Insurance Education

Get to know about Insurance

What Is Insurance?

As per the term definition Insurance can be defined in many ways and get

cheap insurance quotes online instantly according to the situation as well as many other aspects. If it is to be specifically addressed as a definition it can be defined as a “type of an agreement or a contract carried out between two parties, specifically the insurer and the party which obtain services in order to transfer the possible losses or simply to transfer the risk associated with the insurable interest”. As a result the insurer gets a payment or a compensation for the services or the risk carried by them while the policy holder gets a guaranteed compensation for their insured interest. Both parties get benefited with this policy and therefore Insurance can be simply evaluated as transfer of risk between two parties or the transfer of cost of a potential loss for a compensation as a return for a contract which is been carried out between the parties (the insured and the insurer). This may take pages in order to evaluate the global term insurance and I hope this will give a raw idea about the basic concept “Insurance”.

This contract called Insurance becomes much useful regardless of who obtain services whether an individual person with a financial interest or an entity with a considerable amount of significance of a potential loss. Every aspect of insurance or the terms affecting the contract or the policy is determined through the so called “insurance policy” which is the official document to prove the transfer of risk. All the conditions which affects to both parties are mentioned within this document and this is compulsory in case of compensation or any other activity regards to the two parties engaged within the policy.  

Based on the broader concept this can be categorized into sectors according to the situation of the Insurance policy. As per the global insurance definition “any potential risk which can be measured or quantified can be insured with an insurable interest within the party” it can be divided into sectors as,

• Auto Insurance
• Health Insurance
•  Life Insurance (Assurance)
•  Property Insurance
• Marine Insurance
• Fire Insurance

 and so on as per the insurance requirement.

Insurance Principals

There are 6 main insurance principles maintained by the insurance industry in order to achieve some of their objective maintained within the industry as follows.

§  To protect the confidence of insurance industry.

§  To prevent from undue profits

§  To meet the affected legal requirements.

The main 6 Principles which the whole Insurance industry rely upon can be summarized as follows. These are the boundaries or the foundation which this Insurance industry is built on and which controls it.

1)   Insurable Interest

2)   Utmost Good faith

3)   Indemnity

4)   Contribution

5)   Subrogation

6)   Approximate Cause