Life is full of risks and accidents which can lead to loss of a lot of money.And in order to prevent payment of hefty sums of money when such accidents happen, some clever folks introduced insurance.It is believed that the Babylonians practiced a form of insurance as they traded wares as far back as 2,000BC. Next in line were the Greeks and Romans who used to practice their own forms of insurance. Today, this trend continues.All types of insurance operate in the same way.
A whole bunch of people pay small sums of money to a company that will pay for the repairs or replacement of the insured item.That company, the insurer, will always be trying to minimize its payments going out and maximize the income it is taking in.Usually people like insuring things that are of value leading to the following types of insurance:home insurance, car insurance, life insurance etc. As we talk about things of value, it is quite interesting to note that in the developed world pets are considered to be of immense value. For instance in the UK, they have pet insurance. I have never heard of such types of insurance in the developing world. Actually most people would laugh if they would hear that dogs are insured.
Although the value of a possession varies from place to place, it is generally wise to insure the valuable items that you have procured along the way. When accidents or damage strike, the insurer will shoulder the cost:)