Insurance generally is a type of risk management where risk management means not only to identify, assess, and to categorize risks but also to apply and coordinate resources to minimize and control the happening of unfortunate events.
It basically used to have position established in one market to offset exposure to the price risk of an equal but opposite position in another market,generally to cope against the risk of a contingent loss.
Insurance is generally transfer which is fair and reasonable(treating everyone in an equal way) of the risk of a loss, from company to person, in exchange a small loss(provide them some money initially) to prevent a large loss.
Company selling insurance is called Insurer.
Person buying the insurance is called an insured.
Generally a person is been insured on the basis of insurance rate which determines the amount to be charged for a certain amount of insurance generally called as the premium.
There are many types of Insurance available some of which are as follows :
1.Auto insurance
Here the Auto insurance is done if a person gets an accident , it helps in recovering of the financial loss the person had.
It is treated as an contract between person who is victim of the accident and the insurance company.
Just pay the premium and the insurance company pay your losses (vehicle damage , injuries, funeral expenses , theft etc).
2.Home insurance
Here the Home insurance is done if person home is been destroyed by some natural calamities or from artifcial mistakes.Here the house holder gets compensation for damage or destruction of a home from disasters.
Here disasters may include flood and earthquakes.
3.Health insurance
Generally Health insurance are done to cover the cost of medical treatments.
It also have sub-type as Dental Insurance which is done to cover dental costs.
4.Disability insurance
It provides financial and economical support to the policyholder who is unable to work because of disabling illness or injury.
It provides monthly support to help pay credit cards.
5.Casualty insurance
Casualty insurance insures against accidents, not necessarily tied to any specific property.
It helps in providing support that covers the policyholder against losses arising from the criminal acts of third parties.
6.Life insurance
Life insurance policies allow option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity.
If an person is dead or at possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance
7.Property insurance
Property insurance provides protection against risks to property, such as fire, theft or weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.
8.Liability insurance
Liability insurance is covers legal claims against the insured.
For example, a homeowner's insurance policy will protects the insured in the event of a claim brought by someone who slips and falls on the property;
automobile insurance liability insurance that indemnifies against the harm that a crashing car can cause to others' lives, health, or property.
It is conducted in two folds : a legal defense in the event of a lawsuit commenced against the policyholder and payment on behalf of the insured with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of wilful or intentional acts by the insured.
9.Credit insurance
Credit insurance repays some or all of a loan when certain things happen to the borrower such as unemployment, disability, or death.
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