Wednesday, October 3, 2012

How To Reduce The Impact Of Risk Through Insurance

By Mike Goldberg

Whatever activity that is carried out has some uncertainty associated with its outcome. At times this uncertainty can be equated to a risk. In this event the higher the probability of this risk occurring during the activity or process the greater is the requirement to be careful in carrying out the process. Alternatively an insurance process can be adopted to transfer the liability to a service provider that will provide financial compensation.

The other party involved in this risk management process normally charges a stipulated fee for such services. This service can be carried out in many of the areas in life with an intention to transfer the liability. Among the areas commonly included are car and health insurance. The former covers automobile risk whereas the latter deals with personal medical expense risks.

For the automobile cover a number of risks will be considered. Such risks are like those related to the damage from accidents and vehicle repair. Other times a cover scheme is also available for theft of the vehicle. In such an agreement the service provider is obliged to compensate the client the equal value of the vehicle that has been stolen.

Normally the general process involves the insured entity entering a contract with the insurer who is the service provider in this case. This policy enumerates the conditions and circumstances that will warrant a financial compensation by the service provider. This process is governed by a number of principles that must be identified for the process to be actualized.

Therefore it is apparent that various risks are handled differently and so have different cover rates. This is common practice especially in the automobile industry. Presently service providers within this industry are operating car insurance quotes online to assist clients find out what rate they can pay. The query process collects data from the client various departments like the motor vehicle and other state agencies to determine the rate.

While the underlying principles in cover scheme are the same those for automobile and health vary in that the former involves a contract between a provider and a client. The client here is either an individual or their sponsor who may be their employer. This contract will also specify the areas covered in the health policy.

Within such an agreement the person to be covered has several requirements. A premium is one such requirement indicating the amount that must be paid for the cover. This payment can be accomplished using various approaches. This may include deduction coinsurance or co-payment. Apart from the approach used the policy will also highlight such matters like capitation. This is where the provider enters agreement with a healthcare provider to provide umbrella services for its members. This is what is commonly practiced under the national health scheme.

The insurance process benefits the client and service provider in varied ways. For the client they can have a peace of mind because liability for the risk is transferred to a different party giving them a peace of mind. On the other hand the service provider has a steady capital source from the premiums by the customer. In this way the provider can be able in a sustainable business

About the Author:

0 коммент.:

Post a Comment