Insurance is a way to protect yourself from money loss. It is a form of risk management. People or companies who provide insurance are called insurers, and the people who buy insurance are called insureds. When you buy insurance, you agree to give a certain amount of money to the insurer in exchange for them promising that they will pay if something bad happens to you.
Many people rely on insurance to protect them from a large financial loss. Insurance companies are responsible for paying out if you’re unfortunate enough to experience a disaster like an accident or fire, while insureds pay in small amounts each month that add up over time.
This system is how your car insurance works- the monthly fee goes towards covering what it would cost should something happen and your vehicle get totaled by another driver’s mistake for example, but when you have any other types of accidents such as if someone rear ends you at a stop light then they’ll cover those costs too!