Insurance is usually defined as a way of giving some protection against sudden financial loss. The company or organization that offers the insurance is called an insurance company. The party to which the insurance cover is given by an insurance company is also known as a policyholder. The insurance policy is a documented contract that contains the terms and conditions under which the insured person or organization will be compensated by the insurance company in the event of a loss.
The insured is also expect to part with a certain amount of money known as the premium in order to facilitate the insurance cover by the insurance carrier. 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.
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 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. Another characteristic of a financial loss that is legible for cover by an insurance organization is that the loss should not be small. Similarly, the insurance company also has to make sure that the premium to be paid by the insured can be calculated and subdivided into small affordable amounts.
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. 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. There are different kinds of insurance covers that are provided by the insurance company against different kinds 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.