What are insurance risk and insured event?

The current Civil Code of Russia often uses the term “risk” in a wide variety of meanings. This can be proved through chapter 48, where out of 44 articles, the use of this concept is relevant in twenty, and this is almost half. If we recall that in some of them the phrase “insured event” is used, which is closely associated with “risk”, then the frequency of use of this term is very high. What insurance risk, insured event, insurance amount? What features are endowed with these concepts? When are they used in practice?

The concept of insurance risk

Insurance risk and insured event - closely interconnected, but fundamentally different concepts. Thus, insurance risk should be understood as a phenomenon of an objective nature with respect to absolutely any sphere of social activity. It is necessary to add that its manifestation is carried out as the activation of many risks separately. By the way, today every person has the opportunity to accurately measure risk by mathematical methods by applying knowledge of probability theory and the law of large numbers.

In its meaning insurance risk (and insurance case too) is considered to be an event that carries negative consequences in the economic aspect, the occurrence of which is likely to become relevant in the distant or near future. It must be added that the time frame is unknown, as well as the size or features of the consequences caused by it. Thus, any specific insurance risk is only the possibility of the onset of an adverse event.

Insurance risk and insurance organization

As a rule, it is the insurance interest (case, risk, which is almost always appropriate in society) that causes an urgent need to appeal to popular insurance organizations. In turn, a large number of risk manifestations, the severity and frequency of the corresponding consequences, as well as the exclusion of the possibility of its complete elimination, indicate the need for competent insurance organization (in the general sense of the word).

Insurance risk is subject to assessment in relation to the probability of activation of the insured event, as well as the amount of potential damage in quantitative terms. That is why the concepts of "insurance risk", "insured event", "insurance amount" are closely interconnected (the last element is directly a related tool).

Insurance Risk Criteria

What risk can be considered insurance? This question can be answered based on the following criteria, which fully correspond to the term in question:

1. The risk included in the account of the liability of the insurance body should be possible, optional.
2. Risk should have a touch of chance. So, the object of the insurance legal relationship, as a rule, is characterized by a temporary, completely unstable form of communication. Under no circumstances should he be exposed to danger known in advance to the owner of the insurance object or the insurer. In addition, all parties that take part in the contract do not know in advance about the possible amount of damage and the time of the insured event.
3. The random nature of such a risk correlates with a great many objects of uniform shades. That is why today the organization of the relevant statistical observation is relevant, the analysis of the information of which helps to consolidate the insurance premium that is adequate to the current forecasts.Statistical information allows you to fully discuss or even criticize the patterns of manifestation of insurance risk in relation to a system of objects of a similar nature.

Additional insurance risk criteria

Risk insurance events, the damage from the activation of which, as a rule, are significantly lower than the payments to the organization’s account, are characterized by the following points:

1. Activation of the insured event, which is primarily expressed in the realization of risk, should not be based on the will of the insured or another individual interested in this.
2. The occurrence of an insured event cannot be known with respect to time and space.
3. An insured event is not equivalent to a catastrophic disaster, in other words, the corresponding event cannot cover a huge number of objects as a large-scale insurance population, while causing mass damage.
4. The disappointing consequences of increased insurance risk can be objectively measured and evaluated. It is important to add that their scope should be significant, as well as affect insurance interests.

The most common use of the term

As noted above, insurance risk and the insured event are closely interconnected (the former, possibly, leads to the latter). In order to understand which case is an insurance, it is necessary to distinguish the corresponding risks. Therefore, it will be advisable to bring the most relevant circumstances for them:

1. Danger threatening the object that is insured (type of liability in relation to the insurer).
2. Probability, the possibility of the implementation of any insurance event, which is provided for the purposes of the insurance procedure directly (scale of danger).
3. A single event or their combination, from which insurance is provided and upon activation of which the insurer pays a compensation corresponding to the case.
4. Directly the object of insurance taken as a risk (valuable cargo, building, and so on).
5. The amount of liability on the part of the insurer in accordance with the insurance contract.

Insurance Risk Classification

This chapter discusses the types of insurance risks and insurance events that correspond to these categories. Today, such options are known:

1. Risks of environmental nature associated directly with an increase in the degree of environmental pollution. They are equivalent to the interests of insurance, which are presented in a special form. It is important to add that ordinary insurance companies, as a rule, do not take this category of risks into account.
2. Risks associated with transport are divided into two components: in accordance with CASCO, you can insure sea or air transport, trains, cars; Cargo, however, involves insurance of property and goods transported in one way or another.
3. Political risks are also called repressive and are associated directly with illegal activities in relation to a particular state or its citizens.

What other risks exist?

The concept of insurance risks and insured events makes up a single system in which the former are differentiated into the following elements:

1. Special risks include the implementation of the insurance procedure in respect of valuable cargo or its transportation. It would be advisable to include cash, jewelry and other expensive objects. It is important to add that all the nuances accompanying these risks, as a rule, are negotiated through official documentation (contract).
2. Technical risks are most often realized as accidents due to equipment failure. By the way, the reason for the activation of such risks may be a flaw or an error in the management process, a violation of a technological nature or simple negligence in the development of the relevant activity.It should be remembered that this type of risk warns of damage not only in terms of health and property, but also in life.
3. Risks regarding the liability of an individual are somehow related to some claims of persons of different types at the level of the law. The reason for this may be harm to human health, human life or damage to his property. This group of risks is often caused by such sources of danger as sea, space, rail transport or automobile activity.

Risks to be insured

Social risks and insured events have qualitative characteristics (in relation to the event - and quantitative) and can be measured through financial units. Absolutely all species diversity of risks is divided into two groups:

1. Risks of a mass nature are considered an insurance object by the interests of a private individual.
2. Large-scale risks, as a rule, are related to industrial enterprises.

Insurance risk, insured event, insurance payment - all elements of insurance can be found by contacting the appropriate structure. By the way, in order for the insurance procedure to be successful, experts recommend turning to professionals for help.

Social insurance: insurance risk and insured event

As it turned out, the insured event is an already implemented event, which is provided for by the insurance contract or at the legislative level. It is important that immediately after its occurrence the insurer undertakes to pay the sum insured to the insured, the person who has been insured, or to third parties (in accordance with the ninth article of the Law of the Russian Federation “On the organization of insurance business in the Russian Federation”).

Example

For example, the occurrence of death is an event, in case of activation of which the individual is insured (documented, this person is considered insured). It is considered as an insurance risk, because it is initially endowed with signs of randomness, probability of implementation. In the event that this event (or any other agreed upon through an insurance contract) nevertheless has arrived, it will already be considered an insurance event. So, the insurer undertakes to make a specific payment to the individual in whose favor the contract was concluded.

Classification of insured events

As noted, an insured event is an event after the occurrence of which there is a need to pay, for example, for causing damage to property. Insurance risk and insured event, like any other categories, have a certain classification. So, all the specific variety of insurance cases is clearly stated in the official documentation (insurance contract), which is certified by two parties (the insured and the insurer).

Today, two types of insurance are known: voluntary and compulsory. It is important to note that absolutely any goods of a material nature that are in civil circulation are subject to the corresponding procedure. Nevertheless, protection from illegal activities ideally does not exist. So, the entire set of insurance cases is differentiated by insurance industry into the following groups:

• property insurance;
• social insurance;
• personal insurance;
• liability Insurance;
• risk insurance of a person engaged in entrepreneurial activity.