To put it simply, insurance guarantees protection against risk. The fact is, everyone needs protection, and insurance is a good way to ensure that you’ll be getting it. However, some people at the lowest rung of the financial ladder cannot enjoy the physical and psychological relief that comes with having insurance protection.
History of Insurance
Insurance law actually goes way back to the dark ages. From the very beginning, people knew the importance of protecting themselves and their goods from potential danger. This can be seen in the fact that they used to hunt in groups instead of individually so that they could protect each other, and they also used to send goods in multiple caravans so that not all goods would be lost if one was hijacked.
The first official insurance law appeared in the form of the “Hammurabi Code”, based on Babylonian King Hammurabi’s dictate that a debtor would be released from his debts if he faced an unprecedented personal disaster (disability, death etc). Then, during the dark ages and into the middle age, the guild insurance scheme was formed. Children would work as apprentices for their masters, who would pay the wealthier guild with the money they earned from doing business. In the event of the master’s practice burning down, the guild would pay to rebuild it. In case a master got robbed, the guild would support him financially until he was back on his feet. Also, if a master unexpectedly died or faced a disability, the guild would offer its financial support. In this way, insurance law actually has its roots in the guild system, whose modern-day counterpart would be insurance companies.
Insurance in America
Whereas insurance made an early debut in Europe and thrived there from the beginning, it was late to arrive in America. At the time, no insurance company was ready to enter the chaos filled landscape that was colonial America; lack of provisions, constant war, and plague. Benjamin Franklin was the one who finally got it off the ground by helping the first company offering fire insurance emerge in America. Later on, he also contributed in creating the country’s first life insurance corporation.
It’s interesting to note that life insurance, now the norm, actually sparked outrage at its inception as people thought that a value was being attached to human life. It is apparent everything has a history; even today’s insurance law.