27/02/2023
SOME OF THE REASONS WHY PEOPLE NEED INSURANCE
1. Insurance protects you and your assets from the financial risk of something going wrong.
Reasons people buy insurance
Most people buy insurance for four main reasons:
➢ High value
To protect something they have purchased that has a high value (such as a house, a car or perhaps jewellery or a painting) and which would be expensive to replace. Often a loan has been taken out to purchase the items.
➢ Catastrophe
To protect their property and possessions against a disaster, such as a fire, flood, cyclone or other calamity (Misfortune)
➢ A specific event
To protect them when they are doing something not covered by their normal insurance policies, such as travelling overseas
➢ Liability
To provide financial protection if sued – for example, if a visitor should sue you for negligence after injuring themselves on your property
2. Insurance will not stop something from happening, but if something unexpected does happen that is covered by your policy it means you won’t have to pay the full cost of a loss.
3. That means that if something goes wrong, you are much less likely to have to raid your savings or your investments, borrow money, ask family or friends for financial help, or sell your assets to pay for repairs, building or outstanding debts.
4. You won't have to rely on assistance from governments and community groups that usually only help in disaster situations such as floods or bushfire where the assistance might not reflect the extent of your loss and so may not help you to rebuild your life.
Most people are willing to pay an insurance premium to protect things such as their home and its contents, their car, boat or caravan. Business owners will usually also take out insurance cover to protect assets and stock, and to provide financial help if they face legal
