Sunday, April 16, 2017

What Is Insurance

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What Is Insurance

Insurance Definition And Meaning

Insurance is a more commonly known concept that describes the act of guarding against risk. An insured is the party who will seek to obtain an insurance policy while the insurer is the party that shares the risk for a paid price called an insurance premium. The insured can easily obtain an insurance policy for a number of risks. The most common types of insurance policy taken out is a vehicle/auto insurance policy as this is mandated by law in many countries. Other policies include home owner’s insurance, renter’s insurance, medical insurance, life insurance, liability insurance, etc.

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The insured who takes out a vehicle insurance will specify the losses against which he wishes to be insured. This may include repairs to the vehicle in case of an accident, damages to the party who is injured, payment for a rented vehicle until such time the insured’s vehicle is fixed, etc. The insurance premium paid will depend upon a number of factors such as the insured’s driving record, driver’s age, any medical complications of the driver, etc. If the driver has had a reckless driving record he may be charged a higher premium as the probability of loss is higher. On the other hand, if the driver has had no previous accidents then the premium will be lower since the probability of loss is relatively low.

Insurance Law And Practice - ICSI
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