 |
|
|
|
|
Welcome to Wike Insurance Services!
|
|
|
 Stuff Happens. You hear it all the time - a hurricane, a car accident, a fire in the home, illness. If we’re fortunate, these things don’t happen to us. In fact, generally speaking, most of us are certain these things won’t happen to us. But what is insurance exactly and why do we have it? How does it benefit us? Do we really need it?
Insurance is actually the transfer of risk, allowing a large group of people to share that risk. There is a risk that something adverse will happen that will affect us financially. In the event something adverse does happen what occurs if we don’t have the money to pay for it? If we have a mortgage on a house and the house burns to the ground, we still have to pay the mortgage. Logically, if we can pay someone else a small amount each year to take on the risk in case the house burns down, and they assume the costs of rebuilding the house or paying off the mortgage aren’t we better off? This is the basic idea. All of the people that are insured with that insurance company pay a premium to share in the risk and to reduce the risk to themselves.
Whose idea was this? Insurance has actually been around for thousands of years . A collection of Babylonian Laws called the Code of Hammurabi included a form of credit insurance. Later during the time of Moses the people were asked to contribute a portion of their produce periodically to assist in feeding orphans and widows. In ancient times ship owners borrowed money for their journeys and provided a form of insurance to the lenders. Over time the process became more sophisticated and in 1769 a group of merchants and bankers who had been meeting at Edward Lloyd’s coffee house in London for many years formalized the underwriting process and became known as Lloyd’s of London, one of the most famous insurance companies to this day.
Today most all of us carry some form of insurance. Some insurance is mandatory, as in the example of the homeowner with a mortgage. A company that provides a mortgage for you is not going to do so unless you have insurance and name them as the mortgagee under the policy. A company that gives you a car loan or lease won’t give you that loan unless you have insurance to cover the car and in Florida you can not obtain license plates for your car unless you provide proof of insurance to the state.
Some insurance is optional. If you live in an apartment and sometimes in a condominium you are not required to have insurance, although it’s probably a good idea to carry some. For a small insurance premium you can have $15 or 20,000 or more of insurance coverage. You would also have coverage for Liability – in the event someone is injured on your premises. These are things that your landlord or condo association is not responsible for. Take a look around you and estimate what it would cost you to replace what you have; your furniture, clothing, appliances, linens, cosmetics, books, CD’s, TV and stereo. Better yet, put it on paper and try to estimate what you paid for these items and what you think it would cost to replace them today. Chances are it’s a great deal more than you thought. In the case of a condominium what would it cost to replace the interior walls, kitchen and bathroom cabinets and fixtures?
Health insurance is also optional. And for most small things, many of us are more than willing to bear the cost rather than pay for health insurance. But what happens if there is a catastrophic illness in the family? National Health Expenditures during 2002 totaled $1.5 billion (yes, billion!) and the projections for 2004 are that they are projected to approach $1.8 billion. By 2013 this figure is expected to exceed $3.3 billion. So, while health insurance is optional, self-insuring might be more costly than obtaining some form of health insurance.
In many cases business insurance is also optional. But it is not recommended that any business operate without insurance. consider that you have taken years to build your business to a profitable level. You have bills to pay; employees who depend on you and losing your business assets due to a loss would be devastating. After all, who wants to start all over again, because of some chance occurrence or small error or omission? What if fire burned down your workplace? What if someone were injured on your premises? A business policy could cover you for these events.
Let’s look at a few more statistics for a moment. In 2002 8.2% of all insured cars on the road were involved in a collision for which a claim was made to an insurance company. Since 1994 the cost of medical care items has increased 40.8%. Nationwide homeowner insurance losses totaled $25.6 billion in 2002, the latest year for which figures are available at this writing.
I hope it never happens to you. No one likes the idea of having a loss. But if you would like to transfer the risk from yourself to an insurance company, it may not cost as much as you think. You can insure your home, condo, apartment, car, health, life, commercial property and business. Call us today for a quote.
Denise Wike
President
Wike Insurance Services
Tel: 727-446-9009
FAX: 727-298-8414
E-mail: info@WikeInsurance.com
|
|
|
|
|
