Protection is the second nature of humankind after survival. Since the dawn of civilization, man has been protecting those things or beings that he considers as precious. Protection can come in many forms, physical, financial, spiritual, etc. Identifying and mitigating risks are some of the primary instincts that human beings excel in. One of the most risk-prone areas in the modern era is the financial world.
Financial Risk can come in many forms, like complex things, which include property, investments, trade, etc. or simple things that include missing your flight, canceling any holiday or any booking that has been paid for, etc. In today’s world, finances are considered riskiest after health. While the health risk can only be mitigated through a good lifestyle, financial risk can be taken care of through Insurance.
Basics of Insurance
As the name suggests, insurance is protection against financial loss. In case, a financial loss has already happened, insurance arranges the financial compensation incurred against the loss. To avail of this compensation, one has to pay regularly a defined sum of money to the insurance provider. Therefore, insurance is often termed as a contingency plan as well to secure any precious things financially.
The method of minimizing risk by distributing goods across different areas has been the starting point of insurance in history. Such methods were practiced by Chinese Merchants in about 2000-3000 BC. Another interesting way to lessen the risks was practiced by the Babylonian Merchants.
If a merchant took a loan against his shipment, then he would pay an additional amount to the lender in exchange for a guarantee that the lender would forego the loan if the shipment was damaged or lost during travel.
The modern form of insurance saw the light of the day during the Enlightenment Age. Insuring Property or Home against any kind of damage was instigated by the Great Fire of London in 1666.
Today, property insurance is one of the most common forms of insurance and comes in line with others like health, automobiles, etc.
Characteristics of Risks for Insurance
The primary factor for any insurance is the risk associated with the product or event that is to be insured. Several surveys indicate that seven common traits are present in the risks against which the insurance occurs. They are:
High Occurrence of similar exposed units: It means that the loss that is predicted often matches that actual loss happening in large numbers
Definite Loss: The time, place, and cause of the loss are known
Accidental Loss: The loss is incurred by an event that is not under the beneficiary’s control and the claim made is fortuitous
Large Loss: The loss incurred should be meaningful at least from the insured’s perspective
Premium Affordability: Any insurance needs a regular premium (sum of money) to be paid. This money must not go overboard in terms of the actual value of the insured object or event
Loss Calculability: The loss that has been incurred because of the risk must be calculable. In case, it is not, then a minimum estimate must be available along with attendant cost and loss probability
Insurer’s Risk Factor: While the insured party’s risk is the key to the insurance business, the risk of the insurer is also taken into consideration. The insurers only insure for those losses, which are not capable of bankrupting the insurers themselves.
Home Insurance in an Instant
We are all aware that food, clothing, and shelter are the necessities for sustaining life. Of these three, the one that needs major financial risk mitigation is ‘shelter’ or in other words, home. Homes can be under various kinds of threats like natural calamities, accidental hazards, socio-political unrest and attacks, burglary, etc.
Ensuring your home against these threats will not be able to make up for the sentimental or emotional loss, but would try to balance by taking care of the financial part.
Gone are the days, when getting insurance used to be a quite lengthy process. In the era of Information and Technology, getting home insurance is just a few clicks away. If you are not able to believe, just go to Simply Insurance and check out the amazingly fast ways to get home insurance all by yourself.
Dubious Factors in Home Insurance
Many social activists denounce insurance as an unethical process. They are of opinion that the large insurance corporations thrive upon fear of the common person and make a profit. While this topic has been the agenda of many debates, however, we cannot get away with some of the dubious factors that are present in the insurance business. Of the many, two are most common as mentioned below:
Insurance Agents: We are well aware of the number of frauds that are committed via agents. Both the insurer and the insured have to bear the brunt.
Language: The language that the insurance companies come up with in their clauses is quite technical and does not make much sense to the commoners. Many times, because of a lack of proper communication and understanding the insured fails to receive what they had expected.
In continuation of the above factors, both parties must stay alert on the insurance proceeds and have ethical standards in their dealings with the least involvement of third parties.
How does online insurance work?
People nowadays have become more self-sufficient and try to handle their investments and finances all by themselves. This mindset has specially evolved with the easy access of information from the internet. It is the case for buying online insurance. All you need is an internet connection and you are good to go.
The processes of filling up application forms are easy and simple. Moreover, the transparency maintained at the websites is commendable thus gaining the trust and confidence of the masses.
For example, the quotes present in such sites also give a side-by-side analysis of the existing market quotes, thereby displaying honesty. Besides, the verification process is hassle-free as well. In short; it is a win-win situation for the parties.