Risk Management Rules-Know before you buy Insurance

Anyone individual or company needs to understand the basic rules of risk management before purchasing insurance products. Risk management is a "buzz term" which relates to how exposure to risk of loss is evaluated. The three[3] simple rules of this art are: Never risk more than you can afford to lose; Never risk a lot to save a little and; Know the odds facing you.
Many people over the years grasp the first two principles but struggle with the third one. Perhaps an example will help clarify the third principle. Once I owned a small sail boat that was purchased for the sum of $1,600. The liability on this boat was picked up under my homeowners policy so that risk of loss was covered. I did not insure the boat for damage or total loss. I was willing to risk this exposure because the total cost of the boat was low and it was stored when not in use in my garage.
The odds of a loss were small. This is how you understand or know the odds.
If you operate a vehicle or a fleet of them as is the case with a business the odds of having a loss are high indeed. The vehicles operate daily and in all kinds of weather.
So before you buy insurance apply the simple rules of risk management and you can usually save money.