How Insurance Really Works

Some of the most Googled questions on the internet are “Why were Corn flakes invented?” and the deep, intellectual query of “Who Am I?” Because of the internet, we have all the information we desire at our fingertips, instantaneously (even if incorrect). When it comes to insurance, the top Googled question is “How does insurance work?” Great question! But before we begin, we wanted to be clear about a few words. Don’t fret ladies and gents, this is all you need to know.

First things first, “Insurer” = Insurance Company. Here we go.

Insured = You
Insurance Companies use money from a pool of premiums to pay for home, auto and business losses of any insured who has unexpectedly experienced a loss.

The Insurance Process:

1. The Insurer (insurance company) estimates the cost (premium) to accept the risk of covering your home, business, or car. This amount is based upon many factors, as well as, how much the Insurer thinks they would need to pay if you had a claim.
2. The Insured (you) buys insurance and pays an annual or monthly premium.
3. The Insurer puts all premiums into one large pool to utilize if there are claims made.
4. If any Insured has a loss, they draw funds from this pool of premiums.

Side Notes
Easy as 1,2,3 … 4. Now here’s the catch, the loss must be from an insured peril only (remember, a Peril is an insured loss like flood, earthquake, fire etc). Also, your insurance policy is not a maintenance contract! For example, you cannot claim your broken-down hockey equipment from overuse.

Predictable events, such as building a house next to a volcano would probably not be covered. That seems like common sense, right? The best advice we can offer is to talk to a professional Insurance broker if you have questions. They will lay it all out for you.

A Fun Fact …. from us to you.
For any of you still wondering why Corn flakes were invented … they were invented by the Kellogg’s brothers for a healthy meal alternative for the patients of Battle Creek Sanitarium (a world-renowned health resort founded in 1876). Seriously, a fascinating internet read.

Lastly, who am I? I’m someone who happens to enjoy Corn Flakes occasionally, amazing customer service, saving time and of course, shopping online. Hopefully, you are too because at Insurely, we’ve made it incredibly easy for you to shop online….for your home insurance coverage.