Human life is full of risks. Several of them are avoidable and some of the can be minimized. Some are entirely unforeseeable. But here what is significant to know about the risk, especially about the insurance risk. As early described in article “How Does Insurance Work” about the insurance, it is the form of risk. Here we give brief description about the type of risk, cost and effect of that risk. Let's consider the car driving as an example:
Related Concern Posts
What Is Mean By Type of Risk
In car driving case types of risk can be as total loss of the accidental vehicle, physical damage / injury, having to fix carWhat Is Mean By The Effect of Risk
Effects of Risk can be define as spending some or more time in the hospital due to physical injury in accident. In another case if you get a car on rent and after accident you pay car payments for that car that no more exists.What Is Mean By The Cost of Risk
Cost of Risk can be defined as a small amount of risk or a very large amount of risk.What Is Mean By Mitigating risk
Individual can avoid the risk by avoiding driving at all. He can become compete with other drivers but even then he drive car safely. Like insurance transfer your risk to someone else. Let's describe the concept of the risk management or mitigation principles. How can an individual apply them? The fundamental risk management tools point out those risks that may possibly bring the financial losses. Some are those whose harshness cannot be reduced that should be transferred. The very important point must be consider, the link between cost of risk transfer and value of the transferring the risk.What Is Risk Control
Risk is controllable. There are two different ways to control risks. An individual can avoid the risk and can select to reduce the risk.What Is Risk Financing
If individual choose to keep his risk exposure then he can transfer that risk to an insurance company. He can also keep that risk voluntarily or involuntarily.Related Concern Posts