Why should we get insured? What is the need for getting Insured?
These questions are answered in this post.

Assests are insured , because they are likely to be destroyed or made non-functional before the expected life time, through accidental occurences. Such possible occurences are called Perils. Fire, Floods, breakdowns,lightining, earthquakes,etc., are perils. If such perils can cause damage to the assest, we say that the assest is exposed to that risk. Perils are the events. Risks are the consequential losses are damages. The risk to a owner of a building, because the peril of an earthquake, may be a few lakhs or a few crores of rupees, depending on the crores of rupees, depending on the cost of the building, the contents in it and extent the damage.

The risk only means that there is a possibility of loss or damage. The damage may or may not happen. The earthquake may occur, but the bulding may not have been affected at all. Insurance is done against the possibilty that the damage may happen. There has to be an uncertainity about the risk. The word "possibility" implies uncertainity. Insurance is relevant only if there are uncertainities. If there is no uncertainity about the occurence of an event,it cannot be insured againts. In case of a human being, death is certain, but the time of death is uncertain. The person is insured, because of the uncertainity about the time of his death. In the case of a person who is terminally ill, the time to death is not uncertain, though not exactly known. It would be "soon".He cannot be insured.

Insurance does not protect the assest.It does not prevent its loss due to the peril. The peril cannot be avoided through insurance. The risk can sometimes be avoided, through better safety and damage control measures. Insurance only tries to reduce the impact of the risk on the owner of the assest and those who depend on that assest. They are the ones who benefil from the assest and therefore, would lose, when the assest is damaged. Insurance only compensates for the losses and that too, not fully.

If you have any queries or doubts kindly post your valuable comments on this post.

Let us have a close view about the first insurance company in India:

In India, insurance began in 1818 with life insurance beign transacted by an English company, the Oriental Life Insurance Co.Ltd..The first Indian Insurance company was the Bombay Mutual Assurance Society Ltd, formed in 1870 Mumbai.This was followed by the Bharat Insurance Co.in 1896 in Delhi, the Empire of India in 1897 in Mumbai, the United India in Chennai, the National, the National Indian and the Hindustan Cooperative in Kolkata.

Later were established the Cooperative Assembly in Lahore, the Bombay Life (originally called the Swadeshi Life), the Indian Mercantile , the New India and the Jupiter in Mumbai and the Lakshmi in New Delhi. These were all Indian companies started as a result of the swadeshi movement in the early 1900's. By the year 1956, when the Life Insurance business was nationalised and the Life Insurance Cooporation of India(LIC) was formed on 1st September 1956, there were 170 companies and 75 provident fund societies transacting life insurance business in India. After the ammendments to the relevant laws in 1999, the L.I.C did not have the exclusive privilege of doing life insurance business in India. By 31.8.2007, sixteen new life insurers had been registered and were transacting life insurance business in India.

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