FINA 385 Lecture Notes - Lecture 8: Property Insurance, European Cooperation In Science And Technology, Vehicle Insurance
28 Jun 2016
School
Department
Course
Professor
Document Summary
An insurance company, or insurer, is a risk-sharing firm that agrees to assume financial responsibility for losses that may result from an insured risk. A person joins the risk-sharing group (the insurance company) by purchasing a policy (a contract). Under the policy, the insurance company agrees to assume the risk for a fee (the premium) that the person (the insured or the policyholder) pays periodically. Risk is the chance that something may be lost. When people buy insurance, they assume that even if the associated risk happens, they will not be overly affected. For example, many people insure their car for loss and damage because they know the odds are good that risk may occur, and they know that repair or replacement costs could be high. By buying insurance, they minimize the potential impact of a risk. Peril is the cause of a possible loss. It is the event that causes someone to take out insurance.
