Definition of Insurance
The definition of insurance is a little more extended than just a simple definition of a word or a term.
While there is a lot for people to know what it comes to insurance having insurance is simply the promise of compensation (the insurer) for specific losses that potentially could happen in the future which is exchanged for payments (the insured.) The payments are what are called the premium. Most people will pay monthly payments for their premium; however, there are paid in full options.
The purpose and design of an insurance policy is to protect the insured from their financial, individual, company or any other entity in the case of an unexpected loss. You’re paying for the protection of a possible loss regardless of if a loss ever actually occurs. It’s commonly just considered a piece of mind payment.
When it comes to insurance there is no lack when it comes to the types of insurance. There are some that are optional and others that are mandated by law; such as liability insurance on your automobiles.
After you’ve received your quote and agree to the terms therein there will be the finalized insurance policy written and which creates a binding contract with the insured with the insurer, (the insurance company.)
With you making your premium payments any covered losses will be covered less deductible. The deductible is the amount you’ll pay before your insurance policy pays out anything on a loss, after your deductible the insurer pays the rest of the loss up to your policy limits.
The main types of insurance are, but not limited to, the following: