What is Insurance?

How much do you know about insurance? Although the topic is familiar to many people, sometimes it is misunderstood. What is insurance? Why should persons insure their property? These are common questions that people often ask.

Insurance is a contract between two parties, the insurer (the company) and the insured (the individual), that provides financial protection against losses or damages to your assets from unexpected events such as accidents, natural disasters, or theft. When you purchase an insurance policy, you pay a premium to the insurer in exchange for reimbursement of any losses or damages that may occur.

Four reasons to have auto and home insurance

1. It reduces out of pocket spending:  An unexpected loss or damage will require you to dig deep in your pockets which may put a big dent into your finances. Sometimes the cost to replace or restore your asset(s) is so much that you may not be able to afford to do so alone.  Having insurance means that the expenses associated with the restoration of your personal possessions is transferred to the insurer who will compensate you for your loss, thus enabling you to ‘get back on your feet’ quickly. Now, that’s peace of mind!

2. Your assets are valuable; secure them!

Home, contents (personal possessions such as laptops and jewellery) and motor vehicle are valuable assets. You worked hard to acquire them; don’t risk losing them.  Insurance will protect your assets from various risks.

3. A disaster can strike at any time. We live in a region that is prone to hurricanes and earthquakes. Besides, other insured perils, such as fire, flood, burglary and theft, can happen unexpectedly which could, in minutes, put what you worked so hard to acquire at a loss.

4. Home insurance provides more than you think. A homeowner insurance policy will pay for medical expenses up to the limits stated in the policy documents, if a visitor or domestic employee is accidentally injured in the home and you are legally responsible for the injury.