Caleb M

Insurance is a dynamic method to minimize risk across different groups of people, businesses and capital. The opportunities that insurance (and insurance companies) enable for the insured are infinitely preferable to the uninsured, who must bear the full penalty of disaster that might affect themselves, their families, their possessions and their household. With life, auto, business and home insurance, there is less fear in being able to live freely and take care of oneself.

Insurance is akin to what the original settlers in America did when they pooled resources and worked together. If someone needed help building a barn, the community would help. If a farmer needed help with his harvest, other members of the community would help him and then the farmer would do the same for others when their crops were ready. Also, families in a community would support each other when someone was sick or incapacitated. The concept of a “commonwealth” was very real. Insurance is a formalized extension of this concept of a commonwealth, where resources would be available from the whole community if anyone in particular needed it. No one expects (or even wants to be in a position) to need help but insurance is there if necessary and it performs a valuable function.

Ultimately, insurance is important to me because it is a guarantee for mitigation against uncertainty that is a part of daily life. Any negative uncertainty that comes from driving a car, cooking, running a business, or walking down the street might be at the back of most people’s minds, but there is always a probability that something might go wrong; that is where insurance comes in. The idea that individuals pool their money in the off-chance that one of them might need it to repair their car due to an accident, pay hospital fees for a family member who needs treatment, or claim recompense for possessions lost in the case of a fire (amongst other examples) lowers the cost of risk to any specific individual, and enables a more abundant life. It is a much more efficient and cost-effective system than everyone paying the full-price to cover damages, which is usually many times greater than what the average person can afford to pay.

Aside from damage that may be self-inflicted, insurance is a helpful system in mediating scenarios between different parties, where one person may be at-fault in causing damage to another or another’s possessions. One great example of this is car insurance. During the 20th century, where automobiles became more mainstream, policy makers responded by making automobile insurance mandatory, eventually in every state across the United States. As the number of cars increased, so did the number of accidents, and the number of conflicts between the parties involved. Since each party must now legally have car insurance, there is little room for the at-fault party to avoid paying for the damage; now the automobile insurance companies involved can handle that with little bias and maximum fairness. I believe that this is a great way for conflicts to be resolved, especially when there may be untrustworthy individuals involved. Insurance in operation actually parallels the idea of consulting: bringing in outside experts to solve a problem in the most efficient and honest way.

From all the different types, life insurance is obviously the most important to me. I am never expecting a negative event to affect one of my close-family members, but I am all the same very grateful for the system that is set-up in place to help not just myself, but other people in the event that a loved one passes away. My Dad has told me that in the case that something happens to him, as the breadwinner, that my mother, brother and myself will be taken care of extremely well because of the life-insurance that he has invested in. The death of a family member of which you are financially dependent upon is one of the worst types of damage that could be afflicted upon a family, and the monetary cost is usually too much for anyone to bear, without mentioning the devastating emotional cost as well. The service that life-insurance provides for the affected family members is much more valuable than the repair on any car, house, or possession.

Lastly, a type of insurance that I myself would be interested in investing in is business-based insurance. Now that I am in my sophomore year of college at the University of Central Florida, I have been exposed to many types of innovation and entrepreneurship, and I am extremely interested in starting my own business. Recently I have already taken steps to learn about entrepreneurship and being involved with university programs which help take entrepreneurial ideas to possible customers. One of the biggest ideas that was emphasized to me during the program I was involved in was minimizing risk. I cannot think of a much better way of minimizing risk than a system designed to spread risk out so that it does not affect any one person too severely, which might be solved with insurance. Whether it will be for the product produced, capital goods to produce the product, or guarantees that deliveries will be covered from unfortunate risk, insurance is an integral part of America’s economy, and one that I will most definitely incorporate into my own business.

From automobile to life to business to household insurance, each type of insurance has helped millions of individuals survive and thrive whenever disaster strikes. Insurance is designed in such a way so that it is both affordable, and capable of covering the costs of risk: it is ingenious. I believe that more financial systems like insurance will enable increased cooperation and efficiency among individual people and businesses, which will enable increased economic growth and investment. Insurance is ultimately important to me because it enables security for my family, my possessions and myself, and it takes away the worry of uncertainty and risk.

Other Enhanced Insurance articles related to Car Insurance:

When Do I Need to Get Temporary Car Insurance

Can My Friend Be on My Insurance Policy

What Coverage Do I Need when Leasing a Car

Does My Car Insurance Cover a Friend

How Many Drivers Can I Have on My Insurance Policy?

Is My New Car Covered by My Insurance?

GAP Insurance

Rental Car Insurance

Bodily Injury Coverage

Consumer Guide to Car Insurance

Does Car Insurance Cover the Car or the Driver

Elderly Drivers

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