Insurance is a means of protection from financial loss. In form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.


An entity which provides insurance are know as an insurer, company, carrier or underwriter. A person or entity who buys insurance will known as an insured or as a policyholder.

The insurance transaction involves the insured assuming a guaranteed. We also known relatively small loss in the form of payment. To the insurer exchange for the insurer’s promise. Mainly for compensate the insured in the event of a covered loss.

The loss may or may not be financial. It must be reducible to financial terms, and usually involves something in which the insured has an insurable interest. Generally established by Firstly ownership, secondly possession and even pre-existing relationship.

The insured receives a contract, called the policy. Which Contain details of the conditions and circumstances under which the insurer will compensate the insured. The amount of money charged by the insurer to the policyholder called the premium.

If the insured experiences a loss which are potentially covered by the insurance policy. The insured submits a claim to the insurer for processing by a claims adjuster. The insurer may hedge its own risk by taking out reinsurance. Whereby another insurance company agrees to carry some of the risks. Especially if the primary insurer deems the risk too large for it to carry.

How Insurance Works

Insurance is available to help you pay for damage to your property or to pay others. In the same way, on your behalf you injure someone. Also for damage their property its available help you. It is a contract that transfers the risk of financial loss from an individual or business to an company. They collect small amounts of money from clients and pool that money together to pay for losses.

Insurance are divided into two major categories:



Property and casualty insurance provides

For protection to businesses and individuals. Even for losses related to their belongings and assets, both physical and financial.

Similarly life and health insurance protects people from financial loss. Also For premature death, sickness or disease.

Why Insurance need good Policy

It uses probability and the law of large numbers to determine the cost of premiums. Charges clients based on various risk factors. The rate must be sufficient for the company to pay claims. In the future, pay its expenses, and make a reasonable profit. Lastly not so much Customer will turn away.

The more likely an event will occur for a given client. The more companies will need to collect to pay the anticipated claims.

Insurers market their products and services to consumers in different ways. The price companies charge for coverage is subject to government regulation.

Companies may not discriminate against applicants. Or insureds based on a factor that does not directly relate to the chance of a loss occurring