Insurance Online

Do you remember about the post “My correspondence with Underwriters”? Today I would like to tell you about one more type of letters in insurance - Sales letters.

Sales letters are written and often sent out with a catalogue which has not been asked for.

These letters require a highly specialized style of writing. For this reason, most large companies employ professional writers - advertising and public relations specialists - who handle all the sales and publicity writing. They know how to appeal to people’s buying motives and find potential buyers. They must also know how to acquire mailing lists (such sources as a company’s own files, telephone books, and directories are good starts) and how to select the right audience from those lists.

Nevertheless, and especially in smaller companies, there are times when almost any business person will have to compose a sales letter.

I present you me own example of a sales letter:

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Sugden & Able Ltd.
45 Flower Street
London,
United Kingdom

Your ref: BF
Our ref: SA

22 March 2006
Brown Fox Ltd.
32 Tate Street
Kern,
Sweden

Dear Sirs,

We would like to inform you that underwriters offer 2 types of insurance for your requirements:

1) Floating policy. This policy will cover all shipments with a maximum amount, and can be renewed when necessary.

2) Open cover. This type of insurance based on conditions that the shipper informs the underwriter when the shipment is made and renews the policy after shipment.

We look forward to hearing from you.
Yours faithfully,

A. Able
the Director of Sugden & Able Ltd.

Enc. 2
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POINTS AND WORDS TO REMEMBER

Sales letters should demonstrate the writer’s knowledge of both product and customer and illustrate the advertising principles known as AIDA:

1. Attention: The letter opens with a gimmick to grab the reader’s attention and create the desire to know more.

2. Interest: The letter provides information and plays up certain features of the product to build the reader’s interest.

3. Desire: The sales pitch appeals to one or more personal needs (such as prestige, status, comfort, safety, or money) to stimulate the reader’s desire.

4. Action: The letter makes it easy for the reader to buy end encourages immediate action.

<:3 )~~~~~~
Yours sincerely,
AlexSandra

And now I will tell you about the third kind of dental insurance in more detail…

III. PPO (Professional Provider Organization)

This type of insurance takes a place between the compensatory kind (Indemnity insurance) and HMO (for more information you can explore the post Dental Indemnity Insurance). Group of the dentists, which refers to so called “preferred providers”, render the services with big discounts, allowing you to save on the treatment while you remain in their network of scope. However, as against HMO plan, you can receive some discounts, even if you are out from this network. Many dentists do not encourage this PPO plan since the low payment for the work limits their ability to provide services of the high quality.

Features of the plan:
1) a monthly insurance payment;
2) an annual limit of the amount of compensation;
3) you can choose a dentist from the offered list only, otherwise - a high nonrecoverable pledge;
4) average expenses $20 a month;
5) the companies selling this plan, submit to State Department of insurance.

<:3 )~~~~~~
Yours sincerely,
AlexSandra

So, let’s consider the second kind of dental insurance in more detail…

II. Direct reimbursement

A new form of services payment which has appeared as alternative of HMO and the traditional kind of insurance (for more information you can explore the post Dental Indemnity Insurance). It is the self-financed plan according to which the employer pays the certain percent from the sum for dental treatment of the worker from the special fund. The insurance company (”middleman”) is actually switched off from the process, that is why the administrative expenses were decreased. The worker visits a dentist, pays for his/her work and receives the receipt for the given services. Then he brings this receipt to the employer, and receives compensation of his expenses from the dental fund of the company. The employer chooses the percent of payments which he can compensate to you, and the annual maximum of the plan.

Features of the plan:
1) there is no preliminary payment, lists, exceptions, monitoring of procedures performance, etc.;
2) low payments (on the average, 30%-75 % is lower, than in other plans);
3) a choice of a dentist at own will;
4) fast assignment of your reception.

There are two kinds of payment: compensatory and payment for the purpose. When the worker choose compensatory payment he settle the account, the check will be sent in the Department Direct Reimbursement (DDR) - the compensatory check will be sent to the worker back - the worker pays services of the dentist or uses indemnification to compensate the previous check.

When we speak about the payment for the purpose we mean that the worker settle the account - the check will be sent in DDR - the compensatory check will be sent to the dentist - the worker pays residual balance only.

The majority of employers choose the compensatory kind of payment. The advantages of this desidion are the following: the average expenses are lower, than in the second kind since only the worker is responsible for the settling the account.

<:3 )~~~~~~
Yours sincerely,
AlexSandra

Let’s consider each kind of dental insurance in more detail…

I would like to tell you about the following plans:
I. Dental Indemnity insurance
II. Direct reimbursement
III. PPO (Professional Provider Organization)
IV. HMO (Health Maintenance Organization)
V. Dental discount plans

So, the first kind of dental insurance….

I. Dental Indemnity insurance

It is the traditional plan of insurance in which you pay for service (fee-for-service). The insurance company pays the certain percent for so-called UCR - usual, customary and reasonable (service). These payments are based on the average prices. There is commonly encountered situation: the insurance covers 100 % of your expenses for preventive maintenance of dental diseases (medical examination, cleaning of teeth and X-ray photography), 80 % of expenses for the basic treatment (simple tooth stopping, extraction of a tooth), and 50 % of expenses for the specialized treatment (root canal treatment, crown of tooth, bridges, other kinds of prosthetics).

Thus, the patient pays nothing for preventive maintenance; 20 % from the sum for the basic treatment pay, and pays 50 % of the specialized treatment. Usually there is a limit of the sum which the insurance company is ready to pay a year.

For example: from January, 1 till December, 31 the insurance company has established a limit of the sum - $1000. If the patient exceeds this figure, let it be $1200. In this case these $200 he pays from his own pocket since under the contract the insurance is not distributed to the sums above $1000. Therefore, it will be quite reasonable to make some treatment in one calendar year, and the rest - to transfer to the next.

Features of the plan:

1) High, not compensated, initial investments ($20-50). Usually well developed plans do not apply not compensated payments to preventive services;
2) Annual limit of the amount of compensation;
3) An opportunity to choice the dentist at own will;
4) Average expenses $19-50 a month;
5) The companies selling this plan, submit to State Department of insurance.

<:3 )~~~~~~
Yours sincerely,
AlexSandra

Do I actually need the dental insurance?

Many of us asked this question. While you are young and healthy, have no problems with your teeth, and visit the doctor 2 times a year for preventive maintenance you will refuse dental insurance since cost of the insurance can be much greater cost of your treatment. However, if you not absolutely healthy person and have not the most pleasant impressions from visiting dentists, certainly, it will be favorable to you to get such insurance. Even despite of water fluorination in the USA, annually millions of Americans require this or that dental health treatment. There is a set of the factors influencing health of our teeth: the hygiene, consumed food, stress, personal habits, etc. Even in perfect conditions, sooner or later, the majority of people would face expenses of dental treatment.

There are two basic kinds of dental insurance which allow patients:
A) To choose the dentist at own will (open panel);
B) To choose the dentist from the given list (closed panel).

To the first group includes:
1) dental indemnity insurance;
2) direct reimbursement.

The second group includes:
1) the professional organization giving services (PPO - professional provider organization), and its “version” EPO (Exclusive Provider Organization);
2) the organization of public health services (HMO - health maintenance organization);
3) the insurance based on the reduced cost of treatment (dental discount plans).

<:3 )~~~~~~
Yours sincerely,
AlexSandra

Today I would like to continue my previous post and tell you about different types of coverage; it means that we pass to the second question from the list:

Coverage: which of them and how much

We do not have the task to pass on all available coverings in the world of car insurance. There are a lot of sources in the network, books where you can find information, and, not in the last instance, your insurance agents. On the contrary, we shall try to see a problem as a whole, not dividing it into details.

Liability Coverage

We speak about this type of covering when somebody brings an action against us or somebody is going to do it, irrespective of validity of claims and irrespective of result of the court examination. 95 % cases do not reach the court, as the parties reach settlement. The insurance company in this case pays (instead of us) not only damage which we have brought to health or the property of other people, it also pays litigation cost. Sometimes it does it without any payment of indemnification to fight tooth and nail against completely absurd claims and spends thousands of dollars on good lawyers.

The person cannot be judged for the sum, bigger, than all his assets (bank accounts are included), equity in the real estate, shares, and, that is very important for beginners - garnishment of wages (deduction from wages during 10 years forward from all members of family at the rate of 25 %). That means that young family without good private means have not so many assets. But, the husband and the wife can earn together, for example, 160 thousand one year. Therefore it is possible to keep 400 thousand dollars within 10 years back.

The important question:

In what situation the court will take away everything from the initiator of traffic accident?

The answer:

The court will take away everything from the initiator of traffic accident in case of death(s), or in case of physical inability of another person.

The amount of damage also depends on the solvency of the victim. The moral damage\spiritual injury (pain and suffering) of a serious lawyer or a doctor costs much more than the same one of a worker.

It is obvious, that we as drivers cannot supervise how many car we shall damage in case of traffic accident, neither their price, nor quantity of drivers and passengers, neither gravity of traumas received by them, nor cost of their subsequent medical treatment. Therefore, we proceed from the worst for definition of the amount of our insurance responsibility.

We should calculate how much it is possible to take away from us if to take away everything, including 25 % from the salary during the next 10 years? So, it is necessary to insure our liability for this sum in the part which is responsible for damage to health of people (Bodily Injury - first two components of our fraction - for more information see the previous post CAR INSURANCE IN THE USA: WHY IT IS NECESSARY TO BE INSURED).

But soon $500,000 of the maximal coverage will be not enough. Then we need an additional coverage in form of Umbrella Insurance. The need for insurance coverage varies from time to time. This implies very simple and important …

The Conclusion:

Insurance coverage should be reconsidered periodically, in accordance with growth of the potential responsibility.

Uninsured Motorist Bodily Injury (UMBI) - covers our moral damage and physical injuries in a case, when we have suffered from the not insured (or insufficiently insured) driver. That is, if the initiator of traffic accident has no enough Liability Coverage. Usually we take this covering in the same size as in Liability Coverage and not less. A principle is the following - it is necessary to insure ourselves not worse, than we insure against other people.

Uninsured Motorist Property Damage (UMPD) - covers damage to our automobile in similar circumstances that is if we have suffered from the not insured (or insufficiently insured) driver.

If WE have damaged our car the damage will be covered as Collision (collision with machine, the house, a border etc.) or as Comprehensive (the rest cases - collision with an animal, theft, vandalism, hailstorm, flooding and so forth). You can buy such an insurance with different deductible (the sum paid to you before the insurance company starts to pay).

Choosing the large amount of deductible the person saves on cost of the insurance, but loses in case of accident. The person who drives without accidents for a long time (some years) it will be reasonable to think about high deductible on Collision, for example, $1,000. Comprehensive which costs ridiculously a little, and it is possible to take $250 as there is nothing to save.

Medical Coverage

Medical Coverage is rather curious covering . Some thousands of dollars, usually 2-5 thousand, that were bought in this coverage, are spent without examination (in other words you may be guilty or not). In the case of expensive medical treatment the necessary sum will be charged from the Liability of the guilty person.

To be continued…

<:3 )~~~~~~
Yours sincerely,
AlexSandra

Do you remember about new interesting topic “CAR INSURANCE IN THE USA”? In my post about it I told that we will be interested in PAINFUL POINTS and I also listed the most important questions. So, today I would like to answer the first one: Why it is necessary to be insured.

First of all it’s important to know that that you must insure your car without fail in most states. Otherwise your friend with 4 wheels will not be registered!

The second thing - insurance is adjusted legislatively at states level, not at federal one. This implies very simple and important …

Conclusion №1

You can trust the information received from the experts in insurance from your state only. Any information from other states can be absolutely inapplicable outside these states.

As I have said almost in all states (there are exceptions) car insurance is obligatory regarding LIABILITY (civil liability). The size of required covering varies from state to state.

For example, in California it makes up to $15,000 bodily injury for one victim and up to $30,000 for more than one victim. Moreover, there is the responsibility for damage of other’s property - $5,000. I’ve made all these accounts for one accident only. It means that aggregate payment will be between 20,000$ and 35,000$.

By the way I’d like to mention that experts in insurance usually use fractional record for amount of covering. Record 15/30/5 corresponds to the covering that has each driver in California according to the law of this state.

Driving without the insurance is a serious crime and is punished strictly!

A piece of advice:

You shouldn’t communicate with people who drive without the insurance or argue that it is possible, or they say why this kind of a crime is “nothing terrible”. These people on a way to the big troubles - it is not necessary to keep them the company.

According to the police statistics in California 28-30 % drivers have no any insurance in general. I can add to this still the same percent of people having minimal covering and you will understand, that it will be very difficult to receive money from others (your will have few chances). This implies very simple and important …

Conclusion №2

It is necessary to have your own car insurance policy!

Moreover, there are two types of the states:

- At Fault (for example, California - the culprit pays the insurance to the victim)

- No Fault (for example, Arizona -your damage is compensated with your insurance irrespective of fault)

The conclusion №3

You should known about the system in state, where you live or are going to live.

If the person is very poor and is going to remain poor practically to the end of his days, in this case driving without the insurance is nothing for him. It must be confessed. In all other cases the sum of insurance should protect the driver from requisitioning of his property and incomes (including the future incomes).

Besides arguing about the whys and wherefores of car insurance, we should know, that are no such occupations in our life which is more dangerous then driving (if you are not a policeman, fireman or something like that). Therefore, it is necessary to answer the following question: “Shall I risk life and health of other people to save ten or more dollars a month?”

<:3 )~~~~~~
Yours sincerely,
AlexSandra

So, and there are the descriptions of these INCOTERMS (these descriptions provide the most important information about each term, they are not fun definitions):

Group E (Departure)

EXW    - Ex Works - means that the seller’s only responsibility is to make the goods available at his or her premises. The buyer bears the full cost and risk involved in transporting the goods to their destination.
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Group F (Main carriage paid by the buyer)

1) FCA - Free Carrier (named place) - mean that the seller fulfils his or her obligation when the goods (cleared for export) are handed over to the carrier named by the purchaser. In the case of rail or road transport, delivery is completed when the goods have been loaded. For sea transport, delivery is complete when the seller has taken the goods to the transport terminal.

2) FAS - Free Alongside Ship (named port of shipment) - means that the seller’s obligations are fulfilled when the goods have been placed alongside the ship on the quay. The buyer is liable for all costs and risks of damage from that moment. Unlike Free 0n Board this term requires the buyer to clear the goods for export. The buyer is responsible for obtaining any export or import license.

3) FOB - Free On Board (named port of shipment). The goods are loaded on board by the seller at a port named in the contract. The risk of loss or damage passes to the buyer when the goods pass the ship’s rail. The buyer is responsible for the transport costs from this port to the destination. However, it is the seller who has to obtain any export license or documentation necessary for the goods to leave the country. In the case of roll-on/roll-off or container traffic, when the ship’s rail is irrelevant, it is better to use the FCA term.
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Group C (Main carriage paid by the seller)

1) CFR - Cost and Freight - this term can only be used for sea and inland waterway transport. The seller must pay for the transport used to bring the goods to the named port but is not liable for risks from the moment the goods pass the ship’s rail in the port of shipment. In the case of roll-on/roll-off or container traffic, when the ship’s rail is irrelevant, it’s better to use the CPT term.

2) CIF - Cost, Insurance and Freight - is the same as CFR except that the seller has to arrange and pay for marine insurance for any risks during transit to the named port of destination.
In the case of roll-on/roll-off or container traffic, when the ship’s rail is irrelevant, it is better to use the CIP terms.

3) CPT - Carriage Paid To - (named place of destination) means that the seller pays for transport to the destination. The risks and costs are then transferred to the buyer when the goods have been given to the carrier. This term is suitable for any kind of transport including multimodal transport.

4) CIP - Carriage and Insurance Paid To (named place of destination) - is the same as CPT but the seller also pays for insurance during carriage.
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Group D (Arrival)

1) DAF - Delivered at Frontier    - means that the seller’s obligations are fulfilled when the goods have arrived at the frontier. It is recommended that contracts should specify which frontier, e.g. “Delivered at Franco-Italian frontier (Modane)”. This term is most often used for rail or road transport but can apply to any mode.

2) DES - Delivered Ex Ship (named port of destination) - can only be used for sea or inland waterway transport. The seller makes the goods (uncleared for importation) available to the buyer on board ship and bears all the costs and risks involved in bringing the goods to the port of destination.

3) DEQ - Delivered Ex Quay - is the same as DES but the seller is also responsible for unloading the cleared goods onto the quay or wharf. The contract should make it clear whether or not the seller pays duty, VAT, etc.

4) DDU - Delivered Duty Unpaid - means that the seller’s obligations cease when the goods are made available to the buyer at a named place in the country of destination. The seller pays for customs formalities but not for customs duty. The term can be used for any mode of transport.

5) The term DDP - Delivered Duty Paid - represents the seller’s maximum obligation. All expenses are incurred by the seller until they arrive at destination. The term may be used for any mode of transport but is unsuitable if the seller cannot obtain an import license.

<:3  )~~~~~~
Yours sincerely,
AlexSandra

INCOTERMS are set of international rules published by the International Chamber of Commerce, Paris, for the interpretation of the most commonly used terms in foreign trade.
The aim is to avoid disagreements resulting from differences in trading practices in various countries by describing clearly the duties of the seller and the buyer. INCOTERMS also regulate responsibility in different insured accidents - that is the most important thing for us!

The terms are grouped in four separate categories:

— E term — the seller makes the goods available to the buyer at the seller’s premises and that is all.

— F terms — the seller has to deliver the goods to a carrier appointed by the buyer.

— C terms — the seller pays for carriage, but does not accept liability for loss or damage after shipment and dispatch.

— D terms — the seller bears all costs and risks in shipping goods to the country of destination.

And now I would like to tell you about these groups in more details.

Group E (Departure)

EXW    - Ex Works
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Group F (Main carriage paid by the buyer)

FCA - Free Carrier
FAS - Free Alongside Ship
FOB - Free On Board
FOR - Free On Rail
FOT - Free On Truck
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Group C (Main carriage paid by the seller)

CFR - Cost and Freight
CIF - Cost, Insurance and Freight
CPT - Carriage Paid To
CIP - Carriage and Insurance Paid To
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Group D (Arrival)   

DAF - Delivered at Frontier
DES - Delivered Ex Ship
DEQ - Delivered Ex Quay
DDU - Delivered Duty Unpaid
DDP - Delivered Duty Paid
DCP - Delivered Carriage Paid

<:3  )~~~~~~
Yours sincerely,
AlexSandra

The main methods of transporting goods are road, rail, air and sea. Transporting goods by sea is called shipping. We all know that transportation and shipping interface with risks and that is why we should insure our cargo and prepare all necessary documentation.

I’d like to help you with it and to tell about some shipping documents and terms concerning insurance in foreign trade.

So, the first document - A Bill of Lading (b/l or blading) is a receipt given by the shipping company. The main document used by air transport is the Air Waybill (AWB). Unlike the bill of lading, the Air Waybill is only a receipt and cannot be transferred to another person.

The second ones - Consignment notes are used in road and rail transportation, and like the AWB they are not documents of title so ownership of the document does not mean ownership of the goods. They are not negotiable, i.e. they cannot be bought, sold, transferred by the consignor (the exporter), or the consignee (the importer).

There are a variety of vessels available for exporters to use when shipping goods safely:

— Passenger liners;
— Passenger cargo vessels;
— Tramps
— Tankers;
— Container vessels;
— Roll-on roll-off ferries;
— Barges (lighters).

Before the name of the ship, which is usually underlined in correspondence, the letter SS stand for Steam Ship and show that it is a British Merchant Vessel. MV, Motor Vessel or Merchant Vessel, and MS, Motor Ship are also used.

The main documents (besides bill of lading) used in shipping are:

— Freight account
— Dock receipt (wharfinger1s receipt)
— Shipped bill of lading

Good packaging is essential because it ensures that goods arrive at their destination in good condition. Therefore, the choice of packaging must suit the product, the means of carriage, handling facilities and any changes in climate during transport. In some countries, import duties are assessed according to the gross weight of shipments, which includes packaging. Therefore, the heavier the packaging the higher the duties will be. Goods packed separately, not in containers, are called conventional cargo.

<:3  )~~~~~~
Yours sincerely,
AlexSandra