Insurance 101

I’m always happy to pass on great info, and this is great info! I’ve included a few snippets below lifted from the full article. 

Risk and insurance

Through the course of our lives we accumulate assets by buying products, homes and vehicles. Many people choose to take out an insurance policy to protect them from a potential loss. This loss might occur through theft or damage, or it could be a total loss through an event like a fire or flood. In most cases the policy may also cover injury to other people.

In its most basic sense, insurance is taken out to transfer the risk of loss from you to someone else (the insurer) in exchange for money. Insurance companies understand the likelihood of risks occurring across all the different types of insurances and they price them accordingly.

Duty of disclosure

An insurer calculates the amount you pay for your insurance (called a premium) based on your answers to a series of questions. These questions relate specifically to what you want to insure. Over a period of time insurers have gathered a great deal of information about various risk factors across the different types of insurance, and the price that you are charged changes according to the level of risk.

The duty of disclosure relates to the obligation that you have to provide true and accurate information so that the insurer is able to determine if it can insure you and at what price. Your policy is only based on the information you have provided and it is expected that you provide honest responses. If you have not been honest or have forgotten to advise the insurer of something you should know, it may impact you adversely if you make a claim against that policy.

Do you need more detail on this subject? Head on over to the full article here for more ideas and perspective. Afterwards, why not drop me an email to share your thoughts at [email protected]; or call me on (07) 3243 0000. 

Thanks,

Mark