Insurance to most people is a strange and uninteresting word. But what do people actually know about insurance and what does it really mean?
By definition, Insurance is a risk transfer mechanism, where individual or business enterprise can shift some of the uncertainty of life on to the shoulders of another. This can only be done, when a known premium (usually a very small amount compared to the potential loss) is paid to the insurer for the cost of transferring that loss to the insurer.
Ok, let's try to make it a bit clearer and appreciative...
An example, Mr. Sanmi owns a duplex in a highbrow area of Lagos state. His building is valued at 25 million Naira. He was approached to secure the building against unexpected fire accidents with a Fire Insurance at a premium of just 46,250 Naira. But he felt it can "never be his portion" (a popular saying) and did not count it important. However not long after, he had a fire accident that started from the kitchen, burning the whole kitchen and sections of the dinning room.
The cost in repairs of the damage amounts to about 3 million Naira. Mr. Sanmi, is now forced to find such huge amount unexpectedly. If he had taken insurance, he would have saved some cost and stress as the insurance company would take responsibility of putting his house back to how it was before the accident. Also with insurance in place, proper risk preventive mechanism (Such as having a fire extinguisher in place and being able to use it effectively) would have been recommended which would have reduced impact of the loss when the damage occurs. .
Don't be like Mr. Sanmi, contact us (@evrytinsurance) today for any questions on your current insurance policies or if you don't currently have one, we can assist you to choose the best insurance protection for your property.
We will be discussing the categories of insurance in our next post and would appreciate your feedback, questions and comments.
Comments