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Reinsurance Companies Keep the Cost Down for Everyone

September 16th, 2015 6:20 am

You may never have heard of reinsurance companies, specialist insurance firms that take over select policies for insurance companies. But the work they do helps keep costs down for the industry – and premiums low for you.

Everyone buys insurance in some form or another. If you drive a car, chances are that you’re required by law to have insurance on that car, or that you’ve chosen to insure it to protect yourself. Homeowners use insurance to protect their single biggest investment, a smart choice that’s often required by mortgage companies. And health insurance is one of the most important benefits sought out when job hunting.

But while everyone is familiar with insurance, not everyone knows about reinsurance companies and the work they do behind the scenes of the insurance industry. Which is a shame, because the role that reinsurance companies pay not only provides stability and savings for your insurer, it also helps keep your premiums low.

Reinsurance is when one company backs or takes over insurance policies from another company. As an example, say that you and 10,000 of your neighbors all buy your home insurance from a single insurance company. That’s good business for them, but if a disaster befell your community – perhaps a hurricane or a flood – they would have to pay out on ever claim all at once. That could very easily bankrupt them.

Instead, you and your neighbors’ insurer can turn to reinsurance companies who will take over the liability on some of those policies – let’s say half of them. Your insurance company pays the reinsurer a premium, just like you pay for your insurance; and if disaster strikes, the reinsurer picks up the tab on those 5,000 policies they backed. The liability is spread among more companies and more bottom lines, and that means the industry is a whole is more stable and predictable.

Aside from spreading liability, reinsurance companies also help save money directly – often by managing lines of policies that have become too costly. This often applies when a certain type of policy is no longer offered, but still has to be honored for those who bought it when it was offered (known in the industry as €legacy policies€).

The world of insurance is a process of making very complex calculations – trying to predict how risky something his and how expensive it will be. Reinsurance allows insurance companies to soften the impact of surprises and unexpected risks, keeping prices down for everyone.

Important Items to Get Shipping Insurance For

September 16th, 2015 6:19 am

It has been argued by many that anything you ship anywhere should be protected with shipping insurance. That being said, it is not always possible for people to spend the extra money on such policies for every little thing.
If you are someone who has decided not to invest in such protection for every package, it is important for you to at least consider the added protection on the following kinds of packages.

International Packages
Any time you send something across the national borders, you will want to purchase shipping insurance. While the mail system has come a very long way since the days of the Pony Express and the telegraph, it can still be quite the ordeal.

If you have loved ones or business clients in distant lands, then you will want to be sure that your package has the right tracking and protection in place. This small added cost will give you the benefit of knowing where your package is and will ensure that the postal workers take special care of the parcel.

Fragile Packages
Believe it or not, simply placing a fragile sticker on a box is not enough for postal workers to really use added caution in their handling of your package. When you purchase the extra protection, however, these workers will be required to treat your package with an increased level of care and concern. There are some very strict rules involved in the professional labels€”and some very harsh punishments for those who do harm to such parcels.
Most fragile packages also tend to be quite valuable. This will be covered in more detail in a later section, but it can be helpful to know that the value of your fragile items will be refunded to you should something happen to the delicate contents in transit.

Packages Containing Food
Care packages for loved ones should always contain some kind of food for the soul and the stomach. Getting the included goodies from one point to the other without being smashed and ruined is another story.
If you are planning on sending food through the mail system to anyone, then you will want to purchase the added protection that the insurance policies provide. The added care and gentle handling will give your receiver a much better chance of getting their edible goods in good condition. Any time you feel the need to ship perishable items, you will also want to at least consider the addition of some extra protection to the packaging itself.

Items of Great Value
As was stated earlier, the mailing system has become a lot better and more reliable in the past years. Sadly, accidents still happen and human error still occurs. If you have to mail something of great value, then it is important for you to get shipping insurance. Simply put, this kind of purchase will allow you to reclaim the value of the shipped items should something happen in transit. The cost of the insurance policy will be much less than the total value of the items you are shipping. That makes this a very simple decision when the ideas of cost and liability are weighed. You would hope that such a thing would never be needed, but the added protection can give you some retribution should the unspeakable occur. By purchasing the protection, you will be purchasing some peace of mind, which is something everyone could do with more of.