Understanding this concept can help save you a lot of money on your insurance.
Risk "pooling" is comparable to buying wholesale groceries. If you show up to your local wholesale store and buy a box of candy bars, chances are you will see significant costs saving compared to purchasing candy bars individually at a local market. This concept is universal and pretty much everyone understands it. Now, what if we compare this concept to insurance?
When you buy an insurance policy you are simply transferring your risk onto someone else. The more volume available, the cheaper an insurance company can offer you coverage. If you show up as an individual consumer, it is comparable to going to your local market to buy a candy bar. Now, if you show up as a group of consumers, say a group of co-workers or organizations, it is comparable to purchasing candy bars at a wholesale store.
People who join one of these pools can typically count on the following benefits:
1. Leverage that forces insurance companies to modify premium and deductibles.
2. A community price that is lower than any individual price.
3. Standard pricing and benefits that do not fluctuate.
4. Limited increases.
5. Centralized insurance policy management.
Are you part of a risk pool?
The Base Team
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