What an insurance policy is

Find out what this concept is all about, along with its most important features.
More and more people are becoming familiar with the world of insurance. Insurance is typically used in a wide range of situations, and in fact, it's legally required in some cases (such as car insurance, for example). However, upon careful reflection, questions may come up involving certain concepts. One of them is the so-called insurance policy . Do you really know what it entails and how it works? In this article, we explain in detail everything you need to know.
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What does an insurance policy entail?

The insurance policy can define as the insurance contract between a policyholder and an insurance company through which establish the terms and conditions of the agreement signed for both parts. The policy lays out the terms under which the insurance company agrees to reimburse an expense and/or pay the relevant compensation after verifying a condition covered under the contract (for example, vehicle theft, a broken window in a home, disability, etc.).

Additionally can call insurance contract , as works in the same way that other documents of character contractual. It is the document that certifies the validity of the insurance contract, and which specifies the benefits that the insured is entitled to after paying the premium for the insurance coverage.

Moreover, the policy establishes the insurance coverage or, what is the same thing, the eventualities that this covers. There are different types of insurance tailored to every field and to what the insured wants to cover, but paying the premium will always serve to provide, in any circumstance, legal proof of the existence of the insurance and will determine its operation and conditions.

The main elements of the policy

In addition to the personal details of the policyholder and the insurance company, which are always required in such a document, there are also certain basic items that are always contained in an insurance policy.

  • Insurable interest: the relationship between the insured item and some financial value. The item may be tangible or intangible, the only requirement being that a value can be assigned to it and that it existed before the policy was signed.
  • Insurable risk: the actual risk covered by the policy if certain basic requirements are satisfied: it must be something specific, that can happen and that can be quantified economically. Moreover, it must be legal and accidental, meaning it occurs within the law and happens unexpectedly with no premeditation.
  • Premium: the amount that is paid to the insurance company as specified in the policy in order to be eligible for the coverage that is provided therein.
  • Obligation: the insurer is required to pay or compensate the insured if any of the eventualities contained in the policy occurs under the agreed terms.

What types of insurance are there?

There is practically no limit to the type of insurance that can be taken out. A vehicle, a home, a specific situation involving a tangible or intangible asset. There are many possibilities, to be sure. On the one hand, are so-called insurance of interests, intended for the protection of goods. These policies are purchased in order to offset the damage sustained by the property in question in a given circumstance, such as theft or fire. Nowadays, this type of insurance covers a multitude of situations. You can, for example, insure your home against fire, or even a cellphone in the event that you're the victim of a robbery.

Moreover, also can talk of the insurance of people, that is, which are designed for protect and, somehow, guarantee the integrity and the life of anyone who the contract. This category includes health or medical insurance, accident and life insurance, etc. It doesn't focus on an asset per se, but rather on a person's well-being.

Finally, other categories are intended for specific situations, such as travel insurance.

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Likewise, not is necessary to forget that some insurance policies are compulsory in determined circumstances. One of the best examples is vehicle insurance, since it is illegal to drive without having compulsory, or public liability, insurance. And there are other types of insurance, such as policies designed to cover dangerous breeds of dogs or high-risk sports activities.

Whatever insurance you're looking for, BBVA has it

No matter its purpose, BBVA can help you find the policy you're looking for, since the options we offer are designed to cover all types of situations. Can ensure your car or motorbike profiting from different modalities, your housing, access health plans and of life, or choose so-called mini insurance (insurance of trips, accidents, legal advice or repatriation).

Discover all the products that BBVA has prepared for you. You can read the conditions for each insurance product, or even calculate your insurance, right from your own home. Moreover, also can enjoy the advantages that you offers BBVA Plan EstarSeguro that you allows break up the payment of your BBVA INSURANCE products from the first insurance, pay it month to month and save up to 15%.

Your peace of mind comes first. Let your BBVA insurance take care of things so you can enjoy life, knowing that what matters most is under control.

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