Kathmandu. Are you doing business or are you preparing? If so, you should also have insurance. Along with this, you also need insurance literacy.
Generally, business insurance protects your company from having to pay out of pocket to cover potential property damage and liability. Most business owners get insurance only because they need it in compulsory situations. This mindset is no different from the outlook around other insurance types such as health, home and motor insurance.
You may or may not be surprised to know that many of the business insurers know very little about it. If you own a small business, you may have taken out some insurance because insurance is cheaper, or you may have contacted an insurance broker because someone suggested you and you followed their recommendations.
But, do you really know what you are paying insurance for in terms of risk bearing? Is your insurance policy doing the best it can for you? Or do you care that insurance is just another expense of doing business?
If so, we want to tell you that you should not compromise when it comes to the insurance risk appetite of your business or firm. It is important to understand the options available to you and make an educated decision about your insurance plan.
What is insurance literacy?
Simply put, ‘insurance literacy’ means fully understanding your plan and using your risk appetite wisely. This term is used in all sectors including life insurance, health insurance, property insurance.
Insurance literacy refers to the state that a person has the knowledge, ability, and confidence to find and evaluate information about their insurance plans. He uses this knowledge to choose the best plan for his situation. Once insured, they are conscious of using their insurance to cover the appropriate cost and claim.
The insurance itself seems to be fairly basic. It’s something you need not only to run a business, own a home, and drive a car, but also to take the risk of your personal life and avoid the need for money. Then you may have thought that all insurance plans are almost the same.
There are actually many factors to consider when choosing the right insurance plan. You won’t pay for something without understanding what you’re getting. It would be like ordering food indiscriminately at a hotel: ‘Please bring me anything less than 300 bucks.’ ’
So why are you willing to leave such an important thing to chance?
As a consumer of insurance, you are your own best advocate. We can tell you what to look for and how the plans compare to each other, and your agent will do our best to help. But, nothing can beat your own time and attention in the process.
Unfortunately, many consumers don’t invest much time in this process and insurance companies often rely on this complacency to sell insurance policies.
How to start your insurance literacy journey?
Hopefully you’ve understood how important insurance literacy can be and why you need to understand your insurance options and risk appetite (it’s not enough just to have one). But we know that action is easier said than done. The process can be overwhelming, especially when there are so many options available).
Start by asking yourself and your agent these questions about your insurance policy
- When did I review my insurance policy?
- Do I know what risks my current insurance policy covers?
- Do I know what risks my current insurance policy doesn’t cover?
- Can I include additional risk bearing?
TAG_OPEN_li_43 Can I vary my insurance premium?
