What is the concept of Insurance?
The factors that can affect the cost of insurance include:1. The likelihood of a loss occurring —the greater the probability a loss will occur the higher the rate. E.g. Floods Insurance in parts of North-east India.2. Purchase of a large amount of coverage (that is, if the item you are insuring is quite valuable) — The chances are there could be a large claim and the premium will need to cover that possibility.
