Why Do We Need Insurance?

Accurately to define concept and insurance appointment is rather difficult, first, owing to that this process is a category economic, and, secondly a social category. It is impossible to reduce in one or other sphere for the purpose of delimitation of its concept. On the one hand, the purpose of the given process is realization […]

Find out if your insurance covers your medical equipment and learn how to make sure your claims are approved by your Medicare or insurance provider.

Accurately to define concept and insurance appointment is rather difficult, first, owing to that this process is a category economic, and, secondly a social category. It is impossible to reduce in one or other sphere for the purpose of delimitation of its concept.

On the one hand, the purpose of the given process is realization of indemnifications of the material damage caused to the victim, and with another – maintenance of stability and continuous dynamics of economic processes. Thus, the conclusion is that insurance being an element of economic sphere concerns a category of economic relations. The money’s worth of indemnification of risks of insurance allows to carry process of insurance maintenance to financial sector defining insurance as a category economic.

Owing to distribution of a level of responsibility between the contract parties, that is insurance company and the insured process of granting of the insurance concerns a social category.
Proceeding from it insurance process means by itself interaction of citizens for the purpose of carrying out of joint counteraction to acts of nature and accidents that once again proves an insurance accessory to a social category.
Among the basic functions of insurance allocate the following:
1. Function of indemnification of risk or, so-called, “brave function”.
2. Function of savings of means – savings.
3. Function of the prevention of cases of risk – precautionary.
4. Function of regulation of a risk level – control.

The most important recognizes function of indemnification of the risk meaning under itself a capture on itself the insurer of indemnification of consequences of negative character from probable brave cases. Thus, the insured carries out decrease in a risk level from the activity, probable events. An unpleasant sort of a consequence from already comes true in case of risk the insurer should compensate to the insured in a money’s worth.

The sense of savings function is concluded in necessity of presence of financial fund at the insurer for realization of processes of insurance. Use of the given fund means two directions:
1. Preservation of monetary resources on a case of occurrence of situations of risk.
2. Realization of compensatory payment under condition of the termination of term of insurance contractual action.

At the conclusion of the contract the insurer carries out the contribution of money resources abreast the actions concerning reduction of a risk level of occurrence of every possible cases of insurance that explains an essence precautionary function.
Thus, the problem of precautionary function is to lower level of potential risk and brave – to assist those who has already suffered.
The substantial characteristic of control function is regulation and management realization by possible brave cases and a material damage, arising, owing to these cases.

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