An interesting question arose in Washington the other day.

At issue is whether Congress will again extend the Terrorism Risk Insurance Act to reimburse insurance companies up to $100 billion should terrorists strike again – a thoughtful gesture of support for insurance corporations. The 2002 act was set to expire last December 31, but Congress extended it for two more years.

“If another 9/11 attack occurs and people do not have insurance, there won’t be anyone to pay those losses, other than the federal government,” said Jeffrey D. DeBoer, president of the Real Estate Roundtable, representing the nation’s top 100 privately owned and publicly held real estate ownership developers. Oh my.

More after the jump…

Unless your child has someone depending on him or her financially, the answer is generally no.

A lot of times insurance companies will try to peddle life insurance for children. Some will say it is a smart idea to buy a policy in his or her earlier year because if your child develops a medical condition later in life, insurance would be very costly. But it’s unlikely a healthy child will develop a problem that will last into adulthood.

Take the money you would have spent on life insurance and put it towards something he or she really needs. Be sure to talk to your kids as they get into their twenties and start settling down with a family. This is the time when he or she should be thinking about life insurance.

Insurers have struck back against new California regulations that will change the way companies set auto policy premiums. California’s Insurance Commissioner John Garamendi released new guidelines in May that requires insurers to calculate rates primarily on their driving records rather than where they live. This issue took on cultural and racial overtones as the neighborhoods associated with higher rates are almost invariably low income and populated with minorities.

The insurance industry took action this week in two lawsuits filed in Sacramento Superior Court claiming that the rules will force them to charge customers more for car insurance. “We felt the right thing to do was to file a lawsuit and ask a judge to kind of call timeout and make a judgment over whether or not these regulations are valid,” quoth Sam Sorich, president of the Association of California Insurance Companies which represents companies that have about 50 percent of the policies in the state.

Garamendi ran in the June primary for Lieutenant Governor, and the insurance companies also took time out to spend about two million dollars in the last two weeks of the race on slam campaign against him in the mail and over the airwaves. Garamendi won the primary handily. Perhaps the industry will have better luck convincing a Superior Court Judge that the State’s Insurance Commissioner is not qualified to regulate insurance policy than they did convincing the electorate that he was a poor choice for Lieutenant Governor. Perhaps not.

Good question! Most people think that they would automatically qualify for the best non-smoker rates if they were otherwise in perfect health. Wrong! At most companies if you quick smoking 1 year ago, you will be classified as a non-smoker, but you will also most likely only qualify at standard rates. Remember there is preferred plus, preferred and standard. Preferred plus being the healthiest of people.

So when do you start to see a good break in rates? At most companies at least 2 years after you have quit smoking. And 5 years to really get the best rates. Why? Because after 5 years you have less of a chance to get back into the habit. However, there are some companies that are more lenient than others with their guidelines.

So what’s a consumer to do? Shop around! You’ve heard this from me several times. Use a broker that deals with multiple carriers and knows the ins and outs of the carriers. They can help you find the best rates available for you.

The term ‘consumer driven’ health insurance is very much in vogue these days, and what it means is that the consumer is picking up more of the cost of health care, the employer proportionately less. This is usually accomplished by providing the consumer with a personal ‘health account’ which provides you with an annual amount of cash to be allocated for health care as you wish. At the same time, copays are going up and exclusions are rising as well.

Nevertheless, you will have choices. Nationally, about two thirds of workers will have a choice of at least two plans; 43 percent will have three or more. Premiums are only going up, so it’s important with each plan to understand what you will and won’t have to pay –especially the “exclusions,” which sets out services that aren’t covered. Look these specifics over thoroughly:

Deductibles and copayments. Comparing these is obvious, but keep in mind that there’s no maximum with regular managed-care plans on out-of-pocket copayments.

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If you haven’t reviewed your life insurance policy recently, you may be paying too much. Life insurance rates have come down dramatically in the last 10 years and even if you bought a policy within the past few years you may still be able to save money…even though your older!

A good rule of thumb is to review your policy every 2-3 years or when a “life event” occurs. A life event is an event such as a birth of a child. These evens should trigger you to re-examine your life insurance needs. For more information on life insurance for every stage, check out this post.

When re-examining your needs, you may want to use a life insurance needs calculator to see how changes in your life might impact your life insurance needs. Once you have a general sense of your needs, you should contact an agent or broker to get a more throrough analysis of your needs.

About 40 percent of American households have at least one dog, according to The Humane Society of the United States. Many of those dog owners have homeowners insurance as well. The Insurance Information Institute informs us that dog liability claims have now topped more than $1 billion a year – and some insurance companies are refusing to write coverage for owners of certain breeds.

The list of top breeds involved in both bite injuries and fatalities changes from year to year and from one area of the country to another. Although genetics do play some part in determining whether a dog will bite, factors such as whether the dog is spayed or neutered, properly socialized, supervised and safely confined play significantly greater roles. Responsible dog ownership the key to dog bite prevention regardless of breed, but certain breeds to raise the odds of an occurrence substantially.

Some insurers have lists of breeds and crossbreeds they will not insure. The usual suspects are: pit bulls, rottweilers, wolf hybrids, huskies, Dalmatians, Airedales, and Great Danes. Other insurers consider such breeds on a case-by-case basis. In some states, it’s illegal for insurance companies to deny coverage simply because a home has a dog of a particular breed.

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Most insurance companies offer the option to pay your premiums annually, semi-annually, quarterly or monthly (through an automatic bank draft). These various fractional modes of payment provide choice to the consumer–something that consumers should treasure, right? Not always.

If you choose anything other than the annual mode, most insurers charge additional amounts to cover the additional administrative costs of handling premium receipts more than once a year. In addition, these other methods of payment also mean that the insurer doesn’t get their money up front, and the time value of money also has its costs. It all sounds fair and reasonable. So what’s the problem?

First, insurers generally do not disclose the effective APR (annual percentage rate) associated with each of their ‘fractional’ premium modes. As a result, it’s downright difficult for consumers to determine whether the convenience of breaking up their annual cost into multiple payments using fractional premiums is reasonable–relative to paying annually.

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Every homeowner’s insurance policy has coverage for damage, theft or vandalism of your personal policy. It is also true that every standard home owner’s insurance policy has woefully inadequate coverage for jewelry that has substantial value.

There are special limits of liability for certain items, meaning that the insurer will not pay more than the amount specified in the policy. One of those limits is for the theft of jewelry. To keep coverage affordable because jewelry can be easily stolen, the standard policy has a relatively low limit of liability for theft: $1,500.

If you own valuable jewelry, there are ways that you can increase coverage. You can raise the limit of liability overall, through a rider on the homeowner’s policy. Raising the limit of liability is the cheapest option; however, there may be a limit on the amount you can claim for the loss of any individual piece, say $2,000, when the overall limit is $5,000. If this level of coverage remains inadequate, the other standard option is insuring each piece – itemized on a schedule that is included in a floater policy, in essence a separate policy that provides adequate coverage for your valuables.

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People ask me this question all the time, “Life insurance rates are so low, so how do life insurance companies make money?” Let’s start by looking at how life insurance is priced.

Remember, when insurers underwrite policies they look at your driving records, family history, heath, height and weight, age, etc. They give the best prices called “preferred plus rate” to only the healthiest of people. So they know the risk of having to pay out is very slim. If you do not meet the criteria for the healthiest rate, then you will be charged more according to the risk. If you’re considered uninsurable, then the risk to insure you is too high in the eyes of the carrier. In other words if they insure you, then they really don’t think you’re going to die and they’re willing to take the chance.

In addition, they know that most policies will lapse within the first 5 years. That means that they collected 5 years of premium and now there is no longer a risk of death because the policy is no longer in force. It’s really that simple.