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ALL
ABOUT HEALTH INSURANCE
The term
health insurance is commonly used in the United States to describe any
program that helps pay for medical expenses, whether through privately
purchased insurance, social insurance or a non-insurance social welfare
program funded by the government. Synonyms for this usage include "health
coverage," "health care coverage" and "health benefits." In a more technical
sense, the term is used to describe any form of insurance that provides
protection against injury or illness. This usage includes private insurance
and social insurance programs such as Medicare, but excludes social welfare
programs such as Medicaid. In addition to medical expense insurance, it
also includes insurance covering disability or long-term nursing or custodial
care needs.
The US
market-based health care system relies heavily on private and not-for-profit
health insurance, which is the primary source of coverage for most Americans.
According to the United States Census Bureau, approximately 85% of Americans
have health insurance; nearly 60% obtain it through an employer, while
about 9% purchase it directly. Various government agencies provide coverage
to about 28% of Americans (there is some overlap in these figures).
In 2007,
there were nearly 46 million people in the US (over 15% of the population)
who were without health insurance for at least part of that year. The
percentage of the non-elderly population who are uninsured has been generally
increasing since the year 2000. There is considerable debate in the US
on the causes of and possible remedies for this level of uninsurance as
well as the impact it has on the overall US health care system.
HISTORY
Accident insurance was first offered in the United States by the Franklin
Health Assurance Company of Massachusetts. This firm, founded in 1850,
offered insurance against injuries arising from railroad and steamboat
accidents. Sixty organizations were offering accident insurance in the
US by 1866, but the industry consolidated rapidly soon thereafter. While
there were earlier experiments, the origins of sickness coverage in the
US effectively date from 1890. The first employer-sponsored group disability
policy was issued in 1911. Before the development of medical expense insurance,
patients were expected to pay all other health care costs out of their
own pockets, under what is known as the fee-for-service business model.
During the middle to late 20th century, traditional disability insurance
evolved into modern health insurance programs. Today, most comprehensive
private health insurance programs cover the cost of routine, preventive,
and emergency health care procedures, and also most prescription drugs,
but this was not always the case. Hospital and medical expense policies
were introduced during the first half of the 20th century. During the
1920s, individual hospitals began offering services to individuals on
a prepaid basis, eventually leading to the development of Blue Cross organizations.
The predecessors of today's health maintenance organizations (HMOs) originated
in 1929, through the 1930s and on during World War II.
Public
health care coverage
Public programs provide the primary source of coverage for most seniors
and for low-income children and families who meet certain eligibility
requirements. The primary public programs are Medicare, a federal social
insurance program for seniors and certain disabled individuals; Medicaid,
funded jointly by the federal government and states but administered at
the state level, which covers certain very low income children and their
families; and SCHIP, also a federal-state partnership that serves certain
children and families who do not qualify for Medicaid but who cannot afford
private coverage. Other public programs include military health benefits
provided through TRICARE and the Veterans Health Administration and benefits
provided through the Indian Health Service. Some states have additional
programs for low-income individuals.
Medicare
Medicare
is a federal social insurance program that provides health insurance to
elderly workers and their dependents, individuals who become totally and
permanently disabled, and end stage renal disease (ESRD) patients. Some
health care economists (Uwe Reinhardt of Princeton and Stuart Butler among
others) assert that the third-party payment feature of this program has
had the unintended consequence of distorting the price of medical procedures.
As a result, the Health Care Financing Administration has set up a list
of procedures and corresponding prices under the Resource-Based Relative
Value Scale. Recent research has found that the health trends of previously
uninsured adults, especially those with chronic health problems, improves
once they enter the Medicare program.
Medicare
Advantage
Medicare
Advantage plans expand the health care options for Medicare beneficiaries.
The option for Medicare Advantage plans is a result of the Balanced Budget
Act of 1997, with the intent to better control the rapid growth in Medicare
spending, as well as to provide Medicare beneficiaries more choices.
Medicare
Part D (Prescription Drugs)
Medicare
Part D provides a private insurance option to allow Medicare beneficiaries
to purchase subsidized coverage for the costs of prescription drugs. It
was enacted as part of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) and went into effect on January 1, 2006.
Medicaid
Medicaid
was instituted for the very poor in 1965. Despite its establishment, the
percentage of US residents who lack any form of health insurance has increased
since 1994. It has been reported that the number of physicians accepting
Medicaid has decreased in recent years due to relatively high administrative
costs and low reimbursements. Medicaid is a social welfare or social protection
program rather than a social insurance program.
State
Children's Health Insurance Program (SCHIP)
The State
Children’s Health Insurance Program (SCHIP) is a joint state/federal program
to provide health insurance to children in families who earn too much
money to qualify for Medicaid, yet cannot afford to buy private insurance.
The statutory authority for SCHIP is under title XXI of the Social Security
Act. SCHIP programs are run by the individual states according to requirements
set by the federal Centers for Medicare and Medicaid Services, and may
be structured as independent programs separate from Medicaid (separate
child health programs), as expansions of their Medicaid programs (SCHIP
Medicaid expansion programs), or combine these approaches (SCHIP combination
programs). States receive enhanced federal funds for their SCHIP programs
at a rate above the regular Medicaid match.
Military
health benefits
Health benefits
are provided to active duty service members, retired service members and
their dependents by the Department of Defense Military Health System (MHS).
The MHS consists of a direct care network of Military Treatment Facilities
and a purchased care network known as TRICARE. Additionally, veterans
may also be eligible for benefits through the Veterans Health Administration.
Indian
health service
The Indian
Health Service (IHS) provides medical assistance to eligible American
Indians at IHS facilities, and helps pay the cost of some services provided
by non-IHS health care providers.
State
risk pools
In 1976,
some states began providing guaranteed-issuance risk pools, which enable
individuals who are medically uninsurable through private health insurance
to purchase a state-sponsored health insurance plan, usually at higher
cost. Minnesota was the first to offer such a plan; 34 states now offer
them. Plans vary greatly from state to state, both in their costs and
benefits to consumers and in their methods of funding and operations.
They serve a very small portion of the uninsurable market—about 182,000
people in the US as of 2004. In best cases, they allow people with preexisting
conditions such as cancer, diabetes, heart disease or other chronic illnesses
to be able to switch jobs or seek self-employment without fear of being
without health care benefits. However, the plans are expensive, with premiums
that can be double the average policy, and the pools currently cover only
1 in 25 of the so-called "uninsurable" population. Efforts to pass a national
pool have as yet been unsuccessful, but some federal tax money has been
awarded to states to innovate and improve their plans.
Private
health care coverage
Private
health insurance may be purchased on a group basis (e.g., by a firm to
cover its employees) or purchased by individual consumers. Most Americans
with private health insurance receive it through an employer-sponsored
program. According to the United States Census Bureau, some 60% of Americans
are covered through an employer, while about 9% purchase health insurance
directly. Private health insurers have a significant economic impact in
the US as employers—in 2004 they directly employed almost 470,000 people
at an average salary of $61,409.
The US
has a joint federal/state system for regulating insurance, with the federal
government ceding primary responsibility to the states under the McCarran-Ferguson
Act. States regulate the content of health insurance policies and often
require coverage of specific types of medical services or health care
providers. State mandates generally do not apply to the health plans offered
by large employers, due to the preemption clause of the Employee Retirement
Income Security Act.
Employer-sponsored
Employer-sponsored
health insurance is paid for by businesses on behalf of their employees
as part of an employee benefit package. Most private health coverage in
the US is employment based. According to the Centers for Medicare and
Medicaid Services, nearly 100% of large firms offer health insurance to
their employees. The employer typically makes a substantial contribution
towards the cost of coverage. In 2008 the average employee contribution
was 16% of the cost of single coverage and 27% of the cost of family coverage.
These percentages have been stable since 1999. Health benefits provided
by employers are also tax favored. Employee contributions can be made
on a pretax basis if the employer offers the benefits through a section
125 cafeteria plan.
Costs
for employer-paid health insurance are rising rapidly: since 2001, premiums
for family coverage have increased 78%, while wages have risen 19% and
inflation has risen 17%, according to a 2007 study by the Kaiser Family
Foundation. Employer costs have risen significantly per hour worked, and
vary significantly. In particular, average employer costs for health benefits
vary by firm size and occupation. The cost per hour of health benefits
is generally higher for workers in higher-wage occupations, but represent
a smaller percentage of payroll. The percentage of total compensation
devoted to health benefits has been rising since the 1960s. Average premiums,
including both the employer and employee portions, were $4,704 for single
coverage and $12,680 for family coverage in 2008.
However,
in a 2007 analysis, the Employee Benefit Research Institute concluded
that the availability of employment-based health benefits for active workers
in the US is stable. The "take-up rate," or percentage of eligible workers
participating in employer-sponsored plans, is falling. The percentage
of workers actually covered has fallen somewhat, but not sharply. EBRI
interviewed employers for the study, and found that others might follow
if a major employer discontinued health benefits. Public policy changes
could also result in a reduction in employer support for employment-based
health benefits.
Although
much more likely to offer retiree health benefits than small firms, the
percentage of large firms offering these benefits fell from 66% in 1988
to 34% in 2002.
Small
employer group coverage
According
to a 2007 study, about 59% of employers at small firms (3-199 workers)
in the US provide employee health insurance. The percentage of small firms
offering coverage has been dropping steadily since 1999. The study notes
that cost remains the main reason cited by small firms who do not offer
health benefits. Small firms that are new are less likely to offer coverage
than ones that have been in existence for a number of years. For example,
using 2005 data for firms with fewer than 10 employees, 43% of those that
had been in existence at least 20 years offered coverage, but only 24%
of those that had been in existence less than 5 years did. The volatility
of offer rates from year to year also appears to be higher for newer small
businesses.
The types
of coverage available to small employers are similar to those offered
by large firms, but small businesses do not have the same options for
financing their benefit plans. In particular, self-insuring the benefits
(see Self-funded health care) is not a practical option for most small
employers. A RAND Corporation study published in April 2008 found that
the cost of health care coverage places a greater burden on small firms,
as a percentage of payroll, than on larger firms. A study published by
the American Enterprise Institute in August of 2008 examined the effect
of state benefit mandates on self-employed individuals, and found that
"the larger the number of mandates in a state, the lower the probability
that a self-employed person will be a significant employment generator."
States
regulate small group premium rates, typically by placing limits on the
premium variation allowable between groups (rate bands). Insurers price
to recover their costs over their entire book of small group business
while abiding by state rating rules. Over time, the effect of initial
underwriting "wears off" as the cost of a group regresses towards the
mean. Recent claim experience - whether better or worse than average -
is a strong predictor of future costs in the near term. But the average
health status of a particular small employer group tends to regress over
time towards that of an average group. The process used to price small
group coverage changes when a state enacts small group reform laws.
Insurance
brokers play a significant role in helping small employers find health
insurance, particularly in more competitive markets. Average small group
commissions range from 2 percent to 8 percent of premiums. Brokers provide
services beyond insurance sales, such as assisting with employee enrollment
and helping to resolve benefits issues.
Federal
employees health benefit plan (FEHBP)
In addition
to such public plans as Medicare and Medicaid, the federal government
also sponsors a health benefit plan for federal employees—the Federal
Employees Health Benefits Program (FEHBP). FEHBP provides health benefits
to full-time civilian employees. Active-duty service members, retired
service members and their dependents are covered through the Department
of Defense Military Health System (MHS). FEHBP is managed by the federal
Office of Personnel Management.
"Portability"
of group coverage
Two federal
laws address the ability of individuals with employment-based health insurance
coverage to maintain coverage.
The Consolidated
Omnibus Budget Reconciliation Act of 1985 (COBRA) enables certain individuals
with employer-sponsored coverage to extend their coverage if certain "qualifying
events" would otherwise cause them to lose it. Employers may require COBRA-qualified
individuals to pay the full cost of coverage, and coverage cannot be extended
indefinitely. COBRA only applies to firms with 20 or more employees, although
some states also have "mini-COBRA" laws that apply to small employers.
The Health
Insurance Portability and Accountability Act of 1996 (HIPAA) provides
for forms of both "group-to-group" and "group-to-individual" portability.
When an individual moves from one employer's benefit plan to another's,
the new plan must count coverage under the old plan against any waiting
period for preexisting conditions, as long as there is not a break in
coverage of more than 63 days between the two plans. When certain qualified
individuals lose group coverage altogether, they must be guaranteed access
to some form of individual coverage. To qualify, they must have at least
18 months of prior continuous coverage. The details of access and the
price of coverage are determined on a state-by-state basis.
Individually
purchased
Policies of health insurance obtained by individuals not otherwise covered
under policies or programs elsewhere classified. Generally major medical,
short-term medical, and student policies. According to the US Census Bureau,
about 9% of Americans are covered under health insurance purchased directly.
The range of products available is similar to those provided through employers.
However, average out-of-pocket spending is higher in the individual market,
with higher deductibles, co-payments and other cost-sharing provisions.
Major medical is the most commonly purchased form of individual health
insurance.
In the
individual market, the consumer pays the entire premium without benefit
of an employer contribution. While self-employed individuals receive a
tax deduction for their health insurance and can buy health insurance
with additional tax benefits, most consumers in the individual market
do not receive any tax benefit.
Premiums
vary significantly by age. In states that allow individual medical plan
underwriting, premiums also vary by health status. For individuals who
pass individual medical plan underwriting where it is used, the average
premiums they pay are lower than the average paid for employer-sponsored
coverage (this comparison is based on the entire premium for employer-sponsored
coverage, including both the employee and employer contributions). Factors
that may be contributing to this include: differences in age; less generous
coverage in the individual market (higher beneficiary cost sharing); and
a tendency for individual consumers to only buy benefits that they expect
to need and use while group coverage may provide some benefits that most
beneficiaries do not use. Individual policyholders are also more likely
to report being in excellent health than are people covered by employer-sponsored
health insurance, which may be a contributing factor. Premiums in the
individual market rose less rapidly over the period 2002 through 2005
than did out-of-pocket premiums in the employer-sponsored market (17.8%
versus 34.4%). The increase was larger for family policies than for single
policies (25.3% for family policies; the increase for single policies
was not statistically significant). Note that these comparisons did not
adjust for changes in benefit levels.
Research
confirms that consumers in the individual health insurance market are
sensitive to price. Estimates of the demand elasticity in this market
vary, but generally fall in the range of -0.3 to -0.1. It appears that
price sensitivity varies among population subgroups and is generally higher
for younger individuals and lower income individuals. One study found
that among individuals who lack other sources of health coverage, the
percentage purchasing individual insurance increases steadily with income.
However, even among those with incomes four times the federal poverty
level, only about a fourth buy individual coverage. The self-employed,
who can tax-deduct their premiums, are more likely to purchase than other
individuals. The researchers concluded that affordability appears to be
a key barrier to coverage in this market, and that any premium subsidies
would likely have to be substantial to be effective. The researchers note
that other factors such as health status and the complexity of the market
can also affect the purchase of individual health insurance, but conclude
that they are unlikely to be the primary drivers of low coverage rates.
Many
states allow medical underwriting of applicants for individually purchased
health insurance. An estimated 5 million of those without health insurance
are considered "uninsurable" because of preexisting conditions. A number
of proposals have been advanced to limit the effect of underwriting on
consumers and improve access to coverage. Each has its own advantages
and limitations. One study published in 2008 found that people of average
health are least likely to become uninsured if they have large group health
coverage, more likely to become uninsured if they have small group coverage,
and most likely to become uninsured if they have individual health insurance.
But, "for people in poor or fair health, the chances of losing coverage
are much greater for people who had small-group insurance than for those
who had individual insurance." The authors attribute these results to
the combination in the individual market of high costs and guaranteed
renewability of coverage. Individual coverage costs more if it is purchased
after a person becomes unhealthy, but "provides better protection (compared
to group insurance) against high premiums for already individually insured
people who become high risk." Healthy individuals are more likely to drop
individual coverage than less-expensive, subsidized employment-based coverage,
but group coverage leaves them "more vulnerable to dropping or losing
any and all coverage than does individual insurance" if they become seriously
ill.
In August
2008 the Hartford Courant reported that competition was increasing in
the individual health insurance market, with more insurers entering the
market, an increased variety of products, and a broader spread of prices.
Individual
health insurance is primarily regulated at the state level, consistent
with the McCarran-Ferguson Act. Model acts and regulations promulgated
by the National Association of Insurance Commissioners (NAIC) provide
some degree of uniformity state to state. These models do not have the
force of law and have no effect unless they are adopted by a state. They
are, however, used as guides by most states, and some states adopt them
with little or no change. The primary NAIC models affecting the individual
health insurance market are:
* The
Uniform Individual Accident and Sickness Policy Provision Law (UPPL);
* The Accident and Sickness Insurance Minimum Standards Model Act;
* The Advertisements of Accident and Sickness Insurance Model Regulation;
and
* The Unfair Trade Practices Act.
All of
these models have been implemented in one form or another by most states.
Federal
laws affecting individual health insurance include:
# The
Health Insurance Portability and Accountability Act (HIPAA);
# The Newborns' and Mothers' Health Protection Act;
# The Women's Health and Cancer Rights Act;
# The Fair Credit Reporting Act; and
# Federal rules governing Medicare supplement policies.
Types
of medical insurance
Traditional
indemnity or fee-for-service
Commercial
insurance companies began offering accident and sickness insurance (disability
insurance) as early as the mid-1800s. Hospital and medical expense policies
were introduced during the first half of the 20th century. The first group
medical plan was purchased from The Equitable Life Assurance Society of
the United States by the General Tire & Rubber Company in 1934.
Early
hospital and medical plans offered by insurance companies paid either
a fixed amount for specific diseases or medical procedures (schedule benefits)
or a percentage of the provider's fee. The relationship between the patient
and the medical provider was not changed. The patient received medical
care and was responsible for paying the provider. If the service was covered
by the policy, the insurance company was responsible for reimbursing or
indemnifying the patient based on the provisions of the insurance contract
("reimbursement benefits"). Health insurance plans that are not based
on a network of contracted providers, or that base payments on a percentage
of provider charges, are still described as indemnity or fee-for-service
plans.
Blue
Cross & Blue Shield plans
During the
1920s, individual hospitals began offering services to individuals on
a prepaid basis. The first group prepayment plan was created at the Baylor
University Hospital in Dallas, Texas. This concept became popular among
hospitals during the Depression, when they were facing declining revenues.
The Baylor plan was a forerunner of later Blue Cross plans. Physician
associations began offering prepaid suAylorcal/medical benefits in the late
1930s Blue Shield plans. Blue Cross and Blue Shield plans were nonprofit
organizations sponsored by local hospitals (Blue Cross) or physician groups
(Blue Shield). As originally structured, Blue Cross and Blue Shield plans
provided benefits in the form of services rendered by participating hospitals
and physicians ("service benefits") rather than reimbursements or payments
to the policyholder.
Health
Maintenance Organizations
The Ross-Loos
Clinic, founded in Los Angeles in 1929, is generally considered to have
been the first health maintenance organization (HMO). Henry J. Kaiser
organized hospitals and clinics to provide prepaid health benefits to
his shipyard workers during World War II. This became the basis for Kaiser
Permanente HMO. Most early HMOs were nonprofit organizations. The development
of HMOs was encouraged by the passage of the Health Maintenance Organization
Act of 1973. Benefits are provided through a network of providers. Providers
may be employees of the HMO ("staff model"), employees of a provider group
that has contracted with the HMO ("group model"), or members of an independent
practice association ("IPA model"). HMOs may also use a combination of
these approaches ("network model").
Managed
care
The term
managed care is used to describe a variety of techniques intended to reduce
the cost of health benefits and improve the quality of care. It is also
used to describe organizations that use these techniques ("managed care
organization"). Many of these techniques were pioneered by HMOs, but they
are now used in a wide variety of private health insurance programs. Through
the 1990s, managed care grew from about 25% US employees with employer-sponsored
coverage to the vast majority.
Rise of
managed care in the US
| Year |
Conventional
plans |
HMOs |
PPOs |
POS plans |
HDHP/SOs |
| 1998 |
14%
|
27%
|
35%
|
24%
|
~
|
| 1999 |
10%
|
28%
|
39%
|
24%
|
~
|
| 2000 |
8%
|
29%
|
42%
|
21%
|
~
|
| 2001 |
7%
|
24%
|
46%
|
23%
|
~
|
| 2002 |
4%
|
27%
|
52%
|
18%
|
~
|
| 2003 |
5%
|
24%
|
54%
|
17%
|
~
|
| 2004 |
5%
|
25%
|
55%
|
15%
|
~
|
| 2005 |
3%
|
21%
|
61%
|
15%
|
~
|
| 2006 |
3%
|
20%
|
60%
|
13%
|
4%
|
| 2007 |
3%
|
21%
|
57%
|
15%
|
5%
|
Network-based
managed care
Many
managed care programs are based on a panel or network of contracted health
care providers. Such programs typically include:
* A set of selected providers that furnish a comprehensive array of health
care services to enrollees;
* Explicit standards for selecting providers;
* Formal utilization review and quality improvement programs;
* An emphasis on preventive care; and
* Financial incentives to encourage enrollees to use care efficiently.
Provider
networks can be used to reduce costs by negotiating favorable fees from
providers, selecting cost effective providers, and creating financial
incentives for providers to practice more efficiently.
Network-based
plans may be either closed or open. With a closed network, enrollees'
expenses are generally only covered when they go to network providers.
Only limited services are covered outside the network—typically only emergency
and out-of-area care. Most traditional HMOs were closed network plans.
Open network plans provide some coverage when an enrollee uses non-network
provider, generally at a lower benefit level to encourage the use of network
providers. Most preferred provider organization plans are open-network
(those that are not are often described as exclusive provider organizations,
or EPOs), as are point of service (POs) plans.
The terms
"open panel" and "closed panel" are sometimes used to describe which health
care providers in a community have the opportunity to participate in a
plan. In a "closed panel" HMO, the network providers are either HMO employees
(staff model) or members of large group practices with which the HMO has
a contract. In an "open panel" plan the HMO or PPO contracts with independent
practitioners, opening participation in the network to any provider in
the community that meets the plan's credential requirements and is willing
to accept the terms of the plan's contract.
Other
managed care techniques
Other managed
care techniques include such elements as disease management, case management,
wellness incentives, patient education, utilization management and utilization
review. These techniques can be applied to both network-based benefit
programs and benefit programs that are not based on a provider network.
The use of managed care techniques without a provider network is sometimes
described as "managed indemnity."
Blurring
lines
Over time,
the operations of many Blue Cross and Blue Shield operations have become
more similar to those of commercial health insurance companies. However,
some Blue Cross and Blue Shield plans continue to serve as insurers of
last resort. Similarly, the benefits offered by Blues plans, commercial
insurers, and HMOs are conveAylorng in many respects due to market pressures.
One example is the convergence of preferred provider organization (PPO)
plans offered by Blues and commercial insurers and the point of service
plans offered by HMOs. Historically, commercial insurers, Blue Cross and
Blue Shield plans, and HMOs might be subject to different regulatory oversight
in a state (e.g., the Department of Insurance for insurance companies,
versus the Department of Health for HMOs). Today, it is common for commercial
insurance companies to have HMOs as subsidiaries, and for HMOs to have
insurers as subsidiaries (the state license for an HMO is typically different
from that for an insurance company). At one time the distinctions between
traditional indemnity insurance, HMOs and PPOs were very clear; today,
it can be difficult to distinguish between the products offered by the
various types of organization operating in the market.
The blurring
of distinctions between the different types of health care coverage can
be seen in the history of the industry's trade associations. The two primary
HMO trade associations were the Group Health Association of America and
the American Managed Care and Review Association. After meAylorng, they
were known as American Association of Health Plans (AAHP). The primary
trade association for commercial health insurers was the Health Insurance
Association of America (HIAA). These two have now merged, and are known
as America’s Health Insurance Plans (AHIP).
New
types of medical plans
One approach
to addressing increasing premiums, dubbed "consumer driven health care,"
received a boost in 2003, when President George W. Bush signed into law
the Medicare Prescription Drug, Improvement, and Modernization Act. The
law created tax-deductible Health Savings Accounts (HSAs). An HSA is an
untaxed private bank account; withdrawals are only penalized if the money
is spent on non-medical items or services. Consumers wishing to deposit
pretax funds in an HSA must be enrolled in a high-deductible insurance
plan with a number of restrictions on benefit design; in 2007, qualifying
plans must have a minimum deductible of US$1,050. HSAs enable healthier
individuals to pay less for insurance and bank money for their own future
health care expenses.[59] HSAs are one form of tax-preferenced health
care spending account. Others include Archer Medical Savings Accounts
(MSAs), which have been superseded by the new HSAs (although existing
MSAs are grandfathered), Flexible Spending Arrangements (FSAs) and Health
Reimbursement Accounts (HRAs). HSAs, FSAs and HRAs are most commonly used
as part of an employee health benefit package.
Limited
Medical Benefit Plans pay for routine care and do not pay for catastrophic
care. As such, they do not provide equivalent financial security to a
major medical plan. Annual benefit limits can be as low as $2,000. Lifetime
maximums can be very low as well. One option that is becoming more popular
is the discount medical card. These cards are not insurance policies,
but provide access to discounts from participating health care providers.
While some offer a degree of value, there are serious potential drawbacks
for the consumer.
Other
types of health insurance (non-medical)
While the
term "health insurance" is most commonly used by the public to describe
coverage for medical expenses, the insurance industry uses the term more
broadly to include other related forms of coverage, such as disability
income and long-term care insurance.
Disability
income insurance
Disability
income (DI) insurance pays benefits to individuals who lose their ability
to work due to injury or illness. DI insurance replaces income lost while
the policyholder is unable to work during a period of disability (in contrast
to medical expense insurance, which pays for the cost of medical care).
For most working age adults, the risk of disability is greater than the
risk of premature death, and the resulting reduction in lifetime earnings
can be significant. Private disability insurance is sold on both a group
and an individual basis. Policies may be designed to cover long-term disabilities
(LTD coverage) or short-term disabilities (STD coverage).Business owners
can also purchase disability overhead insurance to cover the overhead
expenses of their business while they are unable to work. A basic level
of disability income protection is provided through the Social Security
Disability Insurance (SSDI) program for qualified workers who are totally
and permanently disabled (the worker is incapable of engaging in any "substantial
gainful work" and the disability is expected to last at least 12 months
or result in death).
Long-term
care insurance
Long-term
care (LTC) insurance reimburses the policyholder for the cost of long-term
or custodial care services designed to minimize or compensate for the
loss of functioning due to age, disability or chronic illness. LTC has
many surface similarities to long-term disability insurance. There are
at least two fundamental differences, however. LTC policies cover the
cost of certain types of chronic care, while long-term-disability policies
replace income lost while the policyholder is unable to work. For LTC,
the event triggering benefits is the need for chronic care, while the
triggering event for disability insurance is the inability to work. Private
LTC insurance is growing in popularity in the US. Premiums have remained
relatively stable in recent years. However, the coverage is quite expensive,
especially when consumers wait until retirement age to purchase it. The
average age of new purchasers was 61 in 2005, and has been dropping.
Supplemental
coverage
Private
insurers offer a variety of supplemental coverages in both the group and
individual markets. These are not designed to provide the primary source
of medical or disability protection for an individual, but can assist
with unexpected expenses and provide additional peace of mind for insureds.
Supplemental coverages include Medicare supplement insurance, hospital
indemnity insurance, dental insurance, vision insurance, accidental death
and dismemberment insurance and specified disease insurance. Supplemental
coverages are intended to:
# Supplement
a primary medical expense plan by paying for expenses that are excluded
or subject to the primary plan's cost-sharing requirements (e.g., co-payments,
deductibles, etc.);
# Cover related expenses such as dental or vision care;
# Assist with additional expenses that may be associated with a serious
illness or injury.
Medicare
Supplement Coverage (Medigap)
Medicare
Supplement policies are designed to cover expenses not covered (or only
partially covered) by the "original Medicare" (Parts A & B) fee-for-service
benefits. They are only available to individuals enrolled in Medicare
Parts A & B. Medigap plans may be purchased on a guaranteed issue basis
(no health questions asked) during a six-month open enrollment period
when an individual first becomes eligible for Medicare. The benefits offered
by Medigap plans are standardized.
Hospital
indemnity insurance
Hospital
indemnity insurance provides a fixed daily, weekly or monthly benefit
while the insured is confined in a hospital. The payment is not dependent
on actual hospital charges, and is most commonly expressed as a flat dollar
amount. Hospital indemnity benefits are paid in addition to any other
benefits that may be available, and are typically used to pay out-of-pocket
and non-covered expenses associated with the primary medical plan, and
to help with additional expenses (e.g., child care) incurred while in
the hospital.
Scheduled
health insurance plans
Scheduled
health insurance plans are an expanded form of Hospital Indemnity plans.
In recent years, these plans have taken the name mini-med plans or association
plans. These plans may provide benefits for hospitalization, suAylorcal,
and physician services however, they are not meant to replace a traditional
comprehensive health insurance plan. Scheduled health insurance plans
are more of a basic policy providing access to day-to-day health care
such as going to the doctor or getting a prescription drug; but these
benefits will be limited and are not meant to be effective for catastrophic
events. Payments are based upon the plan's "schedule of benefits" and
are usually paid directly to the service provider. These plans cost much
less than comprehensive health insurance. Annual benefit maximums for
a typical scheduled health insurance plan may range from $1,000 to $25,000.
Dental
insurance
Dental insurance
helps pay for the cost of necessary dental care. Many medical expense
plans include coverage for dental expenses, and stand-alone dental insurance
is also available. Discount dental programs are also available. These
do not constitute insurance, but provide participants with access to discounted
fees for dental work.
Vision
care insurance
Vision care
insurance provides coverage for routine eye care and is typically written
to complement other medical benefits. Vision benefits are designed to
encourage routine eye examinations and ensure that appropriate treatment
is provided.
Specified
disease
Specified
disease provides benefits for one or more specifically identified conditions.
Benefits can be used to fill gaps in a primary medical plan, such as CO-payments
and deductibles, or to assist with additional expenses such as transportation
and child care costs.
Accidental
Death and Dismemberment (AD&D) insurance
AD&D insurance
is offered by group insurers and provides benefits in the event of accidental
death. It also provides benefits for certain specified types of bodily
injuries (e.g., loss of a limb or loss of sight) when they are the direct
result of an accident.
Status
of the uninsured
In 2007,
more than 45 million people in the US (15.3% of the population) were without
health insurance for at least part of the year. The percentage of the
non-elderly population who are uninsured has been generally increasing
since the year 2000. Among the uninsured population, some 37 million were
employment-age adults (ages 18 to 64), and more than 27 million worked
at least part time. About 38% of the uninsured live in households with
incomes over $50,000. According to the Census Bureau, nearly 36 million
of the uninsured are legal US citizens. Another 9.7 million are non-citizens,
but the Census Bureau does not distinguish in its estimate between legal
non-citizens and illegal immigrants. It has been estimated that nearly
one fifth of the uninsured population is able to afford insurance, almost
one quarter is eligible for public coverage, and the remaining 56% need
financial assistance (8.9% of all Americans). An estimated 5 million of
those without health insurance are considered "uninsurable" because of
preexisting conditions.
The costs
of treating the uninsured must often be absorbed by providers as charity
care, passed on to the insured via cost shifting and higher health insurance
premiums, or paid by taxpayers through higher taxes. A report published
by the Kaiser Family Foundation in April 2008 found that economic downturns
place a significant strain on state Medicaid and SCHIP programs. The authors
estimated that a 1% increase in the unemployment rate would increase Medicaid
and SCHIP enrollment by 1 million, and increase the number uninsured by
1.1 million. State spending on Medicaid and SCHIP would increase by $1.4
billion (total spending on these programs would increase by $3.4 billion).
This increased spending would occur at the same time state government
revenues were declining. During the last downturn, the Jobs and Growth
Tax Relief Reconciliation Act of 2003 (JGTRRA) included federal assistance
to states, which helped states avoid tightening their Medicaid and SCHIP
eligibility rules. The authors conclude that Congress should consider
similar relief for the current economic downturn.
ALL
ABOUT INSURANCE
What is insurance?
Insurance, in law and economics, is a form of risk management primarily
used to hedge against the risk of a contingent loss. Insurance is defined
as the equitable transfer of the risk of a loss, from one entity to another,
in exchange for a premium. An insurer is a company selling the insurance.
The insurance rate is a factor used to determine the amount, called the
premium, to be charged for a certain amount of insurance coverage. Risk
management, the practice of appraising and controlling risk, has evolved
as a discrete field of study and practice.
Principles
of insurance
Commercially insurable risks typically share seven common characteristics.
A
large number of homogeneous exposure units. The vast majority of insurance
policies are provided for individual members of very large classes. Automobile
insurance, for example, covered about 175 million automobiles in the United
States in 2004. The existence of a large number of homogeneous exposure
units allows insurers to benefit from the so-called “law of large
numbers,” which in effect states that as the number of exposure
units increases, the actual results are increasingly likely to become
close to expected results. There are exceptions to this criterion. Lloyd's
of London is famous for insuring the life or health of actors, actresses
and sports figures. Satellite Launch insurance covers events that are
infrequent. Large commercial property policies may insure exceptional
properties for which there are no ‘homogeneous’ exposure units.
Despite failing on this criterion, many exposures like these are generally
considered to be insurable.
Definite
Loss. The event that gives rise to the loss that is subject to insurance
should, at least in principle, take place at a known time, in a known
place, and from a known cause. The classic example is death of an insured
on a life insurance policy. Fire, automobile accidents, and worker injuries
may all easily meet this criterion. Other types of losses may only be
definite in theory. Occupational disease, for instance, may involve prolonged
exposure to injurious conditions where no specific time, place or cause
is identifiable. Ideally, the time, place and cause of a loss should be
clear enough that a reasonable person, with sufficient information, could
objectively verify all three elements.
Accidental
Loss. The event that constitutes the trigger of a claim should be
fortuitous, or at least outside the control of the beneficiary of the
insurance. The loss should be ‘pure,’ in the sense that it
results from an event for which there is only the opportunity for cost.
Events that contain speculative elements, such as ordinary business risks,
are generally not considered insurable.
Large
Loss. The size of the loss must be meaningful from the perspective
of the insured. Insurance premiums need to cover both the expected cost
of losses, plus the cost of issuing and administering the policy, adjusting
losses, and supplying the capital needed to reasonably assure that the
insurer will be able to pay claims. For small losses these latter costs
may be several times the size of the expected cost of losses. There is
little point in paying such costs unless the protection offered has real
value to a buyer.
Affordable
Premium. If the likelihood of an insured event is so high, or the
cost of the event so large, that the resulting premium is large relative
to the amount of protection offered, it is not likely that anyone will
buy insurance, even if on offer. Further, as the accounting profession
formally recognizes in financial accounting standards, the premium cannot
be so large that there is not a reasonable chance of a significant loss
to the insurer. If there is no such chance of loss, the transaction may
have the form of insurance, but not the substance.
Calculable
Loss. There are two elements that must be at least estimable, if not
formally calculable: the probability of loss, and the attendant cost.
Probability of loss is generally an empirical exercise, while cost has
more to do with the ability of a reasonable person in possession of a
copy of the insurance policy and a proof of loss associated with a claim
presented under that policy to make a reasonably definite and objective
evaluation of the amount of the loss recoverable as a result of the claim.
Limited
risk of catastrophically large losses. The essential risk is often
aggregation. If the same event can cause losses to numerous policyholders
of the same insurer, the ability of that insurer to issue policies becomes
constrained, not by factors surrounding the individual characteristics
of a given policyholder, but by the factors surrounding the sum of all
policyholders so exposed. Typically, insurers prefer to limit their exposure
to a loss from a single event to some small portion of their capital base,
on the order of 5 percent. Where the loss can be aggregated, or an individual
policy could produce exceptionally large claims, the capital constraint
will restrict an insurers appetite for additional policyholders. The classic
example is earthquake insurance, where the ability of an underwriter to
issue a new policy depends on the number and size of the policies that
it has already underwritten. Wind insurance in hurricane zones, particularly
along coast lines, is another example of this phenomenon. In extreme cases,
the aggregation can affect the entire industry, since the combined capital
of insurers and re-insurers can be small compared to the needs of potential
policyholders in areas exposed to aggregation risk. In commercial fire
insurance it is possible to find single properties whose total exposed
value is well in excess of any individual insurer’s capital constraint.
Such properties are generally shared among several insurers, or are insured
by a single insurer who syndicates the risk into the reinsurance market.
Indemnification
The technical
definition of "indemnity" means to make whole again. There are two types
of insurance contracts; 1) an "indemnity" policy and 2) a "pay on behalf"
or "on behalf of" policy. The difference is significant on paper, but
rarely material in practice. An "indemnity" policy will never pay claims
until the insured has paid out of pocket to some third party; i.e. a visitor
to your home slips on a floor that you left wet and sues you for $10,000
and wins. Under an "indemnity" policy the homeowner would have to come
up with the $10,000 to pay for the visitor's fall and then would be "indemnified"
by the insurance carrier for the out of pocket costs (the $10,000). Under
the same situation, a "pay on behalf" policy, the insurance carrier would
pay the claim and the insured (the homeowner) would not be out of pocket
for anything. Most modern liability insurance is written on the basis
of "pay on behalf" language.
An entity
seeking to transfer risk (an individual, corporation, or association of
any type, etc.) becomes the 'insured' party once risk is assumed by an
'insurer', the insuring party, by means of a contract, called an insurance
'policy'. Generally, an insurance contract includes, at a minimum, the
following elements: the parties (the insurer, the insured, the beneficiaries),
the premium, the period of coverage, the particular loss event covered,
the amount of coverage (i.e., the amount to be paid to the insured or
beneficiary in the event of a loss), and exclusions (events not covered).
An insured is thus said to be "indemnified" against the loss events covered
in the policy. When insured parties experience a loss for a specified
peril, the coverage entitles the policyholder to make a 'claim' against
the insurer for the covered amount of loss as specified by the policy.
The fee paid by the insured to the insurer for assuming the risk is called
the 'premium'. Insurance premiums from many insureds are used to fund
accounts reserved for later payment of claims—in theory for a relatively
few claimants—and for overhead costs. So long as an insurer maintains
adequate funds set aside for anticipated losses (i.e., reserves), the
remaining maAylorn is an insurer's profit.
Insurer’s
business model
Profit
= earned premium + investment income - incurred loss - underwriting expenses.
Insurers
make money in two ways: (1) through underwriting, the process by which
insurers select the risks to insure and decide how much in premiums to
charge for accepting those risks and (2) by investing the premiums they
collect from insureds.
The most
complicated aspect of the insurance business is the underwriting of policies.
Using a wide assortment of data, insurers predict the likelihood that
a claim will be made against their policies and price products accordingly.
To this end, insurers use actuarial science to quantify the risks they
are willing to assume and the premium they will charge to assume them.
Data is analyzed to fairly accurately project the rate of future claims
based on a given risk. Actuarial science uses statistics and probability
to analyze the risks associated with the range of perils covered, and
these scientific principles are used to determine an insurer's overall
exposure. Upon termination of a given policy, the amount of premium collected
and the investment gains thereon minus the amount paid out in claims is
the insurer's underwriting profit on that policy. Of course, from the
insurer's perspective, some policies are winners (i.e., the insurer pays
out less in claims and expenses than it receives in premiums and investment
income) and some are losers (i.e., the insurer pays out more in claims
and expenses than it receives in premiums and investment income).
An insurer's
underwriting performance is measured in its combined ratio. The loss ratio
(incurred losses and loss-adjustment expenses divided by net earned premium)
is added to the expense ratio (underwriting expenses divided by net premium
written) to determine the company's combined ratio. The combined ratio
is a reflection of the company's overall underwriting profitability. A
combined ratio of less than 100 percent indicates underwriting profitability,
while anything over 100 indicates an underwriting loss. Insurance companies
also earn investment profits on “float”. “Float”
or available reserve is the amount of money, at hand at any given moment,
that an insurer has collected in insurance premiums but has not been paid
out in claims. Insurers start investing insurance premiums as soon as
they are collected and continue to earn interest on them until claims
are paid out.
In the
United States, the underwriting loss of property and casualty insurance
companies was $142.3 billion in the five years ending 2003. But overall
profit for the same period was $68.4 billion, as the result of float.
Some insurance industry insiders, most notably Hank Greenberg, do not
believe that it is forever possible to sustain a profit from float without
an underwriting profit as well, but this opinion is not universally held.
Naturally, the “float” method is difficult to carry out in
an economically depressed period. Bear markets do cause insurers to shift
away from investments and to toughen up their underwriting standards.
So a poor economy generally means high insurance premiums. This tendency
to swing between profitable and unprofitable periods over time is commonly
known as the "underwriting" or insurance cycle. Property and casualty
insurers currently make the most money from their auto insurance line
of business. Generally better statistics are available on auto losses
and underwriting on this line of business has benefited greatly from advances
in computing. Additionally, property losses in the US, due to natural
catastrophes, have exacerbated this trend. Finally, claims and loss handling
is the materialized utility of insurance. In managing the claims-handling
function, insurers seek to balance the elements of customer satisfaction,
administrative handling expenses, and claims overpayment leakage. As part
of this balancing act, fraudulent insurance practices are a major business
risk that must be managed and overcome.
History
of insurance
In some
sense we can say that insurance appears simultaneously with the appearance
of human society. We know of two types of economies in human societies:
money economies (with markets, money, financial instruments and so on)
and non-money or natural economies (without money, markets, financial
instruments and so on). The second type is a more ancient form than the
first. In such an economy and community, we can see insurance in the form
of people helping each other. For example, if a house burns down, the
members of the community help build a new one. Should the same thing happen
to one's neighbor, the other neighbor must help. Otherwise, neighbor will
not receive help in the future. This type of insurance has survived to
the present day in some countries where modern money economy with its
financial instruments is not widespread (for example countries in the
territory of the former Soviet Union). Turning to insurance in the modern
sense (i.e., insurance in a modern money economy, in which insurance is
part of the financial sphere), early methods of transferring or distributing
risk were practiced by Chinese and Babylonian traders as long ago as the
3rd and 2nd millennia BC, respectively. Chinese merchants traveling treacherous
river rapids would redistribute their wares across many vessels to limit
the loss due to any single vessel's capsizing. The Babylonians developed
a system which was recorded in the famous Code of Hammurabi, c. 1750 BC,
and practiced by early Mediterranean sailing merchants. If a merchant
received a loan to fund his shipment, he would pay the lender an additional
sum in exchange for the lender's guarantee to cancel the loan should the
shipment be stolen.
Achaemenian
monarchs of Iran were the first to insure their people and made it official
by registering the insuring process in governmental notary offices. The
insurance tradition was performed each year in Norouz (beginning of the
Iranian New Year); the heads of different ethnic groups as well as others
willing to take part, presented gifts to the monarch. The most important
gift was presented during a special ceremony. When a gift was worth more
than 10,000 Derrik (Achaemenian gold coin) the issue was registered in
a special office. This was advantageous to those who presented such special
gifts. For others, the presents were fairly assessed by the confidants
of the court. Then the assessment was registered in special offices. The
purpose of registering was that whenever the person who presented the
gift registered by the court was in trouble, the monarch and the court
would help him. Jahez, a historian and writer, writes in one of his books
on ancient Iran: " Whenever the owner of the present is in trouble or
wants to construct a building, set up a feast, have his children married,
etc. the one in charge of this in the court would check the registration.
If the registered amount exceeded 10,000 Derrik, he or she would receive
an amount of twice as much."[1] A thousand years later, the inhabitants
of Rhodes invented the concept of the 'general average'. Merchants whose
goods were being shipped together would pay a proportionally divided premium
which would be used to reimburse any merchant whose goods were jettisoned
during storm or sinkage. The Greeks and Romans introduced the origins
of health and life insurance c. 600 AD when they organized guilds called
"benevolent societies" which cared for the families and paid funeral expenses
of members upon death. Guilds in the Middle Ages served a similar purpose.
The Talmud deals with several aspects of insuring goods. Before insurance
was established in the late 17th century, "friendly societies" existed
in England, in which people donated amounts of money to a general sum
that could be used for emergencies. Separate insurance contracts (i.e.,
insurance policies not bundled with loans or other kinds of contracts)
were invented in Genoa in the 14th century, as were insurance pools backed
by pledges of landed estates. These new insurance contracts allowed insurance
to be separated from investment, a separation of roles that first proved
useful in marine insurance. Insurance became far more sophisticated in
post-Renaissance Europe, and specialized varieties developed.
Toward
the end of the seventeenth century, London's growing importance as a canter
for trade increased demand for marine insurance. In the late 1680s, Mr.
Edward Lloyd opened a coffee house that became a popular haunt of ship
owners, merchants, and ships’ captains, and thereby a reliable source
of the latest shipping news. It became the meeting place for parties wishing
to insure cargoes and ships, and those willing to underwrite such ventures.
Today, Lloyd's of London remains the leading market (note that it is not
an insurance company) for marine and other specialist types of insurance,
but it works rather differently than the more familiar kinds of insurance.
Insurance as we know it today can be traced to the Great Fire of London,
which in 1666 devoured 13,200 houses. In the aftermath of this disaster,
Nicholas Barbon opened an office to insure buildings. In 1680, he established
England's first fire insurance company, "The Fire Office," to insure brick
and frame homes. The first insurance company in the United States underwrote
fire insurance and was formed in Charles Town (modern-day Charleston),
South Carolina, in 1732. Benjamin Franklin helped to popularize and make
standard the practice of insurance, particularly against fire in the form
of perpetual insurance. In 1752, he founded the Philadelphia Contributionship
for the Insurance of Houses from Loss by Fire. Franklin's company was
the first to make contributions toward fire prevention. Not only did his
company warn against certain fire hazards, it refused to insure certain
buildings where the risk of fire was too great, such as all wooden houses.
In the United States, regulation of the insurance industry is highly Balkanized,
with primary responsibility assumed by individual state insurance departments.
Whereas insurance markets have become centralized nationally and internationally,
state insurance commissioners operate individually, though at times in
concert through a national insurance commissioners' organization. In recent
years, some have called for a dual state and federal regulatory system
(commonly referred to as the Optional Federal Charter (OFC)) for insurance
similar to that which oversees state banks and national banks.
Types
of insurance
Any risk
that can be quantified can potentially be insured. Specific kinds of risk
that may give rise to claims are known as "perils". An insurance policy
will set out in detail which perils are covered by the policy and which
are not. Below are (non-exhaustive) lists of the many different types
of insurance that exist. A single policy may cover risks in one or more
of the categories set forth below. For example, auto insurance would typically
cover both property risk (covering the risk of theft or damage to the
car) and liability risk (covering legal claims from causing an accident).
A homeowner's insurance policy in the US typically includes property insurance
covering damage to the home and the owner's belongings, liability insurance
covering certain legal claims against the owner, and even a small amount
of health insurance for medical expenses of guests who are injured on
the owner's property. Business insurance can be any kind of insurance
that protects businesses against risks. Some principal subtypes of business
insurance are (a) the various kinds of professional liability insurance,
also called professional indemnity insurance, which are discussed below
under that name; and (b) the business owners policy (BOP), which bundles
into one policy many of the kinds of coverage that a business owner needs,
in a way analogous to how homeowners insurance bundles the coverages that
a homeowner needs.
Health
Insurance
Health insurance policies will often cover the cost of private medical
treatments if the National Health Service in the United Kingdom (NHS)
or other publicly-funded health programs do not pay for them. It will
often result in quicker health care where better facilities are available.
Dental insurance, like medical insurance, is coverage for individuals
to protect them against dental costs. In the US, dental insurance is often
part of an employer's benefits package, along with health insurance. Most
countries rely on public funding to ensure that all citizens have universal
access to health care.
Disability
Insurance
* Disability insurance policies provide financial support in the event
the policyholder is unable to work because of disabling illness or injury.
It provides monthly support to help pay such obligations as mortgages
and credit cards.
* Total permanent disability insurance insurance provides benefits when
a person is permanently disabled and can no longer work in their profession,
often taken as an adjunct to life insurance.
* Disability overhead insurance allows business owners to cover the overhead
expenses of their business while they are unable to work.
* Workers' compensation insurance replaces all or part of a worker's wages
lost and accompanying medical expense incurred because of a job-related
injury.
Casualty
Insurance
Casualty insurance insures against accidents, not necessarily tied to
any specific property.
* Crime insurance is a form of casualty insurance that covers the policyholder
against losses arising from the criminal acts of third parties. For example,
a company can obtain crime insurance to cover losses arising from theft
or embezzlement.
* Political risk insurance is a form of casualty insurance that can be
taken out by businesses with operations in countries in which there is
a risk that revolution or other political conditions will result in a
loss.
Life
Insurance
Life insurance provides a monetary benefit to a decedent's family or other
designated beneficiary, and may specifically provide for income to an
insured person's family, burial, funeral and other final expenses. Life
insurance policies often allow the option of having the proceeds paid
to the beneficiary either in a lump sum cash payment or an annuity. Annuities
provide a stream of payments and are generally classified as insurance
because they are issued by insurance companies and regulated as insurance
and require the same kinds of actuarial and investment management expertise
that life insurance requires. Annuities and pensions that pay a benefit
for life are sometimes regarded as insurance against the possibility that
a retiree will outlive his or her financial resources. In that sense,
they are the complement of life insurance and, from an underwriting perspective,
are the mirror image of life insurance. Certain life insurance contracts
accumulate cash values, which may be taken by the insured if the policy
is surrendered or which may be borrowed against. Some policies, such as
annuities and endowment policies, are financial instruments to accumulate
or liquidate wealth when it is needed. In many countries, such as the
US and the UK, the tax law provides that the interest on this cash value
is not taxable under certain circumstances. This leads to widespread use
of life insurance as a tax-efficient method of saving as well as protection
in the event of early death. In US, the tax on interest income on life
insurance policies and annuities is generally deferred. However, in some
cases the benefit derived from tax deferral may be offset by a low return.
This depends upon the insuring company, the type of policy and other variables
(mortality, market return, etc.). Moreover, other income tax saving vehicles
(e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value
accumulation. A combination of low-cost term life insurance and a higher-return
tax-efficient retirement account may achieve better investment return.
Property
Insurance
Property insurance provides protection against risks to property, such
as fire, theft or weather damage. This includes specialized forms of insurance
such as fire insurance, flood insurance, earthquake insurance, home insurance,
inland marine insurance or boiler insurance.
* Automobile
insurance, known in the UK as motor insurance, is probably the most common
form of insurance and may cover both legal liability claims against the
driver and loss of or damage to the insured's vehicle itself. Throughout
the United States auto insurance policy is required to legally operate
a motor vehicle on public roads. In some jurisdictions, bodily injury
compensation for automobile accident victims has been changed to a no-fault
system, which reduces or eliminates the ability to sue for compensation
but provides automatic eligibility for benefits. Credit card companies
insure against damage on rented cars. o Driving School Insurance insurance
provides cover for any authorized driver whilst under going tuition, cover
also unlike other motor policies provides cover for instructor liability
where both the pupil and driving instructor are both equally liable in
the event of a claim.
* Aviation
insurance insures against hull, spares, deductible, hull wear and liability
risks.
* Boiler
insurance (also known as boiler and machinery insurance or equipment breakdown
insurance) insures against accidental physical damage to equipment or
machinery.
* Builder's
risk insurance insures against the risk of physical loss or damage to
property during construction. Builder's risk insurance is typically written
on an "all risk" basis covering damage due to any cause (including the
negligence of the insured) not otherwise expressly excluded.
* Crop
insurance "Farmers use crop insurance to reduce or manage various risks
associated with growing crops. Such risks include crop loss or damage
caused by weather, hail, drought, frost damage, insects, or disease, for
instance."
* Earthquake
insurance is a form of property insurance that pays the policyholder in
the event of an earthquake that causes damage to the property. Most ordinary
homeowners insurance policies do not cover earthquake damage. Most earthquake
insurance policies feature a high deductible. Rates depend on location
and the probability of an earthquake, as well as the construction of the
home.
* A fidelity
bond is a form of casualty insurance that covers policyholders for losses
that they incur as a result of fraudulent acts by specified individuals.
It usually insures a business for losses caused by the dishonest acts
of its employees.
* Flood
insurance protects against property loss due to flooding. Many insurers
in the US do not provide flood insurance in some portions of the country.
In response to this, the federal government created the National Flood
Insurance Program which serves as the insurer of last resort.
* Home
insurance or homeowners insurance: See "Property insurance".
* Marine
insurance and marine cargo insurance cover the loss or damage of ships
at sea or on inland waterways, and of the cargo that may be on them. When
the owner of the cargo and the carrier are separate corporations, marine
cargo insurance typically compensates the owner of cargo for losses sustained
from fire, shipwreck, etc., but excludes losses that can be recovered
from the carrier or the carrier's insurance. Many marine insurance underwriters
will include "time element" coverage in such policies, which extends the
indemnity to cover loss of profit and other business expenses attributable
to the delay caused by a covered loss.
* Surety
bond insurance is a three party insurance guaranteeing the performance
of the principal. * Terrorism insurance provides protection against any
loss or damage caused by terrorist activities.
* Volcano
insurance is an insurance that covers volcano damage in Hawaii.
* Windstorm
insurance is an insurance covering the damage that can be caused by hurricanes
and tropical cyclones.
Liability
Insurance
Liability insurance is a very broad superset that covers legal claims
against the insured. Many types of insurance include an aspect of liability
coverage. For example, a homeowner's insurance policy will normally include
liability coverage which protects the insured in the event of a claim
brought by someone who slips and falls on the property; automobile insurance
also includes an aspect of liability insurance that indemnifies against
the harm that a crashing car can cause to others' lives, health, or property.
The protection offered by a liability insurance policy is twofold: a legal
defense in the event of a lawsuit commenced against the policyholder and
indemnification (payment on behalf of the insured) with respect to a settlement
or court verdict. Liability policies typically cover only the negligence
of the insured, and will not apply to results of willful or intentional
acts by the insured. * Environmental liability insurance protects the
insured from bodily injury, property damage and cleanup costs as a result
of the dispersal, release or escape of pollutants. * Errors and omissions
insurance: See "Professional liability insurance" under "Liability insurance".
* Professional liability insurance, also called professional indemnity
insurance, protects insured professionals such as architectural corporation
and medical practice against potential negligence claims made by their
patients/clients. Professional liability insurance may take on different
names depending on the profession. For example, professional liability
insurance in reference to the medical profession may be called malpractice
insurance. Notaries public may take out errors and omissions insurance
(E&O). Other potential E&O policyholders include, for example,
real estate brokers, home inspectors, appraisers, and website developers.
* Directors and officers liability insurance protects an organization
(usually a corporation) from costs associated with litigation resulting
from mistakes incurred by directors and officers for which they are liable.
In the industry, it is usually called "D&O" for short. * Prize indemnity
insurance protects the insured from giving away a large prize at a specific
event. Examples would include offering prizes to contestants who can make
a half-court shot at a basketball game, or a hole-in-one at a golf tournament.
Credit
Insurance
Credit insurance repays some or all of a loan back when certain things
happen to the borrower such as unemployment, disability, or death. * Mortgage
insurance insures the lender against default by the borrower. Mortgage
insurance is a form of credit insurance, although the name credit insurance
more often is used to refer to policies that cover other kinds of debt.
Other
types of Insurance
* Collateral
protection insurance or CPI, insures property (primarily vehicles) held
as collateral for loans made by lending institutions.
* Defense Base Act Workers' compensation or DBA Insurance insurance provides
coverage for civilian workers hired by the government to perform contracts
outside the US and Canada. DBA is required for all US citizens, US residents,
US Green Card holders, and all employees or subcontractors hired on overseas
government contracts. Depending on the country, Foreign Nationals must
also be covered under DBA. This coverage typically includes expenses related
to medical treatment and loss of wages, as well as disability and death
benefits.
* Expatriate insurance provides individuals and organizations operating
outside of their home country with protection for automobiles, property,
health, liability and business pursuits.
* Financial loss insurance protects individuals and companies against
various financial risks. For example, a business might purchase cover
to protect it from loss of sales if a fire in a factory prevented it from
carrying out its business for a time. Insurance might also cover the failure
of a creditor to pay money it owes to the insured. This type of insurance
is frequently referred to as "business interruption insurance." Fidelity
bonds and surety bonds are included in this category, although these products
provide a benefit to a third party (the "obligee") in the event the insured
party (usually referred to as the "obligor") fails to perform its obligations
under a contract with the obligee.
* Kidnap and ransom insurance
* Locked funds insurance is a little-known hybrid insurance policy jointly
issued by governments and banks. It is used to protect public funds from
tamper by unauthorized parties. In special cases, a government may authorize
its use in protecting semiprivate funds which are liable to tamper. The
terms of this type of insurance are usually very strict. Therefore it
is used only in extreme cases where maximum security of funds is required.
* Nuclear incident insurance covers damages resulting from an incident
involving radioactive materials and is generally arranged at the national
level. (For the United States, see the Price-Anderson Nuclear Industries
Indemnity Act.)
* Pet insurance insures pets against accidents and illnesses - some companies
cover routine/wellness care and burial, as well.
* Pollution Insurance, which consists of first-party coverage for contamination
of insured property either by external or on-site sources. Coverage for
liability to third parties arising from contamination of air, water, or
land due to the sudden and accidental release of hazardous materials from
the insured site. The policy usually covers the costs of cleanup and may
include coverage for releases from underground storage tanks. Intentional
acts are specifically excluded.
* Purchase insurance is aimed at providing protection on the products
people purchase. Purchase insurance can cover individual purchase protection,
warranties, guarantees, care plans and even mobile phone insurance. Such
insurance is normally very limited in the scope of problems that are covered
by the policy.
* Title insurance provides a guarantee that title to real property is
vested in the purchaser and/or mortgagee, free and clear of liens or encumbrances.
It is usually issued in conjunction with a search of the public records
performed at the time of a real estate transaction.
* Travel insurance is an insurance cover taken by those who travel abroad,
which covers certain losses such as medical expenses, lost of personal
belongings, travel delay, personal liabilities, etc.
Insurance
financing vehicles
* Protected Self-Insurance is an alternative risk financing mechanism
in which an organization retains the mathematically calculated cost of
risk within the organization and transfers the catastrophic risk with
specific and aggregate limits to an Insurer so the maximum total cost
of the program is known. A properly designed and underwritten Protected
Self-Insurance Program reduces and stabilizes the cost of insurance and
provides valuable risk management information.
* Retrospectively Rated Insurance is a method of establishing a premium
on large commercial accounts. The final premium is based on the insured's
actual loss experience during the policy term, sometimes subject to a
minimum and maximum premium, with the final premium determined by a formula.
Under this plan, the current year's premium is based partially (or wholly)
on the current year's losses, although the premium adjustments may take
months or years beyond the current year's expiration date. The rating
formula is guaranteed in the insurance contract. Formula: retrospective
premium = converted loss + basic premium × tax multiplier. Numerous variations
of this formula have been developed and are in use.
* Fraternal insurance is provided on a cooperative basis by fraternal
benefit societies or other social organizations.
* Formal self insurance is the deliberate decision to pay for otherwise
insurable losses out of one's own money. This can be done on a formal
basis by establishing a separate fund into which funds are deposited on
a periodic basis, or by simply forgoing the purchase of available insurance
and paying out-of-pocket. Self insurance is usually used to pay for high-frequency,
low-severity losses. Such losses, if covered by conventional insurance,
mean having to pay a premium that includes loadings for the company's
general expenses, cost of putting the policy on the books, acquisition
expenses, premium taxes, and contingencies. While this is true for all
insurance, for small, frequent losses the transaction costs may exceed
the benefit of volatility reduction that insurance otherwise affords.
* No-fault insurance is a type of insurance policy (typically automobile
insurance) where insureds are indemnified by their own insurer regardless
of fault in the incident.
* Reinsurance is a type of insurance purchased by insurance companies
or self-insured employers to protect against unexpected losses. Financial
reinsurance is a form of reinsurance that is primary used for capital
management rather than to transfer insurance risk.
* Stop-loss insurance provides protection against catastrophic or unpredictable
losses. It is purchased by organizations who do not want to assume 100%
of the liability for losses arising from the plans. Under a stop-loss
policy, the insurance company becomes liable for losses that exceed certain
limits called deductibles.
* Social insurance can be many things to many people in many countries.
But a summary of its essence is that it is a collection of insurance coverages
(including components of life insurance, disability income insurance,
unemployment insurance, health insurance, and others), plus retirement
savings, that mandates participation by all citizens. By forcing everyone
in society to be a policyholder and pay premiums, it ensures that everyone
can become a claimant when or if he/she needs to. Along the way this inevitably
becomes related to other concepts such as the justice system and the welfare
state. This is a large, complicated topic that engenders tremendous debate,
which can be further studied in the following articles (and others): o
Social welfare provision o Social security o Social safety net o National
Insurance o Social Security (United States) o Social Security debate (United
States)
Insurance
Companies
Insurance companies may be classified into two groups:
* Life insurance companies, which sell life insurance, annuities and pensions
products.
* Non-life, General, or Property/Casualty insurance companies, which sell
other types of insurance.
General
insurance companies can be further divided into these sub categories.
* Standard Lines
* Excess Lines
In most
countries, life and non-life insurers are subject to different regulatory
regimes and different tax and accounting rules. The main reason for the
distinction between the two types of company is that life, annuity, and
pension business is very long-term in nature — coverage for life
assurance or a pension can cover risks over many decades. By contrast,
non-life insurance cover usually covers a shorter period, such as one
year. In the United States, standard line insurance companies are your
"main stream" insurers. These are the companies that typically insure
your auto, home or business. They use pattern or "cookie-cutter" policies
without variation from one person to the next. They usually have lower
premiums than excess lines and can sell directly to individuals. They
are regulated by state laws that can restrict the amount they can charge
for insurance policies. Excess line insurance companies (AKA Excess and
Surplus) typically insure risks not covered by the standard lines market.
They are broadly referred as being all insurance placed with non-admitted
insurers. Non-admitted insurers are not licensed in the states where the
risks are located. These companies have more flexibility and can react
faster than standard insurance companies because they are not required
to file rates and forms as do the "admitted" carriers do. However, they
still have substantial regulatory requirements placed upon them. State
laws generally require insurance placed with surplus line agents and brokers
to not be available through standard licensed insurers. Insurance companies
are generally classified as either mutual or stock companies. This is
more of a traditional distinction as true mutual companies are becoming
rare. Mutual companies are owned by the policyholders, while stockholders
(who may or may not own policies) own stock insurance companies. Other
possible forms for an insurance company include reciprocals, in which
policyholders 'reciprocate' in sharing risks, and Lloyds organizations.
Insurance
companies are rated by various agencies such as A. M. Best. The ratings
include the company's financial strength, which measures its ability to
pay claims. It also rates financial instruments issued by the insurance
company, such as bonds, notes, and securitization products. Reinsurance
companies are insurance companies that sell policies to other insurance
companies, allowing them to reduce their risks and protect themselves
from very large losses. The reinsurance market is dominated by a few very
large companies, with huge reserves. A re-insurer may also be a direct
writer of insurance risks as well. Captive insurance companies may be
defined as limited-purpose insurance companies established with the specific
objective of financing risks emanating from their parent group or groups.
This definition can sometimes be extended to include some of the risks
of the parent company's customers. In short, it is an in-house self-insurance
vehicle. Captives may take the form of a "pure" entity (which is a 100
percent subsidiary of the self-insured parent company); of a "mutual"
captive (which insures the collective risks of members of an industry);
and of an "association" captive (which self-insures individual risks of
the members of a professional, commercial or industrial association).
Captives represent commercial, economic and tax advantages to their sponsors
because of the reductions in costs they help create and for the ease of
insurance risk management and the flexibility for cash flows they generate.
Additionally, they may provide coverage of risks which is neither available
nor offered in the traditional insurance market at reasonable prices.
The types of risk that a captive can underwrite for their parents include
property damage, public and products liability, professional indemnity,
employee benefits, employers liability, motor and medical aid expenses.
The captive's exposure to such risks may be limited by the use of reinsurance.
Captives
are becoming an increasingly important component of the risk management
and risk financing strategy of their parent. This can be understood against
the following background:
* heavy and increasing premium costs in almost every line of coverage;
* difficulties in insuring certain types of fortuitous risk; * differential
coverage standards in various parts of the world;
* rating structures which reflect market trends rather than individual
loss experience;
* insufficient credit for deductibles and/or loss control efforts.
There
are also companies known as 'insurance consultants'. Like a mortgage broker,
these companies are paid a fee by the customer to shop around for the
best insurance policy amongst many companies. Similar to an insurance
consultant, an 'insurance broker' also shops around for the best insurance
policy amongst many companies. However, with insurance brokers, the fee
is usually paid in the form of commission from the insurer that is selected
rather than directly from the client. Neither insurance consultants nor
insurance brokers are insurance companies and no risks are transferred
to them in insurance transactions. Third party administrators are companies
that perform underwriting and sometimes claims handling services for insurance
companies. These companies often have special expertise that the insurance
companies do not have. The financial stability and strength of an insurance
company should be a major consideration when purchasing an insurance contract.
An insurance premium paid currently provides coverage for losses that
might arise many years in the future. For that reason, the viability of
the insurance carrier is very important. In recent years, a number of
insurance companies have become insolvent, leaving their policyholders
with no coverage (or coverage only from a government-backed insurance
pool or other arrangement with less attractive payouts for losses). A
number of independent rating agencies, such as Best's, Fitch, Standard
& Poor's, and Moody's Investors Service, provide information and rate
the financial viability of insurance companies.
LIST
OF US INSURANCE COMPANIES
* American National Insurance Company
* American Automobile Association
* AIG
* Allstate
* American Family Insurance
* American Farmers and Ranchers Mutual (formerly Oklahoma Farmers Union
Mutual)
* Amica
* Auto-Owners Insurance
* California Casualty Insurance
* CapitalOne
* Commerce Insurance Group
* COUNTRY Insurance & Financial Services
* Cuna Mutual Group
* Electric Insurance Company
* Esurance
* Expatriate Insurance
* Farm Bureau Insurance
* Farmers Insurance
* Frankenmuth Mutual Insurance Company
* GAINSCO Auto Insurance
* GMAC Insurance
* Geico
* The General
* GuideOne
* Hanover Insurance
* The Hartford
* Hastings Mutual Insurance Company
* Haulers Insurance Company
* Infinity Auto Insurance Company
* Liberty Mutual
* Nationwide Insurance
* National Interstate
* Metropolitan Life Insurance Company
* Mutual of Enumclaw
* OneBeacon Insurance Group
* Pekin Insurance
* Pemco
* Progressive
* Safeco
* Safeway Insurance Group
* Standard Insurance Company
* State Auto Insurance Companies
* Shelter Insurance Companies
* Solid Insurance Group
* State Farm Mutual Automobile Insurance Company
* The St. Paul Travelers Companies, Inc.
* Trustgard Insurance
* Unitrin Direct Auto Insurance
* USAA
* Wawanesa (California)
* Westfield Insurance
LIST
OF DISABILITY INSURANCE COMPANIES
* American Family Insurance * Mutual of America * Principal Financial
Group * Standard Insurance Company * Unum * Berkshire Life * MetLife
LIST
OF EXPATRIATE INSURANCE COMPANIES:
* Clements International
LIST
OF GENERAL LIABILITY INSURANCE COMPANIES: *
American Family Insurance
LIST
OF HEALTH INSURANCE COMPANIES: *
American National Insurance Company * Aetna * Aflac * American Family
Insurance * American Medical Security Life Insurance Company * Anthem
* Assurant * Asuris Northwest Health * Blue Cross and Blue Shield Association
* Celtic Insurance Co. * CIGNA * community first * Continental General
* Fortis * Golden Rule Insurance Company * Group Health Inc. * Group Health
Cooperative * Harvard Community Health Plan * HealthMarkets * Health Net
of Arizona * Health Net of Oregon * HealthPartners * Health Plan of Nevada
* Humana Inc. * Insurance Services of America * Intermountain Health Care
* Kaiser Permanente * LifeWise Health Plan of Arizona * LifeWise Health
Plan of Oregon * LifeWise Health Plan of Washington * Medica of Minnesota
* Medical Mutual * Oxford Health Plans, Inc. * Principal Financial Group
* Shelter Insurance Companies * UNICARE * UnitedHealthCare (UnitedHealth
recently purchased Pacificare) * Vista Healthplan of South Florida * Wellpoint
* College Health IPA * Acordia National
LIST
OF LIFE INSURANCE COMPANIES: *
AAA d.b.a. Western United * AAA Life Insurance Company * Aetna * AIG American
General * Alfa Life Insurance * Allstate Insurance Company * American
Family Insurance * American Farmers and Ranchers * American International
Group * American National Insurance Company * Aon Corporation, formerly
known as Combined Insurance Company of America * Auto-Owners Insurance
* AXA * Bankers Life and Casualty Company * Banner Life * The Chesapeake
Life Insurance Company * Farm Bureau Insurance * Farmers Insurance * First
United American Life Insurance Company * Foresters * Garden State Life
Insurance Company * Globe Life And Accident Insurance Company * Guardian
Life Insurance Company * Jackson National Life * John Hancock Insurance,
now a unit of Manulife Financial * The Hartford * Kansas City Life Insurance
Company, Inc. * Lafayette Life Insurance Company * Liberty NationalLife
Insurance Company * Mass Mutual Financial Group * MEGA Life and Health
Insurance * Metropolitan Life Insurance Company * Minnesota Life Insurance
Company * Modern Woodmen of America * Nationwide Insurance * New York
Life * Northwestern Mutual Life Insurance Company * Old Mutual * Pacific
Life Insurance * Primerica Life Insurance Company * Principal Financial
Group * Protective Life Corporation * Prudential Financial * RBC * Sagicor
USA, Inc., formerly known as American Founders Life * Shenendoah * The
Standard (Also known as Standard Insurance Company) * Shelter Life Insurance
Company * State Farm Insurance * Thrivent Financial for Lutherans, product
of merger between Lutheran Brotherhood & Aid Association for Lutherans
* Travelers Group, now somewhat part of Citigroup, other parts belong
to The St. Paul Travelers Companies, Inc. * USAA * West Coast * Western
& Southern * Western Reserve Life
LIST
OF PET INSURANCE COMPANIES: * ASPCA Pet Health Insurance
* Pets Health Plan * Hartville Pet Insurance * PetCare * Global Pet Insurance
* Pets Best Pet Insurance * Veterinary Pet Insurance * Embrace Pet Insurance
* Petplan USA Pet Insurance * PetFirst Healthcare Pet Insurance * Trupanion
Pet Health Insurance
LIST
OF PROPERTY AND CASUALTY INSURANCE COMPANIES: * ACE USA
* Acuity * Allstate * Alfa Mutual Insurance * American Family Insurance
* American National Property and Casualty * American International Group
* Assurant Specialty Property * Argonaut Group, Inc. * Auto-Owners Insurance
* BISYS Commercial Insurance Services, Inc. * Bliss & Glennon, Inc. *
Chubb Corporation * Church Mutual * Cincinnati Financial Corporation *
Commerce Insurance Group * CNA Financial Corporation * Farm Bureau Insurance
* Farmers Insurance * Fireman's Fund Insurance Company * FM Global * Frankenmuth
Mutual Insurance Company * Great American Insurance Company * Hanover
Insurance * The Hartford * Hastings Mutual Insurance Company * Harleysville
Insurance Company * HomeInsurance.com * Infinity Property & Casualty *
Liberty Mutual * Manulife Financial * Markel Corporation * Nationwide
Insurance * NLC Insurance Companies * OneBeacon Insurance Group * Penn
National Insurance * Philadelphia Insurance * The St. Paul Travelers Companies,
Inc. * Safeway Insurance Group * Secura * Sentry Insurance * Shelter Insurance
Companies * State Auto Insurance Companies * State Farm Insurance * Southern
Farm Bureau * Union Standard Insurance * United Automobile Insurance Company
* USAA * Wausau Insurance Companies * West Bend Mutual Insurance Company
* Westfield Insurance * Zenith Insurance Company * Zurich Insurance Services
* Island Insurance * The Phoenix Group
LIST
OF RENTER INSURANCE COMPANIES: * American Family Insurance
* American Bankers Insurance Company of Florida * Assurant Specialty Property
* Balboa Insurance * State Farm Insurance
LIST
OF TRAVEL INSURANCE COMPANIES: * American Family Insurance
* ASSIST-CARD
LIST
OF WORKERS' COMPENSATION INSURANCE COMPANIES: * ACE * Amerisafe
* Liberty Mutual * Missouri Employers Mutual * Penn National Insurance
* State Accident Insurance Fund (Oregon) * State Compensation Insurance
Fund (California) * Zenith Insurance
ABOUT
ORANGE COUNTY
Orange County is a county in Southern California, United States.
Its county seat is Santa Ana. According to the 2000 Census, its
population was 2,846,289, making it the second most populous county
in the state of California, and the fifth most populous in the United
States. The state of California estimates its population as of 2007
to be 3,098,121 people, dropping its rank to third, behind San Diego
County. Thirty-four incorporated cities are located in Orange County;
the newest is Aliso Viejo.
Unlike many other large centers of population in the United States,
Orange County uses its county name as its source of identification
whereas other places in the country are identified by the large
city that is closest to them. This is because there is no defined
center to Orange County like there is in other areas which have
one distinct large city. Five Orange County cities have populations
exceeding 170,000 while no cities in the county have populations
surpassing 360,000. Seven of these cities are among the 200 largest
cities in the United States.
Orange County is also famous as a tourist destination, as the county
is home to such attractions as Disneyland and Knott's Berry Farm,
as well as sandy beaches for swimming and surfing, yacht harbors
for sailing and pleasure boating, and extensive area devoted to
parks and open space for golf, tennis, hiking, kayaking, cycling,
skateboarding, and other outdoor recreation. It is at the center
of Southern California's Tech Coast, with Irvine being the primary
business hub.
The average price of a home in Orange County is $541,000. Orange
County is the home of a vast number of major industries and service
organizations. As an integral part of the second largest market
in America, this highly diversified region has become a Mecca for
talented individuals in virtually every field imaginable. Indeed
the colorful pageant of human history continues to unfold here;
for perhaps in no other place on earth is there an environment more
conducive to innovative thinking, creativity and growth than this
exciting, sun bathed valley stretching between the mountains and
the sea in Orange County.
Orange County was Created March 11 1889, from part of Los Angeles
County, and, according to tradition, so named because of the flourishing
orange culture. Orange, however, was and is a commonplace name in
the United States, used originally in honor of the Prince of Orange,
son-in-law of King George II of England.
 |
Incorporated:
March 11, 1889
Legislative Districts:
* Congressional: 38th-40th, 42nd & 43
* California Senate: 31st-33rd, 35th & 37
* California Assembly: 58th, 64th, 67th, 69th, 72nd & 74
County Seat: Santa Ana
County Information:
Robert E. Thomas Hall of Administration
10 Civic Center Plaza, 3rd Floor, Santa Ana 92701
Telephone: (714)834-2345 Fax: (714)834-3098
County Government Website: http://www.oc.ca.gov |
CITIES OF ORANGE COUNTY CALIFORNIA:
City
of Aliso Viejo,
92653, 92656, 92698
City of Anaheim, 92801,
92802, 92803, 92804, 92805, 92806, 92807, 92808, 92809, 92812,
92814, 92815, 92816, 92817, 92825, 92850, 92899
City of Brea, 92821,
92822, 92823
City of Buena Park,
90620, 90621, 90622, 90623, 90624
City of Costa Mesa,
92626, 92627, 92628
City of Cypress,
90630
City of Dana Point,
92624, 92629
City of Fountain
Valley, 92708, 92728
City of Fullerton,
92831, 92832, 92833, 92834, 92835, 92836, 92837, 92838
City of Garden
Grove, 92840, 92841, 92842, 92843, 92844, 92845, 92846
City of Huntington
Beach, 92605, 92615, 92646, 92647, 92648, 92649
City of Irvine,
92602, 92603, 92604, 92606, 92612, 92614, 92616, 92618, 92619,
92620, 92623, 92650, 92697, 92709, 92710
City of La Habra,
90631, 90632, 90633
City of La Palma,
90623
City of Laguna Beach,
92607, 92637, 92651, 92652, 92653, 92654, 92656, 92677, 92698
City of Laguna
Hills, 92637, 92653, 92654, 92656
City of Laguna
Niguel, 92607, 92677
|
City
of Laguna Woods,
92653, 92654
City of Lake Forest,
92609, 92630, 92610
City of Los Alamitos,
90720, 90721
City of Mission Viejo,
92675, 92690, 92691, 92692, 92694
City of Newport
Beach, 92657, 92658, 92659, 92660, 92661, 92662, 92663
City of Orange,
92856, 92857, 92859, 92861, 92862, 92863, 92864, 92865, 92866,
92867, 92868, 92869
City of Placentia,
92870, 92871
City of Rancho Santa Margarita,
92688, 92679
City of San Clemente,
92672, 92673, 92674
City of San Juan
Capistrano, 92675, 92690, 92691, 92692, 92693, 92694
City of Santa Ana,
92701, 92702, 92703, 92704, 92705, 92706, 92707, 92708, 92711,
92712, 92725, 92728, 92735, 92799
City of Seal Beach,
90740
City of Stanton,
90680
City of Tustin, 92780,
92781, 92782
City of Villa Park,
92861, 92867
City of Westminster,
92683, 92684, 92685
City of Yorba Linda,
92885, 92886, 92887
|
Noteworthy
communities Some of the communities that exist within city
limits are listed below:
* Anaheim Hills, Anaheim * Balboa Island, Newport Beach *
Corona del Mar, Newport Beach * Crystal Cove/Pelican Hill,
Newport Beach * Capistrano Beach, Dana Point * El Modena,
Orange * French Park, Santa Ana * Floral Park, Santa Ana *
Foothill Ranch, Lake Forest * Monarch Beach, Dana Point *
Nellie Gail, Laguna Hills * Northwood, Irvine * Woodbridge,
Irvine * Newport Coast, Newport Beach * Olive, Orange * Portola
Hills, Lake Forest * San Joaquin Hills, Laguna Niguel * San
Joaquin Hills, Newport Beach * Santa Ana Heights, Newport
Beach * Tustin Ranch, Tustin * Talega, San Clemente * West
Garden Grove, Garden Grove * Yorba Hills, Yorba Linda * Mesa
Verde, Costa Mesa
Unincorporated communities These communities are outside
of the city limits in unincorporated county territory:
* Coto de Caza * El Modena * Ladera Ranch * Las Flores * Midway
City * Orange Park Acres * Rossmoor * Silverado Canyon * Sunset
Beach * Surfside * Trabuco Canyon * Tustin Foothills
Adjacent counties to Orange County Are: * Los Angeles
County, California - north, west * San Bernardino County,
California - northeast * Riverside County, California - east
* San Diego County, California - southeast
|
|
ALL
ABOUT CALIFORNIA
The
State of California is a state located in the western Pacific region of
the United States and was the 31st admitted to the Union. It is the most
populous state of the United States. It is bordered by Oregon to the north,
Nevada to the east, and Arizona to the southeast in the United States,
as well as Baja California in Mexico to the south. California's capital
city is Sacramento, with the four largest cities being Los Angeles, San
Diego, San Jose, and San Francisco. California is known for its diverse
climate and geography, as well as ethnically diverse population. The state
has 58 counties.
Before
becoming a part of the United States, Alta California was colonized by
the Spanish Empire in 1769. After Mexican independence in 1821, Alta California
remained as part of Mexico until 1846, when it was the independent California
Republic for one brief week. Following the conclusion of the Mexican-American
war of 1848, California was annexed by the United States and was admitted
to the Union as the thirty-first state on September 9, 1850.
California
is the third largest state by area in the US; its size gives it a diverse
geography, which ranges from sandy and rocky beaches of the Pacific coast,
to the rugged snowcapped Sierra Nevada mountains in the east, to desert
areas in the southeast and the forests of the northwest. The center portion
of the state is dominated by the Central Valley, one of the most productive
agricultural areas in the world and the largest of any US state. The Sierra
Nevada mountains contain Yosemite Valley, famous for its glacially-carved
domes, and Sequoia National Park, home to the giant sequoia trees, the
largest living organisms on Earth. The state is home to Mount Whitney,
the highest point in the contiguous United States,[2] as well as the second
lowest and hottest place in the Western Hemisphere, Death Valley. Many
of the trees located in the California White Mountains are the oldest
in the world; one Bristlecone pine has an age of 4,700 years.
The
California Gold Rush began in 1848, dramatically changing California to
accommodate an influx of population and an economic boom. The early 20th
century was marked by Los Angeles becoming the center of the entertainment
industry, in addition to the growth of a large tourism sector in the state.
Along with California's prosperous agricultural industry, other industries
include aerospace, petroleum, and computer and information technology.
California ranks among the top ten largest economies in the world, and
were it a separate country, it would be 34th amongst the most populous
countries, just behind Poland, as well as the 6th World's largest economy.
California borders the Pacific Ocean, Oregon, Nevada, Arizona, and the
Mexican state of Baja California. With an area of 160,000 mi² (411,000
km²) it is the third largest state in the United States in size, after
Alaska and Texas.
California's geography is rich, complex, and varied. In the middle of
the state lies the California Central Valley, bounded by the coastal mountain
ranges in the west, the Sierra Nevada to the east, the Cascade Range in
the north and the Tehachapi Mountains in the south. The Central Valley
is California's agricultural heartland and grows approximately one-third
of the nation's food.[5] Divided in two by the Sacramento-San Joaquin
River Delta, the northern portion, the Sacramento Valley serves as the
watershed of the Sacramento River, while the southern portion, the San
Joaquin Valley is the watershed for the San Joaquin River; both areas
derive its name from the rivers that transit them. With dredging, the
Sacramento and the San Joaquin Rivers have remained sufficiently deep
that several inland cities are seaports. The Sacramento-San Joaquin Bay
Delta serves as a critical water supply hub for the state. Water is routed
through an extensive network of canals and pumps out of the delta, that
traverse nearly the length of the state, including the Central Valley
Project, and the State Water Project. Water from the Sacramento-San Joaquin
Bay Delta provides drinking water for nearly 23 million people, almost
two-thirds of the state's population, and provides water to farmers on
the west side of the San Joaquin Valley. The Channel Islands are located
off the southern coast.
The Sierra Nevada (Spanish for "snowy range") include the highest peak
in the contiguous forty-eight states, Mount Whitney, at 14,505 ft (4,421
m), Yosemite National Park, and the deep freshwater lake, Lake Tahoe,
the largest lake in the state by volume. To the east of the Sierra Nevada
are Owens Valley and Mono Lake, an essential migratory bird habitat. In
the western part of the state is Clear Lake, the largest freshwater lake
by area entirely in California. Though Lake Tahoe is larger, it is divided
by the California/Nevada border. The Sierra Nevada falls to Arctic temperatures
in winter and has several dozen small glaciers, including Palisade Glacier,
the southernmost glacier in the United States.
About
35% of the state's total surface area is covered by forests, and California's
diversity of pine species is unmatched by any other state. California
contains more forest land than any other state except Alaska. In the south
is a large inland salt lake, the Salton Sea. Deserts in California make
up about 25% of the total surface area. The south-central desert is called
the Mojave; to the northeast of the Mojave lies Death Valley, which contains
the lowest, hottest point in North America, Badwater Flat. The distance
from the lowest point of Death Valley to the peak of Mount Whitney is
less than 200 miles (322 km). Indeed, almost all of southeastern California
is arid, hot desert, with routine extreme high temperatures during the
summer.
Along
the California coast are several major metropolitan areas, including Greater
Los Angeles, the San Francisco Bay Area, and San Diego.
By
2007, California's population has reached 37,700,000, making it the most
populated state, and is the 13th fastest-growing state. This includes
a natural increase since the last census of 1,909,368 people (that is
3,375,297 births minus 1,465,929 deaths) and an increase due to net migration
of 774,198 people into the state. Immigration from outside the United
States resulted in a net increase of 1,724,790 people, and migration within
the country produced a net decrease of 950,592.[10] According to the Sacramento
News & Review, California's population will increase to 50 million
people by 2025.[11]
California
is the second most populous state in the Western Hemisphere, exceeded
only by São Paulo State, Brazil. More than 12 percent of US citizens live
in California and its population is greater than that of all but 34 countries
of the world. California has eight of the top 50 US cities in terms of
population. Los Angeles is the nation's second-largest city with a population
of 3,849,378 people, followed by San Diego (8th), San Jose (10th), San
Francisco (14th), Long Beach (34th), Fresno (36th), Sacramento (37th)
and Oakland (44th). Los Angeles County has held the title of most populous
county for decades, and is more populous than 42 US states. The center
of population of California is at the town of Buttonwillow in Kern County.
As of 2005, The gross state product (GSP) is about $1.62 trillion, the
largest in the United States. California is responsible for 13% of the
United States gross domestic product (GDP). As of 2005, California's GDP
is larger than all but seven countries in the world (and all but eight
countries by Purchasing Power Parity).
California is also the home of several significant economic regions, such
as Hollywood (entertainment), the California Central Valley (agriculture),
the Silicon Valley and Tech Coast (computers and high tech), and wine
producing regions, such as the Napa Valley, Sonoma Valley and Southern
California's Santa Barbara and Paso Robles areas.
The
predominant industry, more than twice as large as the next, is agriculture,
(including fruit, vegetables, dairy, and wine). This is followed by aerospace;
entertainment, primarily television by dollar volume, although many movies
are still made in California; music production and recording studios;
light manufacturing, including computer hardware and software; and the
mining of borax. Oil drilling has played a significant role in the development
of the state.
Per
capita personal income was $38,956 as of 2006, ranking 11th in the nation.[24]
Per capita income varies widely by geographic region and profession. The
Central Valley is the most impoverished, with migrant farm workers making
less than minimum wage. Recently, the San Joaquin Valley was characterized
as one of the most economically depressed regions in the US, on par with
the region of Appalachia.[25]
Many
coastal cities include some of the wealthiest per-capita areas in the
US The high-technology sectors in Northern California, specifically Silicon
Valley, in Santa Clara and San Mateo counties, are currently emeAylorng
from economic downturn caused by the dot.com bust, which caused the loss
of over 250,000 jobs in Northern California alone. As of spring 2005,
economic growth has resumed in California at 4.3%.[26]
California
levies a 9.3% maximum variable rate income tax, with 6 tax brackets. It
collects about $40 billion per year in income taxes. California's combined
state, county and local sales tax rate is from 7.25 to 8.75%.[27] The
rate varies throughout the state at the local level. In all, it collects
about $28 billion in sales taxes per year. All real property is taxable
annually, the tax based on the property's fair market value at the time
of purchase. This tax does not increase based on a rise in real property
values (see Proposition 13). California collects $33 billion in property
taxes per year.
The
state of California has 478 incorporated cities and towns, of which 456
are cities and 22 are towns. Under California law, the terms "city" and
"town" are explicitly interchangeable; the name of an incorporated municipality
in the state can either by "City of (Name)" or "Town of (Name)." Please
find the list below:
|
A
| City |
County |
Incorporated |
| Adelanto |
San Bernardino |
December
22, 1970
|
| Agoura
Hills |
Los Angeles |
December
8, 1982
|
| Alameda |
Alameda |
April
19, 1854
|
| Albany |
Alameda |
September
22, 1908
|
| Alhambra |
Los Angeles |
July
11, 1903
|
| Aliso
Viejo |
Orange |
July
1, 2001
|
| Alturas |
Modoc |
September
16, 1901
|
| Amador
City |
Amador |
June
2, 1915
|
| American
Canyon |
Napa |
January
1, 1992
|
| Anaheim |
Orange |
March
18, 1876
|
| Anderson |
Shasta |
January
16, 1956
|
| Angels
Camp |
Calaveras |
January
24, 1912
|
| Antioch |
Contra Costa |
February
6, 1872
|
| Apple
Valley * |
San Bernardino |
November
28, 1988
|
| Arcadia |
Los Angeles |
August
5, 1903
|
| Arcata |
Humboldt |
February
2, 1858
|
| Arroyo
Grande |
San Luis Obispo |
July
10, 1911
|
| Artesia |
Los Angeles |
May
29, 1959
|
| Arvin |
Kern |
December
21, 1960
|
| Atascadero |
San Luis Obispo |
July
2, 1979
|
| Atherton
* |
San Mateo |
September
12, 1923
|
| Atwater |
Merced |
August
16, 1922
|
| Auburn |
Placer |
May
2, 1888
|
| Avalon |
Los Angeles |
June
26, 1913
|
| Avenal |
Kings |
September
11, 1979
|
| Azusa |
Los Angeles |
December
29, 1898
|
|
B
| City |
County |
Incorporated |
| Bakersfield |
Kern |
January
11, 1898
|
| Baldwin
Park |
Los Angeles |
January
25, 1956
|
| Banning |
Riverside |
February
6, 1913
|
| Barstow |
San Bernardino |
September
30, 1947
|
| Beaumont |
Riverside |
November
18, 1912
|
| Bell |
Los Angeles |
November
7, 1927
|
| Bell
Gardens |
Los Angeles |
August
1, 1961
|
| Bellflower |
Los Angeles |
September
3, 1957
|
| Belmont |
San Mateo |
October
29, 1926
|
| Belvedere |
Marin |
December
24, 1896
|
| Benicia |
Solano |
March
27, 1850
|
| Berkeley |
Alameda |
April
4, 1878
|
| Beverly
Hills |
Los Angeles |
January
28, 1914
|
| Big
Bear Lake |
San Bernardino |
November
28, 1980
|
| Biggs |
Butte |
June
26, 1903
|
| Bishop |
Inyo |
May
6, 1903
|
| Blue
Lake |
Humboldt |
April
23, 1910
|
| Blythe |
Riverside |
July
21, 1916
|
| Bradbury |
Los Angeles |
July
26, 1957
|
| Brawley |
Imperial |
April
6, 1908
|
| Brea |
Orange |
February
23, 1917
|
| Brentwood |
Contra Costa |
January
21, 1948
|
| Brisbane |
San Mateo |
November
27, 1961
|
| Buellton |
Santa Barbara |
February
1, 1992
|
| Buena
Park |
Orange |
January
27, 1953
|
| Burbank |
Los Angeles |
July
8, 1911
|
| Burlingame |
San Mateo |
June
6, 1908
|
|
C
| City |
County |
Incorporated |
| Calabasas |
Los Angeles |
April
5, 1991
|
| Calexico |
Imperial |
April
16, 1908
|
| California
City |
Kern |
December
10, 1965
|
| Calimesa |
Riverside |
December
1, 1990
|
| Calipatria |
Imperial |
February
28, 1919
|
| Calistoga |
Napa |
January
6, 1886
|
| Camarillo |
Ventura |
October
22, 1964
|
| Canyon
Lake |
Riverside |
December
1, 1990
|
| Capitola |
Santa Cruz |
January
11, 1949
|
| Carlsbad |
San Diego |
July
16, 1952
|
| Carmel-by-the-Sea |
Monterey |
October
31, 1916
|
| Carpinteria |
Santa Barbara |
September
28, 1965
|
| Carson |
Los Angeles |
February
20, 1968
|
| Cathedral
City |
Riverside |
November
16, 1981
|
| Ceres |
Stanislaus |
February
25, 1918
|
| Cerritos |
Los Angeles |
April
24, 1956
|
| Chico |
Butte |
January
8, 1872
|
| Chino |
San Bernardino |
February
28, 1910
|
| Chino
Hills |
San Bernardino |
December
1, 1991
|
| Chowchilla |
Madera |
February
7, 1923
|
| Chula
Vista |
San Diego |
November
28, 1911
|
| Citrus
Heights |
Sacramento |
January
1, 1997
|
| Claremont |
Los Angeles |
October
3, 1907
|
| Clayton |
Contra Costa |
March
18, 1964
|
| Clearlake |
Lake |
November
14, 1980
|
| Cloverdale |
Sonoma |
February
28, 1872
|
| Clovis |
Fresno |
February
27, 1912
|
| Coachella |
Riverside |
December
13, 1946
|
| Coalinga |
Fresno |
April
3, 1906
|
| Colfax |
Placer |
February
23, 1910
|
| Colma
* |
San Mateo |
August
5, 1924
|
| Colton |
San Bernardino |
July
11, 1887
|
| Colusa |
Colusa |
June
16, 1868
|
| City
of Commerce |
Los Angeles |
January
28, 1960
|
| Compton |
Los Angeles |
May
11, 1888
|
| Concord |
Contra Costa |
February
9, 1905
|
| Corcoran |
Kings |
August
11, 1914
|
| Corning |
Tehama |
August
6, 1907
|
| Corona |
Riverside |
July
13, 1896
|
| Coronado |
San Diego |
December
11, 1890
|
| Corte
Madera * |
Marin |
June
10, 1916
|
| Costa
Mesa |
Orange |
June
29, 1953
|
| Cotati |
Sonoma |
July
16, 1963
|
| Covina |
Los Angeles |
August
14, 1901
|
| Crescent
City |
Del Norte |
April
13, 1854
|
| Cudahy |
Los Angeles |
November
10, 1960
|
| Culver
City |
Los Angeles |
September
7, 1917
|
| Cupertino |
Santa Clara |
October
10, 1955
|
| Cypress |
Orange |
July
24, 1956
|
|
D
| City |
County |
Incorporated |
| Daly
City |
San Mateo |
March
22, 1911
|
| Dana
Point |
Orange |
January
1, 1989
|
| Danville
* |
Contra Costa |
July
1, 1982
|
| Davis |
Yolo |
March
28, 1917
|
| Del
Mar |
San Diego |
July
15, 1959
|
| Del
Rey Oaks |
Monterey |
September
3, 1953
|
| Delano |
Kern |
April
13, 1915
|
| Desert
Hot Springs |
Riverside |
September
25, 1963
|
| Diamond
Bar |
Los Angeles |
April
18, 1989
|
| Dinuba |
Tulare |
January
6, 1906
|
| Dixon |
Solano |
March
30, 1878
|
| Dorris |
Siskiyou |
December
23, 1908
|
| Dos
Palos |
Merced |
May
24, 1935
|
| Downey |
Los Angeles |
December
17, 1956
|
| Duarte |
Los Angeles |
August
22, 1957
|
| Dublin |
Alameda |
February
1, 1982
|
| Dunsmuir |
Siskiyou |
August
7, 1909
|
E
| City |
County |
Incorporated |
| East
Palo Alto |
San Mateo |
July
1, 1983
|
| El
Cajon |
San Diego |
November
12, 1912
|
| El
Centro |
Imperial |
April
16, 1908
|
| El
Cerrito |
Contra Costa |
August
23, 1917
|
| El
Monte |
Los Angeles |
November
18, 1912
|
| El
Segundo |
Los Angeles |
January
18, 1917
|
| Elk
Grove |
Sacramento |
July
1, 2000
|
| Emeryville |
Alameda |
December
8, 1896
|
| Encinitas |
San Diego |
October
1, 1986
|
| Escalon |
San Joaquin |
March
12, 1957
|
| Escondido |
San Diego |
October
8, 1888
|
| Etna |
Siskiyou |
March
13, 1878
|
| Eureka |
Humboldt |
April
18, 1856
|
| Exeter |
Tulare |
March
2, 1911
|
|
F
| City |
County |
Incorporated |
| Fairfax
* |
Marin |
March
2, 1931
|
| Fairfield |
Solano |
December
12, 1903
|
| Farmersville |
Tulare |
October
5, 1960
|
| Ferndale |
Humboldt |
August
28, 1893
|
| Fillmore |
Ventura |
July
10, 1914
|
| Firebaugh |
Fresno |
September
17, 1914
|
| Folsom |
Sacramento |
April
20, 1946
|
| Fontana |
San Bernardino |
June
25, 1952
|
| Fort
Bragg |
Mendocino |
August
5, 1889
|
| Fort
Jones |
Siskiyou |
March
16, 1872
|
| Fortuna |
Humboldt |
January
20, 1906
|
| Foster
City |
San Mateo |
April
27, 1971
|
| Fountain
Valley |
Orange |
June
13, 1957
|
| Fowler |
Fresno |
June
15, 1908
|
| Fremont |
Alameda |
January
23, 1956
|
| Fresno |
Fresno |
October
12, 1885
|
| Fullerton |
Orange |
February
15, 1904
|
|
G
| City |
County |
Incorporated |
| Galt |
Sacramento |
August
16, 1946
|
| Garden
Grove |
Orange |
June
18, 1956
|
| Gardena |
Los Angeles |
September
11, 1930
|
| Gilroy |
Santa Clara |
March
12, 1870
|
| Glendale |
Los Angeles |
February
15, 1906
|
| Glendora |
Los Angeles |
November
13, 1911
|
| Goleta |
Santa Barbara |
February
1, 2002
|
| Gonzales |
Monterey |
January
14, 1947
|
| Grand
Terrace |
San Bernardino |
November
30, 1978
|
| Grass
Valley |
Nevada |
March
13, 1893
|
| Greenfield |
Monterey |
January
7, 1947
|
| Gridley |
Butte |
November
23, 1905
|
| Grover
Beach |
San Luis Obispo |
December
21, 1959
|
| Guadalupe |
Santa Barbara |
August
3, 1946
|
| Gustine |
Merced |
November
11, 1915
|
|
H
| City |
County |
Incorporated |
| Half
Moon Bay |
San Mateo |
July
15, 1959
|
| Hanford |
Kings |
August
12, 1891
|
| Hawaiian
Gardens |
Los Angeles |
April
9, 1964
|
| Hawthorne |
Los Angeles |
July
12, 1922
|
| Hayward |
Alameda |
March
11, 1876
|
| Healdsburg |
Sonoma |
February
20, 1867
|
| Hemet |
Riverside |
January
20, 1910
|
| Hercules |
Contra Costa |
December
15, 1900
|
| Hermosa
Beach |
Los Angeles |
January
14, 1907
|
| Hesperia |
San Bernardino |
July
1, 1988
|
| Hidden
Hills |
Los Angeles |
October
19, 1961
|
| Highland |
San Bernardino |
November
24, 1987
|
| Hillsborough
* |
San Mateo |
May
5, 1910
|
| Hollister |
San Benito |
March
26, 1872
|
| Holtville |
Imperial |
July
1, 1908
|
| Hughson |
Stanislaus |
December
9, 1972
|
| Huntington
Beach |
Orange |
February
17, 1909
|
| Huntington
Park |
Los Angeles |
September
1, 1906
|
| Huron |
Fresno |
May
3, 1951
|
|
I
| City |
County |
Incorporated |
| Imperial |
Imperial |
July
12, 1904
|
| Imperial
Beach |
San Diego |
July
18, 1956
|
| Indian
Wells |
Riverside |
July
14, 1967
|
| Indio |
Riverside |
May
16, 1930
|
| City
of Industry |
Los Angeles |
June
18, 1957
|
| Inglewood |
Los Angeles |
February
7, 1908
|
| Ione |
Amador |
March
23, 1953
|
| Irvine |
Orange |
December
28, 1971
|
| Irwindale |
Los Angeles |
August
6, 1957
|
| Isleton |
Sacramento |
May
14, 1923
|
J
K
|
J
|
K
|
L
| City |
County |
Incorporated |
| La
Cañada Flintridge |
Los Angeles |
November
30, 1976
|
| La
Habra |
Orange |
January
20, 1925
|
| La
Habra Heights |
Los Angeles |
December
4, 1978
|
| La
Mesa |
San Diego |
February
16, 1912
|
| La
Mirada |
Los Angeles |
March
23, 1960
|
| La
Palma |
Orange |
October
26, 1955
|
| La
Puente |
Los Angeles |
August
1, 1956
|
| La
Quinta |
Riverside |
May
1, 1982
|
| La
Verne |
Los Angeles |
August
20, 1906
|
| Lafayette |
Contra Costa |
July
29, 1968
|
| Laguna
Beach |
Orange |
June
29, 1927
|
| Laguna
Hills |
Orange |
December
20, 1991
|
| Laguna
Niguel |
Orange |
December
1, 1989
|
| Laguna
Woods |
Orange |
March
24, 1999
|
| Lake
Elsinore |
Riverside |
April
9, 1888
|
| Lake
Forest |
Orange |
December
20, 1991
|
| Lakeport |
Lake |
April
30, 1888
|
| Lakewood |
Los Angeles |
April
16, 1954
|
| Lancaster |
Los Angeles |
November
22, 1977
|
| Larkspur |
Marin |
March
1, 1908
|
| Lathrop |
San Joaquin |
July
1, 1989
|
| Lawndale |
Los Angeles |
December
28, 1959
|
| Lemon
Grove |
San Diego |
July
1, 1977
|
| Lemoore |
Kings |
July
4, 1900
|
| Lincoln |
Placer |
August
7, 1890
|
| Lindsay |
Tulare |
February
28, 1910
|
| Live
Oak |
Sutter |
January
22, 1947
|
| Livermore |
Alameda |
April
1, 1876
|
| Livingston |
Merced |
September
11, 1922
|
| Lodi |
San Joaquin |
December
6, 1906
|
| Loma
Linda |
San Bernardino |
September
29, 1970
|
| Lomita |
Los Angeles |
June
30, 1964
|
| Lompoc |
Santa Barbara |
August
13, 1888
|
| Long
Beach |
Los Angeles |
December
13, 1897
|
| Loomis
* |
Placer |
December
17, 1984
|
| Los
Alamitos |
Orange |
March
1, 1960
|
| Los
Altos |
Santa Clara |
December
1, 1952
|
| Los
Altos Hills * |
Santa Clara |
January
27, 1956
|
| Los
Angeles |
Los Angeles |
April
4, 1850
|
| Los
Banos |
Merced |
May
8, 1907
|
| Los
Gatos * |
Santa Clara |
August
10, 1887
|
| Loyalton |
Sierra |
August
21, 1901
|
| Lynwood |
Los Angeles |
July
21, 1921
|
|
M
| City |
County |
Incorporated |
| Madera |
Madera |
March
27, 1907
|
| Malibu |
Los Angeles |
March
28, 1991
|
| Mammoth
Lakes * |
Mono |
August
20, 1984
|
| Manhattan
Beach |
Los Angeles |
December
12, 1912
|
| Manteca |
San Joaquin |
June
5, 1918
|
| Maricopa |
Kern |
July
25, 1911
|
| Marina |
Monterey |
November
13, 1975
|
| Martinez |
Contra Costa |
April
1, 1876
|
| Marysville |
Yuba |
February
5, 1851
|
| Maywood |
Los Angeles |
September
2, 1924
|
| McFarland |
Kern |
July
18, 1957
|
| Mendota |
Fresno |
June
17, 1942
|
| Menlo
Park |
San Mateo |
November
23, 1927
|
| Menifee |
Riverside |
November
23, 1927
|
| Merced |
Merced |
April
1, 1889
|
| Mill
Valley |
Marin |
September
1, 1900
|
| Millbrae |
San Mateo |
January
14, 1948
|
| Milpitas |
Santa Clara |
January
26, 1954
|
| Mission
Viejo |
Orange |
March
31, 1988
|
| Modesto |
Stanislaus |
August
6, 1884
|
| Monrovia |
Los Angeles |
December
15, 1887
|
| Montague |
Siskiyou |
January
28, 1909
|
| Montclair |
San Bernardino |
April
25, 1956
|
| Monte
Sereno |
Santa Clara |
May
14, 1957
|
| Montebello |
Los Angeles |
October
16, 1920
|
| Monterey |
Monterey |
June
14, 1890
|
| Monterey
Park |
Los Angeles |
May
29, 1916
|
| Moorpark |
Ventura |
July
1, 1983
|
| Moraga
* |
Contra Costa |
November
13, 1974
|
| Moreno
Valley |
Riverside |
December
3, 1984
|
| Morgan
Hill |
Santa Clara |
November
10, 1906
|
| Morro
Bay |
San Luis Obispo |
July
17, 1964
|
| Mount
Shasta |
Siskiyou |
May
31, 1905
|
| Mountain
View |
Santa Clara |
November
7, 1902
|
| Murrieta |
Riverside |
July
1, 1991
|
|
N
| City |
County |
Incorporated |
| Napa |
Napa |
March
23, 1872
|
| National
City |
San Diego |
September
17, 1887
|
| Needles |
San Bernardino |
October
30, 1913
|
| Nevada
City |
Nevada |
April
19, 1856
|
| Newark |
Alameda |
September
22, 1955
|
| Newman |
Stanislaus |
June
10, 1908
|
| Newport
Beach |
Orange |
September
1, 1906
|
| Norco |
Riverside |
December
28, 1964
|
| Norwalk |
Los Angeles |
August
26, 1957
|
| Novato |
Marin |
January
20, 1960
|
|
O
| City |
County |
Incorporated |
| Oakdale |
Stanislaus |
November
24, 1906
|
| Oakland |
Alameda |
May
4, 1852
|
| Oakley |
Contra Costa |
July
1, 1999
|
| Oceanside |
San Diego |
July
3, 1888
|
| Ojai |
Ventura |
August
5, 1921
|
| Ontario |
San Bernardino |
December
10, 1891
|
| Orange |
Orange |
April
6, 1888
|
| Orange
Cove |
Fresno |
January
20, 1948
|
| Orinda |
Contra Costa |
July
1, 1985
|
| Orland |
Glenn |
November
11, 1909
|
| Oroville |
Butte |
January
3, 1906
|
| Oxnard |
Ventura |
June
30, 1903
|
|
P
| City |
County |
Incorporated |
| Pacific
Grove |
Monterey |
July
5, 1889
|
| Pacifica |
San Mateo |
November
22, 1957
|
| Palm
Desert |
Riverside |
November
26, 1973
|
| Palm
Springs |
Riverside |
April
20, 1938
|
| Palmdale |
Los Angeles |
August
24, 1962
|
| Palo
Alto |
Santa Clara |
April
23, 1894
|
| Palos
Verdes Estates |
Los Angeles |
December
20, 1939
|
| Paradise
* |
Butte |
November
27, 1979
|
| Paramount |
Los Angeles |
January
30, 1957
|
| Parlier |
Fresno |
November
15, 1921
|
| Pasadena |
Los Angeles |
June
19, 1886
|
| Paso
Robles |
San Luis Obispo |
March
11, 1889
|
| Patterson |
Stanislaus |
December
22, 1919
|
| Perris |
Riverside |
May
26, 1911
|
| Petaluma |
Sonoma |
April
12, 1858
|
| Pico
Rivera |
Los Angeles |
January
29, 1958
|
| Piedmont |
Alameda |
January
31, 1907
|
| Pinole |
Contra Costa |
June
25, 1903
|
| Pismo
Beach |
San Luis Obispo |
April
25, 1946
|
| Pittsburg |
Contra Costa |
June
25, 1903
|
| Placentia |
Orange |
December
2, 1926
|
| Placerville |
El Dorado |
May
13, 1854
|
| Pleasant
Hill |
Contra Costa |
November
14, 1961
|
| Pleasanton |
Alameda |
June
18, 1894
|
| Plymouth |
Amador |
February
8, 1917
|
| Point
Arena |
Mendocino |
July
11, 1908
|
| Pomona |
Los Angeles |
January
6, 1888
|
| Port
Hueneme |
Ventura |
March
24, 1948
|
| Porterville |
Tulare |
May
7, 1902
|
| Portola |
Plumas |
May
16, 1946
|
| Portola
Valley * |
San Mateo |
July
14, 1964
|
| Poway |
San Diego |
December
1, 1980
|
|
R
| City |
County |
Incorporated |
| Rancho
Cordova |
Sacramento |
July
1, 2003
|
| Rancho
Cucamonga |
San Bernardino |
November
30, 1977
|
| Rancho
Mirage |
Riverside |
August
3, 1973
|
| Rancho
Palos Verdes |
Los Angeles |
September
7, 1973
|
| Rancho
Santa Margarita |
Orange |
January
1, 2000
|
| Red
Bluff |
Tehama |
March
31, 1876
|
| Redding |
Shasta |
October
4, 1887
|
| Redlands |
San Bernardino |
December
3, 1888
|
| Redondo
Beach |
Los Angeles |
April
29, 1892
|
| Redwood
City |
San Mateo |
May
11, 1867
|
| Reedley |
Fresno |
February
18, 1913
|
| Rialto |
San Bernardino |
November
17, 1911
|
| Richmond |
Contra Costa |
August
7, 1905
|
| Ridgecrest |
Kern |
November
29, 1963
|
| Rio
Dell |
Humboldt |
February
23, 1965
|
| Rio
Vista |
Solano |
January
6, 1894
|
| Ripon |
San Joaquin |
November
27, 1945
|
| Riverbank |
Stanislaus |
August
23, 1922
|
| Riverside |
Riverside |
October
11, 1883
|
| Rocklin |
Placer |
February
24, 1893
|
| Rohnert
Park |
Sonoma |
August
28, 1962
|
| Rolling
Hills |
Los Angeles |
January
24, 1957
|
| Rolling
Hills Estates |
Los Angeles |
September
18, 1957
|
| Rosemead |
Los Angeles |
August
4, 1959
|
| Roseville |
Placer |
April
10, 1909
|
| Ross
* |
Marin |
August
21, 1908
|
|
S
| City |
County |
Incorporated |
| Sacramento |
Sacramento |
February
27, 1850
|
| Salinas |
Monterey |
March
4, 1874
|
| San
Anselmo * |
Marin |
April
9, 1907
|
| San
Bernardino |
San Bernardino |
August
10, 1869
|
| San
Bruno |
San Mateo |
December
23, 1914
|
| San
Carlos |
San Mateo |
July
8, 1925
|
| San
Clemente |
Orange |
February
28, 1928
|
| San
Diego |
San Diego |
March
27, 1850
|
| San
Dimas |
Los Angeles |
August
4, 1960
|
| San
Fernando |
Los Angeles |
August
31, 1911
|
| San
Francisco |
San Francisco |
April
15, 1850
|
| San
Gabriel |
Los Angeles |
April
24, 1913
|
| San
Jacinto |
Riverside |
April
20, 1888
|
| San
Joaquin |
Fresno |
February
14, 1920
|
| San
Jose |
Santa Clara |
March
27, 1850
|
| San
Juan Bautista |
San Benito |
May
4, 1896
|
| San
Juan Capistrano |
Orange |
April
19, 1961
|
| San
Leandro |
Alameda |
March
21, 1872
|
| San
Luis Obispo |
San Luis Obispo |
February
16, 1856
|
| San
Marcos |
San Diego |
January
28, 1963
|
| San
Marino |
Los Angeles |
April
25, 1913
|
| San
Mateo |
San Mateo |
September
4, 1894
|
| San
Pablo |
Contra Costa |
April
27, 1948
|
| San
Rafael |
Marin |
February
18, 1874
|
| San
Ramon |
Contra Costa |
July
1, 1983
|
| Sand
City |
Monterey |
May
31, 1960
|
| Sanger |
Fresno |
May
9, 1911
|
| Santa
Ana |
Orange |
June
1, 1886
|
| Santa
Barbara |
Santa Barbara |
April
9, 1850
|
| Santa
Clara |
Santa Clara |
July
5, 1852
|
| Santa
Clarita |
Los Angeles |
December
15, 1987
|
| Santa
Cruz |
Santa Cruz |
March
31, 1866
|
| Santa
Fe Springs |
Los Angeles |
May
15, 1957
|
| Santa
Maria |
Santa Barbara |
September
12, 1905
|
| Santa
Monica |
Los Angeles |
November
30, 1886
|
| Santa
Paula |
Ventura |
April
22, 1902
|
| Santa
Rosa |
Sonoma |
March
26, 1868
|
| Santee |
San Diego |
December
1, 1980
|
| Saratoga |
Santa Clara |
October
22, 1956
|
| Sausalito |
Marin |
September
4, 1893
|
| Scotts
Valley |
Santa Cruz |
August
2, 1966
|
| Seal
Beach |
Orange |
October
27, 1915
|
| Seaside |
Monterey |
October
13, 1954
|
| Sebastopol |
Sonoma |
June
13, 1902
|
| Selma |
Fresno |
March
15, 1893
|
| Shafter |
Kern |
January
20, 1938
|
| Shasta
Lake |
Shasta |
July
2, 1993
|
| Sierra
Madre |
Los Angeles |
February
2, 1907
|
| Signal
Hill |
Los Angeles |
April
22, 1924
|
| Simi
Valley |
Ventura |
October
10, 1969
|
| Solana
Beach |
San Diego |
July
1, 1986
|
| Soledad |
Monterey |
March
9, 1921
|
| Solvang |
Santa Barbara |
May
1, 1985
|
| Sonoma |
Sonoma |
September
3, 1883
|
| Sonora |
Tuolumne |
May
1, 1851
|
| South
El Monte |
Los Angeles |
July
30, 1958
|
| South
Gate |
Los Angeles |
January
20, 1923
|
| South
Lake Tahoe |
El Dorado |
November
30, 1965
|
| South
Pasadena |
Los Angeles |
March
2, 1888
|
| South
San Francisco |
San Mateo |
September
19, 1908
|
| St.
Helena |
Napa |
March
24, 1876
|
| Stanton |
Orange |
June
4, 1956
|
| Stockton |
San Joaquin |
July
23, 1850
|
| Studio
City |
Los
Angeles |
July
23, 1850
|
| Suisun
City |
Solano |
October
9, 1868
|
| Sunnyvale |
Santa Clara |
December
24, 1912
|
| Susanville |
Lassen |
August
24, 1900
|
| Sutter
Creek |
Amador |
February
11, 1913
|
|
T
| City |
County |
Incorporated |
| Taft |
Kern |
November
7, 1910
|
| Tehachapi |
Kern |
August
13, 1909
|
| Tehama |
Tehama |
July
5, 1906
|
| Temecula |
Riverside |
December
1, 1989
|
| Temple
City |
Los Angeles |
May
25, 1960
|
| Thousand
Oaks |
Ventura |
October
7, 1964
|
| Tiburon
* |
Marin |
June
23, 1964
|
| Torrance |
Los Angeles |
May
12, 1921
|
| Tracy |
San Joaquin |
July
22, 1910
|
| Trinidad |
Humboldt |
November
7, 1870
|
| Truckee
* |
Nevada |
March
23, 1993
|
| Tulare |
Tulare |
April
5, 1888
|
| Tulelake |
Siskiyou |
March
1, 1937
|
| Turlock |
Stanislaus |
February
15, 1908
|
| Tustin |
Orange |
September
21, 1927
|
| Twentynine
Palms |
San Bernardino |
November
23, 1987
|
U
V
W
| City |
County |
Incorporated |
| Walnut |
Los Angeles |
January
19, 1959
|
| Walnut
Creek |
Contra Costa |
October
21, 1914
|
| Wasco |
Kern |
December
22, 1945
|
| Waterford |
Stanislaus |
November
7, 1969
|
| Watsonville |
Santa Cruz |
March
30, 1868
|
| Weed |
Siskiyou |
January
25, 1961
|
| West
Covina |
Los Angeles |
February
17, 1923
|
| West
Sacramento |
Yolo |
January
1, 1987
|
| Westlake
Village |
Los Angeles |
December
11, 1981
|
| Westminster |
Orange |
March
27, 1957
|
| Westmorland |
Imperial |
June
30, 1934
|
| Wheatland |
Yuba |
April
23, 1874
|
| Whittier |
Los Angeles |
February
25, 1898
|
| Williams |
Colusa |
May
17, 1920
|
| Willits |
Mendocino |
November
19, 1888
|
| Willows |
Glenn |
January
16, 1886
|
| Windsor
* |
Sonoma |
July
1, 1992
|
| Winters |
Yolo |
February
9, 1898
|
| Woodlake |
Tulare |
September
23, 1941
|
| Woodland |
Yolo |
February
22, 1871
|
| Woodside
* |
San Mateo |
November
16, 1956
|
Y
|
The majority of these cities and towns are within one of five metropolitan
areas. Sixty-eight percent of California's population lives in its three
largest metropolitan areas, Greater Los Angeles, the San Francisco Bay
Area and the Riverside-San Bernardino Area also know as the Inland Empire.
Although smaller, the other two large population centers are the San Diego
and the Sacramento metro areas. California is home to the largest county
in the contiguous United States by area, San Bernardino County.
|
"The
speed, efficiency and professionalism I experienced were truly
remarkable." 
