This is a process through which security against loss in value or worth is given. The entity which offers the protection against that financial loss is usually known as the insurer or underwriter. 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. An insurance carrier usually observes a various number of set instructions in the providing of a security cover against financial loss.
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. 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 insurance company will offer insurance cover for a possible loss whose time and place of occurrence as well as the cause are well known.
An accidental loss or a loss that is not planned or orchestrated by the insured is legible for covering by an insurance carrier. Another set guideline for the insurance company to give a covering against a financial loss is that the size of the expected loss has to be quite meaningful in the view of the insured. 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.
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. An insurance company offers a number of insurance covers that protect against different financial losses.
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 protection also caters for other occurrences such as the destruction of the vehicle or loss of the vehicle through theft.