Functions of Insurance

Pure Risk The insurer cannot make any gain from insuring against splendid jeopardize. There is no investment involved. If no claim is made, i.e. the occurrence doesnt happen, there provide be no redress of premiums or payments to the insured. Insuring against pure risks such as fire and hap are common. Speculative Risk If you understand the word speculative you will see that this cannot be insured against as both a gain (chance) and a loss (risk) are possible. Fundamental Risk This unremarkably means huge or catastrophic, like an asteroid contact the earth or in more expected situations war or FAMINE Particular Risk This is a situation where there is a risk but it is confined, or limited in scope. E.G. 1. theft of buildings contents from an individual (television, jewellery) or from a go with (computer equipment, rick files) 2. Accidental damage to either a company (coffee spilt on computer equipment), or an individual (television knocked over) 3. Vehicle damage (car, cutting edge etc.). Acceptable Risk Acceptable risks cannot be insured against. E.G.

being accomplish by a ball while watching golf game or losing something with little monetary value but mellow individual value Primary Function People who suffer a risk of a particular type can receive expediency from a large group of people who have the identical risk and who are all paying for the cover of that risk. In other words, to transfer risk to others .the risk approach becomes low-cost because it is spread across many. But often the end guide of a claim produces only a part rehabilitation of the overall cost of the loss. The Secondary Functions of Insurance The functions can be dissever into direct Functions and indirect functions. 1. The increasing of calling activities. Companies could transfer the cost of possible loss to the insurance company. So the insurance stimulates the business event to some extent. For example, of fire. By paying the insurance company a premium they free up their main capital for business activities. 2. The... If you want to get a full essay, decree it on our website: Ordercustompaper.com

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