What is insurance?
A contract whereby a person called the insurer undertakes to compensate another person called the insured for a potential loss suffered by the latter, in return for a sum of money called the premium that the insured pays to the insured.
Insurance is based on cooperation in bearing risks and the participation of financial contributions among the insured.
Three elements are therefore necessary for the formation of an insurance contract
Premium
an amount owed by the underwriter of the insurance contract in exchange for guarantees granted by the insurer.
Compensation
the insurer’s fulfillment of his obligation to compensate for the damage caused.
Risk
a possible event to verify that its effects are inevitable, and it is the subject of the insurance contract.
The conclusion of the insurance contract also requires the intervention of four parties:
The insured
a natural or legal person whose insurance is based on or on his interests.
The subscriber
a legal or natural person who concludes an insurance contract for his account or for the account of others and is obligated to pay the insurance premium to the insurer.
The insurer
an approved contractor to carry out insurance operations.
The beneficiary (if applicable)
a natural or legal person appointed by the underwriter of the insurance contract and who receives the capital of the revenue due from the insurer
Example: car insurance
As a car owner, you are exposed to several risks such as accidents, theft, breakdowns, fire, etc.
You can transfer the material consequences of these risks on your financial responsibility as an insured to the insured by entering into an insurance contract covering these risks in return for payment of the insurance premium.
Therefore, when these dangers occur, they may cause damage to others or your companions, which will entail your responsibility towards them, or may cause damage to your car or driver.
Therefore, the insurer intervenes to compensate for these potential damages within the framework of the civil liability coverage for cars in the first case, and in the second case within the framework of additional (optional) guarantees that you have subscribed to with your insurance company. This is the service that the believer provides.
Learn about car insurance and what are its types, advantages, and disadvantages
What is car insurance?
Car insurance is done through an agreement or contract between two parties The first party is the insurance company, and the second party is the owner of the vehicle, and this contract, the insurance company is obligated to compensate the car owner for the damages and malfunctions that occurred to his vehicle or to the cars that caused it damage, according to what was agreed upon in the contract.
Types of insurance
1- Third-party insurance
2- Comprehensive insurance
What is third-party insurance?
this insurance company is obligated to repair the damages and malfunctions caused by the insured car. Third-party insurance for other cars The repairs or compensation do not include the third-party or damaged car this insurance is mandatory for all cars to protect the rights of owners of damaged cars.
Pros of third party insurance:
1- Third-party insurance pays the amounts of damage caused by the insured car to other cars that have been in the accident, and this keeps the car owner away from paying any amounts and makes him feel a kind of reassurance about the cars that caused the damage.
2- As for the annual amount that the owner of the car is obligated to pay to the insurance company in the case of third-party insurance, it is somewhat reasonable and does not constitute a burden on him.
Disadvantages of third party insurance:
The most important negative of the third party insurance system is that the insurance companies do not bear the cost of the damages that occurred to the insured car, but only to the other damaged cars, and this means that the owner of the car must repair the fault that happened to his car if he is the one who caused it at his personal expense.
What is comprehensive insurance?
Comprehensive insurance obligates the insurance company to repair the damages and malfunctions caused by the insured car comprehensive insurance, in addition to repairing all the damages of the insured car, meaning that the damages of all cars covered in the accident are repaired, and this insurance is optional for all cars and is not mandatory as insurance against third parties.
Pros of comprehensive insurance:
1- Comprehensive insurance, in addition to car repair, provides car insurance in the event of theft, vandalism, fire, and many other things that may happen to the car at any time.
2- In the event that the insured car causes the accident, the owner will feel reassured because the insurance will take care of the repairs, and will avoid paying large sums of money to repair his car.
Disadvantages of comprehensive insurance:
1- One of the negatives of comprehensive insurance is that it applies to the date and age of the car’s manufacture, and the comprehensive insurance law is not subject to old cars, because they may break down quickly unlike a new car.
2- The second negative of comprehensive insurance is the high annual payments to insurance companies, and this is a burden on car owners who want this type of insurance, especially if they buy their cars through banks and monthly installments.
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