A way by which covering is offered against any unexpected financial loss is known as insurance. The company or organization that offers the insurance is called an insurance company. 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. In the event that a financial loss that is covered for in the insurance policy occurs, the insured makes a submission of a claim through effecting a claim adjuster to the insurance company. For an insurance cover to be effected by the insurance company to the policyholder, a list of set guidelines is usually adhered to.
An insurance company will provide for an insurance cover for a loss in value in the event that there is a large number of like 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 insurance company will offer insurance cover for a possible loss whose time and place of occurrence as well as the cause are well known.
Additionally, another ground for the provision of an insurance cover by the insurance carrier to the insured is that the loss has to he accidental. The insurance company also considers the size of the probable loss in that it ensures that the loss is large. 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.
A loss to a vehicle caused by an accident such as a traffic collision can be covered for by an insurance company in an auto insurance. This protection also caters for other occurrences such as the destruction of the vehicle or loss of the vehicle through theft.