The insurance is a contract that is represented by an insurance policy in which a person or company receives financial protection or reimbursement for losses from an insurance company. The company groups the risks of the customers, so that the payments for the insured are cheaper.
Insurance policies are used to protect against the risk of financial loss, both large and small, that may result from damage to the insured person or his property or liability for damage or injury inflicted on a third party.
There are a variety of different types of insurance available, and virtually every person or business can find insurance that is willing to insure them for a price. The most common types of personal insurance are cars, health, homeowners and life. Most people in the United States have at least one of these types of insurance, and the law requires car insurance.
Businesses require special types of insurance policies to insure against certain types of risks that a particular business faces. For example, a fast food restaurant needs a policy that covers damage or injury that occurs as a result of cooking with a fryer. A car dealer is not subject to this type of risk but requires coverage for damage or injury that may occur during driving tests. There are also insurance policies for very specific needs, such as kidnapping and ransom (K & R), medical malpractice and professional indemnity insurance, also known as a failure and cease and desist insurance.
When choosing a policy, it is important to understand how insurance works. Three important components of insurance policies are the premium, the policy limit, and the deductible. A strong understanding of these concepts will help you choose the most appropriate policy for you.
The premium of a policy is its price, usually expressed as a monthly cost. The insurer determines the premium according to its risk profile or that of its enterprise, to which also the creditworthiness can count. For example, if you own several expensive cars and have a history of reckless driving, you will probably pay more for a motor vehicle policy than someone with a single mid-size sedan and a perfect driving record. However, different insurers may charge different premiums for similar policies. Therefore, to find the right price for you, you need some preparation.
How Does Insurance companies work?
Insurance companies assess the probability of an event occurring and then create appropriate prices called premiums, to charge individuals against a particular type of risk. The premiums need to be both competitive in the market and high enough to cover any payouts or 'claims'. Insurance firms then invest the premium money to enhance profits.
To deliver these service insurers require a workforce with a diverse mix of skills like agents, brokers, underwriters to perform different insurance back-end & front-end task.
What are the four main types of insurance?
~~~~>Life insurance is important if you have people who are dependent on you financially. If you were to die unexpectedly then your salary would no longer be available to cover regular household expenses such as mortgage payments, and utility bills and your family would suffer financial hardship as a result. Life insurance is designed to cover these expenses in your absence and to ease the financial burden experienced by your family at what would already be a very difficult time.
Health insurance is another one of the four main types of insurance that experts recommend. A recent study revealed that sixty-two percent of personal bankruptcies in the US in 2007 was as a direct result of health problems. A surprising seventy-eight percent of these filers had health insurance when their illness began. These figures demonstrate that it is important to take out health insurance and to assess whether your level of cover if you already have a policy in place, is adequate.
Many of us doubt that we will ever become disabled, and therefore we omit to take out long-term disability coverage. However, figures show that three in ten workers will become disabled before they reach retirement age and that twelve percent of the population is currently disabled; almost fifty percent of these people are of working age.
There were over ten million traffic accidents in the U.S. in 2009 (latest available data) and 33,808 people died in motor vehicle crashes in those accidents, according to data released by the Fatality Analysis Reporting System (FARS). The number one cause of death for American's between the ages of five and 34 were auto accidents. Over two million drivers and passengers received treatment in emergency rooms in 2009 and the costs of those accidents including deaths and disabling injuries were around $70 billion.