Insurance since back in the days of bullions and coin trade is a financial scheme made to let other financial actors feel that they are being safeguarded with a reliable financial stream. After hundreds of years this financial scheme has been evolving to a more objectified and bureaucratized system. The objectivity that companies follow hinders the possibility of insurance policies to compensate for more than just the financial aspect of the trade. In car insurance policies companies can insure for the car in a holistic way but policies can only do much when it comes to the lives involve. A totaled car with a good insurance policy can be replaced by a new car. But a lost life can never be compensated for no matter how expensive an insurance policy is. The design of insurance policies is limited to compensating for the “economic” loss of the policy holder; it pays no mind to the “sentimental” losses of the policy holders.
The compensation processes of most insurance companies would require a third party privately or company hired to assess the validity of the claims. These claims will be mitigated by the insurance companies in terms of the economic transmutation of the loss or losses claimed by the parties involved. Even if car insurance companies have a wide variety of insurance packages like a comprehensive type of insurance policies or a collision insurance policy, there are still modes of insurance compensations that do not fall in any of the main techniques. The manner of compensating through economic loss is the ultimate proof that insurance companies are following an objective way of identifying the losses to be mitigated. The alterations and modifications of the processes on loss mitigation vary from a company to the other. These changes in the car insurance company are only from quantifiable and transmutable factors like income, inflation and other economic factors.
An insured compensation puts the policy holders in a stronger position to use his or her policy. This position is characterized as a stronger financial position which could have been lost if the event has not occurred otherwise. Insurance moreover car insurance to be precise is a type of financial interaction that prepares people for the worst possible situations of their lives. The very nature of insurance companies attests to the importance of its existence. The nature of protecting policy holders through an objective manner sustains the technicality of this business, which can be considered as its plus factor or edge among other financial businesses.