| Insurance Is The Arrangement Between The Policy Issuer Thed The Insured |
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| Written by Graham McKenzie |
| Tuesday, 26 January 2010 23:14 |
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The dictionary says that insurance is the arrangement between an insurer and the insured for the purpose of providing protection against loss/damage as the result of theft, or other means, in the exchange of payment. This basically means that insurance is an agreement that is formed between the company and the customer for the purpose of protecting property or persons in the event of injury or damage. The policy exists as long as premiums are being paid by to customer to the company.
The dictionary says that insurance is the arrangement between an insurer and the insured for the purpose of providing protection against loss/damage as the result of theft, or other means, in the exchange of payment. This basically means that insurance is an agreement that is formed between the company and the customer for the purpose of protecting property or persons in the event of injury or damage. The policy exists as long as premiums are being paid by to customer to the company. Insurance is available for many different purposes; many of these policies are designed to protect property, while a few policies pertain to human beings. Some of the most common types of policies include car, home, fire, life, and medical. It is also common practice to insure other property such as boats, and motorcycles. Some policies also exist that will cover travel or renters, while others cover laptops and cell phones. No matter what item in insured the policy basically works the same. As long as the customer is making premiums the policy will be recognized as soon as the payments are missed the policy is voided. Premiums are typically paid each month but they may also be paid quarterly or yearly. When there is a situation that affects the insured they can file a claim. Depending on the circumstances the company may or may not provide payment on the damages or loss. In many cases a policy will have perimeters that determine the coverage that will be provided depending on the type situation that contributed to the claim. When a condition occurs the insured contacts the insurance company and they file a claim for the damage or loss. The company examines all of the elements that affect the loss and inspect the circumstances behind the loss. If the company determines that the loss is something that is covered by the policy then they will typically award a payment against the damages. In the event of payment of a claim there may be a stipulation in the policy that the insured has to make a payment toward the claim before the company will. The portion that the customer pays is known as the deductible. Many companies will not issue payment until the deductible has been met. In some types of insurance there may be more than one type of coverage that is available. A perfect example of this is auto insurance. Most auto insurance policies actually consist of several sections. The minimum liability section is the minimum coverage that the company will provide. The collision covers the damage to the vehicles and comprehensive provides the replacement of the vehicle. Another example of different types of coverage comes into play with life insurance. In the case of life policies the insured must die before the policy is paid on, this payment is paid to the beneficiary of the policy. There are several types of life policies, such as universal, term and whole. The difference in these policies exists with how they are paid and how the total value of the policy is determined. With some types of insurance the claim may affect the future of the policy. If the company determines that the claim is fictitious or dishonest then the claim will typically not be covered and the insured may be dropped as a policy holder DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. The proper definition of insurance is an arrangement between insurance companies and a customer, by which the company provides the customer with protection against loss or damage in the form of theft, or death, in exchange for the payment of a monthly premium by the customer. |