BLOG DETAILS

As manufacturers, we shoulder the responsibility of creating knowledge in society by trying to promote a rational mindset towards fire insurance. Normally we behave rationally when making financial choices but, at the same time display bias in decision making and it depends on how we handle risk. The mindset during the premiums decided and during the claims is completely in contrast. Lack of comprehension by us, of the principles of insurance results into various mistakes during the policy-making process. The first principle states that insurance is done with utmost good trust and faith. The information exchanged between the insurer and the insured should be done with equal caution as is done on the claim. The document acts as an agreement that complete caution is been taken and nothing has been left for granted. For instance, taking valuation of machinery on a Reinstatement basis would be on the current market value of the machinery and not on the book value so the premium will also be on the basis of today’s market value. The strength of the insurance policy depends on the value-added knowledge of both parties with a rational mindset.