|"Don't Let these Insurance Companies RIP You OFF Any More!"|
The Surety Bond Domino Effect
I have written many articles about the hard surety bond market. To my surprise many want to know more details as to how we got to where we are at. Like all industries the surety bond industry is heavily influenced by the economy. We can all remember the strength of the US economy at the end of the millennium; it seemed that businesses were flourishing with prosperity everywhere you turned. By the end of 2000 the economy began to slow down. The success of any contractor is directly effected by changes in the economy, thus more contractor's businesses began to fail. With the failing of the contractor businesses came an abundance of claims. This is not to say that the soft economy was the only cause for the increase in claims, but it was the start of the domino effect.
What actions set up the rest of the dominos to trigger the current hard market? In an attempt to generate more premium bonding companies used very loose underwriting practices. These loose underwriting guidelines allowed for contractors to be approved for bonds they should not qualify for. The sureties were not only writing bonds for contractors that do not qualify, they also wrote bonds that should not be written even for the best contractors. Maintenance bonds exceeding 5 years were a lot more common, these days anything over 3 years is pretty much unheard of. To put it simply the sureties grew too hungry for business and wrote what they should not have and got burnt because of it.
The bonding companies set up the dominos and the softening economy started the chain reaction of them falling. What was the outcome for the bonding companies? In the past, the surety bond industry will see losses around 25%. In 2001 the industry saw an staggering 82% loss for the year. In 2002 the industry produced $3.7 billion in premium, however the industry as a whole showed a 70% loss. The 2002 Insurance Expense Exhibit reported the industry losing more than $2.5 billion from 2000-2002. The end result of the losses was many bonding companies getting downgraded to junk status by AM Best other simply had to close their doors permanently. The rest of the sureties took note and quickly changed their ways. Underwriters have returned to more traditional underwriting guidelines and go through accounts with a fine tooth comb. The entire industry has become much more cautious about how to use capital. Contractors has since seen their bond lines reduced for single contracts and their aggregate capacity.
If you are a contractor and are discouraged with your current bonding limitations, keep in mind you are not the only one. Many contractors compare what they have today to what they had a couple years back and go looking for a new agency only to find similar terms elsewhere. Always keep in mind that every cloud has a silver lining. Bond lines have been reduced, however the value of a bond has improved due to the conservative underwriting practices in place; contractors can no longer obtain the bonding required to participate on contracts they are not financially qualified for (obviously this is only a plus for contractors that are financially healthy).
It is more important than ever for contractors to have an agent that truly understands suretyship. A surety bond agent should be able to give you sound advice to improve your financial situation and help your business grow. A good agent does not just write bonds, they consult contractors to make changes so the bonding companies have less of a risk, thus increasing bond capacity and lowering premium rates. A contractor must be comfortable that their agent is knowledgeable enough to help them make the right decisions, it is absolutely necessary in today's surety bond market.
Protecting Your Expatriate Family
If you and your family relocate overseas, one of your first priorities from a financial planning point of view may very well be establishing health care.
Insurance Glossary of Terms
Assured - Those insured under the terms of an insurance policy.
Travel Health Insurance - Understand the Benefits
If you're planning an overseas trip, you need travel health insurance. Every year, nearly 1 million Americans require emergency medical treatment while overseas. Traditional health insurance plans limit the expenses and amounts that they will pay outside the country, and necessary care may be delayed while arrangements for payment are made.
Why Dont Women Have Life Insurance?
Traditionally, life insurance companies solicited men as the main breadwinners in a family to ensure, that they had adequate life insurance coverage.
Term Life Insurance - Buy Term and Invest the Difference!
The phrase "BUY TERM AND INVEST THE DIFFERENCE" evolves around the concept of term life policy which is a basic protection policy and the endowment/ whole life policy which has protection and investment/saving features. To put it simply, the phrase means that instead of taking up the endowment/whole life policy, an individual should buy a term policy for protection and the difference between the premiums of the two policies is to be invested by the individual himself to earn some dividend on the investment.
What Should I Do About Billing Problems When Using HSA Money?
If you run into a billing problem or misunderstanding with a hospital or doctor's office for which you're planning to use money from your Health Savings Account (HSA), you could be in trouble.
Why Boat Insurance Doesnt Help A Lousy Sailor
For thousands of years men have sailed the seas. From the earliest trips by the discoverers and settlers of the Americas, Australia and the Pacific Islands, through Odysseus' voyage to Troy and beyond to the time of Swashbucklers in the Caribbean mankind has made exciting voyages to the far corners of the world.
Terrorism: Acts of Terrorism: When Will Insurance Respond?
Insurance policies provide financial protection in a broad range of circumstances but each type of product specifies certain situations where the policy will not respond. These vary from one type of product to another, and can vary in detail between one insurer and another. It is important to check the details of your individual policy. However the questions and answers below seek to set out the usual approach for each of the main types of insurance.If you have specific queries on your policy you should approach your insurer or broker.
Health Insurance 101 for Individuals and Families
The changing healthcare and health insurance landscape in the United States has resulted in more individuals and families purchasing health insurance coverage on their own. Rather than touch on the number of reasons why this is the case, I would like to provide individuals and families finding themselves in this position with ten basic ideas to assist them with getting the best health insurance policy for their specific situation. Below is a combination of ten questions and suggestions that will provide the tools necessary to get a medical insurance policy that will best work for you and your family.
Insurance For All Your Gadgets
Personalisation, Digitalisation, Mobilisation, these 3 words represent your life today. Here in the 21st century our lives have become more and more reliant on mobile items. As we go through our days, keeping a mental log of everything we have and where we have it becomes more and more difficult. It is inevitable that some things get lost. In fact as stated in a recent research "Around 62,000 mobile phones were left in London taxis during the last six months. That's an average three phones per taxi, according to a survey of licensed London cabbies by the Taxi Newspaper and Pointsec Mobile Technologies. Absent minded and drunken travellers also forgot 4,000 laptops and 5,000 PDA's when exiting cabs".
What is Travel Insurance?
Travel Insurance is designed to protect your health, belongings, and your financial investment in your trip. It provides peace of mind for you and your family while on your vacation.
High Deductible Health Insurance Plans For Individuals and Families
Do you pay more attention to your car than your body? You change your oil every 3000 to 4000 miles. You have your tires rotated every other oil change. Your air filter and brake pads are changed at the appropriate intervals.
Check Out The Variety of Auto Insurance Texas Style
They say everything is bigger and better in Texas, and this is true when you look at the wide variety of different auto insurance companies offering auto insurance. Texas drivers have to consider four main options when they choose an auto insurance company. These include:
Types of Homeowner Insurance
There are 6 different types of homeowners insurance in general that are consistently utilized. Of these HO-3 is the most usual policy then it is followed by HO-4 and HO-6. Others less used, but still important, are HO-1, HO-2 and HO-5. Everyone is described below:
Photography Insurance-Insurance for the Photographer
Part and parcel of establishing your own photographic business is establishing your own legal entity. This means establishing yourself for taxes. This is broader than the scope of this article, because every country has it's own business rules. Also every state in federal countries has different legal rules. The first thing you need to do is register your business according to your local rules, if you are unsure of this either take legal advice or go and see your local town hall and ask them about local legal requirements.
Why Does Health Insurance Cost So Much?
Why does health insurance cost so much? Year after year, many of the articles that appear in print detail the specific factors driving the cost of healthcare.
Business Insurance; Information you will need
When you start a small business you will need to have insurance. You would be wise to shop around. Triple A rated carriers like Farmers Insurance, State Farm and All State are definitely places to get quotes from, but also be sure to check out your local independent insurance agents as well. When shopping for a quote there is some things you will need to know. For instance you SIC code and business category. If you are involved in more than one, it pays to look at both SIC codes to see which category is preferred by the agents underwriters. Some SIC codes many insurance companies will not even touch. For instance Car Washes, Amusement Parks, Aviation Businesses and security companies. But there are insurance companies who specialize in these areas. Perhaps you might wish to thumb through a recent trade journal to see which insurance companies are actively seeking clients in those categories. You will be glad you did; also do not forget to check online as well.
Vehicle Insurance Online is a Convenient Way to Get Insurance Cheap
Online comparison shopping is a convenient way to get cheap insurance for your auto. For the last few years, insurance companies have been dropping their premiums annually because of lower accident rates and increased competition. So, with a few clicks of the mouse, you can save hundreds of dollars a year on your vehicle insurance.
Motor Vehicle Accident Insurance Claim Guide
This is a FREE Insurance Claim Guide
Whole Life Insurance - Whole Life Insurance Information
The original purpose of life insurance was to provide for your family in the case of your death. While this purpose is still the most potent reason to take out a life insurance policy, there are a number of other ways that life insurance can be used to benefit you and your family, even while you are still alive.
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