How to Choose the Right Event Insurance Company ?
It is crucial and important to choose the right insurance provider for the right event. Some companies are not reliable and can end up taking your money by finding ways to avoid coverage for serious accidents that you might incur in your event. Good providers enable you to get insurance for the event online very fast.
In our digital era, you can get insurance with just a few clicks but Be particular and careful while selecting a provider by reading their policy documentation, where insurance coverage and exclusion should be stated.
Below are some of the most important factors to keep in mind when choosing your Right Event Insurance company.
1. Company history/reputation –
Research the insurance companies you’re interested in. By visiting their websites, you may learn:
- How long they’ve been in business;
- In which states they sell their products;
- Their mission, vision, and values;
- Company leadership;
- Community involvement;
- Types of products they sell; and
- Financial strength.
It’s unlikely you’ll find a company with only positive reviews. If the information doesn’t answer all your questions or leaves you feeling not quite right about them, research another company. As with other purchasing decisions, you should be comfortable with your decision.
2. Claim Settlement Ratio (CSR) –
CSR is a percentage that reflects the total number of claims settled with respect to the total number of claims received by the insurance company. In other words, the CSR gives you an idea of the possibility for the insurance company to settle a claim that you are likely to make.
While it is justified for insurance companies to reject duplicate or fake insurance claims, it is peculiar if an insurance company rejects most of the claims it receives.
Therefore, insurance companies that have a low claim settlement ratio are likely to reject most claim requests received by them – which puts you in a vulnerable position at the time of an emergency need.
CSR = Number of claims settled / total number of claims received
3. Incurred Claim Ratio – (ICR)
Incurred Claim Ratio (ICR) refers to the total amount paid by the insurance company to settle insurance claims in a year with respect to the total amount collected by the company as premiums from all its insured.
If the amount paid by the company is more than the premium it receives, this means that the company is running on a loss and may not be able to pay for claim requests in the future.
However, if the ICR is too low (less than 50%), then it means that the company is not paying enough in terms of settlements. Therefore, a balanced ICR (between 75% – 90%) is what establishes an insurance company’s ability to pay and its reliability.
ICR = Net Claims Incurred / Net Earned Premium
4. Solvency Ratio – (SR)
Solvency Ratio (SR) is used to measure a company’s ability to meet its debt and other obligations by determining if its incoming cash flow is sufficient to meet liabilities.
It is preferred to opt for an insurance company with a higher solvency ratio as this means that it has a higher proportion of asset holdings. is preferred while a low solvency ratio indicates that the company may not be able to pay for claims.
SR = Net Income / Total Liabilities
5. Business Volume –
Business volume refers to the total number of active customers, who are paying monthly or quarterly premiums to the insurance company. This can also be determined by the number of policies sold by the insurance company in any given year.
Naturally, the company with a large business volume is considered to be more trustworthy, simply because it is likely to have the resources required to pay for claims.
The importance of making an informed choice when investing your money cannot be emphasised enough. We hope that this list will enable you to choose wisely
6. Coverage –
Select an insurance company that provides your appropriate or maximum coverage for your personal or business needs.