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The Insurance Business


In our current situation now, people from all walks of life irrespective of their businesses have always tried to insure against unexpected disasters.For example, even today people buy charms which they believe will protect them from danger and from financial or other problems.Others pay fortune tellers who, they hope, will tell them when to start a new business or to plant their next crop.


All of these people are trying to insure to be secured against financial difficulties or other emergencies that may confront them unexpectedly.

Nowadays, when we talk about insuring against difficulties, we are usually talking about money.Insurance is now a huge business which involves millions of cedis every year.Thousands of people are involved in the business as insurance agents, insurance brokers and insurance underwriters.Hundreds of thousands of people are consumers of insurance.Everybody who owns a motor vehicle must by all means abide by its disarmament to insure it.More and more people who own their own houses are insuring them against damage.For those who have some money that they want to save for later in their lives, life assurance policies are becoming more popular.

The principles of all kinds of insurance is the same.It is based on the idea of risk.An insurance company will work out the risk of a certain event happening for example that a persons property might be stolen.The company will then arrange a policy for their customers who want to insure against that kind of event happening.These customers, the policy holders, will have to pay a regular premiums to the company.Of course, not everyone who pays the premiums will have their property stolen.But some of them will. When this happens,the policy holder can send a claim to the company and they will pay some of the money collected from all the policy holders to the one who has suffered the lost.

In this way, all the policy holders have shared the risk that anyone of them might have their property stolen.
This might look as though one person is getting something for nothing at the expense of all the others.But initially, we have to remember that what they have all gained is covered against the risk of a certain bad event.
Secondly, a payment made by an insurance company will only cover a person’s loss.It will not leave him or her richer than before.A man who has lost a small and old house in a fire will not be able to buy a palace afterwards and can set as an example to majority undoubtedly.So we cannot really say that someone who makes a claim is making money out of the other policy holders.

Neither can we say that the claimant is making money out of the insurance company.The larger the claims made against the insurance policies the larger will be the premiums paid by everyone.
This is palpably happening with car insurance nowadays.So many people are making claims for damage to their cars that the premiums for everybody have to keep rising and rising..Thus the extra claims have to be paid for by the insured people themselves, who all have to pay higher premiums.

There are kinds of people who might hope to benefit from insurance more than others.The first kind is the sort of person who makes a lot of claims.Perhaps a man is a very bad driver and he is always having accidents.He just thinks, never mind the insurance company will pay for it.But this man will have to pay exorbitant much higher premiums than everyone else.All car insurance policies now have what is called a NO CLAIMS BONUS, BY WHICH EACH YEAR A BONUS IS GIVEN TO DRIVERS WHO HAVE NOT MADE ANY CLAIMS.EACH YEAR THEIR PREMIUMS WILL BE REDUCED,IF THEY GO FOR FIVE YEARS WITHOUT MAKING A CLAIM, THE YEARLY PREMIUMS MAY BE CUT BY A HALF.SO NOT MAKING CLAIMS WILL SAVE DRIVERS MONEY.

The other kind of person who hopes to make money from insurance is the person who deliberately tries to cheat the company.Let us imagine a businessman whose business is losing money.He thinks that he would be rich again if his factory burned down, because the insurance would pay for his loss,Surprisingly, the very next day his factory is annihilated in a mysterious conflagration fire.To catch this sort of person, insurance companies employ a fully- fledged investigators, some of them highly paid,these investigators try to uncover attempts to defraud the company.After all, the people who are really being cheated are all the other policy holders who have honestly paid their premiums and have only made genuine claims.

At its best, insurance is a way in which people help each other to carry financial burdens.It makes sure that people who have suffered a major loss do not loss everything.It gives the unfortunate trader whose storehouse was burnt down, the chance to rebuild and keep his or her business.I SHALL RETURN AGAIN.

edward frimpong

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