Consumer Price Report

The History of Insurance
By Mike Smiths

The concept of insurance is increasingly gaining popularity even in India, though instead of being seen as a protection shield, its being seen as an investment. Insurance can be considered as a promise of reimbursement for specific potential future losses for a periodic payment between the insurer and the insured.

How important is insurance really? An insurance product is designed such as to protect the life and/or the property of an individual, company or other entity from losses under unforeseen circumstances.

It would not be incorrect to say that the concept of insurance is as old as that of human societies. In the ancient times, if an individual's house burned down, the other members of the community helped build a new one by contributing the necessary resources.

In as early as 3rd and 2nd millennia BC, the Chinese and the Babylonian traders' practiced methods of risk transfer. The Chinese were known to redistribute their wares across many vessels to limit the loss due if a ship sunk when traveling through treacherous river rapids.

Insurance was practiced by Babylonians in form of a system, the famous Code of Hammurabi, c. 1750 BC and the by early Mediterranean sailing merchants. If a merchant took a loan to fund his shipment, he would also pay the lender an extra sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen.

The concept of insurance was also popular among the Iranian Achaemenian monarchs of Iran who were pioneers in insuring their people. They went an extra step by registering the insuring process in governmental notary offices. Insurance was almost ceremonial and was performed each year in Norouz (beginning of the Iranian New Year). The heads of different ethnic groups, as well as others willing to take part, presented gifts to the monarch. The most important gift was presented during a special ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold coin) the issue was registered in a special office. This was advantageous to those who presented such special gifts. For others, the presents were fairly assessed by the confidants of the court. Then the assessment was registered in special offices.

People in Rhodes came up with the concept of the 'general average'. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinkage.

Life insurance and health insurance have been around since 600 AD when the Greeks and Romans who organized guilds called "benevolent societies" that took care of families and paid funeral expenses of members upon death. In the late 17th century England, "friendly societies" existed where people donated funds to be used for emergencies. This was much before the concept of insurance was formally brought in place.

It was in 14th century in Genoa that came up the concept of separate insurance contracts which were not bundled with loans. The insurance pools were backed by mortgage of property.

The end of the 17th century, the concept of marine insurance existed in a concrete form.

The modern day concept of insurance has its origin in the Great Fire of London, 1666 which destroyed 13,200 houses. This lead to the establishment of England's first fire insurance company, "The Fire Office," to insure brick and frame homes by Nicholas Barbon in 1680.

The first Insurance Company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732. Benjamin Franklin popularized the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he established the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Insurance has come a long way today

ApnaInsurance.com is India's first online definitive guide to insurance requirements. Learn & compare various insurance schemes and apply for insurance including health insurance, life insurance & car insurance schemes offered by different insurance companies in India.

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Auto insurance is a legal requirement in every US state and Canadian province. Costs are continuing to rise. How can you reduce some of these expenses and still get the best coverage?

First, get multiple quotes from the Internet and your neighborhood broker. You can shop for different types of quotes from a direct-sell insurance companies and offline and online brokers.

Auto insurance that is cheapest isn’t always the smartest move. Ask yourself, is the company financially secure? Are they reputable and will they pay out if you have to make a claim.

The first piece of the policy is almost always liability insurance. If you only have minimum liability coverage and you injure someone, their attorney can go after your personal assets. Many insurers feel that minimum liability is a gamble. In fact, that is why it is often only a little more money for more protection.

Auto insurance varies on car types. Coverage for a sports car is very different from insuring the family sedan or mini-van.

If you are looking to buy a car, consider buying a car that "looks good" to insurance companies. For instance, insurance companies know what kinds of cars are prone to problems. They also know what kinds of cars are most often stolen. If you haven't purchased your car yet, find out what cars make this "good list" among auto insurers.

Consider how much coverage you really need to buy and the price each of these coverages will pay. Think about collision and comprehensive coverage, which is how much you will be reimbursed for the loss or destruction of your vehicle. Are you carrying $30,000 worth of collision coverage for a $12,000 vehicle?

If your car was totaled, would you be able to afford to replace it? If not, you will want comprehensive and collision coverage.

The decision to buy this coverage is usually based on the value of your car. Guidelines usually suggest that if your car is worth less than $2,000, it won't be worth it to buy comprehensive and collision.

If you own a $50,000 car though, it would most certainly be worth it to pay an extra $200 annually or so to insure that your car will be replaced if you get in a serious accident.

If you’re driving a used car from 10 years ago, dropping collision and/or comprehensive coverage can usually give big savings.

Run through various scenarios such as if I totaled someone else's car, will my insurance cover it? How much will I have to pay out of my own pocket?

Paying a higher deductible can also keep your policy costs down. Remember, the deductible is what you pay out of own pocket when making a claim.

Buying a low mileage car and insuring with a good driving record, will all help bring insurance rates down. Don’t speed, don’t drink and drive and you’ll save.

Single, young males under the age of 25 get the short end of the stick in this deal so if you fall into this category make up for this price increase by purchasing a more sensible vehicle. Consider delaying the purchase of that cherry red Mustang until after you’re 26 and married.

Keep yourself adequately covered. You can get away with having the bare minimums required by each state to keep you in compliance with state laws, but that may not be enough to protect your assets if you have a major incident.

Insurance experts recommend that you review your insurance policy often and thoroughly.

Many insurance companies offer discounts for anti-theft devices and advanced driver-training courses.