The term insurance refers to the protection of an individual or a business from a financial loss. The key main players in insurance are the insurance company also referred to an insurer and an insured, the insurer, for instance, is a company that offers insurance services while the insured is the policy holder. Furthermore, in insurance, the policy holder is required to pay premiums at various intervals say monthly , quarterly or yearly. Before entering into an insurance contract, it is important of the insured to beware of the principals that govern the insurance business. Any type of insurance cover bought has the following characteristics, these include large loss, definite loss, affordable premiums, calculable loss, accident loss, among other. The principals of insurance include indemnity, insurable interests, utmost good faith principle, the principle of contribution, the principle of subrogation, the principle of proximate cause, as well as mitigation principal.
The principal of indemnity differs from the principle of insurable interest in that the former states that the insurer will only compensate the insured in the event of the occurrence of the loss up to a certain insured’s interest, whereas the latter states that the insurance will compensate the insured when they suffer the loss insured against. The other vital principals of insurance include the principle of utmost good faith and the principle of subrogation; the two principals are different in that the former requires the insured to disclose all the material facts about themselves whereas the later provides the insurer the legal rights to pursue recoveries on behalf of the insured.
The following are the guides to taking insurance protection from either a personal insurance provider or a from a commercial provider. The primary step to taking an insurance policy is to know the type of risk that you need to be protected from. The type of insurance company that one chooses to work with depends on a person’s employment, for instance one can get insurance services through the employer, however, in some cases the employer may not offer such services, then the employee will have to seek the services directly from the insurance company.
Due to the availability of numerous insurance providers, one needs to choose a company that offer guaranteed services. The best way of getting the ideal insurance company is by comparing the insurance services offered by the insurers. As an individual, to get the best personal insurance provider, you also need to compare the benefits promised by the different insurance provider when you buy their policy; individuals and businesses need to select the insurance providers whose benefits meet their needs.