In any life, a little rain must fall. This is a common saying when reflecting on life. This phrase basically refers to the possibility of not having a sunny day all the time. This is reflective in the process of insurance. Insurance is money that a company will back against you or your property. The idea is that when you have insurance fort myers the payout will be more than what you paid in. The insurance companies are betting on the opposite, they are betting you will pay more in than they will pay out.
It is through this process of betting against disaster where the concept of insurance was born. The question becomes however, how can you win in the insurance game?
The main component of insurance is determining the value of an item. For example the value of your car will be different than the value of your house. The value of your car and your house will have a different value then your neighbor’s house and car. It is from these numbers we determine the replacement value of these items which in turn determines your maximum payout in an insurance claim.
Risk vs Reward
When working with insurance the next component is the risk vs reward. How this works is the insurance company will look at you as an individual, the environment you live in, the weather patterns and other factors. This evaluation will determine your risk if given insurance. If you are more likely to break your stuff, have a lot of claims or other factors your risk is high which will make your premiums high. If you have a lower risk factor number your risk is lower resulting in a lower premium.
The trick to insurance is simple. Keep your costs down in regards to what the insurance company will have to pay out to you if you have a claim and in return they will reward you with lower monthly payments. With insurance it is basically a money and number games. If everyone feels good about what they are getting and what they are receiving then the policy is cut. If not, you have to work on some issues bringing your risk vs reward numbers down.