When people buy insurance today, they are still sharing their risk. Modern insurance companies study statistics that show the frequency of past losses-for example, losses from shop fires-to try to predict what losses their clients will experience in the future. The insurance company uses the funds paid by many clients to compensate the clients who suffer losses.
Do you need insurance? If so, what kind of insurance is right for your circumstances? And whether you have insurance or not, what precautions can help you to cope with life's risks?
In some lands certain kinds of insurance are compulsory. In others, most kinds are practically unknown. In addition, the cost of insurance and the type of coverage provided vary widely from country to country. But the fundamental principle of insurance-sharing risk-remains the same.
Naturally, the more property a person owns, the more he has to lose. Similarly, the more family responsibility a person has, the greater the impact if he or she dies or becomes physically disabled. Having insurance can alleviate one's concern about the possibility of suffering a loss of property or a disabling accident.
Yet, is it wise to spend money on insurance even though a claim may never be made? Well, is keeping a spare tire in the car a wasted investment, even if the tire is never needed? The sense of security to the car driver may make the expense of the extra tire worthwhile. While financial compensation cannot make up for certain losses, it may compensate for other losses.
What types of loss do insurance policies cover?
Do you need insurance? If so, what kind of insurance is right for your circumstances? And whether you have insurance or not, what precautions can help you to cope with life's risks?
In some lands certain kinds of insurance are compulsory. In others, most kinds are practically unknown. In addition, the cost of insurance and the type of coverage provided vary widely from country to country. But the fundamental principle of insurance-sharing risk-remains the same.
Naturally, the more property a person owns, the more he has to lose. Similarly, the more family responsibility a person has, the greater the impact if he or she dies or becomes physically disabled. Having insurance can alleviate one's concern about the possibility of suffering a loss of property or a disabling accident.
Yet, is it wise to spend money on insurance even though a claim may never be made? Well, is keeping a spare tire in the car a wasted investment, even if the tire is never needed? The sense of security to the car driver may make the expense of the extra tire worthwhile. While financial compensation cannot make up for certain losses, it may compensate for other losses.
What types of loss do insurance policies cover?
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