Need of Insurance – 12 Important Needs of Insurance | Insurance

Need of Insurance

1) Economic protection is provided by insurance:

People and their property are protected economically by insurance. The property may be damaged or lost due to events such as fire, flood, lightning, earthquake, theft, or breakdown in machinery. Insurers provide financial protection against losses caused by specific risks to property. The property is not protected from any risk by insurance nor is it able to avoid any risk.

Losses cannot also be reduced by it. Such financial losses are only indemnified by it. The occurrence of fire cannot be prevented by a fire insurance policy. As a result, it compensates property owners for fire-related losses.

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