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Insurance: Definition, How It Works, and Main Types of Policies

Insurance is a contract (policy) in which an insurer indemnifies another against losses from specific contingencies and/or perils.

Julia Kagan has written about personal finance for more than 25 years and for Investopedia since 2014. The former editor of Consumer Reports, she is an expert in credit and debt, retirement planning, home ownership, employment issues, and insurance. She is a graduate of Bryn Mawr College (A.B., history) and has an MFA in creative nonfiction from Bennington College.

Charles is a nationally recognized capital markets specialist and educator with over 30 years of experience developing in-depth training programs for burgeoning financial professionals. Charles has taught at a number of institutions including Goldman Sachs, Morgan Stanley, Societe Generale, and many more.

Katrina Ávila Munichiello is an experienced editor, writer, fact-checker, and proofreader with more than fourteen years of experience working with print and online publications. In 2011, she became editor of World Tea News, a weekly newsletter for the U.S. tea trade. In 2013, she was hired as senior editor to a-sist in the transformation of Tea Magazine from a small quarterly publication to a nationally distributed monthly magazine. Katrina also served as a copy editor at Cloth, Paper, Scissors and as a proofreader for Applewood Books. Since 2015 she has worked as a fact-checker for America's Test Kitchen's Cook's Illustrated and Cook's Country magazines. She has published articles in The Boston Globe, Yankee Magazine, and more. In 2011, she published her first book, A Tea Reader: Living Life One Cup at a Time (Tuttle). Before working as an editor, she earned a Master of Public Health degree in health services and worked in non-profit administration.

Most people have some kind of insurance: for their car, their house, or even their life. Yet most of us don’t stop to think too much about what insurance is or how it works.

Put simply, insurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursement against losses from an insurance company. The company pools clients’ risks to make payments more affordable for the insured.

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What Is Insurance?

Insurance is a contract between you and your insurer. You pay a premium, and the insurance company agrees to pay for certain types of losses you may experience.

Lorraine Roberte is an insurance writer for The Balance. As a personal finance writer, her expertise includes money management and insurance-related topics. She has written hundreds of reviews of insurance products.

Gina LaGuardia has more than 25 years of experience in senior editorial roles, and is an expert in personal finance topics, including banking and lending. She has created content for financial powerhouses such as Chase Bank, American Express Canada, First Horizon Bank, BBVA, and SoFi.

Insurance is a way to protect yourself from potential financial losses. It’s a contract between you and an insurance company in which you agree to pay a premium in exchange for the company's promise to pay a set amount of money if you experience a covered event. Insurance is commonly used to cover the costs related to a car accident, medical expenses, or damage to your home, up to the limits of your policy.

For example, if you have a car insurance policy with a $25,000 limit on collision coverage and you get into an accident that causes $30,000 worth of damage to your car, the insurer would pay a maximum of $25,000 to help cover the cost of repairs.

Depending on the terms of your policy, you may be responsible for a deductible if a covered event occurs. This means you'll be responsible for covering a set amount before your insurance coverage kicks in.

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Health Insurance | USAGov

Get information on health insurance, including Medicaid, Medicare, and find help paying for medical bills. Finding Health Insurance. Official government information on getting common …

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FACTORS EFFECTING CAR INSURANCE IN UK | HOW TO GET CHEAPER INSURANCE IN UK | INTERNATIONAL LICENSE

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Finding Health Insurance | USAGov

Get information on how to find and sign-up for health insurance, including ACA, COBRA, long-term care and health care for people with disabilities.

Note: In response to the coronavirus pandemic, you may be eligible to apply for coverage through the Health Insurance Marketplace during the special enrollment period, February 15 - May 15, 2021.

The Affordable Care Act (ACA) provides individuals and families greater access to affordable health insurance options including medical, dental, vision, and other types of health insurance that may not otherwise be available. Under the ACA:

Open enrollment time typically happens at the end of the year. It’s when you can freely make changes to your health care coverage purchased through the ACA's Health Insurance Marketplace.During the open enrollment period, you will be able to:

Visit HealthCare.gov to apply for benefits through the ACA Health Insurance Marketplace or you'll be directed to your state's health insurance marketplace website. Marketplaces, prices, subsidies, programs, and plans vary by state.

If you have questions about specific parts of your insurance plan, you must contact your insurance company to get answers. Only your insurance company can answer specific questions about doctors, medications, treatments, medical equipment, and what is and is not covered under your plan.

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Insurance Definition & Meaning - Merriam-Webster

The meaning of INSURANCE is coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril. How to use insurance in a sentence.

Recent Examples on the Web: Noun Housing prices statewide have skyrocketed in recent years along with insurance premiums, with rents growing by 30 percent in the last two years. — Kate Aronoff, The New Republic, 6 Oct. 2022 Incorporating policies like Babcock’s state-wide could potentially lower insurance premiums for all residents. — Eamon Barrett, Fortune, 5 Oct. 2022 The accumulation of points can result in the loss of driving privileges, while a poor driving record can raise insurance premiums. — Luz Lazo, Washington Post, 30 Sep. 2022 Floridians already pay some of the highest home-insurance premiums in the nation, at an average $4,231 this year, according to projections by trade group Insurance Information Institute. — Elizabeth Findell, WSJ, 29 Sep. 2022 These programs include down payment a-sistance, lower mortgage insurance premiums and a credit reporting system that factors in rent payment history. — Anna Bahney, CNN, 22 Sep. 2022 Employees get generous benefits, including a 50% match on 401(k) contributions and discounts on insurance premiums through a wellness program. — David Lyons, Sun Sentinel, 18 Sep. 2022 Similarly, some employers add surcharges to the insurance premiums for smokers within their workforce. — Johnny C. Taylor Jr., USA TODAY, 6 Sep. 2022 Installing and maintaining smart security systems can also save consumers money by cutting up to 13% from homeowners insurance premiums, according to NerdWallet. — Kate Santichen, CBS News, 25 Aug. 2022 Recent Examples on the Web: Adjective But the company has already announced that Greg Abel, the 60-year old vice chairman of all of Berkshire's energy and other non-insurance units, will eventually take over for Buffett. — Paul R. La Monica, CNN, 8 Aug. 2022 Buffett announced last year that vice chairman Greg Abel, who oversees Berkshire's energy, consumer and other non-insurance businesses, will eventually take over as Berkshire CEO. — Paul R. La Monica, CNN, 30 Apr. 2022 Currently, Abel is responsible for Berkshire’s two largest operating companies, Berkshire Hathaway Energy and BNSF Railroad, as well as an a-sortment of relatively smaller and successful non-insurance companies. — Laura Rittenhouse, Forbes, 5 May 2021 Further, the gradual improvement in the economic conditions will likely boost both the total premiums and the non-insurance revenues. — Trefis Team, Forbes, 24 Sep. 2021 Buffett will be joined by Greg Abel, the company's vice chairman of non-insurance operations. — Paul R. La Monica, CNN, 9 Aug. 2021 All of Berkshire's non-insurance businesses reported $7.25 billion in operating earnings, up from $5.69 billion a year ago. — Josh Funk, ajc, 6 Nov. 2021 Here Vice Chairman Greg Abel, who is in charge of the company’s non-insurance businesses, was a breath of fresh air. — Robert G. Eccles, Forbes, 5 May 2021 In 2018, Abel was named vice chairman and put in charge of the company's non-insurance businesses. — CBS News, 3 May 2021 See More

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'insurance.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

1 : an agreement by which a person pays a company and the company promises to pay money if the person becomes injured or dies or to pay for the value of property lost or damaged

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Get Free Car Insurance Quotes in USA for 2022 | CarInsurance.com

Get free car insurance quotes and find all the information you need to save on your car insurance policy. And get the best auto insurance quotes near you.

Regularly comparing car insurance quotes is the most effective way to get the best deal on your coverage. You can save money by seeing which carrier offers the cheapest rate for your particular circumstances.

Get expert advice on how to buy car insurance online, which is the best option if you want to shop on your own schedule and save time and money. We’ll walk you through the steps to take and help you decide how much coverage you need.

State Farm earned the top spot in our review of 2021's Best Auto Insurance Companies. Top-notch claims handling and excellent customer service at affordable prices set State Farm auto insurance apart and secured their ranking as the Best Car Insurance Company Overall of 2021. We found State Farm to be among the lowest-cost options compared to other major providers for full coverage or liability-only policies.

Auto-Owners secured four-star ratings for claims handling and customer service, two areas that strongly influence overall customer happiness. It was no surprise that 96% of customers said they planned to renew their policies with Auto-Owners. Customers reported that the company is people-oriented with a focus on the customer's needs.

MetLife earned a No. 3 spot in our annual review of Best Auto Insurance Companies with an overall score of four stars. In claims, price and customer service, MetLife's score was steady at three and a half stars but their high recommendation and renewal percentages propelled them ahead of some others in the final scoring.

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Health Insurance in US (United States) - Types, plans, COBRA and ACA

What is Health Insurance in US (United States)? Health insurance (Private or Federal insurances) covers the medical expenses of health

Health insurance (Private or Federal insurances) covers the medical expenses of health care treatments of patients, provided by the doctor or provider. Some health insurance plans also covers the prescription drugs. Insurance company is also known as insurer or health plan and it is an organization contracted with patient to pay for his health care expenses.

Medical expenses in US (United States) are really too expensive depending on the type of treatment taken. Most of the people cannot afford to spend so many dollars for their healthcare when they become ill or injured. So to get rid of this risk, it is very important you to have health insurance in US (United States) to cover your medical costs from Health Insurance Company.

As per ACA act, health insurance in all states of US (United States) must offer coverage to both adults and their dependents (until 26 years of old) to remain on their Family (Parent’s) insurance plan.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) which was passed in 1986, which gives health insurance coverage available to an individual and their dependents after becoming unemployed either voluntary or involuntary job loss, transition between jobs, death, or divorce. It typically lasts up to 18 months after becoming unemployed and under certain conditions extend up to 36 months.

Because some health insurance company won’t pay or it might cover only the smaller portion as per the patient plan when the patient gets health care services with out-of- network provider. So it’s better to check before choosing the health insurances.

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An Insurance Company You Can Rely On | Progressive

Get an insurance quote in minutes from a top-rated company. Find 24/7 support and insurance for you, your family, and your belongings.

From customized auto insurance to superior claims service, our people and technology will support you every step of the way. Join us today and experience why we're one of the best insurance companies.

At Progressive, we've built our business around understanding what you need and what's important for you to protect. That's why we offer a wide range of insurance products to meet your specific needs, including customized coverages.

With Progressive auto insurance, you'll enjoy affordable coverage options and a variety of discounts. Plus, you can get a quote in just a few minutes – get started now and enjoy peace of mind behind the wheel.

Simply quote auto and homeowners insurance and you could earn a multi-policy discount.Δ Plus, with both policies under one roof, you can update or make changes to your insurance with ease. Quote now to get started.

With Progressive, you can take your boat to any lake or river, plus ocean waters within 75 miles of the coast. And we offer a variety of coverages to protect your boat and the good times that come with it. Quote now to get started.

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Florida Insurance Information Portal - FloridaInsurance.org

FloridaInsurance.org maintains information on insurance available in Florida: health insurance, auto insurance, residential property insurance, life insurance, commercial insurance, disaster insurance, and others.

Insurance in the State of Florida is regulated by the Florida Office of Insurance Regulation (FLOIR) based on the Florida Administrative Code (690). FLOIR is part of the Florida’s Department of Financial Services (DFS) and its commissioner (also known as a director) is a political appointee, who gets approved by the Governor and the state’s Chief Financial Officer.

The purpose of insurance in Florida is to protect businesses and individuals from personal risks, liability risks, or property risks that may otherwise lead to larger losses. Insurance contracts function to allow you (the insured) to transfer your risks to the insurance provider, by paying a fee (premium) for this protection.

The state of Florida protects its residents on the insurance market in multiple ways. Besides the overall regulation through the Florida Office of Insurance Regulation (FLOIR), state guaranty a-sociations also play a pivotal role in the stability of the industry as a whole...

The desire to feel safe and secure is one of the basic human needs. Insurance helps us do just that, by making sure that we ourselves, the people around us, and our stuff are covered, in case of an emergency, loss, or damage.

FloridaInsurance.org is owned and operated by Florida Insurance Information Portal and is not affiliated with any government agency. It presents independent information for the purpose of providing consumers insight into obtaining the insurance coverage and working with the insurance company that best meets their needs, subject to underwriting. No mention of a specific insurance company or its prices is an offer for insurance, and all users and applicants shall be subject to any and all underwriting requirements by the insurance company to which they apply. The material on this website has been prepared for information and education purposes only. It is not intended to provide nor should it be relied upon for accounting, legal, tax, insurance coverage, or investment advice.

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Allstate Insurance Company | You're In Good Hands

Get auto insurance quotes at Allstate.com. You're In Good Hands With Allstate. Allstate also offers insurance for your home, motorcycle, RV, as well as …

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IDOI: Home

Benicorp Insurance Company was a life and health insurance company domiciled in the state of Indiana. On October 7, 2007, following a hearing in open Court and presentation of evidence, the Circuit Court of Marion County, Indiana entered an Order of Liquidation against Benicorp in accordance with the Indiana Insurance Insolvency Act (Ind. Code 27-9-3). The Liquidator has now filed with the Liquidation Court a Final Accounting and Recommendations as to the Conditions and Procedures for closing the estate and a Notice of Federal Release, Petition for Court to Consider Final Accounting and Updated Recommendations for Closing the Estate. Copies of both the Final Accounting and the Petition can be found here.

Form of NoticeFinal Accounting and Recommendations as to Conditions and Procedures for Closing the Estate Notice of Federal Release, Petition for Court to Consider Final Accounting and Updated Recommendations for Closing the Estate Order of the Marion Circuit Court

On July 8, 2019, the Marion Circuit Court located in Indianapolis, Indiana ("Liquidation Court") issued a Final Order of Liquidation (“Order”) against Geneva Insurance Company ("Geneva"). Pursuant to that Order, Geneva is in the process of being liquidated. The Liquidation Court has established June 30, 2021 as the Bar Date, after which claims against Geneva will be forever barred. If you would be reasonably expected to have a claim against Geneva, or if you have a-serted a claim against Geneva, and if Geneva has your current address, you should have received or shortly will receive a notice about your insurance policy or your other potential claim against Geneva from the Liquidator, or from your insurance agent. All claims against Geneva must be a-serted by filing a Proof of Claim in the liquidation proceeding. If you believe you have a claim against Geneva and have not received or do not soon receive a Proof of Claim Form from the Liquidator, or from your insurance agent, please find links to the relevant documents below:

Please note that Teresa Deaton-Reese is the State’s single point of contact for this RFI. Inquiries are not to be directed to any other staff member of the IDOI. Such action may disqualify Respondent from further considerations in this RFI process and any subsequent Request for Proposal (RFP) process.

All Payer Claims Database Advisory Board Meeting - August 23, 2022 Notice of Public Hearing ICHIA - July 6, 2022 | ICHIA Plan of Dissolution All Payer Claims Database Advisory Board Meeting - March 15, 2022 Notice of Form A Hearing - Universal Fire & Casualty Ins. Co.- December 27, 2021Notice of Form A Hearing - Meridian Security Ins. Co. - December 20, 2021Indiana Political Subdivision Risk Management Commission Meeting - August 4, 2020Indiana Department of Insurance Rulemaking Hearing - June 18, 2020 | Rulemaking DocketNotice of Enforcement Hearing - Velika Shantel Bender - August 20, 2020Notice of Enforcement Hearing - Adam Rhoda - August 26, 2020 Notice of Enforcement Hearing - Todd Hopkins - September 9, 2020 Notice of Enforcement Hearing - TCB Transportation / Christopher Randol - September 23, 2020Notice of Public Hearing for SIHO Holding, Inc. - April 28, 2020 ICHIA Board of Directors Meeting - April 7, 2020 Notice of Hearing - Acquisition of Arsenal Ins. Co. - June 19, 2019 Anthem / Cigna HealthCare of Indiana Final Order Petition for Approval of Plan for Distribution and Dissolution regarding Farmers Mutual Aid A-sociation Order of Supervision - Advantage Health Solutions | FAQ's 2022 Education Advisory Council Meeting Dates

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Insurance – Definition, Principles, Importance, Functions and Types

Learn about Insurance Topic of Commerce in detail explained by subject experts on vedantu.com. Register free for online tutoring session to clear your doubts.

Insurance is a very significant part of our lives. It is what guards us, secures us, and even our loved ones from any sort of mishap. There are many sorts of insurances available out there. And you can get many for yourself, as per your need, as well.

Life is uncertain; there are no guarantees or predictions about what will happen in one's life. Similarly, businesses also don't have any guarantee as they face many unexpected losses or damages in the long run. A-sets like cars, bikes, etc. also don't have any certainty in their lifetime, they can get stolen or damaged in the long run. One can fight all these risks with an insurance cover.

Insurance is generally defined as a contract which is also called a policy. An insurance policy is a contract in which an individual or an organization gets financial protection and compensation for any damages by the insurer of the insurance company. In simpler words, one can answer what is an insurance policy as a form of protection from any unexpected loss or damage. From this paragraph, one can get a clear overview of insurance meaning.

The insured’s family is protected with the help of insurance at the time something unexpected happens. Their family doesn't have to worry about the monetary aspects of the finances in this case.

We all know that unexpected events can occur at any time and are a part of life. In case of any injury, illness, or death, finances are the last thing that they need to worry about. This way, their emotional stress is also reduced to an extent.

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Insurance Technology Trends | Tech Vision 2022 | Accenture

Insurance Technology Vision 2022 explores how today's metaverse innovations are becoming the building blocks of the insurance industry's future. Learn more.

The metaverse continuum has arrived, merging real-world and virtual personas, properties, and space in the next evolution of the Internet. Enabled by technology and creativity—and underpinned by human and social norms—the metaverse will enable a spectrum of exciting new products, experiences and business models for the insurance industry. It will bring about dramatic changes in how insurers interact with customers, employees and partners; design products and services; and run their businesses.

Many of the technologies that the metaverse is being built on aren’t novel, while others represent the cutting edge. But what is revolutionary is the convergence of emerging and maturing technologies in the metaverse—including artificial intelligence (AI), augmented and virtual reality (AR/VR), blockchain, digital twins, edge technologies, cloud, digital currencies, non-fungible tokens (NFTs), social platforms, ecommerce, and digital marketplaces. As they intersect, these technologies give rise to innovative ways for people and organizations to interact.

New ways of training the workforce: There are already early adopters in insurance that use VR/AR to train and upskill employees in a safe, controlled environment. We can expect to see them rapidly scale up these experiments as the metaverse comes of age.

New revenue and shifting revenue pools: From mitigating metaverse-specific risks such as digital fraud through to insuring digital a-sets like blockchain-based tokens and NFTs, expect the metaverse to catalyze new opportunities for insurance.

Just as in the early years of the web, insurers are hurtling toward a future different from the one they were designed for. Within years, we will see a complete transformation of the environment in which insurers operate. Those that have a mature and well-oiled digital engine will be best prepared to participate in and build the new environments and worlds of the metaverse.

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InsureOne: Quality Insurance for Auto, Home, Commercial, and Life

InsureOne offers quality insurance products for auto, home, business, and life. We work with top insurance carriers to get you the coverage you need.

InsureOne is part of Confie, one of the largest, privately-owned insurance agencies in the United States. Established over three decades ago, InsureOne has multiple locations across the US to better serve you.

We’re available online, over the phone, or in person at our conveniently-located offices. Whether you want to request an insurance quote, make a payment, or ask questions, we make it easy for you.

We compare insurance rates from multiple providers with the goal of providing the best possible coverage at the best possible price. We work with top insurance carriers across the United States. The carriers we work with provide quality insurance coverage for a variety of needs, including auto insurance, motorcycle insurance, homeowners insurance, renters insurance, commercial insurance, life insurance, health insurance, and more. Partnering with multiple companies allows us to offer a wide range of insurance options to ensure you get the policy that’s right for you.

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NY State of Health Announces 2023 Health and Dental Insurance Options | NY State of Health

ALBANY, N.Y. (October 5, 2022) – NY State of Health, the state’s official health plan Marketplace, today announced the health and dental insurance plans offered through the Marketplace for the upcoming 2023 Open Enrollment Period. New Yorkers shopping for a Qualified Health Plan can compare plan options now and be prepared for the 2023 Open Enrollment Period, which begins on November 16, 2022 and runs through January 31, 2023.

“NY State of Health continues to be a critical resource throughout the COVID-19 public health emergency, providing over 6.7 million New Yorkers with comprehensive, affordable coverage,” NY State of Health Executive Director Danielle Holahan said. “We will continue to automatically extend consumers’ public program coverage for the duration of the federal emergency, but Qualified Health Plan coverage must be renewed for 2023. We encourage New Yorkers to begin previewing their 2023 health plan options and premiums today using the ‘Compare Plans and Estimate Cost’ tool.”

Significantly expanded federal tax credits will remain available to New Yorkers who enroll in Qualified Health Plans (QHP) in 2023. Originally enacted through the American Rescue Plan Act (ARPA) and extended in August through the Inflation Reduction Act, these enhanced subsidies provide New Yorkers, with an average of $1,450, to lower the cost of their monthly premium and are also available to higher-income individuals. The majority of consumers who receive premium tax credits—more than 60 percent of QHP enrollees—are not expected to see premium cost increases in 2023, and in some cases, may be able to find a better deal if they shop for a new plan. Consumers can estimate their premium costs after the enhanced federal tax credits with the NY State of Health Compare Plans and Estimate Cost tool available here.

Today, one in every three New Yorkers is enrolled in health coverage through the Marketplace. Enrollment has increased across all marketplace programs since April 2021, when the state began implementing ARPA tax credit and Essential Plan (EP) enhancements. Additional data regarding the impact of federal and state health policy changes on individuals across New York State is provided in the NY State of Health “Health Insurance Coverage Update."

All 12 insurers that offered Qualified Health Plans last year will offer them again in 2023. Consumers who enroll in a QHP between November 16, 2022 and December 15, 2022 will have coverage starting January 1, 2023.

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North Bergen, New Jersey Insurance Agents - Nationwide

Robert J Auth Agency Inc. (201) 854-1345. 7117 Kennedy Blvd. North Bergen, NJ 07047. Get directions.

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Insurance in the United States - Wikipedia

Insurance in the United States refers to the market for risk in the United States, the world's largest insurance market by premium volume.[1] According to Swiss Re, of the $6.287 trillion of global direct premiums written worldwide in 2020, $2.530 trillion (40.3%) were written in the United States.[1]

Insurance, generally, is a contract in which the insurer agrees to compensate or indemnify another party (the insured, the policyholder or a beneficiary) for specified loss or damage to a specified thing (e.g., an item, property or life) from certain perils or risks in exchange for a fee (the insurance premium).[2] For example, a property insurance company may agree to bear the risk that a particular piece of property (e.g., a car or a house) may suffer a specific type or types of damage or loss during a certain period of time in exchange for a fee from the policyholder who would otherwise be responsible for that damage or loss. That agreement takes the form of an insurance policy.[3]

The first insurance company in the United States underwrote fire insurance and was formed in Charleston, South Carolina, in 1735.[4] In 1752, Benjamin Franklin helped form a mutual insurance company called the Philadelphia Contributionship, which is the nation's oldest insurance carrier still in operation.[5][6] Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses.[citation needed]

The first stock insurance company formed in the United States was the Insurance Company of North America in 1792.[7] Massachusetts enacted the first state law requiring insurance companies to maintain adequate reserves in 1837. Formal regulation of the insurance industry began in earnest when the first state commissioner of insurance was appointed in New Hampshire in 1851. In 1859, the State of New York appointed its own commissioner of insurance and created a state insurance department to move towards more comprehensive regulation of insurance at the state level.[8]

Insurance and the insurance industry has grown, diversified and developed significantly ever since. Insurance companies were, in large part, prohibited from writing more than one line of insurance until laws began to permit multi-line charters in the 1950s. From an industry dominated by small, local, single-line mutual companies and member societies, the business of insurance has grown increasingly towards multi-line, multi-state and even multi-national insurance conglomerates and holding companies.[4]

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Picking the right accountant's liability insurance | Accounting Today

In a hard market, accountants need to protect themselves.

The decisions made in selecting a professional liability policy are not on every accountant's popularity list. However, there are seemingly obscure issues that have far-reaching consequences for a practice. It's an area which, depending how it is handled, can save money or cause a huge loss for a firm, according to observers.

We are currently in a "hard market," according to Stephen Vono, senior vice president at McGowanPro. "When this happens, underwriting guidelines tighten up, and premiums tend to go up because, in general, companies saw an increase in costs in 2020 and 2021. There has been a higher frequency of claims, although not so much a higher severity. A primary issue has been the higher costs of litigation for 2020 and 2021 because courts were closed across the country."

"Every time a lawyer had to pick up a file to review the claim, they would have billable hours," he said. "If a court date was set for June and the court was closed, they would head for September. When September came they would have to pick up the file, and the date might be pushed off again. The courts were overwhelmed with a backlog of cases."

That process is starting to lighten up, Vono believes, "but insurance companies are still looking at a hard market. In addition to litigation costs, the cost of reinsurance has gone up." Reinsurance kicks in when a claim goes beyond the policy limit and other insurance companies share in the risk, he explained. "Almost all companies have reinsurance. It's a way for insurance companies to spread the risk. "

Hard markets tend to be cyclical, according to Vono. "They tend to occur every five to eight years, but COVID changed that. We don't know if we will come out of this one very soon."

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Florida faces insurance crisis

Early estimates show Hurricane Ian will cost Florida up to $47 billion in damage. But many don’t have the insurance needed to rebuild. Alex Harris and David Jolly weigh in on how complicated insurance is in Florida and how the state can fix it.

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T.A Braithwaite Insurance brokers

47 Marina Lagos, Nigeria Warnford Court, 29 Throgmorton Street, London EC2N 2AT. Phone: +23414541943 | +44 (0)2076384297 Email: [email protected]. Newsletter. I have …

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