What is Insurance?

What is Insurance?

This article is about the risk management method.

Insurance is a means of protection against financial losses. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.An entity that provides insurance is known as an insurer, insurance company or insurance company. A person or entity that buys insurance is known as an insured or policyholder. Insurance operation involves taking a relatively small loss and guaranteed known in the payment to the insurer in exchange for the promise of the insurance company to compensate the insured in the event of a covered loss insured.  

The loss may or may not be financial, but should be reduced to financial terms, and should refer to something in which the insured has an insurable interest set by the ownership, possession or pre-existing relationship. The insured receives a contract called the insurance policy, detailing the conditions and circumstances under which the insured will be compensated financially. The amount of money charged by the insurer to the insured for the coverage provided in the insurance policy is called the premium.  

If the insured experiences a loss that is potentially covered by the insurance policy, the insured present a claim to the insurance company for processing by a claims adjuster.