What Is Insurance And Why Is It Important?
The basic principle of insurance is to provide protection to a person or an entity from any sort of financial loss caused due to events like fire, accidents, hospitalizations, earthquakes, etc. Let us understand this with the help of an example: Ram went for a movie with his friends. Just when he reached the theatre and parked the car along the roadside, a coconut fell on the car, damaging its front windowpane. Ram understood this would be a bit heavy on his pocket, but he did not worry as he had an insurance policy in place. He knew his insurance company would bear the expenses of the damage. In such types of uncertain scenarios there is only one thing common, and i.e., Financial Loss. Insurance companies compensate for such kinds of financial losses.