Definition of Insurance?
Insurance can be defined as a setting whereby a company or a state agrees to give a guarantee of compensating a person for damages, loss, or death. In addition, this compensation comes in exchange for the remittance of a fixed fee.
This simply means that a person will pay an agreed amount of money in advance to the company or state.
This money will cover any future damage of assets under the insurance cover. And the company can achieve this by compensating such persons after the loss of the asset.
Insurance is like saving up when you have plenty against the rainy days.
When you have car insurance, you don’t need to worry if your car is stolen or damaged, your insurance company will compensate you by paying for the repair cost of your car. Also, if your damaged car is beyond repair or gets stolen, your insurance simply gets you a new car.
According to the third-party motor vehicle insurance act of 1950, it is compulsory for you to get third-party insurance for your car.
The act is termed ‘third-party insurance’ and failure to comply could lead to imprisonment. Therefore, it is important, wise, and legal to get insurance for your vehicles.
Origin of Insurance Companies in Nigeria