Some of the arguments looks very brazen such as damages caused by breaching of the levees does not come under the category of tornadoes though it is a well known fact that breaching happened due to water surges caused by hurricane Katrina. Under the circumstances the state has to interfere to ameliorate the sufferers of levees breach since they cannot wash their hands off for the breaching.
Insurance is described as a precautionary hedging instrument against likely future losses. It is used for managing the possible risks of the future, which may or may not take place. Thus, through insurance, a person buys future happiness and smooth living. According to Oxford Dictionary Insurance is a contract undertaking to provide financial compensation for loss or damage or injury etc., in return for a payment made in advance once or regularly. Though loss of life or injuries cannot be measured in financial terms, still, in this materialistic world it is quantifiable and tries to compensate the potential future loss financially. Today insurance industry is one of the largest industry sectors in the world and is three times the size of the oil industry in terms of revenue generated.
The roots of insurance might be traced to Babylonia, where traders we...
The roots of insurance might be traced to Babylonia, where traders were encouraged to assume the risks of the caravan trade through loans that were repaid only after the goods had arrived safely (Hammarabi, 1795 - 50 BC) 1, a practice resembling bottomry, the ancient maritime law where money is lent to a trader at lenders risk. The concept of insurance evolved through the centuries in Europe and later in the United States. Insurance developed rapidly with the growth of British imperialism in the 17th and 18th century 2. The New York fire of 1835 highlighted the need for adequate reserves to meet unexpected large losses. Since the late 19th century there is a tendency for the states to enter the field of insurance, especially in the social sectors. Insurance products are developed according to the need, situation, circumstances and social commitments. All insurances, however, can be broadly divided into:
Consumer Insurance generally consists of home and its contents both animate and inanimate, equipments including transport and compulsory third party covers and Life insurance that covers all personal aspects such as death compensation, illnesses, disability, etc. Some Life insurance products also work as an instrument of saving and investment.
Business Insurance takes care of business assets including capital and revenue generation, liability arising from business activities and profession or injury and damage to property and protection against loss arising from accidents.
Some insurance that are pertinent to our topic are:
Property Loss Insurance. This is an all-risk insurance and the most expansive form of coverage, with typical exclusions for nuclear accident, pollution, flood and