WHAT IS INSURANCE?

WHAT IS INSURANCE?

Insurance: This is our first post and I take this opportunity to welcome you all to our site-sleadas. It is about everything insurance and we are starting by trying to understand what the hell is this Insurance. What is it for? What does is entail? The journey has just began. Welcome, sit and read on.

Insurance is a contractual arrangement between the insurance company (also known as the insurer, underwriter or insurance carrier) and the insured (a person or the entity buying the insurance) in which the insurer agrees to compensate the insured in the case of a loss, injuries or the damages sustained on his property. This is in the exchange of a definite amount paid by the insured to the insurer which is referred to as premium. The premium can be paid daily monthly, annually etcetera depending on the type of cover.

Photo Courtesy of:ย  InsureAfrica

 

What is insurance?

Insurance is a contractual arrangement between the insurance company (also known as the insurer, underwriter or insurance carrier) and the insured (a person or the entity buying the insurance) in which the insurer agrees to compensate the insured in the case of a loss, injuries or the damages sustained on his property. This is in the exchange of a definite amount paid by the insured to the insurer which is referred to as premium. The premium can be paid daily monthly, annually and so on depending on the type of cover.

The insurer and the insured signs a contract referred to as the insurance policy which details the conditions and circumstances under which the insurer will compensate the insured.

Note:


Before signing any insurance policy document, make sure you read and understand the terms and conditions. Understand what the policy covers and what it does not. The circumstances in which after the occurrence of the uncertainty you may or may not be compensated.

It is only after that you may now boast by saying you have an insurance cover, that you have the insurance (in the laymanโ€™s language) or that you are protected against the risk of a contingent or uncertain loss. And you can now be called a policy holder.


Example:

Say you have a motor vehicle (car.)- It can be anything. That vehicle can be involved into a road traffic accident through which it can get damaged, it can also catch fire or maybe get stolen. Either way you as the owner you undergo a loss. If it is damaged you will not be able to drive it unless you repair it and that is an unprepared/unexpected expense. The worst happens when it is stolen, your vehicle is completely gone. And unless it gets recovered it is the same as someone who has died. You will be minus the vehicle forever and that is a total loss.

Therefore to avoid all that you are ought to get a cover for your vehicle so that when that happens (accident or theft) and your policy is in force and meets all the conditions, you are compensated. Either the insurance repairs your vehicle or (in case of a theft,) they get you another car. Thus you will always stay in peace.

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Join us tomorrow as we talk about, who should take an insurance cover. And by the way remember, we have just been born and we need to be taken care of until we can walk properly. So, leave us a comment below-corrections, additional information, applause etc.

Thank you.

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