When taking out an insurance policy, it is essential to note that there is a very important link between risk and insurance. Insurance risk management can basically be described as the appraisal and management of risks related to an insurance policy. As part of insurance research, companies will evaluate the risks of insuring a particular person. For example, car insurance companies will do insurance research on those wishing to take out car insurance, calculating the driver’s risks of getting into an accident. As part of insurance risk management, companies will charge more to insure drivers who are perceived to have a greater risk of getting into an accident. For example young drivers, elderly drivers, and drivers with numerous tickets and traffic violations are likely to pay more in insurance. A car insurance may even drop a policy holder who has had to many traffic violations or tickets, as the risk associated with insuring them is too high. Furthermore, many medical insurance companies will not cover individuals with high risk pre existing conditions, such as HIV. Therefore, if you are deemed as high risk you may want to do a bit of insurance research and look into risk insurance services through a risk insurance company. Sometimes, individuals are even labeled as a high risk and are forced to take out high risk insurance. Again, let’s return to the car insurance example. If a driver has been dropped by an insurance company because he or she has been labeled as “high risk,” this driver will need to likely take out a special high risk insurance policy through a high risk insurance company. In regards to medical insurance, many states mandate that insurance companies have high risk pools, to ensure coverage for people with pre existing conditions that otherwise might not have coverage. Of course, this insurance will likely be more expensive than traditional insurance options, so it is essential to do insurance research and know your options when dealing with high risk insurance.
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