What is insurance and why auto insurance?

Concept of insurance is derived against the risk.Risk refers to the financial uncertainty.Insurance reliefs from the word "risk."Human life is full of risk and they want insurance to get relief from such uncertain risks in different forms.Insurance is just a way which provides security to the person and his property.It is a means of shifting such uncertain risk to insurer i.e. insurance company in consideration of a nominal cost called premium.Insurance,thus,is a contract to indemnify losses occurred due to any particular risk in consideration of cash payment in shape of premium.It provides financial protection against any uncertain risk. It should be remembered that the loses cannot be eliminated by insurance but it spreads over a large number of person just only to compensate the loses.Therefore,insurance is the co-operative task of spreading risk of individual to the community.Generally,a fund is created to meet the liability of risk which ensures the protection from risk.As per statutory provision,it is a contract between two competent parties.One party gives financial protection against the risk from incident and second party pays the certain amount in terms of premium. Mainly insurance can be classified into two groups:- 1)Life insurance and, 2)General insurance. Auto insurance is one of the form of general insurance.Auto insurance compensates loss of motor or vehicles due to accident, theft or similar type of risks.Such insurance is compulsory in many countries of present world.Insurance company compensates the loss of goods and amount for the loss on vehicles.