact Tests:

These forms of accidents have a very significant likelihood of fatality, as cars do not have a significant crumple zone to absorb the impact forces before an occupant is injured.

Roll Over Tests:

These test a car’s ability (specifically the pillars holding the roof) to support itself in a dynamic impact. More recently dynamic rollover test have been proposed as opposed to static crush testing.

Roadside hardware crash tests are used to ensure crash barriers and crash cushions will protect vehicle occupants from roadside hazards, and also to ensure that guardrails, signposts, light poles and similar appurtenances do not pose an undue hazard to vehicle occupants.

Old versus New:

Often on old and big car against a small and new car or two different generations of the same car model. These tests are performed to show the advancements in crashworthiness.

Computer Model:

Because of the cost of full side crash tests, engineers often run many simulated crash tests using computer models to refine new vehicle or barrier designs before conducting live tests.

Crash tests are conducted under rigorous scientific and safety regulations. Each crash test is very expensive so the maximum amount of data must be extracted from each test. Usually this requires the use of high speed data acquisition, at least one triaxial accelerometer and a crash test dummy.
There are a number of crash test programs around the world dedicated to providing consumers with a source of comparative information in relation to the safety performance of new and used vehicles.

The Insurance Institute for Highway Safety, as at October 2, 2014, published safety results for three large luxury cars in the IIHS small overlap front test.  The Infiniti Q70 achieved a good rating, the Lincoln MKS earned a poor rating and the BMW 5 series earned a marginal rating.

On September 18, 2014, the 2015 Volkswagen Jetta earned the IIHS Top Safety Pick award, thanks to a structural upgrade to improve small overlap protection.

The Kia Soul, previously rated poor in the IIHS small overlap front test now earns a good rating, due to structural improvements. The Kia Forte also improved, but only to a marginal rating.

Prize Indemnity Insurance

This type of insurance is taken out for a promotion in which the participants are offered the chance to win prizes. The promoter pays a premium to an insurance company for prize indemnity insurance instead of having to keep cash reserves to cover large prizes.

One of the earliest and most common forms of prize indemnity insurance is hole-in-one insurance. A golf tournament host or sponsor purchases this type of insurance. For example, if the golf sponsor offers $10, 000 for a hole-in-one on hole 17, your insurance company reimburses you the $10, 000 you have to pay out if a participant makes the shot. The odds of an amateur golfer hitting a hole-in-one on an arbitrary par 3 are about 1 in 12, 500. This is according to information published in the newspaper, USA Today. These low odds allow golf tournaments to offer expensive prizes to golfers able to hit a hole-in-one during tournament play.

Typically, these hole-in-one contests operate as part of a marketing promotion. A car dealership might offer a new car from that dealership as the prize for hitting a hole-in-one.

Especially relevant is the relationship between the tournament host and the sponsor. It is usually set up to provide advertising for the sponsor. The sponsor’s name will also be  prominently displayed next to the prize during the tournament.

Companies that provide hole-in-one prize indemnity insurance may furthermore provide signs or other accessories to help the tournament host promote the hole-in-one prize. The insurance contract between the golf tournament and insurance company will detail rules such as :

1. which holes on the course the prize will be insured on:
2. how to verify the hole-in-one was achieved legitimately;
3. what to do if a contestant hits a hole-in-one on a hole other than the insured hole.

Variables that furthermore affect the cost of the hole-in-one prize indemnity insurance include:
1. the number of participants in the tournament;
2. the skill of the participants (amateurs vs professional golfers);
3. the length of the insured hole;
4. the value of the prize being offered.

Many holes-in-one are not recorded. Jack Nicklaus has 20 aces; his last came in a practice round at the 2003 Senior British Open, when he was 63. Gary Player has 19. His most recent was when he was 70 in the pro-am of the Nelson Mandela Invitational in South Africa. Arnold Palmer has 18. He was 74 when he made his last one, in a casual round at the Bay Hill course in Orlando. Tiger Woods has 18.

Interesting hole-in-one snippets

Ryder Cup: Nick Faldo’s ace at the 14th in 1993 at The Belfry was only the second recorded in the history of the match.
First recorded: The earliest recorded hole in one as in 1868 at the British Open by Tom Morris on the No. 8, 145 yard hole at Prestwick.
Four in one: In less than two hours play in the second round of the 1989 U. S. Open at Oak Hill Country Club, Doug Weaver, Mark Wiebe, Jerry Pate and Nick Price each aced the No. 6, 167 yard hole. The odds against four professionals achieving such a record in a field of 156 are estimated at 1.89 quadrillion to 1.
The longest recorded straight drive hole-in-one is believed to be 517 yards by Mike Crean at the par 5 No. 9 at Green Valley Ranch Golf Club in Denver in 2002.


Prize indemnity insurance is also used in motor sport. The highest recorded payout was $250, 000 during the 1992 Interserie. The 1992 Zolder 966 driven by John Bartlett at the Interserie in Belgium won $250, 000 for a podium position paid out by Lloyds of London.


Coverages are offered for other contests as well. Examples are half-court shots in basketball, field-goal kicks in football, home runs in baseball, blue-line goals in hockey and also retail and casino-based promotions.

In the 2005 Super Bowl, prizes were set to be awarded for several events, including a return of the opening kickoff for a touchdown, a safety, and a fourth-quarter field goal of 50 yards or more. Prize indemnity insurance was purchased to cover all these events. However, none of the events occurred in the game.

In 2008 an insurance provider demanded that RTL (Europe’s leading entertainment group) and CBS toughen million dollar win provisions after The Price is Right $1, 000, 000 Spectacular produced three millionaires in the six episodes produced that season. After the four episodes aired with new rules RTL and CBS have not produced any further “million dollar” episodes since, possibly due to insurance concerns.

Policy premiums are based on the number of participants, the amount of the prize being offered and the parameters of the contest itself.

The parameter refers to the length of the hole on which the prize is being offered. US Hole in One’s average policy covers a $25, 000 prize for a contest involving 100 golfers and a 165 yard hole, for a $360 insurance premium.

Problems home insurance


Problems you may encounter are covered by a Standard Home Insurance Policy.   Insurers require special policies for some risks.  Most basic policies exclude claims for earthquakes, floods and landslides.  If you have an exposure, you should definitely look into coverage.

Many homeowner’s policies are however becoming more difficult to understand.  Insurance carriers are adding language that shifts risks and costs to policyholders.  All contracts which contain fine print should be carefully read.  By doing so you may thus discover problems that could be hiding in your home insurance policy.


In the past, earthquake loss was assessed using a collection of mass inventory data and was based on experts’ opinions.  Today it is estimated using a Damage Ration (DR), a ratio of the earthquake damage money amount to the total value of a building.  Another further method is the use of HAZUS, a computerised procedure for loss estimation.

California however is not the only state with a serious earthquake hazard problems.  There are several lesser-known fault zones in other parts of the country.   Another danger zone with problems is New Madrid, Missouri.  The Wasatch Fault is especially relevant because it lies underneath Salt Lake City.  This could be bad news for the area that has 185, 000 vulnerable buildings made of unreinforced masonry that are not built to survive an earthquake.  Alaska and Hawaii are also another two earthquake hotspots.

You can also view earthquake hazard maps on U. S. Geological Survey’s website.


Most natural disasters, such as hurricanes, tsunamis, and rainstorms involve flooding.  You can determine your flood risk by visiting FloodSmart.gov.  Flood coverage is also available from the National Flood Insurance Program (NFIP) and some private insurers. While flood insurance may be available to you, its cost will be tied to your risk.  If you are in a community prone to flooding, flood insurance may be costly.


Although landslides happen throughout the country, some regions are more susceptible.  The U. S. Geological Survey’s website has a map highlighting landslide-prone areas

Wind Deductibles

The Insurance Information Institute (III) says your homeowner’s policy deductible may be a specific dollar amount or a percentage of the total amount of insurance on your policy.  In addition, there are two common types of home policy deductibles, which cover most mishaps, such as fires and burglaries.  The second type is a wind deductible for properties in hurricane or windstorm prone regions.

Problems that could be hiding in your home insurance policy may be related to wind deductibles.  Hurricane deductibles apply to damages solely from hurricanes.  Windstorm deductibles apply to any wind damage, including hurricanes.  Wind deductibles can be for a fixed amount or a percentage of the insured value.  If your house is insured for $500 000 and has a 5% deductible, the first $25 000 of a wind-related claim must be paid out of your own pocket.

Anti-concurrent causation clause

Check your policy closely to see if it includes an often-overlooked anti-concurrent causation (ACC) clause.  If a structure is damaged by two causes, such as wind and flood, and one cause is covered by insurance and one is not, an ACC clause may limit your claim or block it completely.

It is a trap door built into the back of your policy.  Try to find a homeowner’s policy without an ACC clause.  If  you can’t, ask your broker about buying an add-on policy to fill any gap in coverage.S

Spikes in building costs

If you have a mortgage on your home, your lender likely requires you to buy a homeowner’s policy.  Typically homeowners insure their homes for an amount that is adequate to replace it.  Your rebuilding costs will include the price of materials and labour.  When there are problems such as fires or floods that damage numerous structures throughout a single community, building materials and labour temporarily are in high demand.  This can cause a spike in your rebuilding costs.  Most insurers sell extended coverage add-ons that increase your basic homeowner’s policy coverage to make sure you have enough money to rebuild.

Updates in building regulations

Changes in building codes sometimes require construction upgrades if your home is badly damaged and must be repaired or replaced.  For example, most noteworthy,  the new code may require a higher elevation for your home if you are in a flood zone.

Standard policies will not cover these extra construction costs.  You can purchase supplemental insurance to cover your risk.

Certain information Insurers will not disclose

A physician in suburban Chicago had insured his life, home and car with a particular insurer.  However, during a period of 10 years, he had never filed a claim, until a damaged roof and a burglary led to two claims totalling $3, 000.  He immediately installed a home security system.  The insurer did not give him a discount, but dropped him from its preferred coverage citing his “claims history” and instead offered him its standard carrier at a higher rate even though his risk profile had not really changed.

Finally if your home is near the water or in an earthquake-prone zone, insurers will shun you.  Some insurers use illegal underwriting guidelines to redline (discriminate against).  Agents say they often get memos identifying undesirable ZIP codes or reminding them to stay away from couples who are having problems in their marriages.

In conclusions, you could potentially file your one claim and then have your coverage terminated.  Some insurers will unfortunately drop you if you start an at-home business, while others will furthermore label you too risky if you have missed a credit card payment or two.





Global Cyber Attack

Days after the global cyber attack crippled the country’s health service, the U. K. police are trying to establish whether the culprits were part of an established network or bored teenagers.

200,000 Computers in at least 150 countries were affected. Security experts have so far contained the cyber attack infection. Police are looking for the creators.

The worst hit countries are the U. K. and Russia. Finding and locking up hackers is the toughest job in law enforcement. It is likely that the dark web was used to disguise these hackers. Conventional search engines are unable to reach this dark side of the internet. Suspects are however often from Eastern Europe, Russia other other difficult-to-reach jurisdictions.

The “WannaCry” virus replicated itself. As it spread there were demands made for bitcoin, an online currency which is however difficult to track.

Elements that belong to the U. S. National Security Agency were leaked online. A group who has called itself Shadow Brokers has taken credit for the leak. Shadow Brokers is however threatening to release more recent code to enable  cyber attack hackers to break into the world’s most widely used computers, software and phones.

Older versions of Microsoft Corp’s Windows operating system were targeted. In March Microsoft had released a patch to protect users from vulnerability exploited by the attack. Compared to other regions of the world, U. S. users have licensed, up-to-date patched versions of the software. The U. S. was thus less vulnerable to this attack.

A North Korea hacking operation called the Lazarus Group has been found to have some codes related to the “WannaCry” software. Symantec and Kaspersky Lab confirmed these findings. This may not be true but is highly suspect.

The Lazarus hackers were blamed for the theft of $81 million from the Bangladesh Central Bank. They have also been accused of being behind the attack of Sony Pictures in 2014.