Know Your Home Office

Founded in 1931 (more than 85 years)

Encompass - sold through independent agencies that serve brand-neutral customers who prefer
personal service and support from an independent agent

Answer Financial - personal lines insurance agency, servers self-directed, brand neutral consumers who
want a choice between insurance carriers

Allstate - sold through Allstate exclusive agencies and serve brand-sensitive customers who prefer local
personal advice and service

Esurance - sold directly to self-directed, brand-sensitive consumers online and through call centers

Square Trade - extended warranty service provider for consumer electronics and appliances
headquartered in San Francisco's SoMa district. Joined in late 2016.
History:
1931 - Allstate is founded by General Robert E. Wood, Chairman of Sears. Roebuck & Co.
1950 - The famed Allstate tagline - "You're in Good Hands" is coined
1952 - Allstate opens its first drive-in claims office
1968 - Allstate partners with the US Government to roll out driving safety legislation (mandatory
seatbelts and airbags)
1976 - Helping Hands program instituted to mobilize Allstate employees to volunteer in their
communities
1996 - Allstate forms a dedicated catastrophe response team post Hurricane Andrew
2005 - Allstate pledges over $6 million to help those affected by Hurricane Katrina
2010 - Allstate commences Good Hands Roadside Assistance pay-per use program
2013 - Allstate receives Flame of Life award from its work towards helping reduce teen car crashes

Allstate Global Leaders:

1. Tom Wilson - Chairman and Chief Executive Officer, The Allstate Corporation
2. Matt Winter, President, The Allstate Corporation
3. Brian Bohaty, Executive Vice President, Allstate Personal Lines Business Transformation
Condominium Insurance
Monday, March 12, 2018
4:11 PM
Condominium associations are usually responsible for insuring common areas like the building's exterior

Condominium owners are typically responsible for covering everything inside their unit

Includes:
 Building Property Protection - theft, vandalism, freezing of plumbing, fire and smoke, water
damage from plumbing, furnace/AC or water heater
 Additional Living Expenses
 Extended Protection Coverage
 Loss Assessment Coverage
 Personal Property Protection - Protects valuables outside and inside the home
 Family Liability Protection - legally obligated to pay for another person's injuries or damage to
another person's property. If your child is playing at friend's house and hit baseball through their
window? You may be responsible for those types of damages, too. If so your condo insurance can
help
 Guest Medical Protection - included in most residential insurance policies and protect guests who
are injured on and around your property. Medical insurance
 Extended Coverage on jewelry, watches and fur
 Scheduled Personal Property
 Identity Theft Restoration
 Increased Coverage on Business Property

Separate Policies:
 Personal Umbrella Policy (PUP) -
 Flood Insurance

Exclusion
 Breakdown in the home (basic maintenance repairs)
 Flood, earthquakes and water backup
Renters Insurance
Monday, March 12, 2018
4:04 PM
Renters insurance protects you and your family in many situations involving your residence and things
you own.

Covers:
 Theft
 Vandalism
 Fire
 Smoke
 Water damage (not flooding)
 Personal Property Coverage

Actual Cash Value (Replacement Cost - Depreciation)

Replacement Cost Coverage (amt to replace the old with new)

Maximum dollar limit - watches, jewelry

Additional Living Expense Coverage - for living expenses when your property is damaged
Family Liability and Guest Medical Protection
Exclusion -

Motorcycle and ORV

Monday, March 12, 2018
3:43 PM
ORV - Off-Road Vehicle

Motorcycles - designed to use on public road, 2-3 wheels, open air driving seating, handle to, side cart if
fitted by manufacturer.

ORV - vehicles self-prepared, not allowed on public, ATV, UTV, Trail Bike, Snow Mobile, Golf cart. Covers:
Theft or damage, liability.

Liability is mandate
Additional coverage - collision and comprehensive

Medical Payments Coverage - cost of medical bills

Liability Coverage - cost of truck damage
Collision Coverage - cost of motorcycle

Auto - line 10 and 19

Homeowners/Renters - line 62, 64, 70, 71, CA CEA
Motorcycle and ORV
Coverage Option 1
 Bodily Injury Liability - medical costs, loss of income, funeral expenses of other people involved in
an accident
 Property Damage Liability - repair or replacement of another motorist's vehicle or property
 Uninsured/Underinsured Motorist
 Motorcycle Medical Payments/Personal Injury Protection - medical costs or funeral expenses if the
insured or anyone on their motorcycle is injured in an accident
 Guest Passenger Liability

Coverage Option 2 (optional covers)

 Collision - pays for damage to a covered bike if it collides with another vehicle or something else
such as a parked vehicle, construction debris, guardrails, or fences. Someone hitting a covered
bike while it is parked is also considered a collision
 Comprehensive - damage for loss to motorcycle caused by something other than a collision such
as theft, fire, vandalism, windstorm or hitting an animal
 Lease Laon Gap - pays difference between the value of a covered motorcycle and the balance of
loan or lease on the bike. For this they need to have comprehensive and collision coverage on the
same policy
 Optional equipment - pays for after-market additions to covered bikes like custom seats, crash
bars, fairings, etc. Maximum limit is $30000
 Towing and Labor costs - basic roadside-assistance expenses
 Rental Reimbursement - up to 30 days

Landlord Insurance
Saturday, March 10, 2018
12:08 AM
Protects the dwelling and income protection loss of rent if the tenant leaves unexpectedly

Other Structures Protection = additional buildings on the landlord's property that are separate from the
rental dwelling such as stand-alone garage
Dwelling Protection - covers rental property the landlord's tenants live in and other structures attached
to it such as a garage, porch or deck
Landlord Liability Protection - financial loss if legally obligated to pay for another person's injuries or
damage to tenant property.

Add On or Optional Coverages

 Rental property under construction - covers dwelling before it is ready for occupancy
 Flood -
 Burglary
 Vandalism
Separate Policy:
 Personal umbrella Policy (PUP)
 Building Code - fixing things up after a covered loss, adding building code coverage to a landlord
policy could help cover the increased cost of enforcing any building codes, ordinances or laws
regulating the construction, reconstruction, maintenance, repair or demolition of a landlord's
dwelling

Allstate Landlords Package Policy covers:

1. Windstorm and Hail
2. Smoke
3. Burglary - to a limited extent, additional vandalism and burglary coverage to better protect
4. Water Damage
5. Fire
6. Falling objects
7. Vandalism

Exclusion
 Breakdowns in rental property - basic maintenance repairs
 Floods, earthquakes and water backup
 Personal property - items owned by tenants (clothing, electronics and other personal possessions)
Damage due to vandalism caused by a tenant is not typically covered. Should opt for additional
vandalism policy

Damage Reimbursement Options:

 1. Actual Cash Value - may be lower than cost to repair or replace a damaged rental dwelling.
Depends on age and condition of the property
2. Building Structure Reimbursement - replacement cost

Claims
Friday, March 9, 2018
10:56 PM
Claim Life Cycle
 Loss occurs
 Insurer is informed about the loss
 Claim is filed
 Insurer validates the claim and set initial Loss Reserve
 Adjuster gathers adequate information
 Claim investigation
 Claim valuation
 Claim Processing and settlement
 Claim payment

Claims keywords
 Claim - demand by insured to recover loss that might be covered by an insurance policy
 Claimant - anyone who submits a claim to insurance company.
o Property - the insured (first party)
o Liability - usually 3rd party that has suffered a loss and seeks to collect for that loss from an
insured
 Claim representative or adjuster to investigate, evaluate and settle claim
 Insurable interest - right of a person or entity to property
 Depreciation - decrease in value due to wear and tear, decay, decline in price, etc.
 Actual Cash Value (ACV) = replacement cost - depreciation (original purchase price of car -
depreciation due to wear and tear - depreciation due to newer cars available)
 Replacement Cost
 Agreed value

First Notice of Loss (FNOL) - client retention and satisfaction. Insurers emphasize FNOL as a key function
to demonstrate a customer centric attitude.

Claim Handling Process (Property)- involves insured and insurer

1. Investigation
a. Detailed inventory of loss
b. Statement from witness to the loss
i. Does the insured have insured interest in property
ii. Is the damaged property covered under the policy
iii. Is the cause of loss covered under the property
iv. Do any additional coverages, endorsements or limitations on coverage apply
2. Valuation
a. Actual Cash Value
 b. Replacement Cost
c. Agreed Value
3. Negotiation and Settlement

Claim Handling Process (Liability) - involves insured, insurer and claimant (third party)
1. Investigation
a. Gather information from the insured, claimant and witnesses
b. Reconstruct the events that lead to the loss
c. Verify the coverage:
i. Does the activity leading to the claim exist within the scope of policy
ii. Does coverage for the loss exists
iii. Determine whether to accept or deny the claim
2. Valuation
a. Medical information
b. Legal liability of damages
i. Special damages - specific out of pocket expenses such as hospital and doctor bills
ii. General damages - losses that do not have a specific economic value, such as pain and
suffering
iii. Punitive Damages - awarded by court to wrong doers to punish them
3. Negotiation and Settlement
a. Out of court settlement
b. Court settlements

Claim Representative Roles - adjuster is responsible for investigate, evaluate and settle claims
 Staff Claim Representatives - insurance company employee who performs some or all the insurers
claim handling process.
o Inside Claim Rep - over telephone or letter
o Outside Claim Rep - assigned locations
 Independent Adjusters - outsider working for fee
 Agents - independent or exclusive with Draft Authority
 Public Adjuster - hired by an INSURED/POLICY HOLDER to represent the insured in handling a claim

Draft Authority - given to an agent by insurer to settle and pay certain types of claims by writing a claim
draft up to a specific limit ($1000- $2000)

Reporting a Claim:
1. Phone
2. Online
3. Allstate Agent
4. Tweet

Allstate National Catastrophe Team (NCT) was formed to meet the varied needs of Allstate customers
affected by catastrophic weather events, wildfires and earthquakes. 700+ full time inside and field
employees.

Allstate Mobile Claim Centers (MCC) - fleet of MCC can be sent to severely damaged areas to service
policyholders affected by catastrophic events. These units are custom designed motor homes equipped
with workspaces, satellite phones, computer jacks, data lines, FAX and copiers.
Auto Insurance
Friday, March 9, 2018
12:00 AM
Auto Insurance Covers: Protects unexpected medical and repair costs due to a car accident, shield from
financial uncertainty of accident-related to lawsuits

Keywords:
 Vehicle Identification Number (VIN) 17 character code
 Department of Motor Vehicles (DMV)
 Vehicle: Year-Make-Model-Trim 2018-Maruti-Baleno-Alpha
 Coverage Limit - maximum dollar amount
 Deductibles

Coverage Overview:
 Bodily Injury of third party
o Emergency aid at the accident
o Medical expenses for bodily injury
o Medical services for sickness or disease
o Compensation for loss of income
o Funeral expenses
o Legal defense fees
 Property Damage of other property
o Structural damage to homes, other structures, etc
o Repair or replacement costs for other stationary objects
o Vehicle repair or replacement costs
 Medical Coverage - insured and insureds passengers
o Doctor visits
o Hospital visits/Stays
o X-rays
o EMT and ambulance fees
o Professional nursing service and care
o Prostheses and Funeral costs
o Surgery
 Uninsured/Underinsured Motorist
 Comprehensive - vandalism, falling objects, window damage etc.
 Collision - replace or repair insured's vehicle from collision accidents involving other vehicles or
objects such as buildings, bridges and trees

Additional Coverages
 Towing and Labor
 Rental Reimbursement
 Sound system coverage

Discounts:
 Safe Drivers discount - clean driving record
 New car discount
 Multi-Policy discount
  Early signing discount
 Good student discount (academic grades and under 25 years of age
 Deductibles Rewards/Vanishing deductible discount
 Passive restraint discount - factory equipped with airbags and motorized seatbelts
 Anti-Lock brakes discount
 Anti-Theft device discount
 Defensive Driver discount - completing voluntary defensive driver course

Allstate Products/Policy Features

 Drivewise - Safe Speeds (avoid over 80 mph), Safe Hours (skip late night trips) and Safe Stops
(avoid hard breaking)
 Milewise - charged based on a rate per day and rate per mile. Operates on pre-pay billing system
with automatic balance reload
 Good Drivers Get Rewards - earn points for safe driving daily and redeem for brand name
merchandise, gift cards and more
 Claims Satisfaction Guarantee
 Your Choice Auto - deductible rewards, safe driving bonus, new car replacement are optional

Home Owners Insurance

Thursday, March 8, 2018
10:53 PM
Homeowners Insurance Keywords:
 Dwelling - single family building + private residence
 Condominium - apartment house
 Dwelling Extension/Other Structure - separate structure, not attached to dwelling (Garage or
Shed)
 Bodily Injury - physical harm to the body due to accident at insured location. Medical expenses,
lost income compensation and legal fees
 Property Damage - physical injury to or destruction of tangible property
 Insured persons - insured + relative + person under age of 21 in insured care
 Residence employee - maintenance staff
 Residence premises - dwelling + other structures and land located to covered property

Types of Perils
 All Perils (now a days called as Named Perils)
 Open Perils - coverage for any reason not specifically excluded
 Named Perils - perils listed in the policy - fire, theft and hail

Common Named Perils:

 Theft
 Fire or lightning
 Explosion
 Wind or Hailstorm
 Civil Commotion (riots)
 Aircraft Accidents
 Other vehicles colliding into your home
  Smoke damage
 Acts of malicious mischief (vandalism)
 Glass damage by storm
 Earthquake, volcano, shockwave damage

Allstate Covered Perils (highlighted in yellow)

 Falling objects
 Freezing of plumbing
 Water damage from plumbing, furnace/AC or water heater

Coverage Overview
 Dwelling Protection (Coverage A)
 Dwelling Extension (Coverage B)
 Personal Property Protection (Coverage C)
 Reimbursed Living Expenses/Loss of Use (Coverage D) (Includes rent, hotel costs, food and more)
 Family Liability Protection (Coverage E) - if someone sues you after being injured on your property
 Guest Medical (Coverage F) - medical expenses including surgery, x-ray and dental work

Additional Coverages:
 Scheduled Personal Property - engagement ring or fine antiques
 Water Backup
 Business Property (sale or business sample equipment)
 Identify Theft Restoration
 Jewelry, Watches and Furs
 Sports Equipment
Green Improvement Reimbursement (replace the damaged items with more energy-efficient

Basics of Insurance
Thursday, March 8, 2018
1:02 AM
Pure risk vs

Risk Management:
1. Avoidance - ship in harbor
2. Reduction - minimize the risk - fire sprinklers, burglar alarm
3. Retention/Acceptance - planned acceptance (reserves fund in case of emergency)
4. Transfer - insurance

Risk Management Process:

1. Identify and Analyze the possible loss
2. Examine the possible loss using risk management techniques
3. Select the most appropriate technique to mitigate the loss
4. Implement the selected technique
5. Monitor and modify the technique as needed

Benefit of Risk Management:

1. Greater piece of mind
 2. Better ability to cope with disaster and financial loss
3. Reduced Expense
4. Save reputation - for professional insurance

Insurance: Transfer system in which one party - transfers the chance of financial loss to another party. A
business which includes various operations to generate sufficient income to pay claims and provide a
reasonable profit to owners. A legal contract between insured and insurer that transfers the
risk/potential cost of loss. Expresses the insurers promise to pay for loss in exchange for a stated
payment

Insurance principles:
1. Utmost good faith
2. Indemnity
3. Insurable interest
4. Proximate cause
5. Subrogation
6. Contribution

Hazard - condition that increases the chance of loss. It is an active ingredient that could create a peril.
Proximity to the ocean - hurricanes

Peril - actual means by which property is damaged or destroyed - file flood or lighting

Loss exposure - condition or situation that presents a possibility of loss occurring. It has three
components
 Asset exposed to loss
 Peril or cause of loss
 Financial consequences of a loss

How do insurance company deals with Risk?

1. Spread the risk - geographical and financial ranges
2. Reduce the risk - define guidelines, offer discounts and increase awareness in community to
reduce risk
3. Law of large number -
4. Chances of loss - probability (expected or actual loss/number of possible losses)

Types of Insurance:
1. Property and Casualty
a. Property insurance protects a person or business with an interest in physical property
against its loss or the loss of its income producing abilities (rent)
b. Homeowners - property itself, personal property, - home, auto and business
c. Casualty - liability insurance protects from legal liability for losses caused by injury to other
people or damage to the property of others
2. Life - financial consequences of human loss exposures. Income earning potential lost through
death, expenses related to insured's death
3. Health - accident and sickness
a. Medical insurance - illness or injury, hospital bills, doctor charges, lab charges and related
expenses
 b. Disability income insurance

Types of Insurance Companies:

1. Private -
a. Standard (Admitted) Insurance (authorized to sell in insurance by State Insurance
Department)
i. Stock Insurer - owned by stockholders and formed as corporation for earning profit
ii. Mutual Insurer - owned by its policyholders and formed as a corporation for providing
insurance to owners
iii. Reciprocal Insurer - group of individuals (subscribers) who insure each other and
managed by an attorney-in-fact
b. Excess and Surplus insurance - provide coverage for substandard, unusual risk or unable to
place in standard market. Insures:
i. New entity or an entity that does not have an adequate loss history
ii. An entity with unique risk characteristics
iii. An entity that has a loss history that does not fit the underwriting requirements of
standard lines
c. Lloyds Associations - members of Lloyd's are investors
d. Reinsurers -
2. Federal - serve the public in a manner that only government can do. Exists because of huge
amount of financial resources needed to provide coverage and to mandatory coverage. Example,
Social Security Program - retirement, medical, survivorship benefits and disability payment OR
National Flood Insurance Program, Federal Crop Insurance program for farmers in flood and
hailstorm area
3. State Insurance Companies - coverage that are necessary to protect the citizens. Examples,
Workers Compensation Insurance Funds, Unemployment Insurance Program, Automobile &
FAIR Plans (the ones who cannot offer private insurance covers bush fires, wind damage from
hurricanes, etc. something that is not in their control)

Insurance Operations:
1. Underwriting
2. Claims
3. Sales and Marketing
a. Accounting
b. Actuarial - calculates credible premium for covering risks, adequacy of reserves and develop
new policies and strategic plans
c. Information Technologies - develops systems to serve, provides information for decision
making, reports for filing statutory and tax returns and maintains databases
d. Investments - keep liquid assets to meet claims
e. Reinsurance - risk diversification and preservation of limited capital
f. Legal - defend legal liabilities, language of insurance contract, defend denial of a claim and
meet compliance obligations
g. Loss Control - identify techniques to reduce loss frequency or severity and enable insurer to
have more money available for investment
h. Admin and Agency Management - overall admin

Insurer Financials
1. Income - premium, investment income and recoveries
 2. Profit
a. New Underwriting Gain/Loss =- Earned Premium - (Underwriting Expenses - Losses Paid)
b. Overall Gain or Loss from Operations = Net Investment Gain or Loss - Net Underwriting Gain
or Loss
3. Expenses - claims, claims adjusting expenses, operational expenses and reinsurance

 Underwriting Capacity - risk retention ability of insurer

 Unearned premium - portion of the written premium for the policy that has not yet occurred
 Incurred Losses - total amount of claims paid and loss reserves associated with a particular time
period including loss adjusting expenses
 Written Premium - premiums on policies put into effect or written during a given period
 Earned Premium
 Expense Ratio - % of premium used to pay all the costs of acquiring, writing and servicing
insurance or reinsurance
 Underwriting Income = Earned Premium - Incurred Losses
 Investment Income = gross amount earned on investments excluding investment expenses
 Loss Ratio = incurred losses/earned premium
 Combined Ration = Loss Ratio + Expenses Ratio (below 100% = profit and greater than 100% = loss)
 Overall Operating Ratio = Combined Ratio - Investment Income Ratio

Insurance Value Chain

1. Producers (Agent represents insurance company whereas Broker represents customer)

a. Exclusive Agent
b. Independent Agent
c. Broker
d. Managing General Agency
2. Actuary
3. Underwriter
4. Insured, Policyholder
5. Claimant - who submits claim (3rd party suffered a loss and seeks to collect from that loss from
insured)
6. Adjuster/Claim Rep - investigate, evaluate and settle claims
7. Loss Accessor - valuate the claim by site inspection

Insurance Industry Authorities and Regulators

1. National Association of Insurance Commissioners (NAIC) - 1871 to coordinate insurance regulation
activities among the various insurance departments
2. Association for Cooperative Operations and Development (ACORD) - non-profit org involved in
publication and maintenance of huge library of standardized forms
3. Insurance Services Office (ISO) - provider of data, underwriting, risk management and
legal/regulatory services to P&C insurers
4. National Council on Compensation Insurance (NCCI) - insurance rating and data collection bureau
specializing in works comp.
Insurance Contract
1. Declarations
a. Name and Address
b. Subject of insurance
c. Policy period
d. Policy limit, premiums and rates
e. List of coverage
f. Definitions
2. Insuring Agreement
a. Describes the obligations of the insurance company
b. Perils covered, nature of coverage, and risks assumed
c. Package policies provide individual insuring agreements for each covered risk
3. Conditions
a. Rights and duties to be performed by insured and insurer
b. Provisions, rules of conduct, duties and obligations required for coverage
4. Exclusions
a. Excluded property, perils, hazards or losses arising from specific causes
 items)
 Building Code - demolition of home, maintenance

Discounts:
 Multiple Policy Discount (Auto and Property bundled)
 Claim Free Discount (No Claims)
 Welcome Discount - new customers for 2 years
 Early Signing Discount - move to Allstate before their previous other insurer policy is expired
 Easy Pay Discount - automatic payment
 Home Buyer discount - for newly constructed homes
 Protective Device Discount - additional protection like anti-theft alarms
 Hail Resistant discount for hail resistant roof
 Smoke free discount