Coverage Limits: Insurance policies specify the maximum amount an
insurance company will pay for a covered loss. Policyholders can choose
coverage limits based on their needs and budget
Reinsurance: Insurance companies often spread their risk by
purchasing reinsurance, transferring a portion of the risk to another
insurance company.
Claims: When a covered event occurs, the policyholder can file a
claim with the insurance company. The insurer then assesses the claim and
compensates the policyholder accordingly.
Regulation: Insurance companies are typically regulated by government
authorities to ensure they meet financial solvency and consumer protection
standards.