Question

Property Insurance Company is a new property insurer. The company is growing rapidly because of a new home-owners policy that combines traditional homeowner coverages with insurance that pays off the mortgage if the insured dies or becomes totally disabled. Premiums writ-ten have increased substantially; new agents have been hired; and the company is considering expanding into additional states. However, its growth has been hampered by statutory accounting rules that require an insurer to write off immediately its first-year acquisition expenses but do not allow full recognition of premium income until the policy period has expired. In this case, explain how reinsurance will enable Property Insurance to continue to grow in an orderly fashion.

Answer 1

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When it comes to homeowner's insurance, there's no such thing as an option. It's not just for safety's sake; it also helps keep your family protected. Every lender wants to see proof of insurance coverage for the full or fair market value of a home (usually the purchase price) before they can issue or finance a mortgage or residential real estate transaction. Many landlords require renters to get renter's insurance, even if they don't own a home. Having this level of security is a good idea whether or not it is required. We'll go through the basics of homeowner's insurance coverage today.

Policies for homeowners frequently cover both the interior and exterior of a property, as well the loss or theft of private items and the owner's personal liability for third-party damage. In terms of coverage, the three primary options are: actual cash value (ACV), replacement cost (RCC), and combined ACV/RCC. If you submit a claim, your insurer determines how likely it is based on your claim history, the neighbourhood, and the current state of your home. When looking for insurance, seek quotes from at least five different companies and check with any insurers you already work with to see if they can offer you a better deal.