Insurance

Insurance is defined as a promise of compensation for specific potential future losses in exchange for a periodic payment. Today the most common things people insure are their home, contents, car, etc.

How does insurance work? Consumers pay premiums on their insurance policies into a common fund run by an insurance company. The premium size depends upon the risk being isured - the higher the risk the higher the premium. For instance a young driver will tend to pay a higher premium than an older driver on their car. Additionally the larger the surface area of your home the higher the premium.