Business Insurance How does insurance work ?

[Mertayasa]

Insurance provides individuals and companies with protection against major financial losses due to property damage or loss. In exchange for premium payments made, individuals and companies are guaranteed compensation or reimbursement under the terms stated in the insurance policy. Insurance has become a part of modern society's life. Life insurance and auto insurance are the two most common forms of insurance. Health insurance and workers' compensation are also other common types of insurance. While insurance has become a part of most people's lives, not everyone understands how it works.

How does insurance work?

There are always risks in life such as fire, theft or an earthquake. Many people hope to avoid financial loss by getting compensation for lost or damaged personal property. Insurance is a way to protect personal finances from undue burden. Insurance is a form of risk management in which risk is transferred to an insurance company in exchange for premium payments.

When buying insurance, one gets an insurance policy which is a legally binding contract. This policy explains in detail all the rights, responsibilities and obligations of the insured (customer) and the insurance company. When a person suffers a loss covered by the policy, he or she can file a claim. A claim is a complete report of what was lost or damaged and its value.

The amount of money to be reimbursed (sum insured) is based on the amount contained in the policy. When an individual or company buys an insurance policy, all the money from the premiums is then combined into what is called an insurance pool. Insurance companies use statistics to predict what percentage of an insured person or business will actually suffer a loss and file a claim. Statistics also help determine the amount of the premium. Other factors such as credit score and previous claims are also taken into account. Because most insured people have no or only minor losses, insurance companies gain an advantage that allows them to continue operating and pay large claims occasionally.​

 

[Lens1000]

Getting insurance policy is what everyone should out in mind. The major challenges in this industry is honesty on the part of the insurance company. So many insurance companies do not live up to the expectations of their clients whenever problem looms. That's a bridge of trust and it's the number one problem with insurance.

 

[Sherman198]

Having insurance policy plan can be very helpful in some certain times in ones life. Especially if you insure your properties, business etc...You don't know when crisis will strike and you will need help.

So if you insure your business and properties there is fire hazard for instance, it's the insurance company that will help you out. Depends on their terms and conditions though.

 

[A K Rao]

Very nice and informative thread. That is true in insurance we try to cover the risk in our life by taking out the insurance policy by paying some money as the fee every year which is known as the premium.

We can have insurance for many things like property, car, house, property, health, and even our life. In fact we can have insurance for anything which is having risk in the life.

Travel insurance, insurance of the pets and domestic animals has become normal today. The best way to understand the intricacies it is better to get the help of Insurance Agent.

 

[Augusta]

Insurance is a cover needs to be taken out by any adults when once the person is above18 years taking an insurance policy will become a necessity. This is because life itself is risky so one needs to take cover against and have a backup in case any of these risks occurred one can stand tall

 

[Josemendez]

Nice explanation . Amdist the different insurance one can go for , I think the first task is to ensure the legitimacy of the insurance company one is planning to venture into because this has a lot of effect in the end. For one who is going for life insurance , his wife or family members should be notified about it , so that in the case of death , the insurance company won't have to cover up the man's right.

 

[Mandy96]

Insurance generally gives one a particular coverage against damages or loss. It is good to get this, it’s not as if I am trying to make an advert for it but it is definitely a better way to protect one’s day to day life. Well it might seem to be expensive for some commoner but the pay is surely worth it

 

[btaliat]

Insurance is a risk against any unforseen circumstances in simple term. It is an agreement that exist between an insurance company and the insured person. The insurance company is paid premium by the people that buy insurance from the company with the view of compensating the insured person in case of any trouble.

 

[Chibson]

Insurance is not a rocket science and I believe that everyone should be able to understand how it works easily. Insurance provide coverage and protection for properties and of course gives compensation to individuals in times of uncertainties. many individuals have lost a lot of money because they never ventured into insurance companies for coverage.

 

[Wisdom01]

Before going for any insurance policy you should take note of the risk and the benefit attached , and remember you would be paying premium and not just getting coverage for free just like that , these are some of thing you need to note before going for any insurance policy