To Insure Or Not To Insure
Insurance is something that everyone needs, but what does it do?
A car is damaged because someone else runs into it. The insurance company will pay the person enough money so that they can repair their car. money so that they can repair their car.
Another example is where your house is burgled and your television is stolen. Then the insurance company will pay money so that the television can be replaced.
What can you buy insurance for? It‘s possible to insure all sorts of things. You can get medical insurance, buildings insurance, house contents insurance, car insurance, fire insurance…. Or on a more fun note, you can get insurance for space shuttles!
There are even some football players who insure against something happening to them so they can’t play football any more…Or pianists who insure against something happening to their fingers!
An Insurance Policy
When you buy insurance, you get a piece of paper called an Insurance Policy. This represents a contract between you and the insurance company. To get insurance, you have to pay some money (called an insurance premium) to the insurance company. In return for the insurance premium, the insurance company promises to pay money back to you should certain things happen.
The insurance premium depends a lot of different factors. For example, for car insurance, it depends whether the car is kept in a garage or on the street, whether the driver has had tickets from the police for speeding or whether they have had accidents in the past.
Car accidents are never funny, but insurance claim forms often are.
One was from a motorist who had driven into a cow. The form asked him what warning he’d given to ‘the other party’. “I sounded my horn,” he wrote. And what warning did the other party give? “A loud moo,” he answered.
Animals often feature in claims, as this one shows: “I pulled into a lay-by with smoke coming from under the bonnet. I realised the car was on fire, so took my dog out and smothered it with a blanket.”
Even insects are blamed: “In an attempt to kill a fly, I drove into a telephone pole.” Bet the fly escaped!
So do you have Insurance?
Most insurance is a choice but some are compulsory. If you drive a car you have to have insurance to make sure you are financially protected if you damage your car or if you cause damage to someone else’s car. Even if insurance is not compulsory, it is definitely worth choosing to have it for certain things like your belongings in your house and to protect you against huge vets bills if your pet gets ill.
Even though it will cost you money, insurance is a good thing because it means that you don’t have to worry about being out of pocket if certain things happen to you (or your belongings)!
By Claire Schrader - Claire is a Solicitor at Lloyd’s