Insurance in the United States

Insurance in the United States refers to the market for risk in the United States of America. 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., a property or life) from certain perils or risks in exchange for a fee (the insurance premium). 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.

History

The first insurance company in the U.S. dates back to colonial days: The Philadelphia Contributionship, co-founded by Benjamin Franklin in 1752. The industry consolidated more and more, with fewer insurance companies existing each year, a phenomenon known as consolidation.

Types of insurance

Insurance in the United States can be broadly divided into two categories: Life insurance and General insurance.

Life insurance

Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses.

General insurance

General insurance covers insurance of property against fire, burglary, theft; personal insurance covering health, travel and accidents; and liability insurance covering legal liabilities.

Regulation

Insurance in the United States is regulated by the states under the McCarran-Ferguson Act, with "periodic proposals for federal intervention", and a nonprofit coalition of state insurance agencies called the National Association of Insurance Commissioners works to harmonize the country's different laws and regulations.

See also

• Insurance law
• Insurance Commissioner
• Insurance policy
• Insurance premium
• Insurance claim

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