Present the insurance
A insurance is a service that provides a benefit upon the occurrence of a risk to your insured item.
Delivery, usually financial, may be for an individual, an organization or a company, in exchange for the collection of a contribution or premium.
By extension, insurance is the economic sector which includes the design, production and marketing of this type of service.
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The risks encompassed by the guarantees of insurance
Without being specific, the conditions for insurability of such and such a thing in relation to insurance is the hazard, that is to say, the unpredictability of a damaging event, to element insurable as such or one of its characteristics, the independence of the will of the insured (individual, association, company) and the lawfulness of the triggering event.
This implies among other things that known past events (disaster already done) are uninsurable.
Elements of the insurance contract
The insurance contract establishes the essential rights and obligations of each party. It establishes the conditions under which the service is rendered. It usually mentions:
- the premium that the insured agrees to pay;
- detailed provision that the insurer will give to the specify insured in question;
- random and damaging incident (risk) for the insured item (person, object, etc.);
- interest of insurance (expressed negatively): the insured or the beneficiary must not have interest in the occurrence of the risk.
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Pooling of risks and insurance
In general, the insurance contract in its entirety is a risk transfer contract:
- the referred insured transfers, in whole or in part, any risk, by definition random, to the insurer, that is to say the insurance company. When the insurance provides a detailed franchise to pay, the concerned insured person retains part of the risk.
- The insurance company involved in the transaction accept the risk in exchange for the premium established in the contract.
This being defined and concluded, then the insured is well protected against random events that he could not otherwise bear alone. He can then, if desired, carry out activities qualified as "risky". Insurance, in general, helps indirectly to the creation of wealth, depending on the viewpoint.
The insurance company realizes, to get this concept, through the subscription of several similar risks or parents, pooling of risks between the insured clients. This sophisticated risk statistical control gives to the insurer a way to reduce the maximum total volatility risks. This is the law of large numbers that allows the insurer to enter and know approximately the amount of plausible future claims.
Happening of an event insured by insurance
On the occurrence of the incidents listed in the insurance contract for which the insured is covered, the insurer supports the insured as expressed in the agreement between the two parties. This assistance, which may be spread over a short or long period and at different stages, leading to the resolution of the problem, is most frequently monetary and takes the form of compensation.
But other forms of assistance may also be offered by the insurer, such as assistance with legal process.
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End of the insurance contract
The insured, as the insurer may, at its discretion, terminate the contract at each end of term. Usually, insurance contracts are with implicitly renewal. The contract expires in a natural way if the insured risk "disappears".
Some exclusions point though. Group contracts and other collective operations in addition to life insurance, are clearly excluded from the renewal mechanism of insurance contracts.
Function of the insurance policy
The insurance policy is the contractual document that governs the relationship between the insurance company and the insured. The contract shall, in particular:
- list of events guaranteed, with any exclusions.
- warranty, that is to say, the assistance to the insured in case of disaster.
- commitments of the insured:
- preventive measures to reduce the potential risk
- in case of disaster, reporting before deadlines to the insurance company
- meet the fees and terms of payment (method, date, etc.) of the premium
- analyze alternatives cancellation of the insurance policy
- obligations of the concerned insurance company:
- timely payments of compensation
The insurance policies are composed of terms common to all policyholders of the same company for a given risk or set of risks, and conditions specific to the insured.
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Source (modified content): Article Assurance of Wikipédia en français (authors). Content licensed under CC-BY-SA.