A way by which covering is offered against any unexpected financial loss is known as insurance. 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. There is usually a set of rules and conditions which determine the circumstances under which compensation can be made to the policyholder by the insurance carrier.
There is also an amount of money known as the premium that is usually charged by the insurance company to the insured for the covering agreed. A claim adjuster is usually processed by the insured in the process of making a claim to the insurance carrier in the event that a financial loss which is catered for in the insurance agreement happens. 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 principles of insurance is that there has to be a big sum of similar exposure units in order for an insurance cover to be effected. 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 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.