The right way to buy a policy
The right way to buy a policy is to estimate the right coverage or risk exposure first and then to consider the insurance premium afterwards, not the other way around or choosing from the premium and its discount without seriously considering about the coverage of the wording of the policy as typically done nowadays, which is not the right way to buy a policy. It also leads to a conflict when a claim is filed, resulting in a bad reputation of the insurance business. Paying a relatively cheap premium in the beginning probably means paying a more expensive rate later because the claim is refused or the compensation does not cover the damages. Thus, there is another saying, “It may be insured, but may not be covered in the policy.” There is an interesting point about insurance premium.
BEWARE OF CHEAP RATES!!
IT IS UNWISE TO PAY TOO MUCH,
BUT IT’S WORSE TO PAY TOO LITTLE.
WHEN YOU PAY TOO MUCH,
YOU LOSE A LITTLE MONEY – AND THAT IS ALL.
WHEN YOU PAY TOO LITTLE,
YOU SOMETIMES LOSE EVERYTHING,
BECAUSE THE THING YOU BOUGHT WAS INCAPABLE
OF DOING THE THING IT WAS BOUGHT TO DO.
THE COMMON LAW OF BUSINESS BALANCES
PROHIBITS PAYING A LITTLE AND GETTING A LOT.
IT CAN’T BE DONE. IF YOU DEAL WITH THE LOWEST BIDDER,
IT IS WELL TO ADD SOMETHING FOR THE RISK YOU RUN
AND IF YOU DO THAT,
YOU WILL HAVE ENOUGH TO PAY FOR SOMETHING BETTER.
Another interesting point is about insurance language, which resembles legal language, but not all legal specialists can understand it as clearly as insurance specialists do, especially if those legal people do not work in this field. Insurance contracts have the same basic legal conditions of typical contracts. In other words, an expert in general contracts may not have knowledge about insurance contracts because there are many characteristics that cannot be found in other types of contracts. As such, many developed countries, such as the USA, have organized a special legal organization to manage legal problems in relation to insurance that may occur.