DEFINITION OF INSURANCE

Many  definitions have been given to the term insurance, which in passing there is no similarity between the definition of each other. 

This is understandable, because they are defined according to the perspective that they use in looking at insurance, which in accordance with the above description that insurance can be viewed from several angles, included :

1. Definition of insurance according to Article 246 of the Book of the Law of Commercial Law (Commercial code) of the Republic of Indonesia: "Insurance coverage is an agreement or, where a guarantor is bound by the insured to receive a premium, to provide reimbursement to him for any loss, damage or loss of profits expected, which might be experienced as an event that is not certain "Based on these definitions, then the insurance is contained 4 elements, namely:

a. The insured party (insured) who promised to pay the premiums to the insurer, at once or gradually.

b. The underwriter (Insure), which promised to pay some money (compensation) to the insured, all at once or gradually, when something happens that does not contain certain elements.

c. An event (accident) is not known (previously unknown).

d. Interest (interest) that may experience losses due to certain events that do not.

2. Definition of insurance by Prof. Mehr and Cammack: "Insurance is a means to reduce financial risk, by way of collecting exposure units in sufficient numbers, to make for individual losses can be estimated. Then a predictable loss was borne equally by those who joined."

3. Definition of insurance by Prof. Mark R. Green: "Insurance is an economic institution which aims to reduce risk, by combining the management of a number of objects in a large enough amount, so that the overall losses can be predicted within certain limits."

4. Definition of insurance by C. Arthur Williams Jr. and Richard M. Heins, which defines the insurance on the basis of two viewpoints, namely:

a. "Insurance is a security against financial loss by an insurer."

b. "Insurance is an agreement by which two or more persons or entities to raise funds to cover financial loss".

Based on these definitions above would be about the definition of insurance that can cover all points of view: "Insurance is a means to reduce the risk inherent in the economy, by way manggabungkan number of units exposed to the risk of the same or nearly the same, the amount quite large, so the probability of loss is predictable and if the predicted loss occurs will be shared proportionately by all parties in the joint. "

             

           Understanding Insurance when viewed from a legal perspective is: "Insurance or coverage is an agreement between 2 (two) or more parties where the insured party bound itself to the insurer, by accepting premium-premium insurance to reimburse the insured for loss, damage or loss of profits that is expected or legal liability to third parties who may be in pain the insured because of an uncertain event, or to provide payment for death. "