If you’re wondering how your monthly premium can be less than your phone bill, but cover you for more than the cost of a brand-new car, you’re not the only one.
This is because of a clever concept called ‘risk pooling’.
What is ‘risk pooling’?
Risk pooling’s history goes back millennia. Over 5,000 years ago, shippers protected their crew and cargo from being lost at sea by pooling their supplies.
In other words, they spread their men and supplies across multiple different ships.
This meant the risk of losing them at sea was lowered, because it was spread out more evenly.
In the insurance world, a ‘risk pool’ specifically refers to the grouping together of money from each individual policy holder’s premium, to form a collective pool of funds. When someone makes a claim, it then gets paid out from this pool.
If you’d like to learn more about Risk pooling, get in touch with us today!
Call: 0211835835
Email Us: shak@haloadvisers.co.nz
