WHAT IS INSURANCE?

WHAT IS INSURANCE

Insurance is a safe-guard against risks. Any device aimed at reducing the chances of a risk occurring, when it happens, reducing the extent of its damage and providing the affected persons with compensation is a form of insurance.


Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed and known small loss to prevent a large, possibly devastating loss. An insurer is a company selling the insurance; an insured or policyholder is the person or entity buying the insurance. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.


Contents[hide]
1 Principles of insurance
2 Indemnification
3 Insurers' business model
3.1 Underwriting and investing
3.2 Claims
4 History of insurance
5 Types of insurance
5.1 Auto insurance
5.2 Home insurance
5.3 Health
5.4 Accident, Sickness and Unemployment Insurance
5.5 Casualty
5.6 Life
5.7 Property
5.8 Liability
5.9 Credit
5.10 Other types
5.11 Insurance financing vehicles
5.12 Closed community self-insurance
6 Insurance companies
7 Global insurance industry
8 Controversies
8.1 Insurance insulates too much
8.2 Complexity of insurance policy contracts
8.3 Redlining
8.4 Insurance patents
8.5 The insurance industry and rent seeking