General insurance How risk can be Transfer

[Mataracy]

RISK TRANSFER
Insurance is a risk transfer mechanism whereby the individual or business enterprise can shift some of the uncertainty of life on to the shoulders of others. In return for a known premium, usually a very small amount compare med with the potential loss, the cost of that loss can be transferred to an insurer.

Without insurance, there would be a great deal of uncertainty experienced by an individual or an enterprise, not only as to whether a loss would occur, but also as to what size it would be if it did occur.
For example, a house owner will realize that each year several hundred houses are damage by fire. His uncertainty is whether in the coming year his house will be one of those damaged, and he is also uncertain, whether, given that hr will be one of the unlucky ones, his loss will amount $100 or so for the redecoration of his kitchen or whether the house will be gutted and cost him many thousands of dollar to repair.

Even though the probability of their house becoming one of the loss statistics is extremely low most house owners nevertheless elect to spend, say, $250- $300 on house insurance, rather than face the extremely remote possibility of losing a house worth $200,000.

In the case of business enterprises, the values exposed to loss are usually much higher, but in addition the hazards inherent in their operations are often higher than those of the house owner, and so the premium charged is likely to be substantially higher than that for a house.
Even in these circumstances the majority of firms prefer to pay a known cost of premium for the transfer of risk, rather than face the uncertainty of carrying the risk of loss.

 

[uforwealth]

That is the reason why everything that is valuable or essential to our lives or can improve our well-being should be insured in order to transfer the risk of losing them to the insurer or underwriter. Valuables such as house, motor,life,farm,companies,stores or shops should be insured categorically. By so doing, we will surely have peace and rest of mind.

 

[Mandy96]

Yeah we can call it a “risk transfer” like you wrote above but I will not completely agree to that because of the insurance policies. If you are very much into insurance or you know much about insurance, you will notice that these insurance policies do come with some terms and conditions that might seem odd.

 

[btaliat]

Insurance is called risk bearer for no other reason for ability to bear the loss of others. They are there to make sure the insured don't bear all the loss of uncertainty finally happens. However, like other investment platforms that are there for profit. They don't insure everything especially the ones that cannot measured.

 

[Good luck]

Risk transfer has to do with fear within ones mind when it comes to doing business .Every business has its own risk but insurance policy is a very good but one needs to be very careful in venturing into it yet know what it requires and how it is been run so as not to take unnecessary risk and to avoid transferring of such risk.

 

[Mataracy]

That is the reason why everything that is valuable or essential to our lives or can improve our well-being should be insured in order to transfer the risk of losing them to the insurer or underwriter. Valuables such as house, motor,life,farm,companies,stores or shops should be insured categorically. By so doing, we will surely have peace and rest of mind.

You are very correct bro. In fact there are some people will even tell you that there is no bad thing that will happen to them even when you are encouraging them to take up insurance policy. But when the incident now occur they will started saying had I know .
It is very advisable for one to insured one property under insurance company.

 

[Lens1000]

When we buy insurance policy, we are buying peace of mind. We no longer need to worry on what the future holds. We worry less because the responsibilities is on the shoulders of the insurer.. when we buy insurance policy, we are building the future in an uncertain situations and it will be a gain in the long run.