Insurance Is The Agreement With The Policy Issuer Thed The Insured
The dictionary says that insurance is the arrangement between an insurer and the insured for the purpose of providing protection against loss/damage as the result of theft, or other means, in the exchange of payment. This basically means that insurance is an agreement that is formed between the company and the customer for the purpose of protecting property or persons in the event of injury or damage. The policy exists as long as premiums are being paid by to customer to the company.
Insurance is available for many different purposes; many of these policies are designed to protect property, while a few policies pertain to human beings. Some of the most common types of policies include car, home, fire, life, and medical. It is also common practice to insure other property such as boats, and motorcycles. Some policies also exist that will cover travel or renters, while others cover laptops and cell phones.
All types of policies basically work the same way. The customer is obligated to make payments if they desire to maintain the coverage that is provided by the policy. These payments are referred to as premiums, and must be paid on a scheduled basis. The payment schedule is typically monthly, but it may also be done every three months or once a year. The insured files a claim if something happens that affects the property or person that is covered. The company evaluates the situation and determines if the claim qualifies for payment.
In many cases a policy will have perimeters that determine the coverage that will be provided depending on the type situation that contributed to the claim. When a condition occurs the insured contacts the insurance company and they file a claim for the damage or loss. The company examines all of the elements that affect the loss and inspect the circumstances behind the loss. If the company determines that the loss is something that is covered by the policy then they will typically award a payment against the damages.
Some types of policies only cover part of a claim; the remainder is to be paid by the insured. This payment by the customer is referred to as the deductible. Often the deductible amount must be paid before the company will issue a payment.
Some insurable items actually have various types of policies that pertain to them, such as auto insurance. Auto policies contain various sections that pertain to payment; these sections include liability, comprehensive and collision. The liability section pertains to the minimum amount that will be paid in the event of a claim pertaining to an accident.
Life insurance is also available in several different forms. Life policies are meant to insure the person who is on the policy, but the payment is intended to the heirs or beneficiaries of the deceased. Several different forms of life policies exist; these vary based on maturity and payment.
Regardless of the type of policy the company will examine all claims and if they find that a claim has been filed unjustly there may be criminal charges against the policy holder. These individuals will also be denied payment and will be stopped from doing further business with the company.
The full definition of insurance is an agreement between insurance companies and a customer, by which the company provides the customer with protection against loss or damage such as theft, or death, in exchange for the payment of a usually monthly premium by the customer.
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