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An insurance agreement is created between an insurance firm and a person or a company where the insurer agrees to pay the policyholder for any damage to the insured property or item. The policyholder has to pay a premium amount every month or year to insure the item. There can be many types of insurance – life, medical, auto, property – and all this is insured in case there is any damage due to accidents, riots, natural disasters, arson and so on.
Depending on the terms mentioned in the agreement, the insurer shall pay the whole amount for the damages or partially pay the policyholder in return for the premium. The insurance agreement must contain certain points which are important like name of the policyholder, the nominee, term of contract, amount of premium, conditions under which insurer will pay for damages, contract termination clauses, policy riders and so on. The terms of the insurance agreement vary from contract to contract.
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