how does insurance work?

Insurance is a way to transfer the risk of something bad happening to you or your property to an insurance company. Insurance companies will charge you a small fee, called a "premium," to provide you with protection against large losses. Basically, you are paying the insurance company a little bit of money each month so that if something bad happens to you, the insurance company will cover the expenses. So if you have car insurance and you get into an accident, the insurance company will pay for the repairs.