Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium.

An insurer is a company selling the insurance. The insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

When buying insurance:

• Find out whether your state insurance department offers any information concerning insurance companies and rates. This is a good way to get a feeling for the range of prices and the lowest-cost providers in your area.
• Check several sources for the best deal. Try getting quotes from a website, but be aware that many online services may provide prices for just a few companies. An independent insurance agent that works with several insurers in your local area might be able to get you a better deal.
• Check the financial stability and soundness of the insurance company. Ratings from A.M. Best, Standard & Poor's, Moody's Investors Services , and Weiss Ratings, Inc. are available online and at most public libraries.
• Research the complaint record of the company. Contact your state insurance department or visit the website of the National Association of Insurance Commissioners), which has a database of complaints filed with state regulators.
• Find out what others think about the company's customer service. Consumers can rate homeowner insurance companies.
• Once you pay your first insurance premium, make sure you receive a written policy. This tells you the agent forwarded your premium to the insurance company. If you don't receive a policy within 60 days, contact your agent and the insurance company.