Insurance Essay Example | Topics and Well Written Essays - 1500 words - 1

Insurance - turn up ExampleThis redress policy mostly targets boyish drivers because they atomic number 18 inexperienced and reduces their chances of get into road accidents (Avery, 2011). In most cases, juvenility person people, both male and effeminate, usually lack a sense of responsibility especially when they kip down that they receive p atomic number 18nts or guardians to take care of them. This is a moral hazard since these young people have a tendency of taking adverse risks because they know that they will not incur the cost of the damages they cause. Young men are known for engaging in risky behaviour such as drunk driving, overspeeding, and ignoring road signs. This puts them on the high premium section because they are high risk indemnity buyers (Telematics insurance, 2012). Young women, on the other hand, are known to be more diligent because they pay attension to the roadstead as they drive and are keen on observing road rules. This means that young female drivers are bound to benefit more from telematics insurance than their male counterparts. Conforming to the provisions of telematic insurance policies gives the young female drivers an opportunity to enjoy low premiums thus lower insurance costs (Wright, 2012). However, being young, both men and women are bound to make the same mistakes that could cause accidents in which the car gets damaged or they damage other peoples property. They do all this because they know that their parents pay the car insurance and, therefore, they behave recklessly. However, there comes a time that they have to be responsible for their actions and this involves paying for their car insurance. This prompts for the filling of an insurance cover that takes care of their needs wholesomely. Telematic insurance promises rewards for its most careful drivers, and this could encourage careless young drivers to be more careful and abandon their moral hazard so as to increase their chances of getting rewards. Tel ematic insurance is known for its use of technology gadgets which are pricy especially to the young vehicle owners provoke in buying insurance cover. Most of the information given to the buyer is about the use of up to date technology to recover lost vehicles and to help drivers avoid accidents. However, the user is not aware that these gadgets are expensive and contribute to the charges of the insurance cover. This is a case of adverse selection because one party is refuse information from the other. The fact that this cover contains rewards in its package only serves to attract clients and to prompt them to be careful while driving (Wright, 2013). When young people realize that their risky behaviour result in loses, they competency opt to get an insurance cover thus research for an insurance cover. A standard insurance policy requires all those buying insurance to pay for a certain standard amount. This means that females, who are less likely to damage their vehicles have to pa y more. In any case they might not even use the cover after all because chances of them getting into an accident are very low. manlike drivers, on the other hand, tend to get into accidents and the amount females pay may just subsidize that apply by the younger males. In addition, insurers do not reduce the price of insurance cost for young female drivers just because they tend to use it less often. In fact, insurance costs keep termination higher