What insurance is:
Insurance is sold by insurance companies as a financial product, designated to safeguard you and the property against the risk of loss, damage or theft. In the case of life insurance, it can also be used to provide your family with financial comfort in the event of your death.
Insurance types:
- Car insurance
- Life insurance
- Boat insurance
- Business insurance
- Household Contents insurance
- Buildings insurance
- Health insurance
The actual insurance policy is the contract that you take out with an insurer to protect you against the specific risks which have been agreed upon.
How it works:
If you are in search of insurance you should take the time you need to compare various quotes from different insurance companies. Insurance companies use a range of factors to decide in your level of risk and on how likely it is in general terms that someone will need to make a claim.
Once you have found an insurer that is suitable for your needs you can accept the quote and a policy will be drafted. It’s important that you read the terms and conditions of the policy to make sure that you fully understand what you are covered for and what the exclusions are.
In exchange for the cover that you need you will pay monthly premiums or an annual premium to the insurance company.
If you make a claim, your insurer will pay out for the loss that is covered under the policy.
If you don’t make a claim, you won’t get all your money back. More insurance companies are offering a No Claims Bonus. If you make a claim the money comes from a pool of policyholders’ premiums.
What you need to consider when looking for insurance cover:
- Why you need cover
- What you want to include in your cover
- How much you can afford
- How long you might need cover for
- Whether you want cover for yourself and/or for loved ones
