The prevalence of fraud ends up costing all of us more money. Insurance fraud is intentionally deceiving an insurance company for financial gain. It could involve falsifying information, inflating the value of damages or other deceptive behavior. Those who submit bogus claims will have coverage denied and likely canceled. Fraud is illegal and will result in criminal and financial penalties, but even worse, it places a large financial burden on the whole insurance industry that leads to higher costs for you and me.
INSURANCE PROVIDES ESSENTIAL PROTECTION
Nonetheless, insurance is a necessary expense, and you should not expect to get back all that you paid in. Insurance serves as financial protection against unexpected catastrophes like illness, accidents, weather or people-related damages, broken pipes, liability issues and more. Peace of mind comes with having insurance because you will have financial help to put your life back together following a loss.
For valid claims, you would contact your agent or company and provide relevant and accurate information, such as photos and other documentation of the extent of the damage you have suffered. For a property claim, it is best to ensure that the repair cost will exceed your deductible. Otherwise, you will not be paid in a settlement, but the cost of processing the claim will be attributed to your insurance premium for the next five years. Be sure you understand all the provisions of your policy contract before filing.
REDUCING THE RISK
We all hope that we never have to use our insurance, because each loss is a painful experience, but insurance is used to help you recover financially. Every part of our lives involves risk, and insurance serves to reduce the risk of losing everything you have worked for, and it will help your family and your business when the unexpected occurs.
In addition to property protection, insurance can provide legal defense from lawsuits and pay for legal representation, court fees and judgment amounts, which can be substantial. Many policies also include provisions to help preserve your reputation and assist with compliance with your contractual requirements.
The cost of insurance is directly related to the level of the risk and exposure, and the insurance company’s assessment of the risk profile of the individual or business, based on factors such as claims records and credit history. Claims frequency and severity are major influences on the cost of coverage. The more attractive your home or business is to the insurance marketplace, the lower your rate will be.
