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What are insurance companies and what do they do?

Question by Sydney Mulunda On 19 March 2020, 19:03:37

Please write a genuine and meaningful answer to get a good ranking.

Answer by Sydney Mulunda On 19 March 2020, 19:19:03

Insurance comapnies are organizarions found all over the world and whose mandate is to provide security to their customers in a very special way. They cover their customers against the occurence of certain risks that may be detrimental to the customers by proviidng a way to bring back the customers to the position they were before after the occurence of the risk. Insurance holders are usually required to pay regular sums to the insurer known as premiums without fail so that they can claim from the insurer when the loss they had insutred for occurs. 

There are several types of insurance policies provided by insurance companies namely: Health Insurance, property insurance, life assurance and auto insurance. Health insurance firms cater for the medical expenses of a clients in the event they suffer from a certain illness so that they do not have to pay their own medical expenses. Insurance firms also cover the property of their clients againstcertain risks such as fire, accidents, theft and so on whereas for life assurance, insurance companies endevour to provide compensation to the family/beneficiries in the event the clients passes on. Lastly for auto insurance, insurance companies provide cover in the event the client is invlolved in an accident. Moreover they evn go to the extent of covering the third party in the event they are hurt or inconvenienced by the accident.

There are also a special kind of insurance companies referred to as re-insurance companies. They insure the insurance companies to a certain extent in the event they may encounter circimstances where they are unable to cover their clients.

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