Question

Define insurance.

Answer 1

Insurance is a device by which the loss likely to be caused by an uncertain event is diversified over many persons who are exposed to it and who prepare to insure themselves against such an event. It is a contract or agreement under which one party agrees in return for a consideration to pay a specified amount of money to another party to make a loss, damage or injury to something of value in which the insured has a pecuniary interest as a result of some uncertain event.