Asked by Christina Ercolani on Jun 23, 2024
Verified
The insured party transfers his or her risk of loss of property or life to the insurance company through the insurance agreement.
Insurance Agreement
An insurance agreement is a contract between an insurer and the insured, whereby the insurer promises to compensate the insured for specific potential future losses in exchange for a premium.
Insured Party
The party who makes a payment in exchange for payment in the event of damage or injury to property or person.
Risk of Loss
The exposure to potential financial harm or loss of property value, particularly in the case of goods during a transaction.
- Understand the basic principles of insurance, including the transfer of risk and the concept of insurable interest.
Verified Answer
VB
vaibhav birlaJun 28, 2024
Final Answer :
True
Explanation :
In an insurance agreement, the insured party transfers the risk of loss of property or life to the insurance company, which in return, agrees to compensate the insured in the event of such loss, according to the terms of the policy.
Learning Objectives
- Understand the basic principles of insurance, including the transfer of risk and the concept of insurable interest.