Insurance
Okay, so there are two different or significant parties involved in dealing with insurance, you probably can identify with the customer and the insurance company, which is excellent now, but now that you’re going to be deciding to become an insurance professional, you’re going to want to use different terms for the insurance company as well as the customer, those terms are going to be the insurer. And that is considered that is the term for the insurance company; the insured is a term for the customer. So to use that in a sentence, to understand it a little bit more, the insurer, which is the company, provides auto coverage to the insured, which is a customer; in turn, the insured pays the insurer a premium for his or her insurance.
The next keyword is going to be premium. A premium is a periodic payment that keeps a policy in force. So basically, this is the payment that the insured will pay to the insurer in order to have insurance.
Okay, the next term is going to be called the risk. An example of a risk is going to be when you jump into your car because we take risk every day and you start driving down the road; you’re taking a risk, there are numerous possibilities of different outcomes that could occur. These outcomes can lead to an accident, a loss, or you can make it to your destination and peace without a loss. Nevertheless, you are taking a risk, the risk was taken as soon as you got into the car and you started driving. So the risk is going to be called the chance that a loss might occur. So that’s going to be the chance or possibility that a loss might occur. The next word is hazard. Hazard increases the chances of a loss. So this is a a hazard is something that increases a risk it so for example, if there’s a drunk driver on the road that night, and then the driver is considered dangerous. For whatever reason that driver is considered to be a hazard. Because even if that drunk driver was not driving that night, you’d still be taking a chance by driving. However, the loss could be more risky, if there is a hazard. So if that drunk driving hazard is on the road, it increases the chances of your loss. So the next word is going to be the peril. So you want to get used to this word peril because it’s going to be used often in the insurance industry, to the peril quite simply as the cause of a loss. And an example of apparel could be fire. Because if a house burns down to the ground, the peril or reason that it burned down would be due because of fire. Fire would have caused your home to burn down therefore causing a loss, which leads me into my last but not least, and that is that is the loss. The loss is a reduction in an asset. Basically, we all have assets, whether it’s your car, whether it’s your ex Xbox or your computer or your phone or your house, we all have asset, if there was a reduction in that asset, you would you would suffer a loss. So that is a loss a reduction in an asset. If you dropped your phone to the ground and your screen cracked, then that would be considered a loss. And then you have to pay all this money to try to get that screen fixed, believe me, I know. Or if you got into an A car accident, and then the damages to your car would be considered a loss. And if it was your fault, and you had to pay out damages that would be considered a loss to that’s considered a financial loss.