Who Invented Insurance?
No one person invented insurance because its function in business and society is to provide some kind of surety in the case of financial or physical loss. This article covers the origins of insurance, its expansion, advantages and disadvantages.
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The "Inventors of Insurance"
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The origins of insurance trace back to 17th-century England when merchants made arrangements to cover the potential losses of cargo items in trans-Atlantic trade. Lloyds of London became the first insurance house in the Atlantic world, named after the coffee shop where the underwriters met at to exchange news.
Expansion of Commerical Insurance
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Different types of insurance are now available to protect consumers in the global consumer economy of the 21st century. These include but are not limited to: health insurance, life Insurance, automotive insurance and homeowner's insurance.
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Social Security and FDIC
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The "New Deal" program created the concept of Social Security insurance.
Since the Great Depression this idea has expanded to include other forms of insurance provided through the government like Medicare, Medicaid and Social Security Disability Insurance.The large scale bank failure of the Depression era also birthed the creation of the FDIC (Federal Deposit Insurance Corporation), which hoped to increase depositors' faith in their banking system.
Basics of How Insurance Works
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The policy holder pays a premium to the insurance carrier in the event something happens. When an event occurs (like a car accident), the insurance company covers the damages, and to make up for their loss, typically raises the premium.
Advantages of Insurance
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Insurance provides the consumer or individual with financial protection against all types of loss and in some instances fault in the case where her actions or those of her business may have harmed another individual.
Disadvantages of Insurance
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Occasionally many complain that they are paying into a system they will not reap benefits from. This argument has been used in relation to all types of insurance but those faced with accidents or loss quickly are glad they paid their premiums.
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