Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of potential financial loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium and duty of care.

Principles of insurance

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Losses must be uncertain.

The rate of losses must be relatively predictable: In order to set premiums (prices) insurers must be able to estimate them accurately. This is done using the Law of Large Numbers which states that: The larger the number of homogenous exposures considered, the more closely the losses reported will equal the underlying probability of loss. If the coverage is unique, the insured will pay a correspondingly higher premium. Lloyd's of London often accepts unique coverages. (e.g., the insuring of Tina Turner's legs and Jennifer Lopez's buttocks)

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SydPauls (Syd Pauls) Mon, 07 Dec 2009 23:35:24 -0000
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MaameMensima (Maame-Mensima Horne) Mon, 07 Dec 2009 23:35:17 -0000
RT @WomensHealthNY Sen. Brown: Women w breast cancer is 40% more likely 2 die from it if she has no health insurance #hcr #noban #stopnelson
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auto4insur (maury) Mon, 07 Dec 2009 23:35:02 -0000
How to Purchase Car Insurance for Young People | Really Cheap Auto ...: If you have a teenager in the house, you know that you have a lot..
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auto4insur (maury) Mon, 07 Dec 2009 23:34:59 -0000
There's More to Your Car Insurance Rate Than You Might Think: For some, car insurance can be the most unnecessary bill in your monthl..
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richiuy (Richard Chiu) Mon, 07 Dec 2009 23:34:54 -0000
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