It is a system by which the losses suffered by a few are spread over many, exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected event.

Insurance is a hedge against the occurrence of unforeseen incidents. Insurance products help you in not only mitigating risks but also helps you by providing a financial cushion against adverse financial burdens suffered.

It is very important to have adequate amount of coverage for each insurance policy. For any asset or property insurance, the value of the asset based on market value or reinstatement value should be taken into consideration before deciding Sum Insured. If the Sum Insured is not adequate, the percentage representing the uncovered portion of the asset is to be borne by the insured.

Premium is the fixed amount of sum paid over the period by the insured to the insurance company to take insurance policy and to complete the contract of insurance.

The amount, which the insured has to bear in all cases and this amount is first, deducted from the total assessed payable claims amount before determining insurance company’s liability.

It is the consideration of material fact to asses the risk and to take the decision whether to accept the risk for insurance contract and if so at what rate of premium.