Insurance may provide a safety net for when things go wrong and might allow you to navigate life a little more confidently.
Insurance Nerd Day is July 18. In celebration, here are six interesting facts about insurance you may not know.
Insurance Originates from a Marriage Engagement
The origin of the word “insurance” comes from the French word “ensure,” which refers to an engagement of marriage. Eventually, the word adapted to “assurance,” which is the basis for the modern-day definition of insurance.1
Insurance Has Been Around for Thousands of Years
Insurance dates back thousands of years to around 3,000 B.C. China. At that time, some groups of merchants relied on shipped goods, which came with a higher risk of losing merchandise. Instead of putting all the goods on one ship, they would distribute their goods across many boats. If only one boat became shipwrecked, they hoped not to suffer a total loss by sending their goods by multiple shipments.
Contemporary insurance companies work similarly by pooling money together to cover losses.2
Insurance in America Existed Before the American Revolution
America’s oldest and still active insurer is the Philadelphia Contributionship, founded in 1752 by Benjamin Franklin. The initial design of the company’s insurance was to help Philadelphia’s citizens financially due to fire damage to their homes. The Philadelphia Contributionship provides financial support for members and, since inception, has also developed building standards and regulations to decrease the risk of fire.2
In 1987, You Could Purchase Alien Abduction Insurance
Insurance hit its heyday in the mid-80s, with people insuring almost everything, including body parts. During this peak, UFO insurance offered help for Americans if nonhuman life forms abducted them. The policies required substantial evidence of abduction for a claim’s payout, which seemed to make it an unrealistic purchase. Still, 100,000 of these policies sold in the U.S.1
Home Insurance May Cover Volcano and Meteor Damage
Most home insurance policies do not provide coverage for flood damage or earthquake damage without the homeowner having an additional policy. However, most standard home insurance does provide coverage if a volcano or meteor damages your home.1
Some Homeowners’ Policies Restrict Certain Breeds of Dogs
When you pick out a furry friend for companionship, you may not be thinking about your homeowner’s insurance policy. Many people do not realize that your homeowner’s policy provides coverage for medical costs and liability if your dog were to bite someone on your property. Claims for dog bites account for hundreds of millions of dollars in claims annually, so this is an important consideration.
Due to the nature of some dogs, breeds considered more dangerous may have an exclusion clause in your policy. This exclusion means the liability on the insurance policy may not extend to bites inflicted by these specific dog breeds. Dog breeds impacted by some policies include mastiffs, pit bulls, rottweilers, Alaskan malamutes, and Akitas.2
1 Insurance Nerd Day: Fun Facts about the Industry, SmartCompliance, https://smartcompliance.co/blog/insurance-nerd-day
2 10 Hard-to-Believe (and Interesting!) Insurance Facts, The Motley Fool, https://www.fool.com/retirement/2018/12/27/10-hard-to-believe-and-interesting-insurance-facts.aspx
Content in this material is for educational and general information only.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
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