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16.1 Insurance How Insurance Companies Make Money Esurance Login

Description: The article below concentrates on the topic of esurance login, which shows you how insurance companies make money, the different types of coverages that are available and how deductibles and exclusions work. The author talks about homeowner’s, renter’s and automobile insurance policies.

There are all kinds of insurance policies available to consumers, auto insurance, homeowner’s insurance, medical dental vision insurance, personal liability umbrellas, life insurance, long-term care insurance, accidental death and dismemberment insurance.

The point is if you can identify a risk that concerns you, you could probably find an insurance product to guard against it, for the insurers it all boils down to actuarial math, insurance companies are also known as insurance carriers.

They sell risk protection which is known as insurance coverage in the form of policies, consumers and businesses pay a fee known as a premium to buy them, the underlying business model is fairly straightforward, collect more in premiums than the amount, you’d end up paying out foreign claims that are made against the policies you sold.

Collect enough to cover your administrative costs and still have enough left over to post a profit, but how do they know what to charge? This is where the actuarial math comes into play, actuaries use math, statistics and financial theory to estimate the likelihood or the probability that an event may occur as well as to project the financial implications.

They use data from large groups of people with similar characteristics to your own in order to figure out what to charge for the coverage that you’re seeking, that’s why auto insurance premiums are higher for college students than they are for 40-year olds.

It’s also why homeowners insurance is more costly on the San Andreas Fault than it is in Bangor Maine, there are also other factors that are taken into consideration during the insurance underwriting process, these include special personal characteristics such as credit bureau reports, insurance claim history, driving records and so forth.

Policies are also very precise on what they will and will not cover, for example risks are difficult or impossible to protect against or excluded from coverage, some samples of these exclusions include an event affecting a large number of people in the same place at the same time like a terrorist attack or an event that’s within the insurance control such as suicide.

Policies also establish deductibility limits, deductibles are in effect coinsurance, it’s the portion of your claim that you’re required to cover before the insurance company pays out for the rest of your loss, if you have an accident, the cost to repair your car is $1,500 and your deductible is $1,000, the insurance company will pay you $1,500 minus your $1,000 deductible or $500.

If the accident was your fault, then the deductible you covered is yours to bear, however, if the accident wasn’t your fault, the insurance carrier will work with you to collect from the other insurance carrier the money it paid to you as well as the portion of the bill you initially covered.

You are willing to assume that the financial risk for the losses you incur will count against the premium, the carrier would otherwise have charged, but it’s not a dollar-for-dollar proposition, in fact you’ll probably find that it will take many claims for years to square the value of the premium savings with the increased financial burden you’ve undertaken in the form of a higher deductible.

That’s one of the reasons to shop to the best deal which you should take into consideration when you’re in the market for insurance, starting with the first one, zero in on the type of coverage, you need house, car and medical, you may also want to have a discussion with an insurance agent or broker that specializes in the field.

If you’re insuring property or possessions, you’ll need to get a handle on current market values, take the time to understand the exclusions that are listed in the policy, be sure that you could live with the limitations, determine the level of deductible you can comfortably cover, whether from your monthly cash flow or by way of an emergency stash that hopefully you have in place.

Shop for the best deal, the book has links to several online sources for competitive insurance quotes which you can compare to the price quotes you may solicit from the agents and brokers you consult with, do the research, the book also has links to a site that rates the financial capacity of the different insurance carriers.

When you think about it, it is important because you’re relying on their ability to make good on your claim, there are also links to other sites that address customer service and consumer satisfaction levels.

Last but not least if health coverage isn’t offered by your employer or if things are particularly tight after you leave school, look into continuing coverage under your parents’ programs if they have one, the Affordable Care Act of 2010 permits you to piggyback on their policy until you turn 26.

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