Managing loss: The main function of insurance is to give you peace of mind by limiting your chances of loss. The burden is carried by the insurer instead of the insured. A monthly installment called a premium is paid by the insured to the insurance company. In return. you will get a guarantee that the small loss suffered due to certain event occurrences will be limited and not lead to greater loss. Any object or event with a price tag or value to it can be insured.