WHAT IS INSURANCE ?

Put ismply, insurance is a policy desiggned to make sure that ur no worse off after an acident or disaster such as a flood or burgly than u were beforehand.
there are dozenz of diferent types of insurances,from insurances that u have to take out by law such as car insurance to policies that its a good idea to have such as contents insurance to those that are nice to have rather than necesities.
figures from the asociation of british insures show that, during the recesion, one in four people canceled their home insurance. while its a good idea to make sure u r not paying for insurances u dont need, u should always thin kabout what would happen if disaster were to strrike before cancelling any insurances policies.

when u take out an insurances policy, u pay a premmium to the insurances company, u never make a claim, u never get of any type of money back; instead its poled with the premmiums of others who have taken out insurance with a particular firm.
that may not sound like a good , but the idea behind insurances is that everyone pays into a pot of money, knowing that only some of them will ever need to make a claim.
how are premiums calculated?if u have to make a claim perhaps becoz ur washing machine has flooded , ur kitchen and damaged ur floor, the money comes from the pool of ur and other policyholders premiums.
insurers are professional rick takers, which means they know the probability of different types of risk happening so they can calculate the premiums needed to create a fund large enough to cover likely loss payments.
clearly, only a proportion of policy holders will make a claim in any one period. Firstly, how likely it is in general terms that someone will need to claim and secoundly, whether the person who wants to take out the policy is a bigger or smaller risk than the average policyholder.so, an insurers will take two important factors into account when calculating the premmium it will change.
take three examples:in motor insurance, a young person with a high powered car, or a driver with a long history of accidents will pay a higher premiums than a mature and experienced driver with u caar with a smaller engine who has not had an accident before.
similary, the owner of a fish and chip shop will pay a higher premiums for his or her fire.
insurances than, say , the owner of an office.the risk is greater,so the premiums is higher.
someone who is young,fit and in a risk-free job will find it easier to buy life insurances and will pay lower premiums than someone who has heart condition or is in a risky occupation.
 the level of premium is also affected by the insurance company's desire to target a particular section of the market . so if an insurer wants to encourage younger drivers to buy insurance from it, it may deside to under cut the premiums chargedd by some of its rivals..