Insurance in a risky world Essay Example | Topics and Well Written Essays - 1500 words - 1

Insurance in a risky world - Essay Example Flood insurance reduces the fear to purchase a house in flood risk areas since it covers one building and all his or her property against damage that flooding can cause. This paper is a report to a friend who is thinking of buying a house on Trent Road, Beeston, Nottingham NG9 1LQ, but is worried about the likely cost and availability of buildings insurance to cover the risk of flooding (Liedtke 2007, P. 7). The aim of the report is enlightening her about the factors to consider whether to buy an insurance cover and the factors that may affect the availability and likely price of insurance against flood risk in the next three years. There is no need to worry or fear buying a house on Trent Road, Beeston, Nottingham NG9 1LQ. This is because one is able to buy an insurance cover for his or her house and its contents. The insurance cover is advantageous since it will cover a number of flooding events such as a canal or a river bursting its banks, sea flooding caused by high tide or storms, and ground or surface water flooding caused by heavy rains. It is acknowledgeable that flooding results in damage and loss of properties, forcing people to incur unexpected costs, replacing the damaged and the lost properties. Although buying a house on Trent Road, Beeston, Nottingham NG9 1LQ is a risk, the insurance covers almost all these costs when flooding occurs. According to Kunreuther and Michel-Kerjan (2007), the insurance sector is playing a vital role in regards to flooding and addressing the challenges faced by both the insurers and insurers when dealing with the effects of climate change on risk management strategies (p. 3). According to The Money Advice Service (2014), there is no need to worry buying a house in a risky world since the insurance sector covers various costs due to flooding. Such costs include repairing, restoring, and drying out your households, replace or replace your damaged belongings and