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Understanding Insurance and Risk

INSURANCE is one form of risk control is done by way of transfer / transfer of risk from one party to another party in this case is an insurance company.

What is the meaning of Insurance?
According to article 246 Commercial code that "Insurance is an agreement by which an insurer is binding to an insured, to receive a premium, for reimbursement to him for any damage or loss of expected benefits that may be experienced as an event that is not necessarily" .
Understanding other insurance is a transfer of risk from the first party to another party. In the devolution governed by rules of law and enactment of the principles and teachings which are universally adopted by the first or the other party.
In terms of economics, insurance means a collection of funds that can be used to cover or compensate people who suffered losses.

What are the benefits of insurance?
Besides as a form of risk control (financially), the insurance also has a variety of benefits that are classified into: the main function, the function of secondary and additional functions.
The primary function of insurance is a transfer of risk, premium collection and a balanced fund. Insurance secondary function is to stimulate business growth, prevent loss, damage control, have social benefits and the savings. While insurance is an additional function as an investment fund and invisible earnings.

What is the definition of risk?
According to article 246 Commercial code that "Insurance is an agreement by which an insurer is binding to an insured, to receive a premium, for reimbursement to him for any damage or loss of expected benefits that may be experienced as an event that is not necessarily" .
Understanding other insurance is a transfer of risk from the first party to another party. In the devolution governed by rules of law and enactment of the principles and teachings which are universally adopted by the first or the other party.
In terms of economics, insurance means a collection of funds that can be used to cover or compensate people who suffered losses.

What is Risk?
Definition of 'risk' in insurance is the "uncertainty of the occurrence of an event that can cause economic losses".

What are the forms that risk?
Other forms of risk among other pure risk, speculative risk, the particular risk and fundamental risk.
Pure risk is the risk that consequently there are only two kinds: loss or break even, for example, theft, accident or fire.
Speculative risk is the risk that consequently there are three kinds: loss, gain or break even, for example, gambling. Particular risk is the risk that comes from individuals and local impacts, such as plane crashes, car crash and the ship ran aground.
While the fundamental risk is the risk that is not derived from the individual and the impact area, such as hurricanes, earthquakes and floods.

Are all risks can be insured?
Not all risks can be insured. Risks can be insured is: risk which can be measured by money, the risk of homogeneous (the same risks and are pretty much guaranteed by insurance), a pure risk (the risk is not profitable), particular risk (the risk of individual sources), risk occur suddenly (accidental), insurable interest (the insured has an interest in the objects insured) and the risks that are not contrary to law.

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