Explanation
Explanation of insurance? Insurance can be
define as:
A contract between a person and an insurance company.
Explantion of Insurance |
This contract include an agreement that the
insurance company will cover some portion of an individual loss as long as the person
meets certain conditions mention in the insurance contract. The individual or policyholder
pays a premium to obtain insurance coverage. If the person
experiences a loss covered by insurance, such as an accident to the car or a
house damage, the individual files a claim for reimbursement with the insurance
company. The individual will pay a deductible to cover part of the loss, and
the insurance company will pay the rest.
Example
Let’s take an example, consider you have a
homeowners insurance policy. You pay 1,500 Dollar per year in premiums for a
policy with a face value of 300,000 Dollar, this value is what the insurance
company take an estimates it would cost to completely to rebuild your home or house in the
event of a total loss.
Unfortunately 1 day as has happened to too
many people in recent years, a huge
wildfire surround your neighborhood including
your house burns to the ground. After the event you file a claim for 300,000 Dollar
with your insurance company. The company approves the claim. You pay your 1,500
Dollar deductible, and the insurance company covers the remaining 298,500 Dollar
of your loss. You then take that money from insurance company and use it to
hire contractors to rebuild your own house.
When you buy an insurance policy, you are common
your loss risk with the loss risk of everyone else who has purchased insurance
from the same insurance company. If you for some reasong buy homeowners insurance from the State Farm, which sells too many more homeowners insurance policies than any of its
competitors, then you are actually joining forces with millions of other homeowners
to collectively protect each other against any kind of loss. Each homeowner
pays annual premiums.
List
of things you should Insure
This is the list of things you need to
Insure. Insurance give an opportunity for financial protection against a wide
variety of losses:
- apartment
burglaries
- medical
payments to occupants injured in a car accident
- help
with basic activities of daily living
- long-term
disability
- house
fires
- death
of someone (caretaking support)
- emergency
room visits
- surgery
- a
lawsuit brought by a visitor who slips and falls on your icy front porch
- auto
body damage from a car accident
- and
many more.
When you insure the right thing in the right
amounts, you will be protected from potentially devastating losses that could
send your life veering off course and devastate your finances.
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The Author
Imran Khan |
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