单项选择题

Insurance is almost as important to business as banking. It works quite simply by spreading over a large man-her of people, the rests or the losses which otherwise would fall on the few who actually suffer them. Fire, for instance, normally damages only a few businesses each year but almost all companies buy insurance to protect themselves against it. What happens is that most companies pay regular small amounts of money, called the premium, to insurance groups and so a large fund of money builds up. Then the few who have suffered fires claim the cost of the damages. After investigation, the claims are paid out by the insurance companies. For the operation to work, insurance companies have to calculate what is the chance or probability of certain events happening, and what the cost of making accidents good will be, and how many people will pay, what rates, to have protection. Premiums are fixed in proportion to the risk involved. There are four principles backing up every insurance contract. The first, known as indemnity, is that the insured should get back the same value as was lost. If you insure your watch against the risk of its being stolen then the insurance company will only pay out the cost of a similar, second-hired watch unless you make a special agreement with them. The second principle is that of agreeing that the insurer has to own, or have the insurable interest in, the property covered, both at the time of effecting the insurance and at the time of loss. This is usual for policies covering fire; but the insurance on ships and their cargoes can be transferred to new owners if required. Thirdly it is necessary that the agreement be concluded in good faith. Generally the company providing insurance cover charges a premium based on what he is told. If a company fails to mention that a warehouse sometimes contains explosives the underwriter may declare the contract not valid and refuse to y a claim if the warehouse blows up. Finally, insurers distinguish between remote and immediate causes of an event. If there is an earthquake and a house is damaged, catches fire and is flooded by firemen when putting out the flames, the compensation due will depend on the exact words used in the detailed insurance contract. Usually companies do not provide cover against earthquake damage, so the house-owner may not get any compensation for the effects of the fire or water, as these were a direct result of the earthquake. In Para. 2, the term "premium" means ________.