This is a process through which security against loss in value or worth is given. There security against the loss of value of worth is offered by an entity known as an insurance carrier. The party to which the insurance cover is given by an insurance company is also known as a policyholder. 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. There are several guidelines that an insurance company will follow in issuing out insurance policies to the insured.
An insurance company will provide for an insurance cover for a loss in value in the event that there is a large number of like risks. The reason for this is that there have to be accumulated funds so as to enable the insurance carrier to make compensations that are made in a claim as a result of a loss of value covered in an insurance policy. The kind of financial loss that is catered for in the insurance policy offered by an insurance company has to be definite in that its cause, time and place of happening can be determined.
Another condition under which the insurance organization will accept to get the give an insurance protection against the financial loss that may be suffered by an insured is that the financial loss has to be out of the control of the insured. Another characteristic of a financial loss that is legible for cover by an insurance organization is that the loss should not be small. 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.
Additionally, in the event of making a cover against a probable financial risk, an insurance company has to observe that the loss is calculable. Another characteristic that would qualify it for insurance by an insurance company is that the loss should not have the probability of happening in a sequence of similar losses at the same time thereby constituting to large losses. Due to the nature of the various kinds of probable financial losses that may occur, insurance carriers usually give insurance covers against a number of risks.
An auto insurance is one of the insurance covers which offers covering against the damage or loss of a vehicle owned by an insured in the event of an accident. This type of insurance also covers against other losses such as damage or theft of the vehicle.