Insurance is a means of managing risk.  If something could happen that has expensive consequences, an Insurance Policy may be a means of spreading the costs - over time and between all the policy holders.  Insurance companies collect premiums from all their policy holders - Insurance premiums may be single, up-front payments, but typically they are regular payments each month or year.  Insurance companies pay out for Insurance Claims. 

Insurance companies are in business to make a profit - they need to collect more in premiums than they pay out for claims.  Some policy holders may be seen to be "high risk" and could be charged a higher premium for the same amount of Insurance Cover.  In the extreme, insurance companies may refuse to provide cover to those at the highest risk.  Insurance Companies may employ "loss adjusters".  It is the job of the Loss Adjuster to find means of reducing the cost of a claim to the Insurance Company - for example, by recovering damages from other parties, or by reassessing any claims found to be excessive.

Insurance Policies are available from many different organisations and take many different forms; most Insurance Policies are designed to suit specific needs, for example:

Life Insurance Personal Insurance House Insurance Home Contents Insurance Car Insurance
Professional Indemnity Insurance Business Insurance Employer's Liability Insurance Public Liability Insurance Motorbike Insurance
Young Driver Insurance Senior Driver Insurance Payment Protection Insurance Health Insurance Breakdown Insurance
Travel Insurance Holiday Insurance Income Protection Insurance Dental Payment Boat Insurance

Some types of insurance, such as Car Insurance and Employer's Liability Insurance, are legal requirements for some activities.  Some types of insurance (such as House Insurance and Payment Protection Insurance) may be required before a loan can be made.  Most types of insurance are optional.  You should consider taking out insurance for risks that may happen and would be difficult to fund without some provision.  You will need to balance the certain costs of the premiums against the possible value of the claim.

To find the best policy for your needs, you will need to compare various policies - some may appear cheaper but the cover may not be as good, or the claims may not be paid as easily.  Insurance Brokers will be able to provide advice on policies available - some are independent, some may push the policies that earn them the most.  Look for competitive rates and policies online.

When you take out an insurance policy it is important to be honest and provide all the information that may be relevant - even if not asked directly.  Failing to disclose relevant information may lead to claims not being paid when you need them.  Similarly make sure factors that may you a low risk are known to the insurer - this could reduce your premiums - you may need to shop around for an insurer who takes your personal circumstances into consideration.


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