What Is Insurance And How Does It Work?

Julieakin • June 7, 2012

How Insurance Works

 

Two men shaking hands in front of a red check mark Are you wondering what is insurance and how does it work?  We have the answers for you! Insurance is something you purchase to protect yourself from unexpected losses you can’t afford: the accident you hope you never get into, the fire you pray never destroys your home, the hailstorm you know sooner or later is bound to batter your roof, the lawsuit that threatens to wipe out your savings.

Here is some information to help you understand how property and casualty insurance works:

Your insurance policy is a legal contract

An insurance policy is a legal contract between you and your insurance company. Like all legal documents, it very clearly spells out certain conditions that you both agree to when you sign off on the paper work. You agree to pay the premium and your company agrees to cover you for certain losses. Forms may differ from company to company, but all will include what is covered and what isn’t covered by your insurance. There is a limit to the amount any insurance policy will pay for a loss and no policy covers every type of loss. If there is a potential risk that concerns you and it isn’t referred to in your policy, ask your agent or company representative if it is covered by your general policy and if special coverage is available.

Factors that impact cost

Insurance companies are like other businesses, in that the price charged is directly related to the cost of what is used in the product. If the price of car repairs, home construction or settling lawsuits rises, the cost of auto, homeowners or liability insurance must also rise.

Insurance companies have little direct control over the risk factors that affect the amount of claims they pay out. To hold down costs, it’s essential to hold down the costs of what insurance pays for. That’s why the insurance industry devotes considerable resources to supporting programs and proposals that reduce losses, prevent injuries and save lives.

Why do different insurance company charge different rates?

An insurance company sets prices partly on its own past experience with claims that are filed (for example: accidents involving certain types of drivers in certain kinds of vehicles) and on competition in the marketplace. One particular company may have a much better experience insuring a certain type of driver than the industry does as a whole.

What should I look for in an insurance company or agent?

Agents and companies are there to help you. At the most basic level, any agent or company representative should be able to answer all of your questions about insurance, provide you a thorough assessment of your insurance needs, and offer you a choice of insurance products to meet those needs. Also, any insurance agency or company should provide you with prompt, quality service in the case of a claim.

Just as important is the level of professional confidence and personal comfort you feel with the company representative or agent.

An often overlooked factor to keep in mind is that there are two kinds of insurance agents and two kinds of insurance companies. There are companies who sell insurance directly to you and there are companies who sell insurance through agents. There are also two different kinds of agents: those who represent one insurance company and those who represent more than one insurance company.

Agents offering the policies of a single insurance company through their agencies are often referred to as "captive agents." Agents offering the policies of more than one insurance company through their agencies are called "independent agents."

 

Source:   scinsnews

FMM Permit for Rocky Point / Puerto Penasco

May 9, 2025
To update you on what is happening at the Lukeville/Sonoyta border crossing for our insureds traveling to Rocky Point: Depending on the officer, Mexican authorities (Guardia Nacional) are enforcing the FMM and passport requirements, but not consistently. Some travelers have reported crossing as usual without passports, and officers simply waived them through. Others have reported obtaining FMMs at the border, with all travelers carrying passports. If travelers are transparent and declare any alcohol they’re bringing into Mexico, they are being charged a 114% tax. However, some people reported having alcohol but were waived through by officers and did not pay the tax. It appears enforcement depends on the officer, and tourists are currently taking their chances. It comes down to each traveler’s level of confidence and risk tolerance, as enforcement is not yet consistent. Our company’s recommendation is to follow the law: Process the FMM online Print the form Stop at the INM (Immigration) office at the border to get it stamped Reminder: The FMM tourist permit is only for foreign citizens, not for individuals with dual citizenship. Here is the link to obtain the FMM online (in case travelers ask where to process it before crossing the border): https://www.inm.gob.mx/fmme/publico/en/solicitud.html The INM Immigration Office is located in the Aduana building. For your reference, the Gastrak/Sanborn’s location in Lukeville and the Aduana building (just to the left after crossing the border) are highlighted. Additional reminders for this border crossing: All vehicles must have a current, original, valid registration OR the original title/notarized copy. Digital copies or images are not accepted. If the vehicle is not owned by the driver (e.g., a company vehicle, borrowed from family or friends), a notarized letter of permission from the owner is required to take the vehicle into Mexico. Border Hours: U.S. and Mexican authorities have agreed that the Lukeville–Sonoyta border crossing to Rocky Point (Puerto Peñasco) is open daily from 6 a.m. to 8 p.m., with extended hours on Fridays (6 a.m. to 10 p.m.) from March 7 to October 10, 2025.
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