Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed and known small loss to prevent a large, possibly devastating loss. An insurer is a company selling the insurance; an insured or policyholder is the person or entity buying the insurance. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.
Insurance Industry – The Responsibilities of Insurance Professionals
Insurance is a contract wherein an insured (entity or an individual) receives monetary protection or reimbursement against future losses from an insurer (insurance company). To put it in other words, an insured or a policyholder purchases policy from an insurance company and pays premium for the required coverage. In turn, the insurer promises to cover the financial losses listed in the particular policy. Apart from different type of policies, insurance industry is dominated by a number of insurance professionals, who guide people right from purchasing a policy to settling a claim.
Types of insurance policies
Insurance industry is nothing without insurance policies. There are a number of insurance policies, some of which are listed below.
• Life insurance: In life insurance, the designated beneficiary/beneficiaries get cash benefit in the event of the policyholder’s death.
• Auto insurance: You need to purchase an auto insurance policy if you own a vehicle. This policy provides coverage to you and your car in the event of an accident, theft or damage. It also covers bodily injury and property damage liability.
• Health insurance: As the name suggests, this policy covers the cost of future medical treatments.
Apart from personal insurances, there are also business insurance policies that protect your company against financial losses due to theft, damage or liability.
Insurance professionals: Their responsibilities
Whom do you contact when you want to purchase insurance policies or need to settle a claim? Yes, they are insurance professionals, who guide you to purchase a policy, answer your specific queries and also help you to file a claim. It is also the responsibility of these professionals to check whether or not the claim you made is a real one.
From the following lines, know about the specific job role of different insurance professionals.
1. Insurance agents and brokers: Brokers and agents serve as mediators between you and your insurance company. They guide you on the type and the amount of coverage you require. Though the duty of agents and brokers are basically same, yet a broker represents a number of companies whereas an agent is a representative of a particular insurance company.
2. Insurance underwriters: It is the job of insurance underwriters to calculate the risk associated with a person or an entity. Being a representative of the insurer, underwriters design policies so as to make it profitable for the insurance company.
3. Claims examiners: After you file a claim, it the duty of examiners to review the submitted claims. They also help insurance adjusters if there’s a sudden increase in the claim volume.
4. Insurance adjusters: Adjusters are insurance professionals who work with experts to evaluate a particular claim. Apart from this, adjusters negotiate with policyholders and settle a genuine claim.
5. Insurance investigators: Apart from above, there is a group of professionals who investigate a claim if it is suspected as a fraudulent act. In this situation, insurance investigators try to obtain background information by cross-questioning claimants and witnesses and submit the report to the insurance company.
Thus, it can be said that insurance professionals are a part and parcel of insurance industry. They guide you as well as look after the benefit of the insurance company.
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