What is the point of insurance?

The point of insurance is to provide financial protection and peace of mind against unforeseen events or risks. By paying premiums, individuals or businesses transfer the financial burden of certain risks to an insurance company. In return, the insurance company agrees to compensate them or cover the costs associated with covered losses, such as property damage, medical expenses, or liability claims. Essentially, insurance helps mitigate the financial impact of unexpected events, allowing individuals and businesses to manage risk more effectively and recover from losses more easily.