Insurance is risk cover that provides repayment for a loss. There are
a variety of insurances including motor, home, building, life, business, health
and marine insurance.
Insurance companies provide cover under the following circumstances:
- The occurrence or time of the loss must be uncertain. This means that insurance
will only be provided if no one knows when or if something will happen that results
in the loss. For example, if you know that your car is going to be stolen in 3 weeks
time you will not be able to legally get cover for the vehicle.
- The insurance company needs to be able to accurately determine the amount a loss
will incur. They need to do this in order to set the premiums of insurances they
provide.
- Losses may not be catastrophic, meaning that claims may not result in the insurer
becoming insolvent. Most insurance companies buy reinsurance to protect themselves
from something like this happening.
Insurance can be purchased through a variety of means including via a broker and
direct from the
insurance company.
Before purchasing a policy make sure that you fully understand what types of insurances
are available and what your own insurance needs are.