There are many people who are not aware of the concept of insurance. If you are one among them, this article will help you in understanding the concept of insurance, its requirements and the benefits.
An insurance policy is a contract in which there are two parties; the insured and the insurer. The insurer is the company which agrees to take up the policy of the insurer’s asset, in repayment of the premium amount. The terms of the policy is given by the insurer to the general public. The latter party can take it up if he agrees to the terms and conditions laid down by the company.
In case the insured asset of the policy holder gets damaged due to the causes mentioned in the policy, the company is liable to pay for such loses. However, the policy holder has to make the claim from the company which is granted after thorough scrutiny is done regarding the damage or loss.
One such type of insurance is the car insurance. The policy is similar to that of any other policy. In general, the amount of policy does not exceed the total value of the asset which is being insured. Car insurance requires you to have a clean driving record without which, no company will be ready to grant the policy. However, certain companies agree to grant the policy at a high rate of premium and lower policy amount.
In case there is an accident, the company will pay for the repairs of damage caused by minor accidents. However, if the accident has caused complete damage to the car, the policy amount will be given to you. In the first case, you cannot claim the entire policy amount. You should claim only the amount which is required for the repairs.