General insurance Do You Think Insurance is a Waste of Money?

[Jasz]

While it is easy to be positive about the advantages of insurance, it is important to also think about the disadvantages of insurance as well. Insurance is a form of investment and so it has both advantages and disadvantages just like other forms of investments.


Insurance, which is a financial contract in which one party undertakes to make payments to a second party if certain specified events occur, has certain disadvantages. The amount of the premium—which is the price that must be paid for acquiring insurance protection—is influenced by the cost of paying for such protection. The cost of paying for insurance protection depends upon two factors: the per capita risk that is insured and the profit margin that is sought. However, there are also other relevant costs, such as those of obtaining information bearing upon an insured risk or those of monitoring an insurer's behavior.




The primary disadvantage of insurance is that it adds cost to the transaction. If a seller can get $100 for a good that would otherwise cost $110 to replace, the seller has an incentive to sell without insurance. This can lead to adverse selection, where only high-risk buyers want insurance, so that sellers will only sell insurance to such buyers.


It is important to remember that any insurance, even if you never need it, can pose several difficulties and disadvantages.

 

[Deleted member 28127]

The problem when having a company is you could not have legal papers that your work is legal without enrolling in insurance companies from the state means without insurance your work is considered illegal and you may face legal problems.

 

[Dasryny]

No, it's some kind of guarantee that if something happens to me, I'll get help. And who will help me if something serious happens?

 

[Richee84]

Insuring your business against risk or unforseen circumstances is a right move in the right direction.
Every business has it own form of challenges which must be overcome or reduce to acceptable limit for the business owner or for the management. When a business is insured against risk, it is one of the method use in controlling risk which is called risk sharing. Risk sharing is a for of controlling risk by sharing the total burden of the risk with a third party or an insurance company. When a business is insured against risk then the business is safe as the company will compensate the business if in case the business run into a loose. Depending on the risk policy the business enter into with the insurance company, some the insurance company will be fully responsible for the total loose incure on an insured business while some the insurance company will only compensate partly and not fully base on the agree term. A good country with functioning government should be able to encourage all business owner in the country to have their businesses insured. There are more greater advantages to insuring a business to not insuring it not minding the money been pay.

 

[sincerem]

In order for us thinking less that insurance is a waste of money, we should simply plan on what we are choosing to insure before proceeding. And not just going over to insurance company simply to venture into any insurance policy plan which isn't relevant in our lives. Such gonna be waste of money at the end due to the fact, we aren't going to have any issues with such plan in the future. So, it is better to insure what is risky to our well-being, property in order to gain it in case the unbeknownst occurs, cos we are living in a world full of surprises especially unexpected surprises.

One can simply seek to insure his or her home due to environmental disasters, earthquakes, hurricane, fire outbreaks etc. Insure other properties like, cars, land and even our business in terms of emergencies. Our health is important and that of our children, meaning, even if we aren't prone to health issues, it doesn't mean one wouldn't occur in the future, due to how illness affects man. Life again, isn't something one holds, even some healthy men die out of weird luck, like accidents, food poisoning, natural disasters, war etc. That's why we all need insurance at any time, it isn't a waste of money.