Under the same situation, a "pay on behalf" policy, the safeguard carrier would pay the claim and the insured (the Scottsdale Insurance homeowner) would not be out of pocket anything. Most current liability guarantee is written on the basis of "pay on behalf" language.

Insurers make chicamin 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.