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A Quick Guide To The Principles Of Insurance

There are six principles of insurance which insurance companies follow so that they are able to prevent the undertaking of any risks perpetrated by individuals who try to commit fraud for the purpose to gain financial rewards.  The six Principles of Insurance were made to safeguard insurance companies from such fraud.  By following these principles, insurance companies are able to prevent paying off claims made by scheming individuals.

Here is a quick guide to the six principles of insurance:

  1. Principle of Utmost Good Faith – there needs to be a full disclosure of what is being insured, otherwise it can be deemed that the policyholder is in attempt to commit fraud if they do not disclose everything that needs to be disclosed. Proper disclosure allows for proper evaluation or estimates of the item or property that is being insured.
  2. Principle of Insurable Interest – if the person insuring an item has no best interest over what is being insured, therefore the insurer reserves the right to refuse granting a policy as the client holds no value for what is being insured. A loss will prove meaningless to the client if they hold no value or interest of what is being insured.
  3. Principle of Indemnity – claims provided will only value to the amount of the overall cost of repair. The insurer will not provide claims that are much higher than the cost of damage.  Payout of claims means the case will be deemed as pre-damage condition.
  4. Principle of Proximate Cause – coverage of insurance will only cover what is inside the policy. Any loss from similar contingencies but are of different coverage will not be covered by the insurer.  Claims under such with no proper policy under it will be refused by the insurer.
  5. Principle of Subrogation – if damage is caused by a third party, the insurer will pay for the damages to bring it back to pre-damage condition. Due to the loss made by the insurer, the insurer will be forced to sue the third party for damages caused unto them.  This will allow them to compensate for the loss made from the policyholder’s claims.  Settlements will usually cost more than double for the third party than the claims shelled out by the insurer.
  6. Principle of Contribution – if an individual or entity is insured by two insurers with the same policy, the individual or entity cannot make claims from both insurers. The claims will only be from one policy and will be shared by both insurers.

Discount Factors That Can Lower Your Auto Insurance Premium

Auto insurance is a very important type of protection coverage to have on your car.  This lowers your financial duties should your car get involved in incidents that fall under your auto insurance coverage.  Every road-going vehicle should be insured as this has become mandatory by most country’s transport department or ministry.  Although we find auto insurance as important, it can sometimes be a drag, especially if you own a fleet of vehicles in your collection.  In case you do, getting some sort of discount on the premiums will certainly help.

Here is a list of discount factors that can help lower your auto insurance premium:

  1. car-insuranceLow Mileage – if you have very low mileage with the vehicle you are insuring, somewhere below 5000 miles per year, then you are eligible for a low mileage insurance discount. While this does not necessarily qualify you for the discount as certain appraisals still needs to be met, being eligible for the discount means you are only a step further in acquiring the discount.  Low mileage means lower risk so your insurer will be more willing to lower your insurance premium.
  2. Good Driving Record – if you have had a good driving record for the past 5 to 8 years, then you are eligible for the good driving record discount. If you qualify for this discount, you will lower your premium significantly.  Insurers are willing to give discounts on based on long-term good driving record because they find themselves at low risk in providing auto insurance policy to you.  This is one of the reasons why it pays to drive safely and have a good driving record.
  3. Good Credit Score – having a good credit score means you are a client that is of low risk as you surely would not want to jeopardize the good credit score that you have. If you have a good credit score, try to ask your insurer for a discount.  Some insurers will be more than willing than others.
  4. Shopping Around – the best way to get lower premiums on your auto insurance will always be shopping around. Different insurers will have different premiums over the same type of insurance coverage.  If you shop around, you may find that some auto insurance company provides lower car insurance rates than others – something that you will not find if you do not do any shopping around.  This is the very reason why it pays to shop around when it comes to getting auto insurance.

What Makes Insurance Important?

Everyone in the modern world knows what insurance is and what the ideology behind this is all about.  Whether you are practicing a particular profession or have an item or property that is of great importance and value to you, insurance is the best means of providing protection to your best interest.  When you have insurance, you will be able to financially regain what you have lost, provided of course that what you have lost if properly insured and lost under proper coverage of your insurance policy.

Insurance is without doubt a very complex form of risk management.  The risks involved are not just of the insurer, but that also of the policyholder.  Nevertheless, insurance importance is undeniable, especially when you have something very dear and important to you insured.  The cost of losing such may be detrimental to you, but the fact that you are able to get claims as consolation is enough to accommodate the loss of the item or property that has been insured.  After all, it is better to receive something at least rather than a complete and total loss – which will be the case if you do not have any insurance.

These days, there are many things you can insure.  As long as the thing you are insuring is of insurable interest, then an insurance agency will most likely be able to provide you a policy for it.  Take for instance the body parts of athletes or celebrities which they value the most.  Of course, football players will value their foot and their leg, whereas celebrities will value a certain part of their body.  All of these can be insured and for an exuberant price provided you know which insurance agency to insure it.

Since you can insure anything these days, if you find anything that is of extreme importance to you that you would not want to risk losing, it may be in your best interest to insure it.  Getting something insured will definitely give you peace of mind, thus allowing you to sleep better at night knowing that that thing you value most has been properly insured.  Should damage or loss occur, you know that the insurance company will properly compensate you for it provided that the damage or loss is within the boundaries of the insurance policy or coverage.

Auto Insurance – Why Is It Important?

Having your very own car can be very convenient.  You can leave your place headed to your destination at any time as you do not get limited by the schedule of public transport.  Having your very own car also means you can carry more things with you as compared to commuting using public transport.  This is because cars have lots extra space where you can carry luggage.  Of course, aside from luggage, you can also have at most 4 more person ride with you, unless your car is big enough like an SUV or van wherein you can have more people ride with you.

The truth is that a car is both pleasurable to have and also very convenient.  However, it is important to keep in mind that there are certain responsibilities in owning a car.  Aside from keeping it well maintained to ensure its roadworthiness, as a car owner, you also need to have your automobile registered annually.  As part of the prerequisite in registering your car, you also need to have auto insurance.  Although there is really no mandate as to how much coverage you should carry in your auto insurance, still the need to possess auto insurance is necessary to be able to renew your car registration.

Auto insurance is very important for every car owners.  Even though some do not find auto insurance as a necessity as they more of consider it as an added cost to their budget, still an auto insurance is something you should not be without, especially when you encounter accidents wherein an auto insurance would prove to be invaluable.  Keep in mind that insurance is a protection that is intended to lower risk.  Thus by getting auto insurance, you are able to lower your risk on certain contingencies.

There is a lot of coverage available in auto insurance and it is important that you find the right coverages that suit your needs.  Getting too much coverage is good but it can be costly.  Getting very little coverage is not good because you do not get adequate protection.  This is why it is crucial to find the coverage the you really need and get them for your auto insurance so you get only the protection that think are necessary to get the best protection.…

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