Insurance is a method that the majority of people in the western world make use of to reduce the risk of something happening by transferring that risk to an insurance provider. These insurance companies in Philadelphia are able to calculate the odds of something happening, and set a premium figure that reflects this (with some profit on the side). Whilst it might sound like a bad trade, it’s actually a very good technique to cover yourself in case anything major happens.
Insurances are one of those necessary evils in life. You have to pay money to protect your money, in case something unexpected happens and takes all your money. You can buy insurance for pretty much anything in life, the more common ones being your car, your house or even your life (scary I know).
Insurance works like this:
You pay a monthly fee for protection from a certain list of things happening to the thing you’re covering, so for example, the item you’re covering could be your house, and the events that could happen could include things like burglary or fire.
Depending on how much you pay for your premiums, you might have more or less cover. For example, a budget insurance plan for a car could be to only payout to repair the other parties’ property and not yours, you may also have to pay a high premium and on top of that, there may be a low maximum amount you get to claim. With a more expensive policy, you might be able to get them to pay for your car’s reparation costs too, and the maximum amount you can claim may be a lot higher too.
In the event of something happening that is covered on the policy. The insurance company will assess things like liability, who’s fault it is, and if need be, they will then pay the amount needed to cover all your liability.
So Why Buy Insurance?
Whilst you get lower odds than 1 to 1 when buying insurance, you’re also protecting yourself from serious financial problems in the event that something happens and it’s not covered by the insurance company. Liability is a huge problem, and if you do something wrong on the road, or with your business, you could be liable to pay for all damages associated with your mistake.
The cost of these damages could be absolutely huge because we including everything from legal fees to medical bills etc. Insurance cover acts as a buffer between you and these problems. Whilst they do try to make money (like every other business), they do also have the financial stability and power to cover your losses from liability.
Whilst insurance is not necessary in all circumstances, it is usually a recommended investment to make if you have a bit of money to spare. Protection is always better than no protection.
Please note also that insurance only ever really kicks in after something has happened, and preventative measures are always preferable to recovery methods.