Charleston Legal Aid
Charleston Legal Aid
Insurance, as we know it today was the Great Fire of London that are traced in the year 1666 13.200 houses devoured. After this disaster, Nicholas Barbon opened an office to insure buildings. In 1680 he founded England's 1st Fire Insurance Company, "The Fire Office", on brick and frame to insure homes. The first insurance company in the United States provided fire insurance based on in Charles Town (now Charleston), South Carolina, years 1732nd
In 1752 Benjamin Franklin founded the Philadelphia subsidies for the insurance of houses from loss by fire. It refused to some buildings, where the risk of fire was too big, wooden structures, such as 100% insured.
The principles of insurance:
The exact time or Occurrence of the loss must be uncertain. The value of the losses should be quite surprising. In order to determine premiums or in other words, to calculate the price level must be the insurer able to appreciate them. Insurers require that the price would be asked to pay once to know the insurance case occurs. Most Types of insurance have maximum levels of payouts, with some exceptions such as health insurance.
The loss should be significant: The legal principle of de minimis "(From Latin: On minimal things) requires that things are not negligible covered.The paid by the insured to the insurer for the acquisition of risk is known as "Premium".
Possible causes for the chance to rise to insurance claims can mean to "threats". Examples of hazards could be fire, theft, earthquakes, hurricanes and the number of additional possible risks. An insurance company sets out in detail, the risks covered by the policy and are not. The damage must not accept in a catastrophic, if the insurer is insolvent, it is not possible be to pay the insured. In the United States, there are guaranteed funds to insured victims whose insurance report are bankrupt. This program is supported by the National Association of Insurance Commissioners (NAIC) is managed.
Compensation (Compensation)
Anyone want to risk traffic (individuals, businesses or organization of any kind) is the "insured" party where the risk is assumed by an "insurance" to insure the party by a Contract as an insurance "policy" defined. This legal agreement governs, indicating the total number of coverage (compensation) provided to insured be, by the insurer after the adoption of risk covered in the event of a loss, and 100% of the specific threats against (indemnified), for the duration of the contract.
For the insured to a loss for a given risk, the coverage of policyholders entitled to a "claim" against the insurer for the damage if contracted by the policies produce.
Financial viability of insurance
Financial stability and posture the insurance company must be an important factor when buying an insurance policy. An insurance premium paid currently provides coverage to the damge year can arise in the future. Through this means that the financial strength of insurers significant. In recent years, a few insurance companies were do not pay, neglecting their policyholders with cover (or a supported only by a government insurance pool with less priciples and History of Insurance cheap payments for losses). A number of independent rating agencies, such as Best's, facts and assess the financial strength of insurance companies.
Risk Assessment
The insurer uses actuarial science to the risk they are willing to consider to quantify. Information is gathered, to approximate future claims, ordinarily with reasonable accuracy. Actuarial science statistics and probability theory employed to reduce the risks associated with the range of risks covered and analyze these scientific principles are used by insurers to decide, in combination with other factors, rate of composition.
The analogy Gambling
Some people mistakenly assume, insurance, a kind of wager (particularly in connection with moral hazard), which spans the policies of the time. The insurance company bets that you or your property will not suffer an injury while on the reverse money Result. Virtually every homeowner's insurance are not floods. With insurance, you have to manage the risk that you may not otherwise prevent that is not suitable to use the opportunity (pure risk). In other words, gambling is not insurable risks.
The "insurance" Social Solidarity
Some religious groups including the Amish and Muslims to refrain from the insurance business and instead to support by their company provided if depend disasters. This could be thought of as "social security", since the risk of a particular person jointly Who completely accepted by the community, the cost of rebuilding. In closed, mutual aid communities in which other people actually step for a total of lost property to rebuild another could this arrangement function. The majority of the companies could not effectively support this type of models and it is not for major risk function.
(Source: http://en.wikipedia.org/wiki/Insurance ).
MBA – International Trade & Finance – Heriot-Watt University. Bsc. Computers and Information Systems – Long Island University – C.W Post Campus. Hobby: Photography. Married with two Children.
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