Insurance the Distribution of Risk

will collect a premium from all the house owners and when one house owner gets his house destroyed the insurance company pays him to buy a new house. Since the insurance company gets premium from all house owners they are able to pay the house owner whose house got destroyed and retain a profit also. When you compare the two examples of the village and the urban household the story is the same.

Businesses too go for insurance to safeguard against risks. They insure their business properties with business property insurance companies and pay a premium. In case some disaster happens and some loss is incurred the insurance company looks after the business concern by way of compensation. Preset day business insurance normally covers damage by natural hazards such as floods and earthquakes, terrorist attacks, theft, fire and many other hazards. When the insurance covers more areas the premium becomes larger but it is safe to cover as many areas as possible. When it comes to business property even the vehicles machinery and other movable items too are covered with business property insurance.

Property insurance is big business today. With the risk of terrorist attacks it has become essential for owners of properties to go for property insurance with a property insurance company. Property insurance companies too are no insulated against terrorist attacks as a result for their safe guard the property insurance companies go for reinsurance with bigger insurance