Let’s dive into the world of “risk management” which, like its name, is a way to manage the risk of loss you may have. You can never completely avoid risk, but by managing it well, you can lower premiums.
What's Risk Management, Anyway?
Risk management is like being a strategic thinker. It’s all about taking steps to prevent bad things from happening and having a backup plan if they do. In the world of insurance, this is a big deal because it can mean paying less for car or home insurance.
Risk Management in Action
Make smart choices: Think about when you ride your bike. If you wear a helmet, obey traffic rules, and stay alert, you’re making safe choices. Insurance companies notice when you’re responsible, and they might reward you with lower premiums.
Maintenance Matters: Your insurance policy is not a warranty policy. It doesn’t pay for everyday upkeep on your house and car. Just like you keep your car in good shape by checking the tires, oil, and brakes, vehicle owners do maintenance to prevent problems. For homeowners, fixing a leaky roof or repairing a broken window is risk management. It stops small issues from turning into big, costly ones that insurance will not cover in the event of a loss.
Emergency Plans: As mentioned before, no one can avoid all risks. That’s why it’s important to have your deductible in a savings account. The deductible is the amount you will owe, and you don’t want to be scrambling for money when a loss occurs.
Insurance Companies Love Responsible People
Insurance companies keep an eye on how responsible you are. When they see that you’re taking steps to reduce risks (like having a bike helmet or a smoke detector), they think, “Hey, this person is on top of things!” So, they might offer you lower premiums, which means you pay less for insurance.
Risk management is like having a superpower for your wallet. By making smart choices, doing maintenance, and having emergency plans, you not only protect yourself but also save money on insurance. If you want to learn more tips and tricks about insurance, be sure to follow me on social media at @kcmroberts.
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