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What insurance is all about

What insurance is all about

Many unfortunate events take place and this is where insurance comes in to reduce the burden. Some of the events include dying of a loved one who is the breadwinner, burning of a house or items being stolen or a car getting into an accident and being damaged or injuring people. All these involve loss of something.

What is insurance

To reduce the impact of the loss, insurance companies compensate the organization or person, the loss they have suffered. Unfortunately, events such as the loss of a loved one has no equivalent value, though the family left behind is given some money to push through. The level of compensation depends on the agreement between the insurance companys and the individual or organization that has been insured, in a document called ‘policy’. The policyholder is required to pay a premium every year to qualify for the compensation. The policy is also deemed as a contract between the insurer and the client. The company agrees to pay a particular amount of money or to settle the costs to the client if a particular event takes place. For instance, if the contract is on insuring the car, the company can agree that it will pay for car repairs if the car is damaged and can replace it if it is stolen. On the other hand, the client should pay premiums for the policy while also taking care of the car.The insurance policy or contract is based on disclosure and not making false statements on the side of the client, and good faith on the side of the insurer. The insurer gets into the contract on the believe that the client has given all the required information and that it is true, while the client believes that the company will act in good faith while honoring the contract.

What can be insured

Insurance can be taken on a number of events such as against ones death, against damage or loss of valuables, against health and against a home, among others. The field of home ownership has not been left behind in insuring. Many things can happen to a home such as fire and theft and can leave the owner devastated. However, with homeowners insurance, all the owner of a home is required to do is to get into a contract with the company and then pay the premiums to the insurance companys and the home is said to be insured. The insurer and the homeowner have an agreement that in case any of the losses insured take place in the home, the homeowner will be compensated. It is not a legal requirement that homeowners should have the insurance, but it saves a lot of headache if the home is damaged or items are stolen. You can also benefit if someone is injured in your home or your pet injures someone and you are the one liable. You will also find that   some mortgage companies require one to have it in order to be lent money.

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