Insurance as we know today can be traced to Londons major fire, which hit 13,200 houses in 1666. After this disaster, Nicholas Barbon opened an office to insure buildings. In 1680 he established Englands first fire insurance company, The Fire Office, to insure brick and ramhem. The first insurance company in the United States provided fire insurance was established in Charles Town today Charleston, South Carolina, in 1732.
In 1752, Benjamin Franklin founded Philadelphia Help for the insurance of houses from fire loss. It refused to insure certain buildings where the fire risk was too large, such as 100 wooden buildings.
The exact time or occurrence of the loss must be uncertain. The value of losses should be relatively worrying. In order to determine premiums or in other words to calculate price levels, insurers must be able to estimate them. Insurers need to know the price that would be paid when the insured event occurred. Most types of insurance have maximum payout, with several exceptions as health insurance.
The loss should be essential The minimum legal principle from Latin if minimal prescribes that negligent things are not covered. The payment insured to the insurer to take the risk is known as premium.
Potential risks for chances that can give rise to insurance claims are called hazards. Examples of hazards can be fire, theft, earthquake, hurricane and number of additional risks. An insurance policy will be specified in detail which risks are covered by the policy and which are not. The damage must not be catastrophic. If the insurer is insolvent, it will not be able to pay the insured. In the United States, there are guarantee funds to replace insured victims whose insurer is bankrupt. This program is managed by the National Association of Insurance Commissioners NAIC.
Anyone who wishes to transport a risk individual, company or organization of any kind becomes the insured party when the risk is assumed by an insurer, the insurer, through a contract, defined as insurance policy. This legal agreement specifies terms that indicate total coverage remuneration to be provided to insured, insurer at risk, at loss and 100 of the specific hazards covered by remuneration for the duration of the Contract.
When insured experiences a loss, for a certain risk, the coverage allows the policyholder to produce a claim against the insurer for the damage size as specified in the policy agreement.
Insurance companies financial viability
Financial stability and position of the insurance company must be an important factor when purchasing an insurance contract. A paid insurance premium currently provides coverage for damages that may occur for a few years to come. Because of this, the insurance companys financial strength is the most important. In recent years, some insurance companies have become incapable of paying, neglecting their policyholders without coverage or coverage only from an insurance funds insurance pool with less insurance policies and historically favorable payments for losses. A number of independent credit rating agencies, such as Best, provide facts and rate the insurance companies financial strength.
The insurer uses actuarial science to quantify the risk they are prepared to consider. Information is collected to approximate future insurance claims, usually with reasonable accuracy. Actuarial science uses statistics and likelihood of analyzing the risks associated with the extent of hazards covered, and these scientific principles are used by insurers in combination with other factors for determining the interest rate composition.
Some people take out insurance policies incorrectly especially in connection with moral hazard conducted under the policy. The insurance company insists that you or your property will not hurt you when you make money on the opposite result. Almost all homeowners insurance does not cover floods. With insurance you handle the risk that you do not otherwise prevent and it does not give rise to the risk of benefit pure risk. In other words, games are not an insurance risk.
Insurance of social solidarity
Some religious groups among them abandon Amish and Muslims from insurance and instead rely on support from their society when disasters meet. This can be regarded as social insurance because the risk of a particular person is assumed collectively by society that will fully bear the cost of reconstruction. In closed, mutual help communities where other people can actually go in to build up total lost property, like this