Insurance is one of the most recognizable issues in the field of finance. Virtually all of us are covered by at least one of its types, and we are often interested in buying additional policies. What types of insurance do we distinguish and what definitions make up this extremely broad concept?
What distinguishes the issue of insurance is first of all its obligatory duty regulated by Polish law. Theoretically, no one who lives in Poland may not be covered by insurance. At this point, however, specify – specific types of insurance are mandatory, the number of which is extremely high. Some include people who come into possession of, for example, a car or become owners of a farm. There is also an amout of insurance, which possession is not mandatory – you can buy them for a specific occasion, once and without further commitment. The most popular policy of this type is holiday insurance.
What is the issue of insurance in detail, how do you understand the concept at all and what types of policies can we extract?
The insurance is the contractual obligation to provide the benefit by the insurer, if the event provided for in the insurance contract occurs. These events have a specific character – they affect the client’s health, life or property. The insurance which the insurer pays us then is realized due to compensation or funds from the premium fund, which the insured brought.
The insurance contract is defined by the provisions of the Civil Code. It defines the scope of duties that are acquired by the company providing insurance services at the time of signing the contract with the client. The basic is the commitment to pay out funds of a certain amount in the event of circumstances that arise. In turn, the insured is obliged to regularly pay policy contributions.
We distinguish two types of insurance, which most often are subject to various policies available on the market:
- Payment of the sum of money specified in the contract, pension or another accidental benefit of an insured person – personal insurance.
- Payment of the compensation specified in the contract to compensate for the damage that occurred as a result of an accident – property insurance
What is the purpose of insurance?
The purpose of insurance is referred to as “risk transfer”. The insurer uses the insurer’s financial service and pays an insurance premium, which includes the price for the insurance service. In this way, the plant is our insurance if the so-called random event, the effect of which is almost always the risk of incurring serious financial consequences. The amount of compensation is determined by the insurance company, which, by determining the amount we will be poring, takes into account a number of factors. For example, whether the event resulted from our fault or whether we did not have any influence on its course. The insurance companies are particularly allergic to cases of so-called extortion, i.e. arrange the situation to obtain compensation, therefore the verification process of our case can be extremely meticulous and take more time than we expected. What does the issue of providing insurance services from the plant look like?
Although paying out compensation, the plant loses, but thanks to the contributions, it obtains a certain and stable income. The payment of funds to the insured is called uncertain large financial loss, because it is disproportionately less frequent than obtaining funds. This is why the insurance market is so competitive and generates huge profits for enterprises.
A person whose property or life or health is covered by the insurance is insured. The insured and policyholder may or may not be the same natural or legal person.
What types of insurance exist?
The basic category that we distinguish during the characterization of insurance is:
- Social insurance, regulated by the rules of public law
- Economic insurance, which in turn regulates private law.
Another way to distinguish the nature of insurance is to consider the following criteria:
- Who is an insurance company – e.g. a corporation
- What is the subject of insurance – related to personal risk in the form of illness, disability, death or old age or with property risk, i.e. related to property or property interest.
- For how long the insurance will be concluded – long-term or short-term
- The nature of the insurance in terms of freedom in its conclusion – voluntary (eg holiday insurance, postal parcel insurance, bicycle insurance) or compulsory (liability policy for each motor vehicle, insurance of agricultural buildings and liability insurance for persons working in agriculture)
In terms of risk related to the subject of insurance, the Act on insurance activity in an extremely broad, comprehensive and comprehensive way assigns specific types (groups) of insurance to two general species:
- Life insurance – timely or for life
- Dowry insurance, children’s insurance
- Insurance linked to the insurance capital fund
- Disability insurance
- Accident and sickness insurance
All other personal and property insurance
- Insurance against accidents, i.e. all kinds of events in the category of car accidents, accidents in public transport, accidents in urban space, as well as accidents at work, and even illness caused by work and related negative factors, so-called occupational disease
- Insurance against long-term or permanent (incurable) diseases
- Casco insurance for all land vehicles outside trains
- Casco insurance for all rail vehicles
- Casco type aircraft insurance – airplanes, light aircraft, gliders, helicopters, etc.
- Insurance for sea and inland navigation (boats, kayaks) and casco of sea and inland waterway vessels (ships, ferries, catamarans)
- Insurance for items in transport, i.e. items shipped in high-value online stores, the potential destruction of which in transport is a considerable risk
- Insurance for damage caused by the elements, i.e. all the effects of floods (destroyed houses, flooded cars, washed sidewalks), heavy rain (flooded cellars, destroyed cars), whirlwinds (broken roofs, destroyed greenhouses), gusty winds (broken roofs, destroyed greenhouses, flooded cellars) or heavy snowfall (collapsed roof)
- Insurance for damage to property in land, rail, air and water vehicles, the damage of which has been caused by hail or frost
- Civil liability insurance of any kind that results from the possession and use of land vehicles (cars, trucks)
- Civil liability insurance of all kinds, resulting from the possession and use of aircraft, including liability insurance of the carrier
- Liability insurance relating to inland waterway shipping resulting from the possession and use of inland waterway vessels and sea-going vessels, including carrier liability insurance
- Liability insurance in other cases not mentioned above
- Credit insurance – any type, e.g. mortgage or installment loan
- Insurance from the type of insurance guarantees
- Insurance of financial risks, for example investing on the stock market or investing in cryptocurrencies
- Insurance by nature of legal protection
- Assistance insurance
As you can see, over the years, insurance policy services have evolved along with the rapid development of technology and growing human awareness of the risk of adverse events. Life insurance is also increasingly required when taking a payday online . The abovementioned number and types of insurance policies prove that today there is virtually no area of life and the world around us which could not be insured. Most of them, however, are a matter of our good will and personal awareness of the risk of unwanted turnover. Let’s be insured, it’s worth it!