Economy, asked by sinnank4, 7 months ago

define insurance and explain the principles of insurance ​

Answers

Answered by Anonymous
10

Answer:

The basic principle of insurance is that an entity will choose to spend small periodic amounts of money against a possibility of a huge unexpected loss. Basically, all the policyholder pool their risks together. Any loss that they suffer will be paid out of their premiums which they pay.

Answered by devanshi02005
30

Answer:

an arrangement with a company in which you pay them regular amounts of money and they agree to pay the costs if, for example, you die or are ill, or if you lose or damage something

Explanation:

Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. An entity which provides insurance is known as an insurer, insurance company, insurance carrier or underwriter.

The concept of insurance is risk distribution among a group of people. Hence cooperation becomes the basic principle of insurance.

To ensure the proper functioning of an insurance contract, the insurer and the insured have to uphold the 7 principles of Insurances mentioned below:

  • Utmost Good Faith
  • Proximate Cause
  • Insurable Interest
  • Indemnity
  • Subrogation
  • Contribution
  • Loss Minimization

Please mark me brainlist and follow me and don't forget to like the answer

Similar questions