How it Works General Insurance

How General Insurance Works

Insurance is Giving You Protection for Your Family

It's funny if we do not know how insurance works when very often we hear the word insurance, of course, you also have very often heard it not. But that does not matter, because all the unlikely event we need to know that there we just need to learn as much as possible, including also learn about insurance in this article will soon be my pillowcase. Actually studying insurance is not difficult, so simple in fact everyone can learn it because basically the principle of how insurance works is also very simple, easy to understand, how it works is simply to manage risk, any risk depending on the type of insurance, insurance companies manage risk which is owned by its customers (policyholders) then the risk will be for customers throughout the other. More simply, you try to pay attention to the following illustration:

How it Works Insurance Illustration
We assume there are 100 vendors have stalls, 100 traders estimated 5 traders will suffer losses due to catastrophic loss stalls. Each of the disaster in the estimate will result in a loss of 50 million, bringing the total loss of 5 traders amounted to 250 million. If it is assumed that 100 traders pay a premium per year at 3 million per trader to insurance companies, it will be collected funds amounting to 300 million. Then the funds will be used by the company to cover claims losses experienced by traders who suffered the disaster. This is the basic sample of how insurance works.

From the above example, can look at that how something like the actual insurance as well as social gathering, it's just who suffered losses do not wait their turn but goes according to what it is.

Process How it Works Insurance Company
Basically the process of how the insurance company is very simple as I demonstrated above, the outline of how it works is actually just passing through three stages, namely:
1. Attract customers (policyholders), which means that insurance companies are looking for people who will become customers (buying insurance). Please know that the company will classify customers based on the type of insurance, such as health insurance, then the company will classify those who buy health insurance into one, including the funds that will be collected, and also claim damages done. So any kind of insurance is not mixed into one, but grouped based on the type of insurance.

2. Raise funds (premium), after you purchase your insurance company will then later withdraw funds from you, which will be made in the appropriate type of insurance that you buy with the funds of other clients.

3. Pay the claim, then after the money has been raised, then the funds will be used by the company to pay claims will be undertaken by each customer to claim damages. Before paying a claim, the insurance company will certainly conduct an investigation prior to the claim that in doing, whether the claims of the loss actually occurs not on purpose or accidentally, if a loss occurs because the accident then the insurance company will not pay the claim.

The amount of funds (premium) Should You Pay To Vendor Insurance
To determine how much premium you must pay to the company, the company has its own criteria, criteria-kriterian are as follows:
1. The amount of potential losses
2. The value of potential losses
3. Administrative costs
4. Threshold values ​​of error when assessing potential losses
5. Assessments others in need
This determination criteria will be used by companies to determine premiums as precisely as possible, because if the company incorrectly specify (such as the premium is too small), the company will incur a loss. That's why insurance companies do not play in determining the amount of the premium.

What Can You Insure
Please know that not all risks can be insured only certain risks that can be insured, it is not possible too right you insure goods or other non-essential, such as scissors, paper, or others that are not material. So the insurance company will only accept purchase insurance with the following provisions:
1. Can the value financially
2. Sign in one type of insurance offered by the company
3. There are a number of people with the same risk
4. Eligible for the insured (value material and insurance interests)
So before you buy insurance, make sure that the insured risk that you will meet the provisions above.
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Okay, maybe that's just a review about how insurance works in general that I can give, I hope I hope the discussion of how insurance works above might make you know and understand the system work the insurance company.

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