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How Insurance Works

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Insurance is available to assist you to pay for damage to your property or to cover others on your behalf if you injure someone or damage their property. Insurance is a contract that transfers the risk of monetary loss from an individual or company to an insurance provider. The company gathers small amounts of money out of its customers and pools that money together to cover reductions.

Insurance is split into two main categories:

Property and Casualty insurance

Life and Health insurance.

Property and casualty insurance offers protection to companies and people for losses related to their belongings or resources, both financial and physical. Life and health insurance protects people from financial loss due to premature death, sickness or disease.

Insurance uses the law of large numbers to determine the cost of insurance premiums it charges its customers based on several different risk factors. The fee must be enough for the company to pay claims in the future, pay its expenses, and make a reasonable profit, but not so much it turns out clients.

The more probable an event will happen for a particular client (ie a home near the water flooding when the region has a high history of the flood ), the greater insurance companies will need to collect to pay the anticipated claims. You can also check out Leland West Insurance

Insurance companies market their services and products to customers in different ways. The price companies charge for insurance coverage is subject to government regulation. Insurance firms may not discriminate against applicants or insureds based on a factor that does not directly relate to this prospect of a loss happening.

Updated: March 22, 2020 — 11:24 am

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