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Definition - What does Insurance mean?

Insurance is a system of protection against financial loss for individuals, groups, or organizations. In order for this protection to be arranged, an insurer and the party seeking the insurance must agree to terms in a legally binding contract. This is primarily done by having the seeking party choose between a number of policies offered by the insurer. Once this is complete, the insurer is responsible for reimbursing the client for a number of specified situations.

Justipedia explains Insurance

People use insurance to protect themselves against financial losses in case something undesirable happens. For example, if a person has home insurance, they could be financially protected if something happened like a tree falling on their house. Insurance coverage requires premiums to be paid. However, the coverage insurance provides can truly save people a lot of money on the event of a disaster. Essentially, insurance is a hedge against the unknown, the accidental, and the unforeseen. People buy insurance for a number of different things. Examples include health insurance, car insurance, life insurance, and dental insurance

In many states, it is illegal to drive a vehicle without car insurance.

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