Insurance and types of insurance – traffic accidents – personal insurance
The definition of insurance is very easy. You will pay a monthly or annual fee to the insurance company. Either to get life insurance, car insurance, or home insurance. In return, the insurance company will pay you financial compensation, in the event of an accident or damage to either the person or thing insured.
That is, you transfer the risk of financial loss, which you may be exposed to, to the insurance company, in return for the financial premiums that you will pay. Whoever is exposed to a car accident, the insurance policy covers the damage caused to the vehicle. And whoever suffers from a disease or disease, the health insurance policy covers the costs of treatment. Whoever loses his life, the coverage shall be paid to the beneficiaries in the policy. With regard to home insurance, if a fire or flood occurs, for example, the insurance policy covers the damages.
Not only that, but there are very strange types of insurance, you can insure almost everything you want in return for premiums. It is imperative that you benefit from insurance, and get the appropriate coverage, according to your needs, your priorities and even your budget.
Finally, insurance is a means of protection against financial loss. It is a form of risk management, primarily used to hedge the risk of contingent or uncertain loss.
There are three basic components for any type of insurance, which are (premiums, limits of insurance coverage, deductible). By understanding these three components, you can take the most important step in choosing the most appropriate insurance for you. For example, third party car insurance may be the right one for you, or otherwise comprehensive insurance may be what suits you best.
The premium of the insurance policy is the amount that the insured undertakes to pay for the insurance coverage to the insurance company, in the form of monthly or annual premiums. Insurance companies set premiums according to several factors, based on your risk profile, and whether or not you can claim compensation.
To put it further, if you own a number of luxury cars and have a track record of reckless driving, you will likely pay higher premiums in terms of cost. Whereas someone who owns an average saloon car and has a perfect driving record will certainly pay lower premiums.
The prices of the documents vary from one company to another, and the features and exclusions differ from one document to another. So finding the right document will take some effort. Or you can contact insurance comparison companies to help you choose the best policy for you.
Limits of insurance coverage
Limits of insurance coverage means the maximum liability of the insurance company to compensate the insured or insured’s damages, as specified in the insurance policy schedule. This is before applying the deduction or deduction rate or the depreciation rate.
The insurance coverage depends on the period of time, ie the duration of the policy, injury or damage, and other factors. The higher the limits of insurance coverage, the more coverage or compensation you will receive.
The deductible is the amount or percentage that the policyholder agrees to pay out of his or her own wallet, before the insurance company begins settling the claim.
The higher the deductible, the lower the premiums value, and the lower the deductible, the higher the premiums value.
To illustrate the idea more, here is the following example: Suppose that your car was involved in an accident that you caused, and you have insurance coverage of up to 10,000 dirhams, and the deductible is 2,000 dirhams. If the cost of repairing your car damage is 1,500 dirhams, you will pay 1,500 dirhams in full, because it is less than the deductible. If the cost of repairing the damages reaches 8000 dirhams, you will pay 2,000 dirhams as the deductible, and the insurance company will pay the rest of the amount, which is 6000 dirhams.
Types of insurance
There are four basic types of insurance in the UAE, which are motor insurance , home insurance , health insurance , and life insurance. There are also other types offered by insurance companies.
Car insurance is mandatory by law in the UAE. All vehicles must be secured before they are allowed on the roads. Car insurance helps you cover vehicle damage and personal injury in the event of a car accident.
Car insurance in the UAE is easily available, as many companies offer different insurance policies to suit your needs.
There are two types of car insurance in the UAE, third party insurance and comprehensive insurance. Third party insurance pays third party damages in the event of a collision caused by your fault. It does not provide any coverage for you or your vehicle. Whereas comprehensive insurance compensates the damages of both parties regardless of who committed the collision.
Health insurance helps you pay for treatment and drug bills. During the purchase of the health insurance policy, you agree with the insurance company to pay a percentage of the value of the costs. It may be either in the form of a percentage, or in cash in dirhams.
Health insurance, like car insurance, is mandatory in the UAE. This ensures that citizens and residents alike are secured in emergency medical cases.
In addition, in the city of Dubai in particular, employers must provide basic health insurance as part of the employment contract.
There are three types of home insurance plans available in the UAE, as follows:
As the name implies, this type of home insurance covers the basic structure of the building, and pays for claims for repairs and refurbishments of the building. This includes just about everything from walls, floors, fixtures and fittings, garages, gates, backyards to fencing.
Home contents insurance
Home contents insurance covers accidental damage, theft and fire damage to personal property in your home. They include appliances, furniture, paintings, art pieces, and electronics.
Personal property insurance
Just as building insurance does not cover the contents of the house, the contents of the house insurance does not cover some personal items. This includes personal clothing, gems, accessories, and credit cards.
Life insurance pays a certain amount to someone you choose in the policy upon death. Thus, your family can use this amount to pay bills and living expenses. Thus, you insure your loved ones in facing the difficulties of material life in the absence of you.
Insurance companies in the UAE offer various life insurance policies and plans. You can see what suits you best, and choose the best insurance plan for you.
Accidents, diseases and disasters happen every day, to us or to others. What do you think of the idea that through insurance you help every day someone who has had an accident, illness or disaster? Isn’t it a great idea! In the end, research carefully different insurance offers, and choose the best insurance policy that suits your needs and suits your circumstances.