Determines Insurability
Like every company, the goal for an insurance company is to make a profit.
The likelihood of a disaster determines its insurability and, in effect, plays a key role in the cost of the policy. The way insurance companies do this is by receiving more money from investments and policy premiums (a premium is the fee for an insurance policy) than what it costs to payout claims, as well as the general expense of running an insurance company.
Homeowner
The professionals that perform this assessment are called actuaries
What it comes down to is the calculable level of risk surrounding any event. A number of factors determine this percentage of probability. The professionals that perform this assessment are called actuaries. These actuaries examine similar policies for that loss, how frequent the loss occurs, how significant the loss is, and finally the payout to the policy holders as a result of this loss- this process of determining the level of risk is called risk management. This data is processed and adjusted for current-day value to determine the premium for the holder. The process of producing the cost of this premium is called underwriting.
Typically, the more likely an event is to happen, the more expensive a policy will be. This means that if an association has a history of frequent loss, a premium could be higher. Bear in mind that insurance companies may cancel policies if necessary maintenance is neglected or if there are too many claims filed within a certain period of time. In fact, if neglected maintenance leads to a loss, this could disqualify you from receiving a payout for any claim filed for this loss. An example of this would be a roof that has not been inspected or updated in several years, and collapses as a result; because its the homeowners responsibility to maintain the roof, fault for the loss falls onto the owner. This is determined after the claim is inspected for authenticity.
Adjusters are the individuals who inspect and settle these claims. They would be the ones to decide if the claim is legitimate or if the loss that has occurred was the fault of the policy holder or a third party- or if the loss was deliberate, in which case the ordeal may become a legal case, as this could indicate an attempt at insurance fraud. These adjusters may be a part of the insurance company, an independent adjustment agency, or could be a public adjuster. These are professionals that assist people in presenting their claims to insurance agencies. As you can guess, a more accurate premium price can be acquired by contacting an insurance provider and obtaining a quote. For more information regarding insurance, refer to our resource articles.
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