Insurance Companies - Types Recognized By Law
Insurance is a necessity, not a need. People opt for insurance either because they have a specific property that they cannot afford to lose or after getting walked through by some insurance agent trying to make some money. Many a times, these people do not get what they had bargained for because of some reason. The Need is to understand and know the different types of insurance that are accepted by law so that any problems in the future can be dealt with judiciously.
The classification of the insurances recognized by law is not on the basis of those offered by the various financial institutions. Some of the types are:
Foreign: The foreign companies are those who have attained a license to work a region but were formed and registered somewhere else. These primarily include the higher end institutions which offer their services all across the country and not confined to a specific radius.
Domestic: These are those which run in the place where it has its domicile. Every organization is bound to be domestic to some region. It may or may not come under the foreign category depending upon the institutions workflow.
Authorized: Authorized are those who have the legal permission from the insurance department to work in the state. If a company is unauthorized, it will not be recognized and hence any disputes would not be heard for. One should always deal with the authorized companies as they are sure not to dupe you.
Alien: Alien insurance companies are those which have their roots in another country but are authorized to carry out business in the region. Since these companies are formed under the laws which are not same as that of the region of operation, these institutions come under the blanket of being alien.
Reciprocal Company: This type of insurance company comprises of individuals and businessmen who mutually support each other. This is a corporative insurance program and everyone insures the other. Known as subscribers, all the members of this type of insurance participate in non incorporated dealings.
The Mutual and the Stock Companies: The former kind is owned by the people who insure the insured property whereas the latter is a byproduct of the shareholders who own stocks in the market.
Fraternal Benefit Society: An institution that comes under this scheme has permission to offer insurance services to the members associated with it. Since it is for the benefit of the members, it is not a business plan and hence there exist no profits.
Lloyd's Insurer: This type of insurance agency is formed by groups. The working principle is simple; buyers who want insurance meet the sellers who want to underwrite risks.
On the whole there are a total of 9 companies. Before opting for insurance, check the category that the company belongs to. Even though they'll all try to offer you a competitive insurance quote, this is important because no law can be of any help against something that is not recognized by it. It is always preferred to go in for a domestic company as it offers maximum security from any disputes.