Previous article Gambling vs Insurance: Basic Principles of Insurance (part 1) briefly discussed the first three of the basic principles of insurance, namely insurable interest, utmost good faith and proximate cause. We continue now with remaining three principles namely indemnity, subrogation and contribution. 4. Indemnity This principle asserts that insurance will only pay claim for… Continue reading 9. Gambling vs insurance: Basic principles of insurance (part 2)
If insurance were a process of producing something, the five requirements for insurable risks as explained in Gambling vs insurance: requirements for insurable risks are screening over raw materials. What we will discuss below, on the other hand, are to do with the production process. They are basic principles that must be fulfilled in the… Continue reading 8. Gambling vs insurance: Basic principles of insurance (part 1)
We end previous article Between Gambling and Insurance with a statement that basically only pure risks are insurable, while speculative risks are not. However, it is not necessarily that every pure risks are insurable. In other words, pure risk is not the only condition for a risk to be insurable. To ensure insurance does not… Continue reading 7. Gambling vs Insurance: Requirements for insurable risks
Previous articles in the series of 'Understanding Insurance' have discussed what risk is, how it is grouped based on frequency and severity, at a glance how insurance works based on the principle of pooling of risks and law of large number and also briefly alluded to concept of hazard . We continue now to discuss… Continue reading 6. Between gambling and insurance
The previous four articles in the series of Understanding Insurance have laid a basic understanding of risk. Article number one, What is risk?, is defining risks and making arguments about the conservation of risk. The second article, Categorizing risks, sorts risks out into four categories based on a combination of frequency and severity. Several actions… Continue reading 5. Risk Management and Insurance
In the first article of Understand Insurance section of this blog, What is risk?, we have defined risk as uncertainty of loss. In insurance context, losses are any bad or unpleasant events that can be measured financially. Risk is basically a state that contains two possibilities, namely a loss or nothing, at one point in… Continue reading 4. How risks turn into loss?
We closed second article of this series with three choices of actions available in dealing with risks, namely to ignore, to retain and to transfer. Earlier part of the same article discussed that risk can be divided into four categories based on a combination of frequency and severity. Let's continue our discussion to the risks… Continue reading 3. Holding hot potato: transfer or avoid