Home Insurance Is A Smart Choise
Home Insurance, or Houseowner / Householder Insurance as it is also known, is one of the most important insurance policies you can buy in your adult life. Your home is one of the largest financial investment you’ve made, and that’s why it’s so important to protect it. There are three main types of policies which you can buy to protect your home:
Home insurance with peace insurance
Basic Fire
This Policy provides you with coverage against loss or damage to insured property (i.e. house, shop and factory) caused by fire, lightning or explosion.
House Owners Policy
This policy provides additional coverage compared to the basic fire policy. It may include loss or damage due to flood, burst pipes, etc.
House Holders Policy
This is a policy which covers your household contents and includes coverage for fatal injury to you as the insured. This policy does not cover damage to the house itself.
More information about Home Insurance coverage type.
Contact UsThere is however a catch here.
- Would people agree to part with their hard earned money, to create
such a common fund? - How could they trust that their contributions are actually being used for
the desired purpose? - How would they know if they are paying too much or too little?
Obviously someone has to initiate and organise the process and bring members of the community together for this purpose. That ‘someone’ is known as an ‘Insurer’ who determines the contribution that each individual must make to the pool and arranges to pay to those who suffer the loss.
The insurer must also win the trust of the individuals and the community.
Risk management Techniques
Another question one may ask is whether insurance is the right solution to all
kinds of risk situations. The answer is ‘No’.
Insurance is only one of the methods by which individuals may seek to manage
their risks. Here they transfer the risks they face to an insurance company.
However there are some other methods of dealing with risks, which are
explained below:
- Risk Avoidance
Controlling risk by avoiding a loss situation is known as risk avoidance. Thus one
may try to avoid any property, person or activity with which an exposure may
be associated.But risk avoidance is a negative way to handle risk. Individual and social
advancements come from activities that need some risks to be taken. By
avoiding such activities, individuals and society would lose the benefits that
such risk taking activities can provide. - Risk Retention
One tries to manage the impact of risk and decides to bear the risk and its
effects by oneself. This is known as self-insurance. - Risk reduction and Control
This is a more practical and relevant approach than risk avoidance. It means
taking steps to lower the chance of occurrence of a loss and/or to reduce
severity of its impact if such loss should occur.
Important
The measures to reduce chance of occurrence are known as ‘Loss Prevention’.
The measures to reduce degree of loss are called ‘Loss Reduction’.