Insurance is a financial arrangement that provides protection against certain types of risks or losses. It involves an agreement between an individual or an entity (the insured) and an insurance company (the insurer). In exchange for regular payments called premiums, the insurance company agrees to compensate the insured for covered losses or damages, as outlined in the insurance policy.

Insurance policies typically include details about the coverage, premiums, deductibles (the amount the insured pays before the insurance coverage kicks in), limits (the maximum amount the insurer will pay), and exclusions.