How to Maximize Your Workers’ Compensation Benefits

Longer the Time more the money, especially with workers’ compensation claims. If you take long time to report a work-related injury or illness, the more that claim can cost your employer in medical, legal, and insurance fees. Those expenses can cause cutbacks that could potentially impact your job security. Conversely, when you report a claim promptly, you help reduce expenses, stabilize the business where you work, and enable workers' compensation reform to continue strengthening California’s economy.

Before a work injury or illness occurs

Take some time and carefully read the Notice to Employees poster in your workplace. This poster is designed to help you know:

• Information on how to get emergency medical treatment.
• Emergency phone numbers of the doctor, hospital, ambulance, fire, and police.
• Your workers’ compensation benefits and rights.
• Your insurance carrier’s medical provider network (MPN).

After a work injury or illness occurs

• Tell your supervisor as soon as possible (best within 24 hours).
• Complete a Workers’ Compensation Claim Form from your supervisor by describing your injury:
  • How it occurred
  • When it occurred
  • Where it occurred
• Return the completed form to your employer.
• When referred, see your employer’s MPN physician (unless you have already predesignated your personal physician). After the first MPN visit, you can select a different physician from the MPN network if you prefer.
• If you experience a disability due to the injury or illness, ask your employer about a Return to Work (RTW) program.
• Within the RTW program, discuss solutions for modifying an existing job or identifying an alternative job with your employer, the treating physician, and the assigned State Fund claims adjuster.

Reporting your claim promptly, using the MPN, and exploring your RTW options can net you and your employer the best results for quality medical care and reduced workers’ compensation costs.

Facts for the California Employer

Accidents happen, and it can happen at work with anyone. Workers’ compensation insurance protects you, the employer, against losses due to work-related accidents and illnesses. In addition, this insurance provides the injured employee with benefits to compensate for lost wages or decreased ability to work. The California workers’ compensation system is a no-fault system, which means an injured worker is entitled to benefits without regard to negligence or fault.

What is workers’ compensation insurance?

Workers’ compensation provides benefits to employees who are injured or become ill during the course of or due to employment. In California every employer is required to carry insurance to cover the cost of occupational injuries and illnesses. This insurance requirement is mandatory even if you have only one part-time employee. Companies based out of state with employees hired in California must also have California workers’ compensation insurance.

Is workers’ compensation the same as State Disability Insurance ?

No. Workers’ compensation is only for injuries or illnesses that occur due to employment. State Disability Insurance (SDI) is for injuries or illnesses that are not work-related, and it is a benefit that the Employment Development Department provides.

How is the workers’ compensation premium calculated?

Before 1995 the Workers’ Compensation Insurance Rating Bureau (WCIRB) established the rates applied to your premium. Since January 1, 1995, all insurance c a rriers have been responsible for establishing their own rates. This system of determining rates is called the competitive rating system.Under competitive rating, State Fund’s pricing is basedon the classifications, the size of payroll, and the individual risk characteristics of each business. We multiply these base rates for each class code by the employer’s payroll .“Understanding Your Quote for Insurance” (form 10502) is available upon request from any State Fund office. The form explains in more detail how we calculate your insurance premium.

Does company’s accident record affect my premium ?

Yes. Your ability to control workplace accidents can affect your insurance premium. If your safety record is better than the average for your industry, your premium could decre a s e by a percentage. A worse-than-average loss history could result in an increase in premium. This calculation is called experience modification (ex-mod). If your payroll generates a minimum level set by the Workers’ Compensation Insurance Rating Bureau (WCIRB), the WCIRB will automatically begin calculation of an ex-mod for your business. Employers with a poor loss record or unsafe working conditions may also pay more than basic rates, due to a surcharge applied to their premium .

When you apply for insurance with State Fund, we may perform a risk evaluation of your operations to ensure a fair price representation. Additionally, after you become a State Fund insured, we can inspect your workplace at any time to observe conditions.

How is having a Return to Work program beneficial for my business?

Most studies indicate that injured employees recover faster when they return to work sooner. The evidence supporting Return to Work (RTW) programs is so compelling that workers’ compensation law now includes RTW provisions that allow for monetary reimbursements and/or reduced costs when an eligible employer makes workplace modifications to accommodate the employee’s return to modified or alternative work. Reimbursements to qualified employers may be payable to the employer from the state Division of Workers’ Compensation, and can be up to $1,250 or $2,500 for workplace modifications, depending on whether the employee is temporarily disabled or permanently disabled. An RTW program can also achieve cost savings by reducing or eliminating temporary disability (TD) payments, reducing permanent disability (PD) payments by 15 percent (for qualifying employers), and reducing or preventing the Supplemental Job Displacement Benefit (SJDB) voucher forr retraining.

What if my employee is a victim of a crime in the workplace?

Under Labor Code §3553, in the event that an employee is a victim of a crime in the workplace, you must notify y o u r employee of his or her eligibility for orkers’
compensation for injuries, including psychiatric injuries, that may have resulted from a workplace crime. You are required by workers’ compensation law to provide the notice, either personally or by first-class mail, within one (1) working day of the crime, or within one (1) working dayof the date you reasonably should have known of the crime.

What are workers’ compensation benefits and rights?

Medical care. Within one day after an employee files a claim form, the law requires the employer to authorize medical treatment as required and limited by the law, until the claim is accepted or rejected, up to a limit of $10,000 in total. All medical treatment is provided in accordance with the medical treatment utilization schedule. If State Fund accepts the employee’s claim, State Fund will pay all approved medical care that is reasonable, necessary, and supported by evidence-based treatment guidelines. This care may include doctors, hospital services, physical therapy, lab tests, x-rays, medicines, and related reasonable transportation expenses. For injuries on or after January 1, 2004, there are limits on the number of chiropractic, occupational therapy, and physical therapy visits. State Fund pays for all authorized treatment, so the employee should not receive any bills. The law states that the employee is not responsible for copayments or balance- due bills after we have paid the provider.

Predesignation of physician. The employee can predesignate a personal physician. However, effective April 19, 2004, there are new requirements and hresholds for predesignation. State Fund advises employers to provide all new and existing employees with the New Employee’s Guide to Workers’ Compensation b rochure (form 15765), which contains the new provisions of the law and includes the new predesignation form.

Temporary Disability. The employee receives this payment every two weeks to replace a portion of the wages lost while recovering from the injury. Payments begin after the third calendar day the employee is unable to work. The amount is two-thirds of the employee’s weekly earnings, within a minimum and maximum benefit amount, as determined by current law.

Permanent Disability. This benefit is money that compensates an employee for any permanent disability suffered as a result of the injury. The amount of compensation is based upon a formula that takes the factors of the permanent impairment reported by the examining physician(s), as well as the employee’s age, occupation, and diminished future earning capacity.

Vocational rehabilitation and SJDB. For injuries occurring before January 1, 2004, if the employee is unable to return to his or her job due to a workers’ compensation injury, he or she may qualify for vocational rehabilitation benefits. There habilitation plan may be as simple as a modification of the current job to accommodate any limitations suffered , or it may involve training for a new job. Our vocational rehabilitation counselors will help the employee obtain any needed services. For injuries on or after January 1, 2004, if the injury results in permanent disability, and the employee is unable to return to work within 60 days after the last payment of temporary disability, or you do not offer modified or alternative work within 30 days of the end of temporary disability, a non-transferable voucher for education-related costs is payable to a state-approved school. The voucher can range up to $10,000, depending on the level of perm a nentdisabilit. This benefit is called a Supplemental Job Displacement Benefit (SJDB). The following table shows the different ranges.

Supplemental Job Displacement Benefits (SJDB)
Permanent Disability Level             SJDB Voucher Amount

Less than 15%                                  Up to $4,000

15% to 25%                                      Up to $6,000

26% to 49%                                      Up to $8,000

50% to 99%                                      Up to $10,000

Death benefit. If the injury causes death, a benefit is payable to qualified surviving dependents. In addition , burial expenses are covered up to a maximum limit. Note: Death benefits will be paid until the youngest minor child reaches age 18 and will continue even if the aggregate total exceeds the statutory maximum amount. This coverage applies only to injuries on or after January 1, 1990. For injuries on or after January 1, 2003, benefits will be paid to a dependent child for life when physically or mentally incapacitated from earning. Effective January 1, 2004, if no dependents exist, $250,000 will be paid to the employee’s estate.

What is State Compensation Insurance Fund?

The California Legislature established State Fund in 1914 for two reasons: to provide employers with an available market for workers’ compensation insurance at the lowest possible cost; and to make certain that injured workers receive prompt and complete care for a work-related injury or illness.

Though it was established by the Legislature, State Fund has never been tax-supported. State Fund operates competitively with other insurance carriers while acting as a yardstick for the maintenance of fair premium rates for employers and the fair treatment of injured employees. State Fund offers a high level of service to its policyholders and their injured workers. Our complete professional staff consists of servicing underwriters, claims adjusters, safety specialists, auditors , attorneys, Return to Work consultants, and vocational rehabilitation counselors.

I want to report a claim as quickly as I can. Is there a service available to allow me to report a claim immediately?

Our policyholders may report an injury immediately t h rough our Claims Reporting Center, which is available 24 hours a day, 7 days a week. To report an injury using this service, simply call. We encourage our policyholders to use this service to expedite completion of the Employer’s Report of Occupational Injury or iIlness (form 3067) directly over the phone, thus avoiding additional paperwork.

What is first aid?

First aid is defined in Labor Code §5401 as “any one-t i m e treatment, and any follow-up visit for the purpose of observation of minor scratches, cuts, burns and splinters, or other minor industrial injury, which do not ordinarily require medical care.” This section further provides “this one-time treatment, and follow-up visit for the purpose of observation, is considered first aid even though provided by a physician or registered professional personnel.”

If the employee needs additional care or there is lost time from work beyond the employee’s work shift, the injury is no longer considered first aid and an employee claim form (form 3301/DWC1) must be provided to the employee and an Employer’s Report of Injury (form 3067) is to be completed.

All industrial injuries, including “first-aid” injuries, require the filing of a Doctor’s First Report of Occupational Injury or Illness ( form 5021). Workers ’ compensation law mandates that all physicians must complete and submit the Doctor’s First Report to the employer’s claims administrator within 5 days.

Upon receipt of the Doctor’s First Report, State Fund will send a copy to the California Department of Industrial Relations. At that point State Fund will determine whether the injury/illness meets the Labor Code definition of first aid. If it does, the Doctor’s First Report will be sent to the employer along with any related medical bills. If an employer does not want to handle payment of first-aid injuries, State Fund will draw up a claim and pay the approved bills. If you have any questions, please contact your State Fund claims representative.

How can I obtain a policy with State Fund?

We need to know how many employees you have, their estimated annual payroll, and what kind of work they do. You can complete and return the questionnaire by mail or take it to the State Fund office nearest you. Once we have reviewed the information and assessed your operations, we can p rocess your application. In some cases, we can write your policy while you wait at our office. You may also obtain coverage through your insurance broker.

Can I get a quote over the phone?

Determining the correct job classifications and rates for premium calculation is not as simple as it may sound . Jobs that appear to be similar may be considered different for classification purposes. State Fund reviews your operations carefully to make sure that your charges are the correct rates. For this reason, we cannot give estimates over the phone.

Need more information ?

You can contact your broker or the State Fund location nearest you for more information about our services. Locations and phone numbers are listed on the back of this brochure.

Heat Illness in the Workplace: How You Can Control the Risk

When temperatures increase, workers face a greater risk of experiencing heat illness. This type of hot condition strikes employees in many different industries and can be fatal in the most extreme cases. Cal/OSHA requires employers of outdoor workers to control their employees’ exposure to excessive heat to prevent the debilitating effects of heat illness,

All The Preventive Steps That You Can Take

By following some simple guidelines, employers can better protect their employees against heat illness.

The Cal/OSHA Heat Advisory lists seven steps employers can take to reduce heat risks:

• Recognize the hazards of heat and working conditions

• Supply adequate drinking water

• Provide shaded working and rest areas

• Acclimate workers to hotter conditions

• Schedule rest breaks

• Recognize the symptoms of heat illness and get prompt medical attention

• Establish heat illness training for supervisors and employees

Group Insurance Savings

Enjoy the Advantages of a Group Plan

it is easy to get more workers’ compensation coverage by joining a group program. State Fund offers Group Workers’ Compensation Insurance through more than 200 trade associations, representing a wide range of industries throughout California. Group members enjoy numerous advantages that add value to a workers’ compensation policy, including:

• Cost savings
• Convenient service
• Safety programs

If you are an individual State Fund policyholder, consider converting to a group program at renewal and discover the difference.

Savings Advantages

• All group policies receive a 6 percent discount. Because this group discount is combinable with other State Fund discounts, employers save more on their premiums.
• Small employers with low payroll save by paying a reduced group minimum premium.
• Because of a group’s mandatory loss-control threshold, employers have an added incentive to create safer workplaces and decrease their claims costs and experience modifications.
• Group policyholders may also benefit from additional claims-management services, such as the Alternative Dispute Resolution program.

Service Benefits

• Trade association programs may provide advice on business procedures, legislative advocacy, and necessary forms and documents. Other group services may include health and dental plans, legal services, and life insurance.
• Many associations perform claims reviews. Close monitoring of claims can help resolve them sooner, which can result in reduced experience modification.
• As a group member, you receive an additional layer of service from State Fund’s staff of group specialists. These resources can help employers more effectively take advantage of the trusted core of State Fund services.
• Membership gives employers a voice for member feedback as well as a network for contacts and information.

Safety Enhancements

• Group members share a commitment to maintaining a good safety record, with selective underwriting review to maintain low group losses.
• Employers get industry-focused safety services that may include the interpretation of regulations, emergency-care planning, safety seminars, and a review of workplace accidents and their costs and trends.

How to Qualify

• Must be a current member in good standing of a qualifying association.
• Must meet the requirements of having the proper designated governing class code or schedule.
• Must meet the group underwriting criteria for the specific association.

GLOSSARY OF WORKERS COMPENSATION TERMS

Advisory Organization
The new designation for what were formerly known as rating bureaus (such as the NCCI). This new term, recently coined by the National Association of Insurance Commissioners, is meant to reflect more accurately the role of NCCI and other such organizations (like Insurance Services Office) which compile rating data and file policy forms for use by member insurance companies.

ALE - Allocated Loss Expenses
Insurance company costs for adjusting and settling claims which can be identified with a specific claim. The ALE are often then included in the claims costs used to adjust premium in some loss-sensitive premium adjustment types of workers' comp policies, such as sliding scale dividend plans or some retro- or retention plans.

ARAP - Assigned Risk Adjustment Program
An additional debit charge placed on Assigned Risk policies (In NCCI jurisdictions) with experience modification factors higher than 1.00. The notable exception is Massachusetts, where ARAP stands for All Risk Adjustment Factor. This is a surcharge that increases premiums over and above the experience modifier, and in MA the ARAP can be levied against all employers, not just those in the Assigned Risk Plan.

Assigned Risk Plan
Sometimes called "the Pool", this is a mechanism established by individual states to make sure that employers can obtain workers' compensation insurance even if insurance companies are not willing to write such insurance on a voluntary basis. Assigned risk plans in many states carry higher rates than the voluntary market.

Audited Premium
The final premium for the policy term, produced by auditing actual payroll exposures.

Audit workpaper
Worksheet prepared by the premium auditor, can be either hand-written or computerized, showing how the auditor arrived at the payroll numbers that are used to determine the audited premium.

Carve-Out
An option allowed in California and some other states, where an employer and the union for the employer's workers agree to collectively bargain a separate schedule of Workers' Compensation benefits that differs from the statutory program imposed by the state.

Classification Code
Also called Class Code. The workers' comp premium rate commensurate with the risk associated with that workplace exposure. For example, the classification code for an office clerk should carry a significantly lower rate than the code for a roofer. Misclassification is one of the most common causes of overcharges.

Direct Writer
An insurance company that does not work through independent insurance agents. The largest direct writer of workers' compensation insurance is Liberty Mutual. Agents for direct writers are employees of the insurance company.

Dividend
A return of premium, calculated after policy expiration, based on the over-all performance of the insurance company or of a group of insureds. Dividends cannot be guaranteed in advance, although they are often shown on proposals for insurance.

Employers' Liability
Section B of the standard Workers' Compensation insurance policy, this is the part of the policy that has a dollar limit shown for the coverage. This section insures employers for liability towards employees that is not covered by the statutory Workers' Compensation provisions of the state (which are insured in Section A and have no set dollar limit on the policy).

Excess Losses
In the Experience Modification Factor, the amount of any single claim that exceeds $5,000.

Experience Modification Factor
An adjustment to Manual Premium, calculated by an advisory organization (also known as rating bureaus) such as NCCI, based on historic loss and payroll data of a particular insured. Also called Experience Modifier, or Experience Mod.

Experience Period
The window of time from which loss and payroll data is used to calculate an experience modification factor for an employer. Normally this window is a three year period, starting four years prior to the effective date of the experience modifier. However, rating bureaus do not wait until three full years of data are in the experience period before producing an experience rating for an employer. If an employer reaches a certain, relatively low threshold of workers' compensation insurance premiums in any one of the three years in the experience period "window", this will make that employer eligible for experience rating.

Fronting
An arrangement between two insurance companies to produce an insurance policy (usually workers' compensation) for a third party wherein one insurance company produces the official policy (for a fee) but cedes all losses from that policy to the other insurer. This kind of arrangement is used in situations where the insurer writing the risk is not an admitted company in a particular state, and the coverage needs to be written by an admitted carrier. In order to meet the statutory requirements, the first insurer pays a second (admitted) insurer to "front" the policy, even though the first insurer remains responsible for paying all losses arising under the policy. This kind of arrangement is often used by captive insurers when they are not admitted carriers in a particular state.

Governing Classification
The classification code on an employer's workers' compensation insurance policy that generates the most payroll aside from standard exception classifications such as clerical or outside sales (unless there is no other workplace classification applicable other than a standard exception).

Guaranteed Cost
A Workers' Compensation insurance policy that is not subject to adjustment due to losses that occur during the policy term. In a guaranteed cost policy, the only variable affecting premium that should change between policy inception and audit is payroll. This is in contrast to the various kinds of loss sensitive plans, such as retrospective rating, retention plans, or sliding scale dividend plans, where there is a premium adjustment made based on losses incurred during the policy term.

Incurred Losses
Paid losses plus loss reserves for estimated future claims costs. Many loss sensitive insurance policies adjust premium based on incurred losses rather than just on paid losses.

Interstate Rating
An experience modification factor that applies across more than one state. Interstate ratings are calculated by NCCI for employers whose past workers compensation insurance policies show payroll in more than one state. Most, but not all states, participate in the interstate rating system. A few states, such as Michigan, Pennsylvania, and Delaware, do not participate in interstate rating, but instead continue to calculate separate experience ratings for employers who operate in their jurisdictions, even if those employers also qualify for interstate rating. Those employers thus have one experience modifier applying to their operations in most states but a separate modifier calculated by the stand-alone state rating bureau. The separate stand-alone mod would apply only to workers compensation insurance premiums developed for the employer's operations in that stand-alone state.

Manual Premium
Workers' compensation premium calculated by multiplying payrolls by appropriate rates, before application of experience modifier, schedule credit, or premium discount.

Medical-Only Claims
Claims for which the only cost is medical care, without any lost-time benefits being paid.

Merit Rating
A premium adjustment used in some NCCI states for employers too small to qualify for an experience modification factor. It provides either a premium credit or a debit for such employers based on prior claims (or lack of them.)

Modified Premium
Workers' Compensation premium calculated after application of experience modification factor. Similar to standard premium, but does not reflect any schedule credits or debits.

NCCI: The National Council on Compensation Insurance
The organization responsible in many states for determining proper Workers' Compensation classifications, experience modification factors, and collecting data used for ratemaking. NCCI also writes the manuals used in many states to calculate Workers' Compensation premiums, and also administers the Assigned Risk Plan in many jurisdictions. NCCI is a private organization, not connected with government, although it is often mistakenly thought to be a governmental agency. In fact, it is a non-profit privately held corporation owned by major insurance companies, whose executives constitute a majority of the directors on NCCI's board.

Premium Auditor
A harmless drudge (with apologies to Samuel Johnson and auditors everywhere -- just kidding!) The premium auditor determines actual exposure (remuneration) for a policy period, in order to determine the final audited premium. The auditor typically works either directly for the insurance company, or for a third-party company retained by the insurance company.

Premium Discount
A premium credit, based on size of the premium paid. It is normally given automatically on voluntary market policies, although retrospective rating or sliding scale dividend policies usually do not have a premium discount.

Primary Losses
In the experience modification factor, the first $5,000 of any single loss.

Rating Bureau, or Rating Organization
See NCCI. Some states maintain their own separate rating bureau, although these often follow NCCI rules and use NCCI manuals. Currently, the states of California, Delaware, Hawaii, Indiana, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, Texas, and Wyoming operate their own non-NCCI rating bureaus. Many of these largely follow NCCI rules for computing premiums and classifications, but California, Delaware, Texas, and Pennsylvania are notably different than NCCI in some aspects of classification and premium computation.

Remuneration
The basis for calculating Workers' Compensation premium. Remuneration is primarily payroll, but may also include other forms of employee compensation. Workers' Compensation premium is computed by applying varying rates (for different classifications) (per hundred dollars of remuneration).

Residual Market
Workers' comp written through an assigned risk plan.

Retrospective Rating
A Workers' compensation insurance policy that makes a subsequent adjustment to premium, after policy expiration, based on losses generated during the policy period. The adjustment can go up or down, within set parameters, based on the losses generated during the policy period.

Retention Plan
Similar to Retrospective Rating, this is a Workers' Compensation policy format that adjusts the premium, up or down, based on losses (and associated costs) that occur during the policy period.

Schedule Credit/Debit
A discretionary premium adjustment based on underwriters evaluation of special characteristics of a risk not reflected in the experience modifier.

Scopes Manual
Manual produced by NCCI which details what kinds of workplace exposures belong in particular Workers' Compensation classification codes.

Sliding Scale Dividend
A return of premium, after policy expiration, based on the actual loss experience of the insured business. The size of the dividend varies with the actual loss ratio of the insured business.

Short Rate Penalty
A penalty applied by insurers when a Workers' Compensation insurance policy is cancelled by the insured before the expiration date of the policy. This penalty is steep in the early days of the policy, and gradually tapers off the closer the policy gets to the expiration date.

Standard Exception
Classifications which are normally not included in the governing classification. These are clerical, outside sales, and often (but not always) drivers.

Standard Premium
Premium after application of Experience Modifier and Schedule Credit/Debit, but before Premium Discount.

Voluntary Compensation
An endorsement to the standard Workers' Compensation insurance policy which extends coverage to employees not required to be covered under the state's statutory Workers' Compensation provisions.

Voluntary Market
Workers' Compensation insurance written outside of the Assigned Risk Plan.

Workers' compensation

Workers' compensation (colloquially known as workers' comp in North America or compo in Australia) is a form of insurance that provides compensation medical care for employees who are injured in the course of employment, in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence. The tradeoff between assured, limited coverage and lack of recourse outside the worker compensation system is known as "the compensation bargain." While plans differ between jurisdictions, provision can be made for weekly payments in place of wages (functioning in this case as a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning in this case as a form of health insurance), and benefits payable to the dependents of workers killed during employment (functioning in this case as a form of life insurance). General damages for pain and suffering, and punitive damages for employer negligence, are generally not available in worker compensation plans.

Employees' compensation laws are usually a feature of highly developed industrial societies, implemented after long and hard-fought struggles by trade unions. Supporters of such schemes believe they improve working conditions and provide an economic safety net for employees. Conversely, these schemes are often criticised for removing or restricting workers' common-law rights (such as suit in tort for negligence) in order to reduce governments' or insurance companies' financial liability. These laws were first enacted in Europe and Oceania, with the United States following shortly thereafter.

Compensation prior to statutory law

Prior to the statutory establishment of workers' compensation, employees who were injured on the job were only able to pursue their employer through civil or tort law. In the United Kingdom, the legal view of employment as a master-servant relationship required employees to prove employer malice or negligence, a high burden for employees to meet. Although employers' liability was unlimited, courts usually ruled in favor of employers, paying little attention to the full losses experienced by workers, including medical costs, lost wages, and loss of future earning capacity.

Statutory compensation law

Statutory compensation law provides advantages to both employees and employers. A schedule is drawn out to state the amount and forms of compensation to which an employee is entitled, if he/she has sustained the stipulated kinds of injuries. Employers can buy insurance against such occurrences. However, the specific form of the statutory compensation scheme may provide detriments. Statutory schemes often award a set amount based on the types of injury. These payments are based on the ability of the worker to find employment in a partial capacity: a worker who has lost an arm can still find work as a proportion of a fully-able person. This does not account for the difficulty in finding work suiting disability. When employers are required to put injured staff on "light-duties" the employer may simply state that no light duty work exists, and sack the worker as unable to fulfill specified duties. When new forms of workplace injury are discovered, for instance: stress, repetitive strain injury, silicosis; the law often lags behind actual injury and offers no suitable compensation, forcing the employer and employee back to the courts (although in common-law jurisdictions these are usually one-off instances). Finally, caps on the value of disabilities may not reflect the total cost of providing for a disabled worker. The government may legislate the value of total spinal incapacity at far below the amount required to keep a worker in reasonable living conditions for the remainder of his life.

A related issue is that the same physical loss can have a markedly different impact on the earning capacity of individuals in different professions. For instance, the loss of a finger could have a moderate impact on a banker's ability to do his or her job, but the same injury would totally ruin a pianist.

Statutory compensation in Australia

As Australia experienced a relatively influential labour movement in the late 19th and early 20th century, statutory compensation was implemented very early in Australia.

Workers' compensation in Brazil

The Welfare (called Instituto Nacional do Seguro Social - INSS) is the social insurance for those who contribute. It is a public institution that aims to recognize and grant rights to its policyholders. The amount transferred by the Welfare is used to replace the income of the worker taxpayer, when he loses the ability to work, by sickness, disability, age, death, involuntary unemployment, or even maternity and imprisonment. During the first 15 days worker’s salary is paid by his employers and after that by Welfare, while inability to work lasts. It is up to 75% of the workers’ wages.

The Brazilian Welfare went through several conceptual and structural changes, involving the degree of coverage, the list of benefits and how the system is financed. In the other hand, if workers intend to receive a compensation from their former employer, there is a time limit for filling a claim (2 years), which must be legally supported. Workers’ compensation laws are the same in the whole country and tend to be protective.

Statutory compensation in Canada

Workers' compensation was Canada's first social program to be introduced as it was favoured by both workers' groups and employers hoping to avoid lawsuits. The system arose after an inquiry by Ontario Chief Justice William Meredith who outlined a system that workers should be compensated for workplace injuries, but that they must give up their right to sue their employers. It was introduced in the various provinces at different dates Ontario was first in 1915, Manitoba in 1916, British Columbia in 1917. It remains a provincial responsibility and thus the exact rules vary from province to province. In some provinces, such as Ontario's Workplace Safety and Insurance Board, the programme also had a preventative role ensuring workplace safety. In British Columbia, the occupational health and safety mandate is legislated. In most provinces it remains solely concerned with insurance. It is paid by employers based on their payroll, industry sector and history of injuries (or lack thereof) in their workplace, sometimes known as "injury experience".

Statutory compensation in the United States

Workers' compensation laws were enacted to reduce the need for litigation, and to mitigate the requirement that injured workers prove their injuries were their employer's "fault". The first state law was passed in Maryland in 1902, and the first law covering federal employees was passed in 1906. By 1949, all states had enacted some kind of workers' compensation regime. Such schemes were originally known as "workman's compensation," but today, most jurisdictions have adopted the term "workers' compensation" as a gender-neutral alternative.

In the United States, most employees who are injured on the job have an absolute right to medical care for that injury, and in many cases, monetary payments to compensate for resulting temporary or permanent disabilities. Most employers are required to subscribe to insurance for workers' compensation, and an employer who does not may have financial penalties imposed. In many states, there are public uninsured employer funds to pay benefits to workers employed by companies who illegally fail to purchase insurance. Insurance policies are available to employers through commercial insurance companies: if the employer is deemed an excessive risk to insure at market rates, it can obtain coverage through an assigned-risk program.

In the vast majority of states, workers' compensation is solely provided by private insurance companies. 12 states operate a state fund (which serves as a model to private insurers and insures state employees), and a handful have state-owned monopolies. To keep the state funds from crowding out private insurers, they are generally required to act as assigned-risk programs or insurers of last resort, and they can only write workers' compensation policies. In contrast, private insurers can turn away the worst risks and can write comprehensive insurance packages covering general liability, natural disasters, and so on. Of the 12 state funds, the largest is California's State Compensation Insurance Fund. The federal government pays its workers' compensation obligations for its own employees through regular appropriations.

It is illegal in most states for an employer to terminate or refuse to hire an employee for having reported a workplace injury or filed a workers' compensation claim. However, it is often not easy to prove discrimination on the basis of the employee's claims history. To abate discrimination of this type, some states have created a "subsequent injury trust fund" which will reimburse insurers for benefits paid to workers who suffer aggravation or recurrence of a compensable injury. It is also suggested that laws should be made to prohibit inclusion of claims history in databases or to make it anonymous. (See privacy laws.)

Employees may not falsely claim benefits. There have been instances where the sub rosa videos recorded by private investigators show employees engaging in sports or other strenuous physical activities, although the employees allegedly suffered disability or injury.[citation needed]. Such evidence may not be admissible at a trial, if it is found that the taping infringed on the employees' reasonable expectation of privacy.[citation needed]

Some employers vigorously contest employee claims for workers' compensation payments. In any contested case, or in any case involving serious injury, a lawyer with specific experience in handling workers' compensation claims on behalf of injured workers should be consulted. Laws in many states limit a claimant's legal expenses to a certain fraction of an award; such "contingency fees" are payable only if the recovery is successful. In some states this fee can be as high as 40% or as little as 11% of the monetary award recovered, if any.[citation needed]

In the vast majority of states, original jurisdiction over workers' compensation disputes has been transferred by statute from the trial courts to special administrative agencies.[citation needed] Within such agencies, disputes are usually handled informally by administrative law judges. Appeals may be taken to an appeals board and from there into the state court system. However, such appeals are difficult and are regarded skeptically by most state appellate courts, because the point of workers' compensation was to reduce litigation. A few states still allow the employee to initiate a lawsuit in a trial court against the employer. Ohio allows appeals to go before a jury.[1]

Alternate forms of statutory compensation in the United States

Employees of common carriers by rail have a statutory remedy under the Federal Employers' Liability Act, 45 U.S.C. sec. 51, which provides that a carrier "shall be liable" to an employee who is injured by the negligence of the employer. To enforce his compensation rights, the employee may file suit in United States district court or in a state court. The FELA remedy is based on tort principles of ordinary negligence and differs significantly from most state workers' compensation benefit schedules.

Seafarers employed on United States vessels who are injured because of the owner's or the operator's negligence can sue their employers under the Jones Act, 46 U.S.C. App. 688., essentially a remedy very similar to the FELA one.

Opposition to statutory compensation in the United States

Opponents argue that workers' compensation laws may hurt the U.S. workers they were designed to help[citation needed]. Large employers may have an incentive to move segments of their business -- and their jobs -- to areas where workers' compensation benefits (and other employee protections) are less generous or are harder to obtain. This is because the United States lacks a unified and national set of employee entitlements covering minimum wage, wage and hour, or collective bargaining rights in addition to compensation. Labor unions describe this system as a race to the bottom, as state legislatures cut employee entitlements to attract capital. Moreover, applying laws to citizens (or organisations) abroad, is an exception rather than the rule under common law.

United States employers can also move some operations to other countries where employee entitlements are much lower than in the U.S., and where there may be no workers' compensation or other legal remedies at all for workers who are injured or who are exposed to hazardous substances while on the job. Such countries may also have weaker or no legal protections available for employees in areas such as job discrimination, social security, or the right to organize or to join a trade union. Some small business owners complain that the cost of workers’ compensation, which they pay in the form of insurance premiums, places a heavy burden on them.

Economists who favor the distributism system of economics cite workers' compensation as an example of how far the modern capitalist economic system approaches what they call the "servile state" or "slavery worker" system. They say that in past times, when ownership of the means of production were more widely distributed, it would not be natural to hold an employer responsible for a worker's injury, since the worker was freely choosing to work for that employer. Distributors assert that in modern times, with the vast majority of people dispossessed of the means of production, requiring employers to have workers compensation shows how much workers really are dependent on being employed and are essentially forced to work for someone else to survive. Some distributors who feel that capitalism is heading in the direction of a slavery system feel that this will come about by workers exchanging their personal freedom for economic benefits like workers' compensation.

Workers' Compensation Cost Containment

Many things can be done to reduce the cost of workers' compensation. While many business owners and managers initially think "workers' compensation is the cost of doing business," this is not really true and there are many controls that can be put in place inside a company to make sure an employer pays only for legitimate injuries, from the time an employee is medically unable to return to any productive task at the workplace.

This field of risk management is a specialized niche called "post loss cost containment," "injury management cost reduction," and several other names. The specialty centers around actions an employer can do to "manage" the processes in the workplace immediately after an injury occurs. There are four stages to the workers' comp cost containment process including: assessment & recommendations, design & development, implementation and rollout.

Cost drivers

The areas generally considered to be key cost drivers are:

• building management commitment,
• working with the insurance company & insurance adjusters,
• implementing an effective return to work & transitional duty program,
• coordinating medical care,
• medical cost management,
• recognizing fraud and abuse,
• improving communication with employees, and
• training supervisors.

Employers should use a "holistic" approach to workers' compensation cost containment by looking at the total problem, rather than focusing only on one area such as reducing medical bills. By taking a "can do" approach, employers focus on controlling procedures within their control rather than the many things they cannot control. For example, employers cannot quickly or easily change the workers' comp laws or eliminate plaintiff's lawyers or the legal system, items that are frequently mentioned as "causes" of high workers' comp costs; however, an employer can implement a "post-injury response procedure" in their own workplace specifying what an employee must do if injured. Employers must "take charge" of those things within their control.

Policies

Having consistent policies and forms helps the employer remain in control of the process. Even very small companies should have a tight post-injury procedure to help management control the post-injury process. The overall goal is for 95% of injured employees to return to work within 1-4 days after the injury unless they are medically unable to perform any productive role for the employer. The time out of work should be proportionate to the length of the disability. The Average Cost Per Employee in 2006, according to the 2006 RIMS Benchmarking Survey is $618 for all employers combined.

Some documents and policies to use are:

• Transitional Duty Policy
• Work Ability Form
• Transitional Assignment Form
• Post Injury Procedure
• Worst-to-Best Benchmark Performance List
• Employee Brochure
• Introduction Letter to Employees
• Employee Acknowledgement Form
• Physician Telephone Contact Questionnaire
• Supervisors Guide to Workers' Compensation
• General Manager Best Practices

History

Workers' Compensation in the U.S. began in 1911 during the Progressive Era when Wisconsin passed the first statutory system. Other U.S. jurisdictions followed suit. In general, statutory Workers' Compensation systems strike a compromise, guaranteeing workers medical care and payment for lost time on a no-fault basis. Prior to the enactment of Workers' Compensation laws, injured workers had to file suit against employers (usually for the tort of negligence), and such legal actions had significant drawbacks for workers. At the same time, a successful suit could impose very large and unpredictable costs on an employer. Statutory Workers' Compensation systems provide for prompt payment of medical, rehabilitation, and lost time costs to injured workers, while placing limits on the cost of the system for employers. This trade-off became known as the "workers' compensation bargain"; that is, the worker traded his/her right to bring a tort suit against their employer in exchange for prompt medical care and disability payments (indeminity payments). Thus workers compensation is the original "Tort Reform."

In many states today, Workers' Compensation represents a major cost of business for employers, and there is ongoing political maneuvering by both business and labor groups to shift the compromise balance struck by Workers' Compensation statutes (for an example see California's Senate Bill (SB) 899). In general, business groups seek to limit the cost of Workers' Compensation coverage, while labor groups seek to increase benefits paid to workers.

For the commercial insurance market, Workers' Compensation represents a major line of business, although one that is sometimes problematic for the insurance industry. Premiums are large, but many insurers find it difficult to turn a profit in many states, as benefit costs sometimes exceed premiums. This line of insurance is regulated fairly closely by most states, although in recent years many states have allowed insurance companies greater flexibility in pricing this line of coverage. The hope has been that by encouraging price competition among insurers for Workers' Compensation insurance, employers would benefit by being able to obtain lower overall premiums. However, the introduction of competitive pricing for Workers' Compensation insurance has also led to significant swings in cost, as the insurance market moves between 'hard' and 'soft' markets. Employers often benefit from lower premiums in 'soft' insurance markets, only to see their premiums increase exponentially during 'hard' insurance markets.

Injured Workers sometimes complain that insurance companies do not treat them fairly or in compliance with the law, while employers often complain about their costs of insurance being driven up by exaggerated or fraudulent claims. Thus, the field engenders a considerable amount of controversy and litigation. These disputed areas include both claims and premium computations.

The statute of limitations for filing a compensation claim for an accidental injury varies from state to state.

Workers’ Compensation in Brazil

The Welfare is the social insurance for the person who contributes. It is a public institution that aims to recognize and grant rights to its policyholders. The amount transferred by the Welfare is used to replace the income of the worker taxpayer, when he loses the ability to work, by sickness, disability, age, death, involuntary unemployment, or even maternity and imprisonment.

The Brazilian Welfare went through several conceptual and structural changes, involving the degree of coverage, the list of benefits and how the system is financed.

If one cannot work, his employer pays for the first 15 days and the Welfare pays from the 16th day on, while he is unable to work.

In the other hand, if worker intends to receive a compensation from his former employer, there is a time limit for filling a claim (2 years), which must be legally supported. Workers’ compensation laws are the same in the whole country and tend to be protective.

ALL ABOUT INSURANCE

What is insurance?

Principles of insurance

Commercially insurable risks typically share seven common characteristics.

A large number of homogeneous exposure units. The vast majority of insurance policies are provided for individual members of very large classes. Automobile insurance, for example, covered about 175 million automobiles in the United States in 2004. The existence of a large number of homogeneous exposure units allows insurers to benefit from the so-called “law of large numbers,” which in effect states that as the number of exposure units increases, the actual results are increasingly likely to become close to expected results. There are exceptions to this criterion. Lloyd's of London is famous for insuring the life or health of actors, actresses and sports figures. Satellite Launch insurance covers events that are infrequent. Large commercial property policies may insure exceptional properties for which there are no ‘homogeneous’ exposure units. Despite failing on this criterion, many exposures like these are generally considered to be insurable.

Definite Loss. The event that gives rise to the loss that is subject to insurance should, at least in principle, take place at a known time, in a known place, and from a known cause. The classic example is death of an insured on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.

Accidental Loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be ‘pure,’ in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks, are generally not considered insurable.

Large Loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is little point in paying such costs unless the protection offered has real value to a buyer.

Affordable Premium. If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that anyone will buy insurance, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance.

Calculable Loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim.

Limited risk of catastrophically large losses. The essential risk is often aggregation. If the same event can cause losses to numerous policyholders of the same insurer, the ability of that insurer to issue policies becomes constrained, not by factors surrounding the individual characteristics of a given policyholder, but by the factors surrounding the sum of all policyholders so exposed. Typically, insurers prefer to limit their exposure to a loss from a single event to some small portion of their capital base, on the order of 5 percent. Where the loss can be aggregated, or an individual policy could produce exceptionally large claims, the capital constraint will restrict an insurers appetite for additional policyholders. The classic example is earthquake insurance, where the ability of an underwriter to issue a new policy depends on the number and size of the policies that it has already underwritten. Wind insurance in hurricane zones, particularly along coast lines, is another example of this phenomenon. In extreme cases, the aggregation can affect the entire industry, since the combined capital of insurers and reinsurers can be small compared to the needs of potential policyholders in areas exposed to aggregation risk. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer’s capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

Indemnification

The technical definition of "indemnity" means to make whole again. There are two types of insurance contracts; 1) an "indemnity" policy and 2) a "pay on behalf" or "on behalf of" policy. The difference is significant on paper, but rarely material in practice. An "indemnity" policy will never pay claims until the insured has paid out of pocket to some third party; i.e. a visitor to your home slips on a floor that you left wet and sues you for $10,000 and wins. Under an "indemnity" policy the homeowner would have to come up with the $10,000 to pay for the visitor's fall and then would be "indemnified" by the insurance carrier for the out of pocket costs (the $10,000). Under the same situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the insured (the homeowner) would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language.

An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, called an insurance 'policy'. Generally, an insurance contract includes, at a minimum, the following elements: the parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be "indemnified" against the loss events covered in the policy. When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a 'claim' against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the 'premium'. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims—in theory for a relatively few claimants—and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (i.e., reserves), the remaining margin is an insurer's profit.

Insurer’s business model

Profit = earned premium + investment income - incurred loss - underwriting expenses.

Insurers make money in two ways: (1) through underwriting, the process by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks and (2) by investing the premiums they collect from insureds.

The most complicated aspect of the insurance business is the underwriting of policies. Using a wide assortment of data, insurers predict the likelihood that a claim will be made against their policies and price products accordingly. To this end, insurers use actuarial science to quantify the risks they are willing to assume and the premium they will charge to assume them. Data is analyzed to fairly accurately project the rate of future claims based on a given risk. Actuarial science uses statistics and probability to analyze the risks associated with the range of perils covered, and these scientific principles are used to determine an insurer's overall exposure. Upon termination of a given policy, the amount of premium collected and the investment gains thereon minus the amount paid out in claims is the insurer's underwriting profit on that policy. Of course, from the insurer's perspective, some policies are winners (i.e., the insurer pays out less in claims and expenses than it receives in premiums and investment income) and some are losers (i.e., the insurer pays out more in claims and expenses than it receives in premiums and investment income).

An insurer's underwriting performance is measured in its combined ratio. The loss ratio (incurred losses and loss-adjustment expenses divided by net earned premium) is added to the expense ratio (underwriting expenses divided by net premium written) to determine the company's combined ratio. The combined ratio is a reflection of the company's overall underwriting profitability. A combined ratio of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an underwriting loss. Insurance companies also earn investment profits on “float”. “Float” or available reserve is the amount of money, at hand at any given moment, that an insurer has collected in insurance premiums but has not been paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest on them until claims are paid out.

In the United States, the underwriting loss of property and casualty insurance companies was $142.3 billion in the five years ending 2003. But overall profit for the same period was $68.4 billion, as the result of float. Some insurance industry insiders, most notably Hank Greenberg, do not believe that it is forever possible to sustain a profit from float without an underwriting profit as well, but this opinion is not universally held. Naturally, the “float” method is difficult to carry out in an economically depressed period. Bear markets do cause insurers to shift away from investments and to toughen up their underwriting standards. So a poor economy generally means high insurance premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the "underwriting" or insurance cycle. Property and casualty insurers currently make the most money from their auto insurance line of business. Generally better statistics are available on auto losses and underwriting on this line of business has benefited greatly from advances in computing. Additionally, property losses in the US, due to natural catastrophes, have exacerbated this trend. Finally, claims and loss handling is the materialized utility of insurance. In managing the claims-handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages. As part of this balancing act, fraudulent insurance practices are a major business risk that must be managed and overcome.

History of insurance

In some sense we can say that insurance appears simultaneously with the appearance of human society. We know of two types of economies in human societies: money economies (with markets, money, financial instruments and so on) and non-money or natural economies (without money, markets, financial instruments and so on). The second type is a more ancient form than the first. In such an economy and community, we can see insurance in the form of people helping each other. For example, if a house burns down, the members of the community help build a new one. Should the same thing happen to one's neighbor, the other neighbor must help. Otherwise, neighbor will not receive help in the future. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread (for example countries in the territory of the former Soviet Union). Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the financial sphere), early methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants traveling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen.

Achaemenian monarchs of Iran were the first to insure their people and made it official by registering the insuring process in governmental notary offices. The insurance tradition was performed each year in Norouz (beginning of the Iranian New Year); the heads of different ethnic groups as well as others willing to take part, presented gifts to the monarch. The most important gift was presented during a special ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold coin) the issue was registered in a special office. This was advantageous to those who presented such special gifts. For others, the presents were fairly assessed by the confidants of the court. Then the assessment was registered in special offices. The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient Iran: " Whenever the owner of the present is in trouble or wants to construct a building, set up a feast, have his children married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of twice as much."[1] A thousand years later, the inhabitants of Rhodes invented the concept of the 'general average'. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinkage. The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "benevolent societies" which cared for the families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Before insurance was established in the late 17th century, "friendly societies" existed in England, in which people donated amounts of money to a general sum that could be used for emergencies. Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed.

Toward the end of the seventeenth century, London's growing importance as a canter for trade increased demand for marine insurance. In the late 1680s, Mr. Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships’ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of London remains the leading market (note that it is not an insurance company) for marine and other specialist types of insurance, but it works rather differently than the more familiar kinds of insurance. Insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. In 1680, he established England's first fire insurance company, "The Fire Office," to insure brick and frame homes. The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732. Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses. In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance markets have become centralized nationally and internationally, state insurance commissioners operate individually, though at times in concert through a national insurance commissioners' organization. In recent years, some have called for a dual state and federal regulatory system (commonly referred to as the Optional Federal Charter (OFC)) for insurance similar to that which oversees state banks and national banks.

Types of insurance

Any risk that can be quantified can potentially be insured. Specific kinds of risk that may give rise to claims are known as "perils". An insurance policy will set out in detail which perils are covered by the policy and which are not. Below are (non-exhaustive) lists of the many different types of insurance that exist. A single policy may cover risks in one or more of the categories set forth below. For example, auto insurance would typically cover both property risk (covering the risk of theft or damage to the car) and liability risk (covering legal claims from causing an accident). A homeowner's insurance policy in the US typically includes property insurance covering damage to the home and the owner's belongings, liability insurance covering certain legal claims against the owner, and even a small amount of health insurance for medical expenses of guests who are injured on the owner's property. Business insurance can be any kind of insurance that protects businesses against risks. Some principal subtypes of business insurance are (a) the various kinds of professional liability insurance, also called professional indemnity insurance, which are discussed below under that name; and (b) the business owners policy (BOP), which bundles into one policy many of the kinds of coverage that a business owner needs, in a way analogous to how homeowners insurance bundles the coverages that a homeowner needs.

Health Insurance
Health insurance policies will often cover the cost of private medical treatments if the National Health Service in the United Kingdom (NHS) or other publicly-funded health programs do not pay for them. It will often result in quicker health care where better facilities are available. Dental insurance, like medical insurance, is coverage for individuals to protect them against dental costs. In the US, dental insurance is often part of an employer's benefits package, along with health insurance. Most countries rely on public funding to ensure that all citizens have universal access to health care.

Disability Insurance
* Disability insurance policies provide financial support in the event the policyholder is unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as mortgages and credit cards.
* Total permanent disability insurance insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance.
* Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work.
* Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expense incurred because of a job-related injury.

Casualty Insurance
Casualty insurance insures against accidents, not necessarily tied to any specific property.
* Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.
* Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss.

Life Insurance
Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies and regulated as insurance and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance. Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed. In many countries, such as the US and the UK, the tax law provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death. In US, the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. This depends upon the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover, other income tax saving vehicles (e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value accumulation. A combination of low-cost term life insurance and a higher-return tax-efficient retirement account may achieve better investment return.

Property Insurance
Property insurance provides protection against risks to property, such as fire, theft or weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.

* Automobile insurance, known in the UK as motor insurance, is probably the most common form of insurance and may cover both legal liability claims against the driver and loss of or damage to the insured's vehicle itself. Throughout the United States auto insurance policy is required to legally operate a motor vehicle on public roads. In some jurisdictions, bodily injury compensation for automobile accident victims has been changed to a no-fault system, which reduces or eliminates the ability to sue for compensation but provides automatic eligibility for benefits. Credit card companies insure against damage on rented cars. o Driving School Insurance insurance provides cover for any authorized driver whilst under going tuition, cover also unlike other motor policies provides cover for instructor liability where both the pupil and driving instructor are both equally liable in the event of a claim.

* Aviation insurance insures against hull, spares, deductible, hull wear and liability risks.

* Boiler insurance (also known as boiler and machinery insurance or equipment breakdown insurance) insures against accidental physical damage to equipment or machinery.

* Builder's risk insurance insures against the risk of physical loss or damage to property during construction. Builder's risk insurance is typically written on an "all risk" basis covering damage due to any cause (including the negligence of the insured) not otherwise expressly excluded.

* Crop insurance "Farmers use crop insurance to reduce or manage various risks associated with growing crops. Such risks include crop loss or damage caused by weather, hail, drought, frost damage, insects, or disease, for instance."

* Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake damage. Most earthquake insurance policies feature a high deductible. Rates depend on location and the probability of an earthquake, as well as the construction of the home.

* A fidelity bond is a form of casualty insurance that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees.

* Flood insurance protects against property loss due to flooding. Many insurers in the US do not provide flood insurance in some portions of the country. In response to this, the federal government created the National Flood Insurance Program which serves as the insurer of last resort.

* Home insurance or homeowners insurance: See "Property insurance".

* Marine insurance and marine cargo insurance cover the loss or damage of ships at sea or on inland waterways, and of the cargo that may be on them. When the owner of the cargo and the carrier are separate corporations, marine cargo insurance typically compensates the owner of cargo for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier or the carrier's insurance. Many marine insurance underwriters will include "time element" coverage in such policies, which extends the indemnity to cover loss of profit and other business expenses attributable to the delay caused by a covered loss.

* Surety bond insurance is a three party insurance guaranteeing the performance of the principal. * Terrorism insurance provides protection against any loss or damage caused by terrorist activities.

* Volcano insurance is an insurance that covers volcano damage in Hawaii.

* Windstorm insurance is an insurance covering the damage that can be caused by hurricanes and tropical cyclones.

Liability Insurance
Liability insurance is a very broad superset that covers legal claims against the insured. Many types of insurance include an aspect of liability coverage. For example, a homeowner's insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property; automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others' lives, health, or property. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of willful or intentional acts by the insured. * Environmental liability insurance protects the insured from bodily injury, property damage and cleanup costs as a result of the dispersal, release or escape of pollutants. * Errors and omissions insurance: See "Professional liability insurance" under "Liability insurance". * Professional liability insurance, also called professional indemnity insurance, protects insured professionals such as architectural corporation and medical practice against potential negligence claims made by their patients/clients. Professional liability insurance may take on different names depending on the profession. For example, professional liability insurance in reference to the medical profession may be called malpractice insurance. Notaries public may take out errors and omissions insurance (E&O). Other potential E&O policyholders include, for example, real estate brokers, home inspectors, appraisers, and website developers. * Directors and officers liability insurance protects an organization (usually a corporation) from costs associated with litigation resulting from mistakes incurred by directors and officers for which they are liable. In the industry, it is usually called "D&O" for short. * Prize indemnity insurance protects the insured from giving away a large prize at a specific event. Examples would include offering prizes to contestants who can make a half-court shot at a basketball game, or a hole-in-one at a golf tournament.

Credit Insurance
Credit insurance repays some or all of a loan back when certain things happen to the borrower such as unemployment, disability, or death. * Mortgage insurance insures the lender against default by the borrower. Mortgage insurance is a form of credit insurance, although the name credit insurance more often is used to refer to policies that cover other kinds of debt.

Other types of Insurance

* Collateral protection insurance or CPI, insures property (primarily vehicles) held as collateral for loans made by lending institutions.
* Defense Base Act Workers' compensation or DBA Insurance insurance provides coverage for civilian workers hired by the government to perform contracts outside the US and Canada. DBA is required for all US citizens, US residents, US Green Card holders, and all employees or subcontractors hired on overseas government contracts. Depending on the country, Foreign Nationals must also be covered under DBA. This coverage typically includes expenses related to medical treatment and loss of wages, as well as disability and death benefits.
* Expatriate insurance provides individuals and organizations operating outside of their home country with protection for automobiles, property, health, liability and business pursuits.
* Financial loss insurance protects individuals and companies against various financial risks. For example, a business might purchase cover to protect it from loss of sales if a fire in a factory prevented it from carrying out its business for a time. Insurance might also cover the failure of a creditor to pay money it owes to the insured. This type of insurance is frequently referred to as "business interruption insurance." Fidelity bonds and surety bonds are included in this category, although these products provide a benefit to a third party (the "obligee") in the event the insured party (usually referred to as the "obligor") fails to perform its obligations under a contract with the obligee.
* Kidnap and ransom insurance
* Locked funds insurance is a little-known hybrid insurance policy jointly issued by governments and banks. It is used to protect public funds from tamper by unauthorized parties. In special cases, a government may authorize its use in protecting semi-private funds which are liable to tamper. The terms of this type of insurance are usually very strict. Therefore it is used only in extreme cases where maximum security of funds is required.
* Nuclear incident insurance covers damages resulting from an incident involving radioactive materials and is generally arranged at the national level. (For the United States, see the Price-Anderson Nuclear Industries Indemnity Act.)
* Pet insurance insures pets against accidents and illnesses - some companies cover routine/wellness care and burial, as well.
* Pollution Insurance, which consists of first-party coverage for contamination of insured property either by external or on-site sources. Coverage for liability to third parties arising from contamination of air, water, or land due to the sudden and accidental release of hazardous materials from the insured site. The policy usually covers the costs of cleanup and may include coverage for releases from underground storage tanks. Intentional acts are specifically excluded.
* Purchase insurance is aimed at providing protection on the products people purchase. Purchase insurance can cover individual purchase protection, warranties, guarantees, care plans and even mobile phone insurance. Such insurance is normally very limited in the scope of problems that are covered by the policy.
* Title insurance provides a guarantee that title to real property is vested in the purchaser and/or mortgagee, free and clear of liens or encumbrances. It is usually issued in conjunction with a search of the public records performed at the time of a real estate transaction.
* Travel insurance is an insurance cover taken by those who travel abroad, which covers certain losses such as medical expenses, lost of personal belongings, travel delay, personal liabilities, etc.

Insurance financing vehicles
* Protected Self-Insurance is an alternative risk financing mechanism in which an organization retains the mathematically calculated cost of risk within the organization and transfers the catastrophic risk with specific and aggregate limits to an Insurer so the maximum total cost of the program is known. A properly designed and underwritten Protected Self-Insurance Program reduces and stabilizes the cost of insurance and provides valuable risk management information.
* Retrospectively Rated Insurance is a method of establishing a premium on large commercial accounts. The final premium is based on the insured's actual loss experience during the policy term, sometimes subject to a minimum and maximum premium, with the final premium determined by a formula. Under this plan, the current year's premium is based partially (or wholly) on the current year's losses, although the premium adjustments may take months or years beyond the current year's expiration date. The rating formula is guaranteed in the insurance contract. Formula: retrospective premium = converted loss + basic premium × tax multiplier. Numerous variations of this formula have been developed and are in use.
* Fraternal insurance is provided on a cooperative basis by fraternal benefit societies or other social organizations.
* Formal self insurance is the deliberate decision to pay for otherwise insurable losses out of one's own money. This can be done on a formal basis by establishing a separate fund into which funds are deposited on a periodic basis, or by simply forgoing the purchase of available insurance and paying out-of-pocket. Self insurance is usually used to pay for high-frequency, low-severity losses. Such losses, if covered by conventional insurance, mean having to pay a premium that includes loadings for the company's general expenses, cost of putting the policy on the books, acquisition expenses, premium taxes, and contingencies. While this is true for all insurance, for small, frequent losses the transaction costs may exceed the benefit of volatility reduction that insurance otherwise affords.
* No-fault insurance is a type of insurance policy (typically automobile insurance) where insureds are indemnified by their own insurer regardless of fault in the incident.
* Reinsurance is a type of insurance purchased by insurance companies or self-insured employers to protect against unexpected losses. Financial reinsurance is a form of reinsurance that is primary used for capital management rather than to transfer insurance risk.
* Stop-loss insurance provides protection against catastrophic or unpredictable losses. It is purchased by organizations who do not want to assume 100% of the liability for losses arising from the plans. Under a stop-loss policy, the insurance company becomes liable for losses that exceed certain limits called deductibles.
* Social insurance can be many things to many people in many countries. But a summary of its essence is that it is a collection of insurance coverages (including components of life insurance, disability income insurance, unemployment insurance, health insurance, and others), plus retirement savings, that mandates participation by all citizens. By forcing everyone in society to be a policyholder and pay premiums, it ensures that everyone can become a claimant when or if he/she needs to. Along the way this inevitably becomes related to other concepts such as the justice system and the welfare state. This is a large, complicated topic that engenders tremendous debate, which can be further studied in the following articles (and others): o Social welfare provision o Social security o Social safety net o National Insurance o Social Security (United States) o Social Security debate (United States)

Insurance Companies

Insurance companies may be classified into two groups:
* Life insurance companies, which sell life insurance, annuities and pensions products.
* Non-life, General, or Property/Casualty insurance companies, which sell other types of insurance.

General insurance companies can be further divided into these sub categories.
* Standard Lines
* Excess Lines

In most countries, life and non-life insurers are subject to different regulatory regimes and different tax and accounting rules. The main reason for the distinction between the two types of company is that life, annuity, and pension business is very long-term in nature — coverage for life assurance or a pension can cover risks over many decades. By contrast, non-life insurance cover usually covers a shorter period, such as one year. In the United States, standard line insurance companies are your "main stream" insurers. These are the companies that typically insure your auto, home or business. They use pattern or "cookie-cutter" policies without variation from one person to the next. They usually have lower premiums than excess lines and can sell directly to individuals. They are regulated by state laws that can restrict the amount they can charge for insurance policies. Excess line insurance companies (aka Excess and Surplus) typically insure risks not covered by the standard lines market. They are broadly referred as being all insurance placed with non-admitted insurers. Non-admitted insurers are not licensed in the states where the risks are located. These companies have more flexibility and can react faster than standard insurance companies because they are not required to file rates and forms as do the "admitted" carriers do. However, they still have substantial regulatory requirements placed upon them. State laws generally require insurance placed with surplus line agents and brokers to not be available through standard licensed insurers. Insurance companies are generally classified as either mutual or stock companies. This is more of a traditional distinction as true mutual companies are becoming rare. Mutual companies are owned by the policyholders, while stockholders (who may or may not own policies) own stock insurance companies. Other possible forms for an insurance company include reciprocals, in which policyholders 'reciprocate' in sharing risks, and Lloyds organizations.

Insurance companies are rated by various agencies such as A. M. Best. The ratings include the company's financial strength, which measures its ability to pay claims. It also rates financial instruments issued by the insurance company, such as bonds, notes, and securitization products. Reinsurance companies are insurance companies that sell policies to other insurance companies, allowing them to reduce their risks and protect themselves from very large losses. The reinsurance market is dominated by a few very large companies, with huge reserves. A reinsurer may also be a direct writer of insurance risks as well. Captive insurance companies may be defined as limited-purpose insurance companies established with the specific objective of financing risks emanating from their parent group or groups. This definition can sometimes be extended to include some of the risks of the parent company's customers. In short, it is an in-house self-insurance vehicle. Captives may take the form of a "pure" entity (which is a 100 percent subsidiary of the self-insured parent company); of a "mutual" captive (which insures the collective risks of members of an industry); and of an "association" captive (which self-insures individual risks of the members of a professional, commercial or industrial association). Captives represent commercial, economic and tax advantages to their sponsors because of the reductions in costs they help create and for the ease of insurance risk management and the flexibility for cash flows they generate. Additionally, they may provide coverage of risks which is neither available nor offered in the traditional insurance market at reasonable prices. The types of risk that a captive can underwrite for their parents include property damage, public and products liability, professional indemnity, employee benefits, employers liability, motor and medical aid expenses. The captive's exposure to such risks may be limited by the use of reinsurance.

Captives are becoming an increasingly important component of the risk management and risk financing strategy of their parent. This can be understood against the following background:
* heavy and increasing premium costs in almost every line of coverage;
* difficulties in insuring certain types of fortuitous risk; * differential coverage standards in various parts of the world;
* rating structures which reflect market trends rather than individual loss experience;
* insufficient credit for deductibles and/or loss control efforts.

There are also companies known as 'insurance consultants'. Like a mortgage broker, these companies are paid a fee by the customer to shop around for the best insurance policy amongst many companies. Similar to an insurance consultant, an 'insurance broker' also shops around for the best insurance policy amongst many companies. However, with insurance brokers, the fee is usually paid in the form of commission from the insurer that is selected rather than directly from the client. Neither insurance consultants nor insurance brokers are insurance companies and no risks are transferred to them in insurance transactions. Third party administrators are companies that perform underwriting and sometimes claims handling services for insurance companies. These companies often have special expertise that the insurance companies do not have. The financial stability and strength of an insurance company should be a major consideration when purchasing an insurance contract. An insurance premium paid currently provides coverage for losses that might arise many years in the future. For that reason, the viability of the insurance carrier is very important. In recent years, a number of insurance companies have become insolvent, leaving their policyholders with no coverage (or coverage only from a government-backed insurance pool or other arrangement with less attractive payouts for losses). A number of independent rating agencies, such as Best's, Fitch, Standard & Poor's, and Moody's Investors Service, provide information and rate the financial viability of insurance companies.

LIST OF US INSURANCE COMPANIES

* American National Insurance Company
* American Automobile Association
* AIG
* Allstate
* American Family Insurance
* American Farmers and Ranchers Mutual (formerly Oklahoma Farmers Union Mututal)
* Amica
* Auto-Owners Insurance
* California Casualty Insurance
* CapitalOne
* Commerce Insurance Group
* COUNTRY Insurance & Financial Services
* Cuna Mutual Group
* Electric Insurance Company
* Esurance
* Expatriate Insurance
* Farm Bureau Insurance
* Farmers Insurance
* Frankenmuth Mutual Insurance Company
* GAINSCO Auto Insurance
* GMAC Insurance
* Geico
* The General
* GuideOne
* Hanover Insurance
* The Hartford
* Hastings Mutual Insurance Company
* Haulers Insurance Company
* Infinity Auto Insurance Company
* Liberty Mutual
* Nationwide Insurance
* National Interstate
* Metropolitan Life Insurance Company
* Mutual of Enumclaw
* OneBeacon Insurance Group
* Pekin Insurance
* Pemco
* Progressive
* Safeco
* Safeway Insurance Group
* Standard Insurance Company
* State Auto Insurance Companies
* Shelter Insurance Companies
* Solid Insurance Group
* State Farm Mutual Automobile Insurance Company
* The St. Paul Travelers Companies, Inc.
* Trustgard Insurance
* Unitrin Direct Auto Insurance
* USAA
* Wawanesa (California)
* Westfield Insurance

LIST OF DISABILITY INSURANCE COMPANIES
* American Family Insurance * Mutual of America * Principal Financial Group * Standard Insurance Company * Unum * Berkshire Life * MetLife

LIST OF EXPATRIATE INSURANCE COMPANIES: * Clements International

LIST OF GENERAL LIABILITY INSURANCE COMPANIES: * American Family Insurance

LIST OF HEALTH INSURANCE COMPANIES: * American National Insurance Company * Aetna * Aflac * American Family Insurance * American Medical Security Life Insurance Company * Anthem * Assurant * Asuris Northwest Health * Blue Cross and Blue Shield Association * Celtic Insurance Co. * CIGNA * community first * Continental General * Fortis * Golden Rule Insurance Company * Group Health Inc. * Group Health Cooperative * Harvard Community Health Plan * HealthMarkets * Health Net of Arizona * Health Net of Oregon * HealthPartners * Health Plan of Nevada * Humana Inc. * Insurance Services of America * Intermountain Health Care * Kaiser Permanente * LifeWise Health Plan of Arizona * LifeWise Health Plan of Oregon * LifeWise Health Plan of Washington * Medica of Minnesota * Medical Mutual * Oxford Health Plans, Inc. * Principal Financial Group * Shelter Insurance Companies * UNICARE * UnitedHealthCare (UnitedHealth recently purchased Pacificare) * Vista Healthplan of South Florida * Wellpoint * College Health IPA * Acordia National

LIST OF LIFE INSURANCE COMPANIES: * AAA d.b.a. Western United * AAA Life Insurance Company * Aetna * AIG American General * Alfa Life Insurance * Allstate Insurance Company * American Family Insurance * American Farmers and Ranchers * American International Group * American National Insurance Company * Aon Corporation, formerly known as Combined Insurance Company of America * Auto-Owners Insurance * AXA * Bankers Life and Casualty Company * Banner Life * The Chesapeake Life Insurance Company * Farm Bureau Insurance * Farmers Insurance * First United American Life Insurance Company * Foresters * Garden State Life Insurance Company * Globe Life And Accident Insurance Company * Guardian Life Insurance Company * Jackson National Life * John Hancock Insurance, now a unit of Manulife Financial * The Hartford * Kansas City Life Insurance Company, Inc. * Lafayette Life Insurance Company * Liberty NationalLife Insurance Company * Mass Mutual Financial Group * MEGA Life and Health Insurance * Metropolitan Life Insurance Company * Minnesota Life Insurance Company * Modern Woodmen of America * Nationwide Insurance * New York Life * Northwestern Mutual Life Insurance Company * Old Mutual * Pacific Life Insurance * Primerica Life Insurance Company * Principal Financial Group * Protective Life Corporation * Prudential Financial * RBC * Sagicor USA, Inc., formerly known as American Founders Life * Shenendoah * The Standard (Also known as Standard Insurance Company) * Shelter Life Insurance Company * State Farm Insurance * Thrivent Financial for Lutherans, product of merger between Lutheran Brotherhood & Aid Association for Lutherans * Travelers Group, now somewhat part of Citigroup, other parts belong to The St. Paul Travelers Companies, Inc. * USAA * West Coast * Western & Southern * Western Reserve Life

LIST OF PET INSURANCE COMPANIES: * ASPCA Pet Health Insurance * Pets Health Plan * Hartville Pet Insurance * PetCare * Global Pet Insurance * Pets Best Pet Insurance * Veterinary Pet Insurance * Embrace Pet Insurance * Petplan USA Pet Insurance * PetFirst Healthcare Pet Insurance * Trupanion Pet Health Insurance

LIST OF PROPERTY AND CASUALTY INSURANCE COMPANIES: * ACE USA * Acuity * Allstate * Alfa Mutual Insurance * American Family Insurance * American National Property and Casualty * American International Group * Assurant Specialty Property * Argonaut Group, Inc. * Auto-Owners Insurance * BISYS Commercial Insurance Services, Inc. * Bliss & Glennon, Inc. * Chubb Corporation * Church Mutual * Cincinnati Financial Corporation * Commerce Insurance Group * CNA Financial Corporation * Farm Bureau Insurance * Farmers Insurance * Fireman's Fund Insurance Company * FM Global * Frankenmuth Mutual Insurance Company * Great American Insurance Company * Hanover Insurance * The Hartford * Hastings Mutual Insurance Company * Harleysville Insurance Company * HomeInsurance.com * Infinity Property & Casualty * Liberty Mutual * Manulife Financial * Markel Corporation * Nationwide Insurance * NLC Insurance Companies * OneBeacon Insurance Group * Penn National Insurance * Philadelphia Insurance * The St. Paul Travelers Companies, Inc. * Safeway Insurance Group * Secura * Sentry Insurance * Shelter Insurance Companies * State Auto Insurance Companies * State Farm Insurance * Southern Farm Bureau * Union Standard Insurance * United Automobile Insurance Company * USAA * Wausau Insurance Companies * West Bend Mutual Insurance Company * Westfield Insurance * Zenith Insurance Company * Zurich Insurance Services * Island Insurance * The Phoenix Group

LIST OF RENTER INSURANCE COMPANIES: * American Family Insurance * American Bankers Insurance Company of Florida * Assurant Specialty Property * Balboa Insurance * State Farm Insurance

LIST OF TRAVEL INSURANCE COMPANIES: * American Family Insurance * ASSIST-CARD

LIST OF WORKERS' COMPENSATION INSURANCE COMPANIES: * ACE * Amerisafe * Liberty Mutual * Missouri Employers Mutual * Penn National Insurance * State Accident Insurance Fund (Oregon) * State Compensation Insurance Fund (California) * Zenith Insurance

ALL ABOUT CALIFORNIA

The State of California is a state located in the western Pacific region of the United States and was the 31st admitted to the Union. It is the most populous state of the United States. It is bordered by Oregon to the north, Nevada to the east, and Arizona to the southeast in the United States, as well as Baja California in Mexico to the south. California's capital city is Sacramento, with the four largest cities being Los Angeles, San Diego, San Jose, and San Francisco. California is known for its diverse climate and geography, as well as ethnically diverse population. The state has 58 counties.

Before becoming a part of the United States, Alta California was colonized by the Spanish Empire in 1769. After Mexican independence in 1821, Alta California remained as part of Mexico until 1846, when it was the independent California Republic for one brief week. Following the conclusion of the Mexican-American war of 1848, California was annexed by the United States and was admitted to the Union as the thirty-first state on September 9, 1850.

California is the third largest state by area in the US; its size gives it a diverse geography, which ranges from sandy and rocky beaches of the Pacific coast, to the rugged snowcapped Sierra Nevada mountains in the east, to desert areas in the southeast and the forests of the northwest. The center portion of the state is dominated by the Central Valley, one of the most productive agricultural areas in the world and the largest of any US state. The Sierra Nevada mountains contain Yosemite Valley, famous for its glacially-carved domes, and Sequoia National Park, home to the giant sequoia trees, the largest living organisms on Earth. The state is home to Mount Whitney, the highest point in the contiguous United States,[2] as well as the second lowest and hottest place in the Western Hemisphere, Death Valley. Many of the trees located in the California White Mountains are the oldest in the world; one Bristlecone pine has an age of 4,700 years.

The California Gold Rush began in 1848, dramatically changing California to accommodate an influx of population and an economic boom. The early 20th century was marked by Los Angeles becoming the center of the entertainment industry, in addition to the growth of a large tourism sector in the state. Along with California's prosperous agricultural industry, other industries include aerospace, petroleum, and computer and information technology. California ranks among the top ten largest economies in the world, and were it a separate country, it would be 34th amongst the most populous countries, just behind Poland, as well as the 6th World's largest economy.

California borders the Pacific Ocean, Oregon, Nevada, Arizona, and the Mexican state of Baja California. With an area of 160,000 mi² (411,000 km²) it is the third largest state in the United States in size, after Alaska and Texas.

California's geography is rich, complex, and varied. In the middle of the state lies the California Central Valley, bounded by the coastal mountain ranges in the west, the Sierra Nevada to the east, the Cascade Range in the north and the Tehachapi Mountains in the south. The Central Valley is California's agricultural heartland and grows approximately one-third of the nation's food.[5] Divided in two by the Sacramento-San Joaquin River Delta, the northern portion, the Sacramento Valley serves as the watershed of the Sacramento River, while the southern portion, the San Joaquin Valley is the watershed for the San Joaquin River; both areas derive its name from the rivers that transit them. With dredging, the Sacramento and the San Joaquin Rivers have remained sufficiently deep that several inland cities are seaports. The Sacramento-San Joaquin Bay Delta serves as a critical water supply hub for the state. Water is routed through an extensive network of canals and pumps out of the delta, that traverse nearly the length of the state, including the Central Valley Project, and the State Water Project. Water from the Sacramento-San Joaquin Bay Delta provides drinking water for nearly 23 million people, almost two-thirds of the state's population, and provides water to farmers on the west side of the San Joaquin Valley. The Channel Islands are located off the southern coast.

The Sierra Nevada (Spanish for "snowy range") include the highest peak in the contiguous forty-eight states, Mount Whitney, at 14,505 ft (4,421 m), Yosemite National Park, and the deep freshwater lake, Lake Tahoe, the largest lake in the state by volume. To the east of the Sierra Nevada are Owens Valley and Mono Lake, an essential migratory bird habitat. In the western part of the state is Clear Lake, the largest freshwater lake by area entirely in California. Though Lake Tahoe is larger, it is divided by the California/Nevada border. The Sierra Nevada falls to Arctic temperatures in winter and has several dozen small glaciers, including Palisade Glacier, the southernmost glacier in the United States.

About 35% of the state's total surface area is covered by forests, and California's diversity of pine species is unmatched by any other state. California contains more forestland than any other state except Alaska. In the south is a large inland salt lake, the Salton Sea. Deserts in California make up about 25% of the total surface area. The south-central desert is called the Mojave; to the northeast of the Mojave lies Death Valley, which contains the lowest, hottest point in North America, Badwater Flat. The distance from the lowest point of Death Valley to the peak of Mount Whitney is less than 200 miles (322 km). Indeed, almost all of southeastern California is arid, hot desert, with routine extreme high temperatures during the summer.

Along the California coast are several major metropolitan areas, including Greater Los Angeles, the San Francisco Bay Area, and San Diego.

By 2007, California's population has reached 37,700,000, making it the most populated state, and is the 13th fastest-growing state. This includes a natural increase since the last census of 1,909,368 people (that is 3,375,297 births minus 1,465,929 deaths) and an increase due to net migration of 774,198 people into the state. Immigration from outside the United States resulted in a net increase of 1,724,790 people, and migration within the country produced a net decrease of 950,592.[10] According to the Sacramento News & Review, California's population will increase to 50 million people by 2025.[11]

California is the second most populous state in the Western Hemisphere, exceeded only by São Paulo State, Brazil. More than 12 percent of US citizens live in California and its population is greater than that of all but 34 countries of the world. California has eight of the top 50 US cities in terms of population. Los Angeles is the nation's second-largest city with a population of 3,849,378 people, followed by San Diego (8th), San Jose (10th), San Francisco (14th), Long Beach (34th), Fresno (36th), Sacramento (37th) and Oakland (44th). Los Angeles County has held the title of most populous county for decades, and is more populous than 42 US states. The center of population of California is at the town of Buttonwillow in Kern County.

As of 2005, The gross state product (GSP) is about $1.62 trillion, the largest in the United States. California is responsible for 13% of the United States gross domestic product (GDP). As of 2005, California's GDP is larger than all but seven countries in the world (and all but eight countries by Purchasing Power Parity).

California is also the home of several significant economic regions, such as Hollywood (entertainment), the California Central Valley (agriculture), the Silicon Valley and Tech Coast (computers and high tech), and wine producing regions, such as the Napa Valley, Sonoma Valley and Southern California's Santa Barbara and Paso Robles areas.

The predominant industry, more than twice as large as the next, is agriculture, (including fruit, vegetables, dairy, and wine). This is followed by aerospace; entertainment, primarily television by dollar volume, although many movies are still made in California; music production and recording studios; light manufacturing, including computer hardware and software; and the mining of borax. Oil drilling has played a significant role in the development of the state.

Per capita personal income was $38,956 as of 2006, ranking 11th in the nation.[24] Per capita income varies widely by geographic region and profession. The Central Valley is the most impoverished, with migrant farm workers making less than minimum wage. Recently, the San Joaquin Valley was characterized as one of the most economically depressed regions in the US, on par with the region of Appalachia.[25]

Many coastal cities include some of the wealthiest per-capita areas in the US The high-technology sectors in Northern California, specifically Silicon Valley, in Santa Clara and San Mateo counties, are currently emerging from economic downturn caused by the dot.com bust, which caused the loss of over 250,000 jobs in Northern California alone. As of spring 2005, economic growth has resumed in California at 4.3%.[26]

California levies a 9.3% maximum variable rate income tax, with 6 tax brackets. It collects about $40 billion per year in income taxes. California's combined state, county and local sales tax rate is from 7.25 to 8.75%.[27] The rate varies throughout the state at the local level. In all, it collects about $28 billion in sales taxes per year. All real property is taxable annually, the tax based on the property's fair market value at the time of purchase. This tax does not increase based on a rise in real property values (see Proposition 13). California collects $33 billion in property taxes per year.

The state of California has 478 incorporated cities and towns, of which 456 are cities and 22 are towns. Under California law, the terms "city" and "town" are explicitly interchangeable; the name of an incorporated municipality in the state can either by "City of (Name)" or "Town of (Name)." Please find the list below:

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

R

S

T

U

V

W

Y

The majority of these cities and towns are within one of five metropolitan areas. Sixty-eight percent of California's population lives in its three largest metropolitan areas, Greater Los Angeles, the San Francisco Bay Area and the Riverside-San Bernardino Area also know as the Inland Empire. Although smaller, the other two large population centers are the San Diego and the Sacramento metro areas. California is home to the largest county in the contiguous United States by area, San Bernardino County.