Difference Between the Motor Insurance Types

Insurance

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Contents

TOC o “1-3” h z u Family Insurance Services PAGEREF _Toc405664227 h 3Abstract PAGEREF _Toc405664228 h 3Introduction PAGEREF _Toc405664229 h 4Types of Family Insurance PAGEREF _Toc405664230 h 4AED 200, 000 Car Budget PAGEREF _Toc405664231 h 4Quotations of Insurance Companies PAGEREF _Toc405664232 h 5Difference Between the Motor Insurance Types PAGEREF _Toc405664233 h 5Travel Insurance PAGEREF _Toc405664234 h 6The Reason for Dependence on Car and Health Insurance PAGEREF _Toc405664235 h 7How to Create Market For Other Insurance Services PAGEREF _Toc405664236 h 8Report on Investment in Trade of Shares PAGEREF _Toc405664237 h 8Reasons for Change in Prices of Shares PAGEREF _Toc405664238 h 9Income from owning Shares PAGEREF _Toc405664239 h 9Reduction of Capital Loss in Shares Investment PAGEREF _Toc405664240 h 9Conclusion PAGEREF _Toc405664241 h 10References PAGEREF _Toc405664242 h 11

Family Insurance ServicesAbstractThere are varied insurance service types that cover family losses and damages. However, the most common in the UAE are the car and business insurances. So many factors including ignorance and monetary value are key to the little use of the other services among the UAE citizenry. As such, the insurance companies should employ strategies that aim at increasing their customer base (Clarke, 1997).

The two types of car insurance, comprehensive cover and the third party insurance, cover for the losses in car ownership on varied scales depending on the monetary value. Apart from compensation for the damages and losses incurred, insurance also come with other packages of benefit like leasing of cars in the case of car insurance (Clarke, 1997).

IntroductionThe equitable reassignment of risk and jeopardy with monetary value is the primary definition of insurance (Clarke, 1997). Insurance services are varied and cover numerous fields. Beneficiaries of insurance services may be institutions, parastatals, businesses or even families (Ferrarini, 2006).

Types of Family InsuranceAmong the most common insurance types that are secured by family households include property insurance, travel insurance, health insurance, and life insurance. Travel insurances offer compensation for inconveniences met during long trips (Ferrarini, 2006). Health insurance helps families meet medical bills that fall beyond the household income on one hand. On the other hand, life insurance offers monetary compensation for loss of loved ones. Property insurance is a reimbursement for property damage or complete loss (Merkind and Stuart, 2004).

AED 200, 000 Car BudgetWith a 200, 000 AED budget, my objective would be to purchase a car with powerful and modern features that still allows room for purchase of the best insurance cover. That would influence my choice to a BMW Z4 automatic with a horsepower of 2000cc. The vehicle is averagely priced at 185, 000 AED. The horsepower allows for regulated fuel consumption hence reducing expenses.

Quotations of Insurance CompaniesSeveral companies have sprung in the recent past to offer insurance services in the UAE. Emirates Insurance Company (Eminsco), for instance, has grown to become one of the dominant factors in the industry. Eminsco’s third party car insurance policy covers only covers damage to property and or property loss in the event of an accident. Its comprehensive cover, on the other hand, covers all the inconveniences burdened upon a client in the case of an accident. For a brand new Toyota Landcruiser that costs 185,000 AED, Eminsco charges 1,800 AED for third party and fire insurance. For comprehensive cover, the company charges 4,500 AED.

American International Group, Inc (AIG), is the other company that has gained ground in the UAE. It’s services are virtually the same compared to Eminsco. The American company charges 1,700 AED for third party insurance and 4, 150 AED for comprehensive cover.

My preference would be a comprehensive protection from AIG because apart from the compensation, they also offer a three-month lease period in case of serious accident or loss of car. In as much as the compensation offered by Eminsco meets the challenges set by AIG, the rental period is quite limited and is set at 21 days.

Difference Between the Motor Insurance TypesThe two types of motor insurance have variations that range from price to cover (Clarke, 1997). The Third Party insurance cover offers compensation for occupants of a vehicle in two dimensions. The first dimension is angled at covering the losses incurred through property damage to individuals whose property were at the accident scene. The second option covers theft of property or loss through fire in case the vehicle is stolen or catches fire. The insurance of the Third Party covers not the damage to or loss of car.

On the other hand, Comprehensive insurance is more diversified and covers all aspects of risks and losses that can be incurred in the event of an accident (Ferrarini, 2006). It may cover damage to both the vehicle or to property at the scene of the accident. Like the third party, it also covers loss of property through theft. The cover may also come with additional services like lease of another for the duration in case of theft or complete damage (Merkind and Stuart, 2004).

The Third party insurance is offered at a lower charge compared to a comprehensive insurance. That is a resultant of inclusion of a wider range of risks. It is the risk range covered by a comprehensive scheme that makes it a better option (Merkind and Stuart, 2004).

The Third Party may not be necessarily cheaper compared to the comprehensive cover despite the few risks it covers (Merkind and Stuart, 2004). Moreover, it doesn’t provide satisfaction for compensation of losses. Its provisions are mere consolations and still leaves the owner with great financial and emotional disorientations. I would, therefore, choose a comprehensive cover for my car so accrue the full benefits of insurance and avoid tremendous financial losses (Merkind and Stuart, 2004).

Travel InsuranceThe inconveniences incurred on the course of the trip may be rare, but all the same are capable of an occurrence. As such there is every need to insure the travel to avoid irreversible damage or suffer a complete loss in the event of an accident (Clarke, 1997). Marwa Mohammad may not have experienced an ill-fated event, but there is always a first time. Marwa’s view of Travel Insurance as an unnecessary expenditure limits her reason beyond the anticipation of the nature of the damage that she might incur in case of an accident.

A trip gone awry may result in theft and burglary, property loss, injury to the traveler or even loss of life (Merkind and Stuart, 2004). Such losses sometimes bear great significance and come as a giant set -backs to the intents of a traveler. Theft may, for instance, deprive the traveler of all money and accessories that were carried along for the trip. Situations of helplessness can be avoided when proper precautions are taken (Ferrarini, 2006).

In any case, insurance is always a precautionary measure and doesn’t come because accidents must happen to a particular individual, but because all individuals are vulnerable to unpredictable events (Ferrarini, 2006). Marwa’s contemporary belief is a very big risk factor. She does not stand an opportunity to accrue the benefits that come with travel insurance like compensation in case of forced cancelation of a trip.

The other benefits that she is missing out on include dismemberment that covers injuries or deaths that may be inflicted upon a family during a trip (Merkind and Stuart, 2004). Travel insurance is hence the means to creation and placement of standard measures against unpredictable accidents that may plague a traveler (Merkind and Stuart, 2004).

The Reason for Dependence on Car and Health InsuranceThe insurance industry has experienced major setbacks in its growth and expansion in the UAE. Reception of types the varied forms of insurance other than health and car insurance has been slow and cold.

Most of the UAE citizenry have not seen the relevance of the varied forms of insurance as they do anticipate other dangers and consider such indulgences and spendthrift (Ferrarini, 2006). Several factors have been key to this among which is the lack of proper sensitization on the relevance and magnitude of insuring virtually all aspects of an individual’s life.

The two types of insurances that are mostly secured by the citizenry are those that they experience on daily life hence have been enlightened about. The other reason is affordability as not all types of insurance are government subsidized. The factor makes them out of reach to some of the citizens who hence opt to conduct their activities without such insurances (Clarke, 1997).

How to Create Market For Other Insurance ServicesInsurance companies should start massive sensitization campaigns to the UAE citizenry to create awareness on all the brand of insurance services. The sensitization should also serve to enlighten the citizenry on the relevance of such insurance policies and encourage them to cover their property and events (Ferrarini, 2006).

They can also lower the charges for such services to encourage more citizens to take the services on the grounds of affordability. This would increase the market base and strengthen the insurance industry in return (Merkind and Stuart, 2004).

Report on Investment in Trade of SharesA share is an account unit for varied investment opportunities derived from corporation stocks. They can also be inclusive of mutual funds, real estate trusts, and limited partnerships. It is a capital unit that is indivisible and expresses the relationship between the investor and the company.

Reasons for Change in Prices of SharesChanges to the prices of shares in the market are greatly influenced by market forces. The demand for the products of a company alters the prices of the shares.

The other reason is the demand of the particular shares. High demands for the company’s shares take the prices up in contrast to low demand (Ferrarini, 2006).

Income from owning SharesThe purchase and sale of shares depend on the evaluation on the worth of a company at a given time. Such evaluation is dependent on the prediction of future value of a company’s stock worth. Good prediction and evaluation make such an investment a gold strike and a great opportunity to make more money (Merkind and Stuart, 2004).

However, it is not every time that such evaluation is correct. Sometimes a prediction goes on the reverse sending the stock value of a company crumbling. The resultant of such an occurrence is great monetary losses to the investors. This factor does not make income from the trade on shares steady as there are highs and lows (Ferrarini, 2006).

Reduction of Capital Loss in Shares InvestmentThe first way of avoiding Capital Loss is through the calculation of conventional risk. This is the collection of dividends from a stock that has little benefit, but bears a similar performance to the opted investment (Ferrarini, 2006). The second way is through calculation of alternative risk. It levels risk by equalizing and determining an option for a risk equivalent (Clarke, 1997).

ConclusionAll family and even formal events and property should be insured to reduce losses incurred and offer fresh grounds for redevelopment incase of complete damage. Ignorance and misconception of ideas should be eradicated by the insurance companies through public education and advertisements.

Insurance is not only limited to property and events, but they also businesses and investments (Ferraini, 2006). Losses incurred in business activities that rely on prediction and gambling are limited through the engagement of insurance companies and expertise.

ReferencesClarke, M. A. (1997). Policies and perceptions of insurance: An introduction to insurance law. New York: Oxford University Press.

Ferrarini, T. (2006). Families, States and Labor Markets: Institutions, Causes and Consequences of Family Policy in Post-war Welfare States. Cheltenham: Edward Elgar Pub.

Merkin, R. M., & Stuart-Smith, J. (2004). The law of motor insurance. London: Sweet & Maxwell.