Property insurance is a form of risk management. Today’s insurance industry grew out of “risk pools” created long ago by merchants and other business owners. Each participant contributed money to a pool. If any of them suffered loss or damage to their business, they could claim compensation from that pool.
If you have an insurance policy, that means that you are contributing to a risk pool. The insurance company determines how to distribute that money when policyholders make claims. This applies to any kind of insurance, including property, auto, and general liability policies.