Insurance is usually defined as a way of giving some protection against sudden financial loss. The entity which offers the protection against that financial loss is usually known as the insurer or underwriter. An insured is a person, set of individuals or organization that benefits from the protection of an insurance policy by an insurance company. So as to determine the occasions in which the insured is legible to a compensation from the insurance company in the event of a financial loss, an insurance policy is usually issued.
Premium is a set value by the insurance company to the policyholder in order to facilitate the efficient covering. In the event that a financial loss that is covered for in the insurance policy occurs, the insured makes a submission of a claim through effecting a claim adjuster to the insurance company. For an insurance cover to be effected by the insurance company to the policyholder, a list of set guidelines is usually adhered to.
One of the guidelines that is followed by the insurance company in the provision of insurance cover against any financial loss to the insured is through the observation of big sums of same exposure risks. This is because insurance companies usually work through the pooling together of resources in order to actualize compensation in the event of a financial loss. The other guideline that is followed by an insurance company in offering insurance cover is that the loss has to be definite meaning that it has to be known.
Additionally, another ground for the provision of an insurance cover by the insurance carrier to the insured is that the loss has to he accidental. The insurance company also considers the size of the probable loss in that it ensures that the loss is large. The insurance company will only offer an insurance coverage against a financial risk whose calculated premium is easily subdivided into amounts that are affordable to the insured.
The probable financial loss for which an insurance cover is provided for by an insurance carrier to an insured should follow that the financial loss is calculable. The insurance company also has to make sure that the financial loss covered for in an insurance policy does not have huge risks in the resulting to catastrophically large losses. There are different kinds of insurance covers that are provided by the insurance company against different kinds of risks.
A loss to a vehicle caused by an accident such as a traffic collision can be covered for by an insurance company in an auto insurance. Theft and other damages that may occur to the vehicle of the insured are also covered I the auto insurance.