What is insurance?
Insurance is the transfer of the equitable and specific risk of possible loss of life, property or property in exchange for money. For this the individual or the insurance company has to take partial or all possible risks of the client in exchange for money. It is part of risk management to avoid uncertainties.
By paying the insurance companies, the insured person or organization is free from all possible losses and the insurance companies increase the money by collecting money from many insured persons or organizations. You can save money personally and avoid the risk of potential risks without the help of an insurance company. There are certain rules to follow in determining the type of insurance, the amount of loss and the amount of compensation.
Performing insurance qualifications
There are seven insolvency rules for insuring by a private company:
1.Existence of many elements that may cause similar losses:
Since an insurance company pays compensation for losses, there may be a large number of factors that may actually cause such losses.
2.Fixed Losses:
Insurance companies are contracted to compensate for only one or more specific losses. For example, if a shop has only fire insurance, then the insurance company will not be obliged to pay any compensation in case of theft in the shop.
3.Accidental damage:
The amount of damage will be out of control. If any damage is caused due to one's own negligence, it may not be compensated.
4.Large loss:
The amount of damage must be reasonable for the insured.
5.The premium must be affordable:
No matter how large the potential loss, the insurance premium must be within the reach of the insured.
6.The amount of loss must be quantifiable:
since all losses cannot be reimbursed and the insurance company can only compensate in money, the potential loss must be measured in money.
7.In the case of natural disasters, the amount of compensation will be limited - for example, the extensive damage caused by floods or earthquakes, insurance companies refrain from paying this amount because such a large amount of compensation will not be possible for a single insurance company.
Legitimacy
1. The principle of ultimate good faith
2. Principles of insurable interest:
3. Principle of compensation:
4. Substitution policy:
5. Principle of participation:
6. Policy to avoid loss
6. Service policy:
8. Principle of fast demand fulfillment
9. Salami determination policy:
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