Insurance provides financial support in the event of unforeseen circumstances like death, medical emergencies or damage to one’s vehicle, property or house. It protects one’s family from financial hardship and helps them recover faster from any setback.
It also helps fundamentals of insurance and the economy in general. It transfers risk to a large number of people who pay comparatively small premiums, thereby allowing business enterprises to operate without fear of catastrophic losses and enabling them to compete in the market. It also lays the foundation for a just society by indemnifying victims of negligent actions and furthering the cause of justice.
The insurance industry is governed by several principles that are necessary for it to function smoothly. One such principle is indemnity, which states that the insurance company will compensate you for your loss by putting you back in a position as financially sound as you were before the loss happened.
Demystifying Insurance: Understanding the Fundamentals of Coverage
Another important principle is subrogation, which allows the insurance company to approach third parties for compensation in case of an insured event that was caused by someone else. For example, if you are insured for your house against fire, and the house is damaged due to a storm before it could be repaired, the insurance company can claim their proportional contribution from the owner of the adjoining property.
Fundamentals of Insurance, 2E combines hands-on activities, examples from news-making companies and creative special features with solid content to help students understand the many important aspects of insurance. The text includes coverage of life, auto and property insurance, health and critical illness policies, insurance rates, claims procedures, careers in insurance and planning for retirement.