Insurance Definition With Example
The definition of insurance is protection against something going wrong.
Insurance definition with example. When you pay premiums in exchange for a policy that pays out when you crash your car in a car accident this is an example of an auto insurance policy. The company also compensates for illness damage or death. Insurance is a contract policy in which an insurer indemnifies another against losses from specific contingencies and or perils. General insurance includes property insurance liability insurance and other forms of insurance.
For example life insurance companies may require higher premiums or deny coverage altogether to people who work in hazardous occupations or engage in dangerous sports. For example one of the branches of a popular fast food chain has turned into ashes due to a big fire. We call the party receiving compensation the insured the insurer on the other hand is the company that provides the compensation or cover. In case of life insurance spouse and dependents have insurable.
There many types of insurance policies. 4 difference between insurance and. Motor theft fidelity and machine insurances include the extent of liability insurance to a certain extent. For example john took a health insurance policy.
An individual bought insurance with a co insurance clause wherein losses will be shared by the insured and insurer in the ratio 80 20. Insured must have the insurable interest on the subject matter. At the time of taking policy he was a smoker and he didn t disclose this fact. Even if a provider desired to provide such coverage it is against the public.
2 principle of insurable interest. Insurance is a shield that protects and secures your business from any possible risks. Insurance company won t pay anything as john didn t reveal the important facts. If the loss amount during the term was 1 000 the insurer will only pay 800 and the balance 200 will be borne by the insured.
Definition features types general insurance. Fire and marine insurances are strictly called property insurance.
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