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Insurance for some people is vital. Even if  it could be any should the insured.  The fact insurance companies flourished. How does insurance work, what advantage?

Insurance companies are financial intermediaries, which based on premiums received, would make payments if certain events occur. Insurance companies act as guarantor risk.

For example, a couple bought a house for $ 10 million. Knowing that the loss of their homes would lead them to financial ruin, they took the insurance protection in the form of home ownership policy. The policy will pay for replacement or repair their homes in case of disaster. Insurance companies on their premiums of $ 1 million per year. That way, the risk of losing their homes have been distributed from the company’s homeowners insurance.

Insurance companies and property damage guarantee payment of a variety of events that cause harm.
The amount and time of claims by property insurance companies much more difficult because of the uncertainty is estimated to natural disasters and large losses occur. Uncertainty about the amount of time and cash to meet expenses filed claims affect the investment strategy used by fund managers of insurance companies.

In the insurance world there are 6 kinds of basic principles that must be met, namely:

* Insurable interest, the right to insure, arising from a financial relationship, between the insured with the insured and recognized by law.
* Utmost good faith, an act to disclose accurate and complete, all material facts (a material fact) about something that will be insured either demanded or otherwise. (The insurer must honestly explain everything clearly about the extent of the terms / conditions of insurance and the insured must also provide a clear and correct for objects or interests of the insured).
* Proximate cause, a cause of active, efficient, causing a chain of events leads to a result without the intervention of the start and actively from a new source and independent.
* Indemnity, a mechanism by which the insurer provides financial compensation in an attempt to place the insured in a financial position that he had just before the occurrence of losses.
* Subrogation, demanded the transfer of rights from the insured to the insurer after a claim is paid.
* Contribution, the right person to take any other person equally bear, but not necessarily the same obligations to the insured to participate in providing indemnity.