Other than the physical manifestations of ink and paper, an insurance policy provides something that cannot be touched. At its core, it is an intangible object. It provides the peace of mind in knowing that if a sudden and fortuitous event occurs that causes financial loss, the insured will be made whole. Insurance is simply a promise to pay for a financial loss that is covered under the terms and conditions of a policy contract. The consumer pays a premium to an insurer who promises to pay for a loss, provided the loss is covered in the policy language.
This begs the question, “What is Insurance?”
Insurance is a method of risk management where a consumer transfers their risk of loss to a third party company known as an insurer. The insurer manages the risk through a method of pooling. This means that the premiums of the many are pooled to pay for the claims of the few; thereby offsetting financial loss through the expenditure of a relatively small amount of money, relative to the potential large size of a loss. This method of risk management has been ingrained to the society as a whole.
There are statutes that require insurance be purchased, such as automobile coverage, where in order to register a vehicle the state must verify that insurance has been procured so that the vehicle is allowed to operate on public roadways. In financial transactions such as a lease of property, insurance is required to offset the landlord’s risk with the tenant’s operations. In matters of a professional’s ability to practice in a given field, such as a general contractor, the state requires that insurance is procured in order for the state to issue a license to do business. The issue is that insurance permeates our society in terms of laws and financial transactions.
The role of the agent is to identify the risks and offer solutions to mitigate the potential financial loss exposures.
Knowing the terms and conditions of policies, understanding the appetite for risk of certain insurers, and analyzing offers of coverage in comparison with a specific client’s needs is what we do at Rolfs Insurance Services. We strive to be knowledgeable people who care for our clients by establishing long-term relationships and trust.