The 5 Largest Insurance Claims in the World, Some Reach 14 Trillion Pounds Sterling

Kokoyo, – Understanding Insurance insurance is a form of agreement between both parties, namely the Insured and the Insurer, in which the Insured pays a dues to the Insurer in order to get a form of compensation for financial risks that can occur unexpectedly. In the context of a modern world, Penanggung means the existing insurance company, while the Insured is the customer.

What are the elements of insurance?

Insurance has 3 main elements, namely insurance premiums, insurance policies, and insurance claims.

Insurance premiums are dues to costs that must be paid by the customer during the agreed period of time. Usually premiums can be paid on a monthly, semester, up to yearly basis.

Meanwhile, an insurance policy is a valid document governing an insurance agreement. Starting from the value of benefits, the amount of premiums, risks covered, to exceptions (risks not covered by insurance). Insurance policies are legal and legally binding. If any party violates the policy rules, then the other party has the right to stop cooperation or even sue the party.

Insurance claim is the process of filing officially to the insurance company when the customer experiences the risks covered in the insurance policy. If the insurance claim is made in accordance with the provisions stated in the policy, then the insurance company will provide some money in compensation for the financial risk experienced by the customer.

So what does insurance function?

The main function of insurance is to help you overcome unexpected risks in life. Insurance does not guarantee that the risk will disappear, but at least you can minimize the financial losses experienced due to the risk.

You need to remember that the function of insurance is not as a certainty that our money will come back and in larger amounts. The main role of insurance is not to earn more money, such as investments, but to focus on protecting against risks that we cannot predict.

In other words, insurance is our way to expect the unexpected (preparing for things we can not prepare). Starting from the risk of accidents, the risk of falling ill, to the risk of losing the main breadwinner in the family. All of these are risks covered by insurance.

What are the types of insurance?

There are many types of insurance available. The risks covered by each insurance are different. However, there are basically some of the most common types of insurance people have:

Health insurance. With the risk of diseases that can occur to anyone and increased health costs, it is not surprising that this type of insurance is very popular because there is outpatient insurance and inpatient insurance, as well as health insurance with daily compensation.

Life insurance. It is usually used to protect the risk of death for the main breadwinner in the family.

Education insurance. Saving for higher education costs is getting harder, therefore it never hurts if you start saving for your child’s education insurance.

Home insurance. Home becomes one of the primary needs. Not only us, but the things we have can also be at risk. Therefore, home insurance guarantees impromptu damage to your home, such as fires, rescues, and others.

Vehicle insurance. Just like a home, a vehicle is also prone to unexpected damage, for example the risk of accident or theft.

Accident insurance. In addition to the vehicle, you need to protect yourself also from the financial risk of accidents. If your bike needs repairs, you may also need medical costs for any risks that may exist.

Critical illness insurance. Even if we try to live as healthy as possible, everyone still has a risk of developing a critical illness. From stroke, cancer, to heart disease, all of these critical illnesses are unpredictable. The cost to pay the hospital bills is not small, because it requires insurance.

Travel insurance. Usually this type of insurance is sold along with the ticket of the vehicle you buy. Both trains, ships, and planes all have travel insurance options for delay protection or damage to baggage.

The type of insurance chosen will also be different for each person. This is because there are several types of insurance that are more needed, such as health insurance and life insurance, but some are secondary, such as education or vehicles.

The five largest insurance claims in the world are worth up to £14 trillion. These insurance claims come from various emergency conditions.  The claims were filed due to accidents to natural disasters, such as the financial crisis to the 9/11 tragedy and tsunami. Here are the 5 most expensive insurance claims in the world, quoted from various sources:

1. Financial Crisis 2008

Value of claims: £14 trillion

Sterling The 2008 financial crisis left the UK and a number of other countries in the world affected tremendously. It was the worst crisis ever since the Great Depression of the 1930s. In the 2008 crisis, many businesses collapsed, causing the highest unemployment rate in history. This incident left the insurance company hit hard for having to prepare funds for claims that reached 14 trillion pounds sterling.

2. Hurricane 2005

Claim value: $130 billion

Hurricane disaster that occurred in North America became one of the things that make insurance companies in the country drain money every year. There were 4,000 fatalities as a result of the disaster. Insurance claims filed reached the figure of 130 billion US dollars for property damage such as homes and office buildings. In addition, claim life insurance and personal accident insurance.

3.Lehman Brothers Bankruptcy

Claim value: $100 billion

Some insurance claims filed are indeed difficult to enter the count, because it falls into the category of confidential data. The financial crisis marked by the bankruptcy of Lehman Brothers in 2008 is one example. It is estimated that claims arising from the collapse of Lehman Brothers touched $100 billion. But it’s also hard to find hard evidence to be sure.

4. Tragedy 9/11

Claim value: $40 billion

This terrorist attack that occurred in 2001 became one of the largest insurance claims in the world. In basic calculations, more than $40 billion must be paid for property insurance claims, life insurance, as well as disruptions to business activities.

5. Japanese Tsunami 2011

Claim value: 40 billion US dollars

Japanese tsunami 2011, insurance claim cost estimated at 40 billion US dollars. But the figure is still far below the actual figure which could possibly reach 100 billion US dollars.

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