In simple language, Insurance means ‘protection against risk’. When a company insures a person, then that company will compensate for the financial loss caused to that person. In this article we will learn about the meaning, circumstances, types etc. of insurance.

How is Insurance done or under what Circumstances?

In order to insure, any company takes the responsibility of indemnifying the other party’s risk/loss by charging a fee/premium. Insurance is a type of contract. It is an agreement that is legally enforceable between two or more persons. The word ‘insurance’ is from the Persian language which means ‘to take responsibility’.

What is an insurance contract? Principles of Insurance Contract

The broad meaning of an insurance contract is the insurer to provide a certain amount of insurance to the person insured on the occurrence of an event written in the insurance policy.

The insurer keeps on paying the insured a periodic premium (insurance, premium), the same is redeemable in this contract.

In this contract, the insurer pays the insured a certain amount (premium) in exchange for a specified amount on the occurrence of a certain event such as death, accident, or the insured’s actual loss from the risk. does.

Types of Insurance Contracts

Contracts of insurance are divided into two types of categories.

1. The first contracts are those in which there is a liability to indemnify.
2. Others in which there is a contract to pay a fixed amount.

What are the types of Insurance?

The field of insurance has become very broad in the modern era. There are many types of insurance but the main classification is as follows:-

• Life Insurance
• Home Insurance
• AutoMobile/Vehicle Insurance
• Health Insurance

Life Insurance

Life insurance usually originated with marine insurance. The idea of ​​this insurance came about for the valuable lives of the captains of the ships going on commercial voyages. After the establishment of artisans’ associations, life insurance contracts were widely distributed. In the past, insurance was outlawed in case of suicide, duel or sea voyage. 

The difference between other types of insurance and life insurance is that it deals with human life. The basic condition of a life insurance contract is that if the insured dies during the period of the contract being in force, the insurer will pay the amount written on the insurance letter to the nominee.

Property Insurance

Property insurance is a type of insurance that provides financial protection against damages or losses to physical assets, such as homes, buildings, personal belongings, and other properties. It typically covers a wide range of perils, including fire, theft, vandalism, natural disasters (such as earthquakes, hurricanes, and floods), and other specified risks.

Home Insurance

Home insurance is also colloquially called homeowner’s insurance. Abbreviated as HOI in the US real estate industry, this is a type of property insurance that covers a private residence. This insurance policy may cover liability insurance for damages to the house, its contents, loss of use, loss of other personal property of the homeowner, accidents. This insurance provides financial protection against calamities. A standard home insurance policy insures the contents of the house.

AutoMobile/Vehicle Insurance

This form of insurance is for cars, trucks, motorcycles and other road vehicles. The purpose of vehicle insurance is to provide financial protection against damages resulting from a traffic collision. The Compulsory Car Insurance Scheme initiative was introduced in the United Kingdom with the Road Traffic Act 1930. This insurance policy ensured that all vehicle owners and drivers were insured against their liability for injury or death to third parties. In 1939 Germany enacted a similar law called the “Act on the Implementation of Compulsory Insurance for Motor Vehicle Owners”.

Different types of vehicle insurance

• Car insurance
• Comprehensive car insurance
• Own damage car insurance
• Third party car insurance
• Two wheeler insurance
• Comprehensive two wheeler insurance
• Own Damage Two Wheeler Insurance
• Commercial vehicle insurance

Health Insurance

Health insurance covers the whole or part of the risk of the person incurring medical expenses. The insurer can develop a regular finance structure by estimating the overall risk of health risks and health system expenses such as monthly premiums or payroll taxes, agreements to provide funds for the payment of health care benefits specified in the insurance. Profit is administered by a central organization such as a government agency, private business, or nonprofit.

According to the Health Insurance Association of America, health insurance is defined as “coverage that provides for the payment of benefits as a result of illness or injury. Health insurance includes insurance for damages resulting from accident, medical expenses, disability, or accidental death and dismemberment.

Some examples of different types of insurance –

1. Personal Accident Insurance – In this insurance, the insured person is compensated for the damage caused by an accident.
2. Theft, Robbery Insurance – In this insurance, the loss due to theft, burglary, burglary, dacoity etc. is compensated.
3. Statutory Liability Insurance – Several statutory obligations may arise from the individual. They are insured i.e. in case of injury to any third person, self or property.
4. Reliability Guarantee Insurance – In this type of insurance, the insurer guarantees the integrity of the employees of an organization. In such a case, the insurer undertakes to compensate the loss due to dishonesty committed by the employee.
5. Crop Insurance – In this, the insurer usually promises to cover damages caused by climate-related damages such as drought, flood, storm, hurricane or epidemic outbreak, plant disease, riots and strikes.
6. Livestock Insurance – In this type of insurance, compensation is given if there is damage related to animals due to epidemic or other insured reasons. Insurance of cow, bull, buffalo, goat, and camels is especially prevalent in India.
7. Engineering Insurance – Under this, the machines and equipment installed in the factory are insured.
8. Other types of Insurance – Insurance is also done for beauty, air travel, showroom glass, television, pumpset, bullock cart, cycle etc.

World’s Top 10 Insurance Companies

1. Life Insurance Corporation
2. Cathay Life Insurance
3. NRMA Insurance
4. PZU
5. China Life
6. SBI Life
7. Samsung Life Insurance
8. Gjensidige
9. UNIQA
10. A.S.R.

Summary

The insurer guarantees to pay a specific amount to the insured or beneficiary in return for a specified payment (premium) in case the policy covers an event that results in loss to the insured.