Benefits of Risk Mitigation
A risk is likely to affect an individual, business, organization, as well as an entity causing a financial loss hence insurance cover, will help reduce the impact of the loss. There are various companies that deal with insurance covers known as insurance company, insurer as well as an insurance carrier. The person or organization that requires insurance can be referred to as policyholder or the insured. The role of the insurer is to compensate the insured in times of unexpected risk that results to financial loss. The insured is required to pay premiums either on a monthly or annual basis to the insurer which will be used to compensate him/her in case the unexpected loss occurs. To helps compensate, the insurance company collects funds form various individuals or organization into a common pool. There are a number of principles that act as guiding measures in insurance benefit insurance, indemnity, utmost good faith, insurable interest, proximate cause, subrogation, contribution as well as mitigation. An individual or organization can take various insurance covers such as for an automotive, a home or even a boat.
Insurance that covers trucks, cars, motorcycles as well as other road vehicles is known as auto insurance. The auto insurance covers all risks that are likely to occur from traffic collision or any other incidence in a vehicle that causes physical damage or even bodily damage leading to financial losses. Other risks that can be covered by auto insurance include theft of the auto, natural disasters that may affect the vehicle, as well as collision of the vehicle with stationary object. Property damage, the party insured, the vehicle insured as well as other third parties such as other cars, property and people are some of the risks that auto insurance covers. Premiums charges for an auto insurance can be determined by the type of the vehicle, its value, the age of the vehicle among many others.
There are risks that may lead to damages and losses in a home and assets present there and the damages can be covered through having a home insurance cover. Accident occurrence in a home is also a risk causing financial losses needs too be covered by the home insurance. To ensure proper coverage using the home insurance, one should look for a suitable insurance provider. Home insurance is also very important when one is getting a mortgage for a home as it is one of the requirements to lend it from financial lenders. Boat insurance is also important as it helps cover any financial losses that may occur from destruction and damage of cargo, ships, and terminals. Property both offshore and onshore is likely to be covered by a boat insurance cover. Having either a home, boat or auto insurance cover is very beneficial as it enables one to have security against risks that may occur in the future.