1. Insured: The term “insured” refers to the individual, entity, or property that is covered by an insurance policy. In other words, the insured is the person or entity that has purchased insurance to protect themselves or their assets against specific risks or losses. The insured is the party that benefits from the financial protection provided by the insurance policy. For example, if you buy a health insurance policy to cover your medical expenses, you are the insured.
2. Insurer: The term “insurer” refers to the insurance company or organization that provides the insurance policy to the insured in exchange for premiums. Insurers are in the business of assuming and managing risks on behalf of their policyholders. They collect premiums from policyholders and, in return, promise to provide financial compensation or assistance to the insured in the event of covered losses or events. Insurers use statistical analysis and actuarial science to calculate premiums and assess risks accurately.
The relationship between the insured and the insurer is contractual. When the insured pays the premiums, they enter into a legally binding contract with the insurer. This contract outlines the terms and conditions of coverage, including the types of risks covered, coverage limits, deductibles, premiums, and any exclusions or conditions that apply.
In the event of a covered loss or event, the insured can file a claim with the insurer to receive compensation or assistance as specified in the insurance policy. The insurer evaluates the claim and, if it meets the policy criteria, provides the agreed-upon benefits or financial support to the insured