Insurance is an agreement by which a guarantor is binding on the insured to receive a premium, to provide reimbursement to him for a loss, damage or loss of expected profit, which may be suffered due to an event that is not certain.
B. Insurance Function
The primary function of insurance is a mechanism to transfer risk (risk transfer mechanism), which transfer risk from one party (the insured) to another party (the insurer). The transfer of risk does not mean eliminating the possibility of misfortune, but the insurer to provide financial security (financial security) and tranquility (peace of mind) for the insured. In return, the insured pays the premium in a very small number when compared with the potential losses that may be suffered (Morton: 1999).
c. role of Insurance
As social institutions in Muslim societies, Islamic insurance should ideally be an institution that represents the values and norms of the Muslim community in cooperation in the field of social security does have fundamental differences with other social institutions society, not only a mere akadnya alignment. For a new institution can act as a social institution which is ideal when at least have to play three main functions. Which gives guidance to the public behavior in the face of social problems; preserving the integrity of the community; and provide grip in the system of social control. As is often asserted that the Islamic insurance is the main foundation of mutual assistance in the goodness (ta’awanu ‘alal Birri wat taqwa)