The Basics of Insurance

While everyone knows insurance is important and something we should all have, the overall concept seems to be shrouded in mystery to many. This is understandable for a number of reasons, but people should still take the time to understand what insurance is and why it’s important. If you’ve had questions about insurance in the past, the below primer may answer them by covering the basics.

What is Insurance?

In simplest terms, insurance is just a method of risk management. For a price, known as a premium, an insurance company takes on a specific kind of risk from their customer. The higher the risk (in terms of likelihood or potential damage), the harder it will be to find an insurance company at and the more your premium will cost.

How Does Insurance Work?

If that explanation seemed a bit simplistic when compared to all the money you spend and paperwork you go through in order to secure insurance, that’s because there is more to it than that. While that is the fundamental concept behind insurance, it doesn’t address insurance as a business. 

In order for the insurance company to make money and hedge against potential losses, they need to bring together a wide pool of people who want to guard against risk. This, however, does not save the insurance company from losses all by itself. 

For this, an insurance company must rely on advanced analytics in order to forecast what their potential losses will be. That way they know how much to charge. Let’s look at an example. If an insurance company took on ten customers, each of whom paid $20 a month, this might seem like a profitable business for the insurance provider. But what if an analysis showed that half of these customers were likely to need a certain kind of surgery that the provider covered, but which cost $10,000 apiece? Still a great business model? Of course not. 

Therefore, in order to maintain profitability, an insurance company needs to assess each individual customer for the potential risk they bring into the pool.

How Much Does Insurance Cost?

This last paragraph segues nicely into this question. The short answer is that insurance costs will depend on the customer. It will depend on them individually and on the insurance company (which oftentimes depends on who the potential customer works for, if it’s health insurance). But when considered, everyone has to undergo an underwriting process.

Underwriting refers to the process of assessing a person’s risk. This process takes into consideration the likelihood of a loss occurring and how much that would cost. The result of this calculation will be whether or not the insurance company takes you on as a customer. Oftentimes they will take you no matter what, it’s just a matter of you agreeing to their premium. That’s because the other part of that calculation is deciding how much the insurance company will have to charge someone in order to protect themselves from potential risks. 

Given the importance of the underwriting process, the insurance company with will often take into consideration an array of information. A health insurance provider, for example, will want access to your medical records and your driving history will usually play a part, but they could also look at insurable interest, ask you to undergo a physical, etc.

How to Lower Your Premium

If you’re like many people, now that you understand how insurance works, you’d like to know how to make it work for less. Insurance premiums can certainly be high and paying them every month is often the reminder most people need that they’d like to obtain a more affordable premium.

The easiest way you can pay less for your insurance is by becoming less of a risk. Take health insurance, for example. If you’re currently obese, a smoker or engaging in risky behavior as part of your job, those are areas you can address. Your car insurance can often be brought down to size simply by going a certain period of time without sustaining risk factors like accidents or speeding tickets.

Ultimately, though, this will be a matter you need to take up with your insurance company. Many of them are happy to speak to you about lowering your premium as it coincides with being less of a risk to them and their profits according to At the same time, if you’re in perfect health, are a perfect driver, etc., your only options may be opting for less coverage (and thus paying less) or switching insurance companies.

There is plenty to find confusing about insurance, despite the fact that it’s such a simple concept at its core. But if you remember that you’re paying a company to take on specific risks on your behalf, you’ll be on the right path to understanding everything else. If you’re looking to lower your premiums, look to engage in choices that make you less of a risk to your provider.

Categories: News and Features

3 Ways to Shop for the Cheapest Homeowners Insurance in Florida

Nearly 113 million tourists graced the streets of one Florida town or another in 2016, but for permanent residents, the influx of tourism during certain seasons is the only reason they ever think about moving to a different state. The beautiful architecture and stunning scenery are awe-inspiring, and if it’s done right, the cost of comprehensive home owners insurance is surprisingly affordable according to Today more than ever, becoming an eternal Floridian is a budget-friendly possibility.

Why Shopping for the Cheapest Home Insurance in Florida Is Important

Owning (or renting) a home without keeping it adequately covered by an insurance policy is a big mistake, especially in a state where there are around 10-15 natural disasters a year. Legislators even created an official website designed to help their fellow Sunshine State residents get through severe weather, but nothing protects like good insurance coverage. 

Even when there’s not a cloud in the sky, disaster can strike. Residents must balance checkbooks and budget funds just like everyone else, despite living in vacation central. As such, finding the cheapest home insurance in Florida is often essential. Why pay more than you have to when you can use the following tips and tricks to save money?


3 Ways to Find the Cheapest Home Insurance in Florida

1.Get Some Quotes 

Try not to settle on the first premium estimate you come across. Insurance providers are highly competitive, so make them work for your loyalty. Get at least 3-5 quotes at before deciding on the right coverage, and make sure the policy offered is relevant to your geographical area. Check with local insurers before moving to larger corporations.

2.Be on the Lookout for Discounts 

Many insurance companies offer special discounts for things you may not even think of. For example, did you know that you can get money off your home insurance premium by installing an alarm system? Or, do you realize that the cost of your policy goes down when you have properly functioning sprinklers and smoke detectors? You can get discounts for bundling policies and being a veteran too. Most of the time, all you have to do is ask.


3.Pay Your Bills on Time 

Several insurance companies offer rate reductions for policyholders who regularly pay their premiums on time. Furthermore, some even offer incentives for switching providers. Greater discounts are given to those who have had an existing policy for at least 6 months to a year. 

Categories: News and Features

Should I Take My College Student Off My Auto Insurance?

When it comes time for your children to go off to college, you are faced with many difficult decisions. One of those decisions being should I keep my college student on my auto insurance policy? You may think it’s best for your teen to branch off and to purchase their own auto insurance policy, however, there are so many benefits of bundling with them instead. If you are trying to save money on your FL car insurance from here, or keep reading as this information may apply to you! Here are the few best-kept secrets when it comes to why you should keep your college student on your policy.

More savings!

Being on the same car insurance policy with your child/student is so much more affordable than paying out for two policies.

You can all share cars

Did you know that you are completely covered if you drive each other’s vehicles?  This eliminates the need to let your insurance company know who is driving what.


It is so much easier to maintain one policy instead of two. Many FL drivers love the convenience of managing one single policy.

Get that good student discount!

Many insurance companies will offer you discounts if your college students are good students.

Distant student discount

Many insurance companies will offer discounts to students that go away to college.

Can it be more affordable for FL college students to be on their own policy?

Sometimes it is more affordable to do things that way. Your college student may have their vehicle in a zip code that is more affordable. Then you could both save money by having individual policies according to If you as a parent have had tickets and accidents and your student has not, then they would also benefit with their own separate policy.

No matter the case your college student will need to be insured with auto insurance in FL. Whether you decide to keep things bundled or to go separate, you should know that there are always better deals out there. With some hard work and careful searching, you could find some great online FL car insurance rates online.

Finding deals online is easy. It only takes collecting a few Florida auto insurance quotes. Once that’s out of the way compare and decide which is best for you. By rule of thumb try to collect 3 or more quotes. It is also essential to read everything carefully! Better get to work now in order to determine which is best for your college student.

Categories: News and Features