Insurance is defined as a document between the insured and the insurer with the consideration of paying a large sum of money upon a given contingency. The person who takes the insurance policy to recover the risk is known as insured and the insurance company that offers compensation is known as insurer. The insurer makes the compensation upon the happening of any loss occurring due to fire, theft, etc.; both the parties undergo a consideration. It is the duty of the insured to pay the premium promptly and on the other hand, the insurer must be ready to compensate the losses occurring thereby. The premium can be paid on the basis of monthly, quarterly, half yearly or annually. Insurance has become an important part in our life. Every individual has the right to apply insurance upon his property, home, health and many more. Insurance also means transferring the risk or loss to the third party.
Principles of Insurance
In present days, most people would like to have insurance policy for their property. There are many kinds of insurance like fire insurance, marine insurance, life insurance, general insurance, home owner’s policy, motor vehicles insurance and many more. The first and the foremost principle followed while making insurance policy is to have good faith and mutual trust among both the parties. There should have an agreement in writing. There should also follow the principle of subrogation. When the insured or the policyholder gets any compensation from the third party, then he has to compute it to the insurance company. Compensating the loss by the third party is simply called as insurance. There should have the nature of contract. It means one party has to offer and the other party has to accept the policy. It is observed that without policyholder, the insurance companies are waste. There should be also the principle of indemnity. Indemnity means the restoration of loss. It is applicable only in the case of general insurance and not in life insurance.
Nowadays, there are various types of insurance policies issued by the insurance companies. Fire insurance is a type of insurance which makes the insurer to compensate the losses occurred to the insurer upon the happening of fire accident. This policy also covers the damage or losses happening to the buildings, employees, etc. the next is the motor vehicle insurance which covers the vehicles of the individual. It also covers the damage causing to the third party liability. Here, the policyholder and the insurance company undergo the principle of subrogation. The third type is the home owner’s policy. It covers the loss or damages caused to valuables, jewelries, and electronic devices. It also covers the damage caused to the members of the family. These are the various kinds of general insurance policy. In life insurance policy, the compensation is compulsory as the death is made for all. Health insurance policy covers the hospitalization services and also provides the medical facilities to the policyholders. Visit Our Site http://www.insuranceagencyguide.net/ for detail Information