What do you understand by “Insured” and “Insurer”?


The term “insured” refers to the individual, entity, or property that is protected by an insurance policy. In other words, the insured is the party seeking financial protection against specific risks or events. When a person or organization purchases an insurance policy, they become the insured party. For instance, in health insurance, the insured is the person covered by the policy and entitled to receive medical benefits. Similarly, in auto insurance, the insured is the vehicle owner who receives coverage for damages and liabilities.


On the other hand, the term “insurer” refers to the insurance company or provider that issues the insurance policy to the insured. The insurer is the entity responsible for honoring the terms of the policy and providing the financial protection outlined in the coverage. They assume the financial risk associated with the events or risks specified in the policy. In return for this protection, the insured pays premiums to the insurer. The insurer assesses the risk factors associated with the insured and the coverage requested to determine the premium amount.

In summary, the insured is the individual or entity that seeks insurance coverage for protection against certain risks, while the insurer is the insurance company that provides this coverage and assumes the financial responsibility for honoring claims based on the terms of the policy. The relationship between the insured and the insurer forms the foundation of the insurance contract, ensuring that financial risks are managed and protection is provided in times of need.

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