Curious about credit insurance?

For those unfamiliar with the mechanism of credit insurances, I propose a brief review on the subject. Policies insurance claims are a tool that companies can use to insure against the default (failure to pay) from their debtors. Credit insurance is a rather peculiar class of insurance, usually provided by companies who specialize only in this area. Although credit insurances have very special characteristics.

First, it is found laid an absolute, which can range between 10% and 20% of expected claims. This means that the company pay compensation to between 80% and 90% of the claims. Usually these policies also provide for exemptions to avoid having to pay damages of limited amounts. The operating mechanism of the bill also provides that coverage for corporate credits is not automatic but must be turned on from time to time. This means that the company must still ask every time a case by case, coverage of specific credit to the insurance company. The credit insurance covers both the insolvency of debtors and any expenses related to debt collection.

One of the characteristics of credit insurance policies for loans is its wholeness and globality. Another very important aspect of credit insurances is that a bank can not provide a credit only, you must ensure at the same company all the credit portfolio, then choose from time to time to enable such creditor insurance. In addition, the insurance company is entitled to carry out on-loan portfolio, a preliminary analysis. In this first scouting, which is done through surveys and surveys of other creditors, the insurance company has the ability to identify and exclude unwelcome risk under the policy. The insurer, finally, also puts a limit on maximum insurable for each of the debtors. When there is a non-payment, the insured has the right to bargain for a certain number of days, with the customer debt collection. When these negotiations fail, the insurance company must file a complaint of non-payment to the insurance company.

Generally, then, the company proceeds through its own facilities to the various attempts to collect, through the courts or through the so-called out "good-natured" (ie non-judicial), although in some cases it will then proceed to the insured claims for those two routes, for which he gets a refund from the insurance company. For some large enterprises, companies provide more flexible credit insurance's  procedures for establishing insurable limits. This is because large companies, having internal structures for recovery, usually provide only the so-called credit insurance's "catastrophic risks" that outstanding claims over a certain annual franchise high.

In conclusion, let me remind you readers that it is important, first, find an institution of trust before thinking about making your own credit insurance.