|
How form
Standardisation
makes choosing a
policy easier
So you’re comparison shopping for
home insurance and want to know what types of home
insurance is available in the United States? Whether
just trying to understand your home insurance policy
or doing some comparison shopping, it’s important to
know what types are available to you.
You can’t effectively compare one policy to another
unless you know what each type covers and excludes.
You also can’t be sure you’re adequately insured
unless you know some basic information. For
instance, did you know that between 2003-2007, 5.8%
of insured homes had a claim, and that wind and hail
accounted for 2.1% of these losses? Thus, you may
want to ensure wind and hail damage is covered in
your policy if you live in certain geographical
areas.
Standardized insurance forms
You used to have to buy hundreds of separate
insurance policies to cover everything in the early
1950s. Fortunately, now almost all home insurance
policies are based off of a specific set of packaged
insurance forms. These forms were standardized by
Insurance Services Office (ISO) in 1971. The
standardized forms make it easier to combine the
various policies into one package.
The ISO has updated their standards in 1991, and
again in 2000. Numerous other policies have been
based off insurance forms that were standardized by
American Association of Insurance Services (AAIS).
However these are similar to the ISO forms.
The ISO and AAIS package insurance policies, then
resell them to individual insurance companies, who
then sell them to consumers. The ISO forms are
currently used by 900+ insurance companies, while
the AAIS forms are used by 200+ insurers. So
basically, almost all insurance policies have the
same basic foundations, no matter which insurance
company sells it. The main differences are the
premiums they charge, how the claims are filed, and
what risks each company is willing to assume. |