3rd June 2010
In general there are just two main types of
insurance policies that are bought by companies and individuals. One is a Short
Term Insurance and the other is a long term insurance. The former policy – the type
on which is article is primarily based on, is insurance for the possessions an
individual holds, and this type of insurance is usually taken for your home,
car, health etc.
When you purchase such a policy you are
protecting yourself against the possibilities of losing your belongings and
having to replace them yourself. In such an event, the insurance company
carries the risk and in exchange of taking this risk on their shoulders, they
charge you a monthly fee – which is called the premium. The size and value of this premium will depend mainly on
the overall amount for which you plan to obtain the insurance.
Here are some instances when your insurance
company will reimburse you when you have a Short Term Insurance cover:
During such instances the insurance company
will either give you cash or replace the items.
If you are planning to invest on a cover of
this type, it is important that you are fully aware of the conditions of your
insurance policy. If the given conditions are not met, your claim may be
denied. Here is a situation which will help you understand this requirement
better and show the importance of fully studying the conditions:
A Short Term Insurance cover policy for a
car might require that the vehicle is equipped with a vehicle-tracking device.
In the event that your car is hijacked and if you had overlooked installing
this device in your car, the insurance company might not honour your claim.
Thus it is your obligation to study what the policy requires and what it might
This insurance can also provide you with a
cover to drive another vehicle or to cover someone else to drive your own. This
type of policy might be more practical and cheaper than making a change to your
existing annual policy. If you consider changing your existing policy, your
insurance company might increase the cost to cover the higher risk because of
Some insurance companies offer these
policies on a 24 hour basis, giving you the opportunity of taking insurance for
only 1 day or you may even have it for a maximum of 28 days.
Benefits of Short Term Insurance:
assistance in the event of an accident that wasn’t your fault.