APPRAISAL OF THE INSURANCE COMPANIES APPROACH TO CLAIM SETTLEMENT

APPRAISAL OF THE INSURANCE COMPANIES APPROACH TO CLAIM SETTLEMENT

CHAPTER ONE

BACKGROUND OF THE STUDY

The phrase “HAD I KNOWN” is a frequently asked question by the human race. If humans can predict or visualize what will happen in the future, the phrase can be induced or possibly eliminated. Life itself is fraught with dangers and uncertainties. Every individual faces risks, whether personal or business-related.
A businessman, for example, faces the risk of his goods being damaged by fire, while his dependents may suffer income loss as a result of his death. A manufacturing firm also faces the physical risk of possible loss of goods due to fire or theft, as well as other technical risks such as loss of trade due to government policies, loss of trade due to changes in fashion, and loss of profit due to competition.

as a result of a fire. A car owner, for example, risks having his vehicle stolen or damaged in an accident. Some of these risks can be avoided with effort. Accidents can be avoided by taking the necessary precautions. An individual can avoid an airplane disaster or crash by not flying. However, no matter how cautious one is, some form of danger always exists.

Some dangers are inherent in nature or life and cannot be avoided. Men, for example, are mortal and must die; when total avoidance is impossible, man attempts to reduce or possibly assumes risks. A house with a thatched roof is more likely to catch fire than one with a tiled roof. Many people are willing to take the minor risk of construction. Risk-taking, when the risk is small or the potential loss is minimal, stems from ignorance or even is a deliberate art. Hijacking is also possible. However, many people prefer to shift or spread risk if possible. The socio-economic services provided by insurance companies are highly valued here. Insurance is an agreement in which the insured agrees to transfer all or part of his risk to the insurer and the insurer agrees to compensate if the insured’s risk materializes at the time the premium is paid. Described as a social arrangement of consent. The basic role of insurance is to create a common pool into which the individual or organization contribute premium commensurate with the degree of risk for which insurance is sought. The members of the pool who are unfortunate to suffer loss are compensated with the contributions of others in the pool. In this way, the larger society is made to be made to be responsible for providing compensation for the unfortunate few who unavoidably incur financial losses through the operation of certain mishap.
It is therefore obligatory on the part of the insurer to compensate the insured (their client) whenever, is loss on the item insured against as long as the insured abides to the conditions stated in the contract or policy. Thus, the modern society retain insurance as the method of solving the risk associated with their activities, in that it helps to soften the financial blow that would have resulted. When the public feels that this function is not being carried out the industry may suffer or face a possible collapse.