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, uncertain loss.
An entity which provides insurance is known as an insurer,
insurance company, or insurance carrier. A person or entity who buys insurance
is known as an insured or policyholder.
The insurance transaction involves the insured assuming a
guaranteed and known relatively small loss in the form of payment to the insurer
in exchange for the insurer's promise to compensate the insured in the event of
a covered loss.
The loss may or may not be financial, but it must be
reducible to financial terms, and must involve something in which the insured
has an insurable interest established by ownership, possession, or preexisting
relationship.
The insured receives a contract, called the insurance
policy, which details the conditions and circumstances under which the insured
will be financially compensated.
The amount of money charged by the insurer to
the insured for the coverage set forth in the insurance policy is called the
premium. If the insured experiences a loss which is potentially covered by the
insurance policy, the insured submits a claim to the insurer for processing by
a claims adjuster.
@Wikipedia
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