types of insurance


Types of insurance


 The forms of insurance are diversified at the present time, so that they do not fall under an inventory, especially with the rapid developments in the modern era, where insurance has expanded to areas in which it did not have any role in the past. Fiqh has settled on dividing the types of insurance into two basic types: insurance in terms of form and insurance in terms of subject matter.


insurance in terms of form 

Dividing the insurance in terms of form means dividing it according to the entity or body that undertakes the insurance process. In this respect, it is divided into two types: cooperative or mutual insurance, and insurance with a fixed premium.
  • Cooperative or mutual insurance:In this type of insurance, a group of people, who are linked to the interest and who are exposed to a certain risk, play the role of the insurer and the insured, within the framework of a cooperative association that brings them together, to compensate the damages that may be caused to one of them, as a result of the realization of the insured risk. The amount of compensation is paid out of the total contributions that each member is obligated to pay. Cooperative insurance has certain characteristics: 
  • The meeting of the capacity of the insured and the insured in each member of the association at the same time. In the sense that there is no insured in this type of insurance who pays a certain premium to the insured, but the same person plays the role of the insured and the insurer together, and each of them pays a contribution, and from the total contributions, compensation is paid to those among whom the disaster strikes. 
  • The ability to change the subscription paid by the insured, and not being fixed. The amount a member pays depends on the number of accidents that actually happen during the year and how serious they are. The ability to participate may be absolute or relative. The change is absolute at the start of cooperative insurance operations, where the value of the subscription paid by each insurer is not specified and depends on the number of accidents that will befall the insured later and their severity, and this may lead to an increase in the subscription times its original value in order to cover these accidents. However, the change in the subscription value may be relative when a maximum contribution limit is set so that what the insured pays to him after that does not exceed this maximum limit, regardless of the degree of damages.
  • Solidarity among members, as members of the Mutual or Cooperative Insurance Association cooperate in covering risks that affect one or some of them. However, the extent of this solidarity depends on whether the difference in the subscription value is absolute, i.e. not limited to a specific amount, or relative, i.e. fixed to a maximum limit that the joint member is not required to exceed.
  •  Fixed installment insurance:In this type of insurance, the insurer, the insurance company, is obligated to pay the sum insured when the insured risk is realized, in return for the fixed premiums paid by the insured. From this, it becomes clear that the insured is not one person, and that the premium or payment that the insured is obligated to is fixed, and that the insured is obligated alone before the insured. Therefore, this type of insurance is characterized by the following characteristics:

    1. Separation of the insured from the insured. The insurer, who is the insurance company, acts as an intermediary between the insured and collects premiums from them in order to use them to compensate for the damages that befall them.

    2. The premium paid by the insured is fixed, meaning that it is determined by a certain amount since the conclusion of the contract. This is achieved by the insured's resorting to statistics and technical studies to know the rates and type of disasters and the rate of their realization, and the premium remains the same throughout the term of the contract. The insured shall be aware of what he is obligated to perform since the conclusion of the contract.

    3. There is no solidarity between the insured and the insured. The insured is obligated to pay the specified premium from the beginning, and the insurer alone is obligated to pay the sum insured when the risk is realized. He depends only on himself in the performance of his obligations, and he cannot place any burden in this regard on the insured, regardless of the size of the payments that he commits to in the face of others, even if these payments exceed the total premiums. And the insurer, that is, the insurance company, accounts for the profit achieved from the decrease in the value of compensation for the total premiums, and that is why some call this type of insurance called commercial insurance.


    Insurance by topic

    Insurance is divided in terms of the subject to which it is referred to several types, it is divided into marine, river, air and land insurance, social insurance, persons insurance, and insurance against damages.

    • Marine, river, air and land insurance:This division of insurance types is based on the nature of the insured risks. On this basis, marine insurance is meant that type of insurance that aims to cover the risks of marine transport, both in the risks that may befall the ship, such as sinking or fire, or the risks that threaten the goods, such as damage or sinking. However, marine insurance does not extend to the risks that may be incurred by the persons on board the ship, as the insurance on these persons falls within the scope of land insurance.Marine insurance follows another form of insurance, which is river insurance, and this form covers the risks of transportation in the waters of canals and rivers, and this insurance, according to the prevailing opinion in jurisprudence, is subject to the same provisions of marine insurance. Air insurance is insurance that covers air transport risks to the aircraft or its cargo only, and this insurance is subject, as most likely, to the provisions of land insurance, except for what is regulated by international treaties in this regard. As for land insurance, it covers risks that do not fall under the previous types.
    •  Private and social insurance:Private insurance means the insurance that a person undertakes in order to prevent the consequences of a specific risk, or an accident that is likely to occur in the future. The person who undertakes this insurance is seeking to achieve his own interest, i.e. an individual interest, which is to obtain safety with one of the insurance companies. In return for this interest, the individual alone bears the insurance premiums. In this insurance, which is carried out by insurance companies, the goal of the latter is to achieve profit, and this insurance is based on technical and statistical foundations with the aim of achievingtarget of. This insurance is characterized by the fact that it is optional according to the origin, although there are cases in which it is mandatory. As for social insurance, it is a system based on achieving a public interest represented in covering the social risks that members of the working class are exposed to and that may prevent them from starting their work, such as sickness, disability, old age and unemployment. This is insurance It responds to social considerations based in its essence on the idea of ​​solidarity or social interdependence. Therefore, the state, along with business owners and workers, contributes to bearing the burden of this insurance, i.e. its contributions. Social insurance is compulsory, not optional, for the worker or the employer, whenever its conditions are met. Participation in this insurance is an obligation stemming from the law, which determines its conditions, conditions and effects, and none of the parties to the relationship has the right to amend that. Thus, the legal regulation of this insurance differs from that of private insurance. Private insurance is subject to the rule of the contract, the law of the contracting parties and the principle of the authority of the will, within the framework of jus cogens rules. As for social insurance, the legislator undertakes its regulation in all its aspects, whether in terms of terms and conditions or the beneficiaries, and the state monitors its organization and manages its affairs.
    •  Damage insurance:In this type of insurance, the insured risk is focused on the money of the insured and not on his person. This insurance aims to compensate the insured for the damage that may be incurred by him as a result of the insured risk, that is, it has a compensatory capacity, and in it the compensation may not exceed the amount of the damage that actually occurred, provided that it is within the upper ceiling of the insurance limits agreed upon between the insurer and the insured. . In this type of insurance, the right of the insured is to return it to the condition it was in before the insured risk occurred. This insurance may not be a source of enrichment for the insured. This type of insurance, in turn, is divided into two main parts: insurance against things and insurance against liability.

    1- Insurance of things:This type of damage insurance aims to compensate the insured for the loss of one of his funds when the insured risk is realized. In this way, there are only two parties in it: the insured and the insured, and he is at the same time the beneficiary of the insurance. Insurance of things includes a wide range of types of insurance, including: insuring homes from the danger of fire, insuring livestock from the danger of death, insuring money from theft, and insuring crops damage from frost or natural factors. It falls under this Insurance is also credit insurance. This insurance, although closer to banking operations than insurance, is considered insurance on things as well. Also included in the insurance of things is the investment insurance contract, whereby the investment owner insures his capital against non-commercial risks that may befall him. The insured thing may be specific at the time of the contract, such as insurance on equipment or goods located in a specific store, and in other cases it may not be specified at the time of the contract, but it is identifiable when the disaster occurs.

     2-Liability insurance:This type of insurance aims to insure the insured against recourse to third parties due to damages that may be incurred by the latter from a mistake committed by the insured before him and causing him damage that requires his responsibility. The insurance aims in this case to compensate for the damage caused to the financial liability of the insured due to the occurrence of his liability towards third parties. Accordingly, the aim of this insurance is not compensation for the harm caused to others, but rather the compensation for the harm that befalls the insured as a result of his obligation to pay compensation to the injured party. The principle is that liability insurance has a compensatory nature, and therefore it is one of the sections of insurance from damages, and despite that, this description is limited to it if it is stipulated in the document.  On the entitlement of the sum insured as agreed upon between the two parties as soon as the risk is realized, regardless of the existence or amount of the damage. Among the forms of liability insurance: insurance against liability for car accidents, insurance against liability for fire, insurance against professional liability, and insurance against liability for transport accidents. Liability insurance assumes the presence of three persons: the insured, the insured, and the uninjured or injured person, who in certain cases has a direct claim against the insurer to obtain To compensate the damage he sustained instead of filing a compensation claim against the insured directly, then the latter shall return after that what he paid in compensation to the insurer. However, this does not make the insurance contract in this case a conditional contract for the benefit of the injured third party, but its main purpose remains to compensate the insured for the damage he suffers from his financial liability as a result of third parties’ recourse to him, so he concludes the insurance contract for his personal interest and not for the interest of others. 

    3- Personal insurance:This insurance relates to the person of the insured, and aims to pay the sum insured if a specific risk or accident occurs. This insurance includes risks that a person is exposed to in his life, body safety or health, and also includes happy accidents, such as marriage, childbearing and others. This insurance does not have the status of compensation, as it is not a compensation contract, and therefore the sum insured is due to the insured regardless of whether the damage is achieved or the amount of this damage. No harm may occur at all, as in the realization of a happy accident, Such as marriage, for example, and it may be difficult to determine or estimate the damage that occurred, as if the insured risk was death and the person died. Therefore, the sum insured in people’s insurance is determined upon contracting, and the insurer is obligated to pay it as soon as the insured risk or accident is realized, regardless of the damage or its amount, and that is why some call this insurance capital insurance. And outside the scope of persons insurance is every operation that is not intended to insure the insured from a risk related to his person, such as contracts that establish a salary for life, and take the form of compensation, such as a sale, or the form of a donation, such as a gift, as long as the person obligated to return is a natural or legal person other than But if the person obligated to pay is an insurance body, then The contract falls within the scope of insurance contracts. Among the forms of insurance for persons are life insurance, insurance against accidents or injuries, and insurance against sickness.

    1- life insurance:This insurance aims to face the risk of death that every person is exposed to at every moment, and it is one of the manifestations of foresight and caution for the future. This insurance is also a means of saving at the individual level and at the level of society as well, where life insurance premiums and reserves are collected with insurance companies, which can be used in projects that benefit the community as a whole, in addition to the collection of the reserve amount over the validity period of the policy Insurance benefits the insured himself within days his old age There are many forms of life insurance with the many goals that the insured seeks, and these forms include: death insurance, in which the insured is obligated to pay the amount agreed upon upon contracting as soon as the life insured dies; Life insurance, in which the insurer is obligated, in return for the premiums he obtains, to pay the sum insured at a specific time if the insured remains alive until that time; Mixed insurance, which is a contract whereby the insurer is obligated to pay a certain amount to the beneficiary upon the death of the insured within a certain period, or to the insurer himself if his life continues until the expiry of this period; Marriage and Birth Insurance In the first section, the insurer is obligated to pay a certain amount to the insured if he marries before reaching a certain age, and in the second section, he is obligated to pay the amount upon the birth of any of the insured’s children; Supplementary insurance, which is to insure the insured in life insurance against the risk of his inability to pay the premiums for this insurance due to his illness or inability to work. ; Popular insurance, which is life insurance commensurate with the capabilities of the popular classes with meager resources; Group insurance, which is the obligation of a person responsible for a specific group linked by a common bond (such as workers in a factory) to pay periodic premiums to an insurance company in return for Its obligation to pay compensation to the beneficiaries if any of the risks listed in the insurance policy occurred.

    2- Accident and bodily injury insurance:In this insurance, the insurer is obligated - in return for the premium - to cover an accident that occurs to the insured, through a sum of money that leads to the latter or to the beneficiary in the event of his death. It is clear from this that this insurance aims to insure the insured against the risk of any physical assault arising from an emergency act due to an external cause, and it covers death or disability, permanent or temporary. In this type of insurance, the insured may be obligated to Dependency by covering all or some of the expenses of treatment and medicine, which arise as a result of the accident. In this respect, insurance is considered insurance against damages. Despite this, the insurance process in its entirety is subject to the provisions of insurance for persons in view of the primary part, although this does not preclude the application of the provisions of insurance against damages on the secondary aspect, i.e. related to treatment and medication expenses. 

    3- sickness insurance:Sickness insurance is a contract whereby the insurer undertakes - in return for periodic premiums - in the event the insured suffers from a disease during the insurance period, to pay him a certain amount, and to reimburse him for treatment and medication expenses. This insurance may be insurance on the person of the insured himself, or another person, in particular the members of the family of the insured. This insurance has a dual nature, as it is in terms of insurance for persons in relation to the insured’s undertaking to pay an amount of money.The agreed upon insurance, regardless of the amount or damage that is achieved as a result of illness. On the other hand, it is insurance against damages, subject to the compensatory principle with regard to the insured's obligation to refund the expenses of treatment and medicine, caused by illness or accident. This insurance includes many forms, although it is often limited to guaranteeing the expenses of treatment and medicine, either for all diseases, or for serious diseases only.It is limited to surgeries only. If the insured suffers from a disease within the scope of insurance, the insured must pay him the sum insured, either in one payment or in installments throughout the period of the illness, according to what is agreed upon. He must also pay him all or some of the treatment and medication expenses as agreed upon. The insured may choose the doctor who treats him. In return, the insurer takes the necessary precautions to prevent abuse by the insured, including that the doctor must be sufficiently qualified medically, and he reserves the right to exclude some doctors, and sometimes requires the exercise of a kind of medical supervision by examining the insured (i.e. the insured’s doctor who is defined by ) and bears its expenses.

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