Impact of Insurance at Personal Level
What if you have encountered a property loss during a Earthquake or Hurricane or a Wildfire or a Car Accident?
It has a great impact to a person/family when it comes to financially and personally.
Insurance can help to transfer risk which means that when house /Building collapses due to Hurricane or Earthquake, Insurance can provide financial funding to construct new House/Building in place of a old one. But Insurance companies wont provide the assurance for free but they take little amount known as "Premium". Basically Insurance companies works on the principle of "Polling of Risk"
Polling of risks:
If a Town has 100 houses and it has reported that 1 houses are destroyed each and every year because of Catastrophe Events. The value of each house is 200 thousands.Consider all houses are insured by XYZ company and premium collected is 2100 Rupees. the total amount collected would be 100*2100
(i.e) 2100000. If 2 houses are destroyed even this year and Insurance company will pay 200 thousands and remaining amount will be used for underwriting and office costs.
In the Above Example , Every house owner is paying 2100 Rupees and that amount is polled and given the persons who encounter the loss
It has a great impact to a person/family when it comes to financially and personally.
Insurance can help to transfer risk which means that when house /Building collapses due to Hurricane or Earthquake, Insurance can provide financial funding to construct new House/Building in place of a old one. But Insurance companies wont provide the assurance for free but they take little amount known as "Premium". Basically Insurance companies works on the principle of "Polling of Risk"
Polling of risks:
If a Town has 100 houses and it has reported that 1 houses are destroyed each and every year because of Catastrophe Events. The value of each house is 200 thousands.Consider all houses are insured by XYZ company and premium collected is 2100 Rupees. the total amount collected would be 100*2100
(i.e) 2100000. If 2 houses are destroyed even this year and Insurance company will pay 200 thousands and remaining amount will be used for underwriting and office costs.
In the Above Example , Every house owner is paying 2100 Rupees and that amount is polled and given the persons who encounter the loss
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