The insurance policy is a contract.
The insurance policy is the document that certifies the support that the insured accesses when paying a premium for it. It is important to keep in mind that the concept of insurance has several uses and meanings; One of them is linked to the contract that requires, through the collection of a premium, to compensate the damage caused to another person. There are various types of insurance that provide financial support for the insured in the event of eventualities.
Policy , from the Italian polizza (which, in turn, derives from a Greek term meaning “demonstration” or “proof” ), is a justifying or supporting document. Therefore, the insurance policy, which can also be mentioned as an insurance contract , establishes the terms by which the insured undertakes to compensate for damage or pay a sum upon verification of an eventuality foreseen in the contract. This insurance policyholder, for his part, is obliged to pay a premium in exchange for coverage.
Logic indicates that the premium will allow the insured to avoid greater economic losses in the event that the accident occurs.
Components of the insurance policy
The insurance policy is made up of several elements, such as the insurable interest , the insurable risk , the premium and the insurer's obligation to indemnify .
However, in addition to all this there are a series of elements that cannot be missing under any circumstances in a policy of this type. Thus, for example, we are referring to the formal elements that must appear in it. This would be the case of the personal data of the contracting party and the insurance company, the insurance fee and its duration or the nature of the risks that are insured.
The insurable interest establishes a lawful relationship between an asset and an economic value. Material things (such as a house or a car) and immaterial things (such as economic damage or the cessation of a productive activity) can be insured, provided that they can be assessed in money, that they existed before the policy and that they are the subject of a lawful stipulation.
The support that the insured has is detailed in the insurance policy.
Classification according to type
In addition to all the above, we have to determine that insurance can basically be classified into three large groups. Firstly, there are those of interest , which are those that try to protect assets, which means that there are insurance policies for theft or fire, for example.
In second place are personal insurances , which are those that are contracted with the clear objective of being able to protect and guarantee, in one way or another, the health, integrity and life of those who contract them.
And in third place are other types of insurance policies that refer to travel assistance, orphanhood ...
All of this without forgetting that we must not overlook the existence of a series of mandatory insurances that must be taken out in relation to vehicles, dangerous or sporting dogs, in case of practices that entail a significant risk. However, we have to establish that the most common types of insurance policies are home, life, health and vehicle policies.
The insurable risk is a future, possible and uncertain event that can cause property damage to the insured, while the premium is the cost of the policy. The insurer's obligation to indemnify, finally, depends on the specificity of the insured risk.