Insurance the Distribution of Risk
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Insurance the Distribution of Risk
Posted: Dec 29, 2009 |Comments: 0
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Insurance is distribution of risk. Ancient people when some disaster happened they all got together and did the repair work. A good example is suppose a house in the village caught fire. The house owner cannot build another house in a day or two on his own though the material such as stones sand and wood are available in the village. What the villagers do is all of them will get together and construct a new house within a day or two. This is a kind of insurance though money is not involved. Even today some rural areas of some countries people practice this principle and work against risk.
A similar thing is done by insurance companies at present. A home owner’s property insurance company
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