The principle of insurance is based on the concept of risk, which refers to exposure to a potential danger inherent in a situation or activity, the financial consequences of which—whether related to property or individuals—could be unmanageable.
From Danger to Accident
Danger precedes risk, which in turn precedes an accident. Once danger has been identified, the risk becomes clearly describable; it is possible that it may occur, but we do not know if or when it will happen.
Insurance is a contract: in exchange for the payment of a premium, the insurer guarantees specific benefits to an individual, association, or company in the event that a clearly identified risk materializes, as outlined in the contract.
The concept of risk is a key aspect of insurance; it refers to an unpredictable event that the insured fears due to its financial consequences. The uncertainty of risk is based on three criteria:
- The Future: We cannot insure a car accident that has already occurred.
- The Uncertain: We cannot insure a certain risk that will occur on a known date.
- The Involuntary: We cannot insure damages that the insured causes voluntarily.
Different Types of Insurance
Property Insurance
Property insurance includes both liability insurance (family civil liability, driver civil liability, professional liability, etc.) and property insurance (insurance for movable and immovable property, damages caused to vehicles, etc.).
The traditional purpose of insurance is to allow for the replacement of destroyed or stolen property. Additionally, today, liability insurance in areas such as domestic life, professional activities, automotive traffic, and leisure has significantly developed. In this case, one insures against damages and potential harm caused involuntarily to third parties.
Property and liability insurance aim to protect the insured’s assets. Some are grouped into “multi-risk” contracts (home multi-risk, business multi-risk, etc.).
Common types of property insurance include fire insurance, theft insurance, water damage, or glass breakage, but other types of events are automatically included (natural disasters, terrorism, etc.) or offered as options.
Personal Insurance
Personal insurance covers risks inherent to human life and offers a comprehensive range of solutions tailored to each situation. Some contracts provide benefits in the event of physical harm: death, disability (death insurance), while others allow for the accumulation of savings and the payment of this amount in the form of an annuity or capital if the insured person is alive at the end of the contract (life insurance).
