How Insurance Works

Insurance can help you financially recover if a risk should damage the things you value.

Insurance can’t prevent something from going wrong, but it can help protect you and your assets from the financial risk if something does happen.

A risk is the chance that something harmful or damaging can occur and leave you facing a loss (such as an auto accident). Insurance spreads the cost of risks among a large group of people who share similar risks.

When you buy an insurance policy, you pay a premium. This joins the premiums of other policyholders in a big pool of funds. The pool of funds can be used to help you if something unexpected does occur and your policy covers your claim.

If something unexpected happens to a property you’ve insured, you can place a claim with your insurer. If you have bought the right coverage in your policy, the insurer will assist you through rebuilding or repairing your property, replacing your possessions or providing other compensation.