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The definition of insurance is a procedure or contract between the insurer and insured which secures compensation for loss, damage or injury of an article or person on payment of an agreed premium. Insurance policies have become part of our lives to such a degree it would be difficult to imagine living in society without them. The amount the insured pays, or insurance premium is based on the probability of the event happening and if it doesn't, the risk taker or insurer, keeps the premium paid.