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| Insure or insurance, as directly implies is the coverage against any possible loss. |
The insurance industry has grown and established itself so well that there are insurance companies that cater to the needs of a specific type of coverage. You have companies only targeting only car insurance buyers, only aviation segment etc.
Usually an insurance policy involves a premium to be paid by the party seeking cover against the damage to the company (party) promising to make good the losses by the way of money. It may be a one-time payment or a periodic payment. This is called as 'insurance premium'
THe modern day insurance works in the following way:
Take example of car insurance. Say there are 1000 cars in a particular place. Each car owner pays x amount of money to the insurance company. This x multiplied by 1000 should cover against the losses that may happen to these cars by way of accidents, theft etc.
Thus it is like all car owners share the loss in the event of a loss to any car in this group.
Here a car insurance company takes the role of a mediator to collect the amount and distribute the same to the owner of a car which has been damaged.
Choosing the right insurance company, type, agent, policy, etc. may many times get challenging. We will try to simplify few aspects on these issues in this site. Insurance is a key tool to protect you against future financial difficulties. You need to understand your insurance policies from time to time depending on your financial needs and situation at that point of time. |
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