September 30, 2020
Julie Moore, Manager, Alberta Commercial Auto Underwriting, SGI Canada
Chances are that you’ve got a good idea of what insurance is all about. At the very least, you (hopefully!) have auto insurance. And if you’re a homeowner, you’ve likely got some sort of home insurance as well.
Beyond that, what you know about how insurance works, and what we mean by policies, coverage types, premiums, deductibles, etc. may be limited. These words are used every day by insurance professionals, but if you don’t live and breathe insurance, you could get a little lost.
Let me break down my favourite topic to help you understand what is meant when the word “insurance” is used.
The definition of insurance
Simply put, insurance is a contract between you and your insurance company. You choose your insurance company and pay them a certain amount every month to receive financial protection and compensation if you have a loss, caused by things like a collision, fire, theft or flood.
You choose the situations you want financial protection for and how much money you think you would need in each situation (we call these amounts “limits”). There are basic packages to choose from and coverages you can add on based on what you own and how important it is to you.
Common types of insurance
The most common insurance types are auto, home, business and, of course, health and life. For nearly 20 years, I’ve worked in the area of Commercial Auto insurance, and for the past 12 years I’ve been with SGI CANADA.
Fun historical facts
-Insurance has been around for a long time. Around 3000 BC, merchants pooled their resources to protect their cargo shipments from bad luck. This was common among many early civilizations.
-The Great Fire of London destroyed much of the city in 1666 and had a hand in the development of modern fire and house insurance. People began to realize they needed financial protection for situations beyond their control.
-One of the world’s largest insurance companies, Lloyds of London, was started in a coffee shop in 1688. At the time, a group of shippers and investors held a series of informal meetings and created a common pot of money that could be accessed by anyone involved if something went wrong with their shipment.
-Not only was Benjamin Franklin an inventor and entrepreneur, he was also an advocate for insurance protection. With his partners, Franklin helped found the Philadelphia Contributionship. This was the first successful fire insurance company in what was then known as “the colonies.” He also served on the company’s first board of directors.
-Benjamin Franklin also proposed other forms of insurance including life insurance, annuities and crop insurance.
Here’s a bonus ‘quirky’ insurance tidbit – alien abduction insurance is available in England and the United States. Some reports suggest that over 37,000 people have purchased these policies, which will kick in if you can prove that you were taken by an extra-terrestrial. I couldn’t find information on how many people have received money for this claim!
So much to learn about insurance
Obviously I’m pretty passionate about insurance so I could go into a lot more detail, but that’s enough for now.
However, if you have any questions about insurance I’d love to hear from you. I’d also recommend contacting your insurance broker to get the answers you need and help protect what matters to you.