What is Insurance?

Insurance is where they put the payment of a small amount of money to protect against "loss or claim" car.This transfers the risk from you to the insurance company for a fee. This protection comes in several ways.

Liability Insurance:

Liability insurance is a part of the general insurance system of risk financing to protect the purchaser (the "insured") from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy. Originally, individuals or companies that faced a common peril, formed a group and created a self-help fund out of which to pay compensation should any member incur loss (in other words, a mutual insurance arrangement). The modern system relies on dedicated carriers, usually for-profit, to offer protection against specified perils in consideration of a premium. Liability insurance is designed to offer specific protection against third party insurance claims, i.e., payment is not typically made to the insured, but rather to someone suffering loss who is not a party to the insurance contract. In general, damage caused intentionally as well as contractual liability are not covered under liability insurance policies. When a claim is made, the insurance carrier has the duty (and right) to defend the insured. The legal costs of a defense normally do not affect policy limits unless the policy expressly states otherwise; this default rule is useful because defense costs tend to soar when cases go to trial.

Property Insurance:

This kind of insurance protection is more tangible than liability. Property insurance protects physical stuff against damage or loss of use. Most policies will include and exclude certain kinds of events, called "perils". For example War is excluded on almost every policy; which is why on 9/11, when President Bush declared war, he simultaneously voided coverage for all of lower Manhattan. Fire on the other hand is included on almost every insurance policy because fire insurance is historically where property insurance has its roots.

Professional Insurance:

You can think of this kind of insurance as liability insurance for specific professions. Doctors, Lawyers and Engineers have to have this kind of insurance in case they make a bad decision or give poor advice. This kind of insurance is expensive, especially in areas like the medical field where professionals are making judgment calls many times a day.

Article Source: http://en.wikipedia.org/wiki/Liability_insurance