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. 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.
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. There are several guidelines that an insurance company will follow in issuing out insurance policies to the insured.
One of the guidelines that is followed by the insurance company in the provision of insurance cover against any financial loss to the insured is through the observation of big sums of same exposure risks. 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.
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. The insurance company also has to make sure that the financial loss covered for in an insurance policy does not have huge risks in the resulting to catastrophically large losses. An insurance company offers a number of insurance covers that protect against different financial losses.
One of the insurance covers that is provided for by an insurance company is auto insurance that protects an insured against a loss of value in the event of a traffic accident which involves their vehicle. This protection also caters for other occurrences such as the destruction of the vehicle or loss of the vehicle through theft.