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INSURANCE
Preview
- Insurance: definition of insurance.
- Insurance services.
- Types of insurance policy – vehicle, fire, burglary, marine, Life insurance, pension, health, etc
- Benefits of insurance
Full Content
Meaning of insurance: insurance is the protection against the loss of property and life. With regard to property, insurance covers practically everything an individual or business owns (building, vehicles and even clothes). Insurance can be taken out on practically anything for which risk is associated.
Insurance is usually undertaken when a person enters into an agreement with an insurance company by paying an amount of money called the Premium. The company is known as the Insurer. The person who pays the premium is the insured.
SERVICES PROVIDED BY INSURANCE COMPANIES
- It provides compensation for losses incurred by individuals and businesses
- It minimizes losses and risks by spreading it through the creation of a common fund to which many contribute in order to make good the losses of a few.
- It aids business survival and help them to quickly recover economically from natural or man-made disaster.
- To help families whose breadwinners may die accidentally while at work
- Provide sources of fund in case of health break down.
- Provide continuous funds for those who have retired.
- It provides employment opportunities.
- It encourages savings habit.
- It educates the insured on the occurrence of certain risks.
- It serves as a collateral security for loan from financial houses.
TYPES OF INSURANCE
- Vehicle insurance: This form of insurance can be taken by any person or business that owns a car. Once an individual has taken out such an insurance , that person is covered against a specific loss.
FORMS OF VEHICLE INSURANCE COVERAGE
- Third party insurance: This policy allows a driver whose car is hit by another car to file a claim against other who is wrong and who holds this type of policy. In other words, the insurance company insures the person which the policy holder may accidentally hit. It provides protection against liability caused by a car accident.
- Comprehensive Insurance: This policy covers the loss incurred by the individual who took out the policy and the person he accidentally hit. The policy holder can also recover a certain percentage, as high as 80% of the cost of the car, if it is stolen, washed away by flood or damaged by a fallen tree.
- Fire insurance: is a coverage against fire hazards which may consume business premises or personal property. In recent years, there have been numerous fire hazards in public buildings. The Republic building in Lagos state, the Cocoa House in Ibadan, the Pay Office in Abuja and NNPC office complex in Lagos and some examples of high rise buildings destroyed by fire in Nigeria. The losses associated with this buildings would have been enormous but for the fact that the owner of this building had insured them against fire hazards. At the occurrence of such fires, the insurance company would pay a sum agreed at the time of insurance.
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