What is the simple definition of insurance?

1 : an agreement by which a person pays a company and the company promises to pay money if the person becomes injured or dies or to pay for the value of property lost or damaged. 2 : the amount for which something is insured. 3 : the business of insuring persons or property.

What is insurance and its example?

In general insurance, the amount of compensation paid is proportional to the loss incurred by the unpleasant event. For example, if the contents of my house are insured and there is a flood, causing $10,000 worth of damage, I will be paid $10,000 to either replace or repair the items that were damaged.

How does insurance work definition?

Insurance coverage helps consumers recover financially from unexpected events, such as car accidents or the loss of an income-producing adult supporting a family. In exchange for insurance coverage, the insured person is responsible for paying premiums to the insurance company.

What is insurance in one word answer?

Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. Insurance is a contract between the insurer and the insured, whereby the insurer agrees to compensate the insured against loss.

What is insurance and why is it important?

Insurance plans will help you pay for medical emergencies, hospitalisation, contraction of any illnesses and treatment, and medical care required in the future. The financial loss to the family due to the unfortunate death of the sole earner can be covered by insurance plans.

Why do we need an insurance?

It provides protection against theft, damage from perils like fire and water, and financial responsibility that could result from a visitor or guest being accidentally injured on your property.

Which of the following best defines insurance?

Which of the following best defines an insurance policy? A contract between an insured and an insurer that guarantees payment for loss caused by a specific event.

What are the 4 types of insurance?

Different Types of General InsuranceHome Insurance. As the home is a valuable possession, it is important to secure your home with a proper home insurance policy. … Motor Insurance. Motor insurance provides coverage for your vehicle against damage, accidents, vandalism, theft, etc. … Travel Insurance. … Health Insurance.

What are the 3 main types of insurance?

Then we examine in greater detail the three most important types of insurance: property, liability, and life.

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