Although it may seem complex, insurance is actually very simple: the payments (or premiums) to allow the multitude to settle claims of a small group. Your premiums are paid in a large pooled fund, if you will, with your insurance company. The small group of claims are paid from this fund. As people who contribute to the common fund are more numerous than those who present claims, the fund still contains sufficient funds to pay claims - whether a single claim of a significant amount, eg when a person becomes permanently disabled as a result of a car accident, or a multitude of claims of a lesser amount, as in the case of a natural disaster. (According to some estimates, the ice storm that hit parts of Quebec, Ontario and New Brunswick in 1998 gave rise to some 700 000 claims for damages totaling $ 1.4 billion.) However, major disasters (such as ice storms) come close to exhausting the fund.
Insurance for insurance companies Even when the cash goes close to being emptied, there is another case in which insurance companies can dip to settle claims. A portion of your premium is used by your insurance company to underwrite reinsurance, ie d. insurance for insurance companies. Sometimes,
claims are so important - as in the case of an earthquake - that would
be impossible for an insurance company to bear alone the costs. The reinsurance provides additional protection against loss of importance.
Annual reconstitution of the body Your insurance is an annual contract, so that the fund is operated in a single year at a time. The amount of your premiums and premiums for other policyholders is determined by the amount that insurance companies feel they must make during the coming year to settle claims. Your premiums do not accumulate over time, unlike some types of life insurance.
Compare premiums Within reasonable limits, some of which are dictated by law, your premiums are calculated based on the likelihood that you file a claim, that is to say that you pigerez in common insurance fund. Those least likely to dip into the fund pay lower premiums than those who are more likely to do so.Insurers take many factors into account in determining the likelihood that you file a claim. According to a preconceived standard, a policyholder who has never made a claim should pay less, little or nothing for their insurance. Although the history of claims are indeed important, a more reliable indicator of the likelihood that a person or company making a claim is the statistical group to which it belongs.
Industry profits Insurance companies generally do not have money with the premiums paid by policyholders. In 2005, insurance companies paid more than $ 21 billion in claims as they hit $ 35 billion in bonuses. Insurance companies use the gap between premiums and claims, or 14 billion dollars in this case, to pay salaries and taxes ($ 6.2 billion in 2005) and pay overhead costs (p . ex., electricity bills) associated with the operation of their business. They also use them to pay administrative costs relating to the settlement of claims.
The insurance covers ... The insurance covers only the types of losses described in your contract. It is very important that you read your policy or you ask your insurance representative about the coverage you get or not. Your insurance will not cover all the problems you can face. And it is not a maintenance contract. The insurance is generally intended - and it is priced accordingly - to help policyholders cope with the financial impact that can have unpredictable events, sudden and accidental. If, for example, you live on a floodplain near a river, flooding of your property in the spring is not sudden or accidental, it is inevitable and therefore uninsurable
Annual reconstitution of the body Your insurance is an annual contract, so that the fund is operated in a single year at a time. The amount of your premiums and premiums for other policyholders is determined by the amount that insurance companies feel they must make during the coming year to settle claims. Your premiums do not accumulate over time, unlike some types of life insurance.
Compare premiums Within reasonable limits, some of which are dictated by law, your premiums are calculated based on the likelihood that you file a claim, that is to say that you pigerez in common insurance fund. Those least likely to dip into the fund pay lower premiums than those who are more likely to do so.Insurers take many factors into account in determining the likelihood that you file a claim. According to a preconceived standard, a policyholder who has never made a claim should pay less, little or nothing for their insurance. Although the history of claims are indeed important, a more reliable indicator of the likelihood that a person or company making a claim is the statistical group to which it belongs.
Industry profits Insurance companies generally do not have money with the premiums paid by policyholders. In 2005, insurance companies paid more than $ 21 billion in claims as they hit $ 35 billion in bonuses. Insurance companies use the gap between premiums and claims, or 14 billion dollars in this case, to pay salaries and taxes ($ 6.2 billion in 2005) and pay overhead costs (p . ex., electricity bills) associated with the operation of their business. They also use them to pay administrative costs relating to the settlement of claims.
The insurance covers ... The insurance covers only the types of losses described in your contract. It is very important that you read your policy or you ask your insurance representative about the coverage you get or not. Your insurance will not cover all the problems you can face. And it is not a maintenance contract. The insurance is generally intended - and it is priced accordingly - to help policyholders cope with the financial impact that can have unpredictable events, sudden and accidental. If, for example, you live on a floodplain near a river, flooding of your property in the spring is not sudden or accidental, it is inevitable and therefore uninsurable
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