Types Of Homeowners Insurance Policies
According to a 2018 National Association of Insurance Commissioners report on data from 2016, 73.8% of homes were covered by owner-occupied homeowners’ policies. Of these, 79.52% had an HO-3 Special policy, and 13.35% had the more expensive HO-5 Comprehensive. Both of these policies are “all risks” or “open perils”, meaning that they cover all perils except those specifically excluded. Homes covered by an HO-2 Broad policy accounted for 5.15%, which covers only specific named perils. The remaining 2% includes the HO-1 Basic and the HO-8 Modified policies, which are the most limited in the coverage offered. HO-8, also known as older home insurance, is likely to pay only actual cash value for damages rather than replacement.
How To File A Claim With Lemonade
Customers can file a claim with the Lemonade Insurance app. Lemonade claims it can take as little as three minutes to get paid.
To file a claim, tap the Claim button on the app and record a brief video explaining the damage and how it happened. An artificial intelligence program will run anti-fraud algorithms and assess your claim. If instantly approved, your claim will be paid in seconds. If not, the program will send your claim to a team of real people for further assessment.
Closed Community And Governmental Self
Some communities prefer to create virtual insurance among themselves by other means than contractual risk transfer, which assigns explicit numerical values to risk. A number of religious groups, including the Amish and some Muslim groups, depend on support provided by their communities when disasters strike. The risk presented by any given person is assumed collectively by the community who all bear the cost of rebuilding lost property and supporting people whose needs are suddenly greater after a loss of some kind. In supportive communities where others can be trusted to follow community leaders, this tacit form of insurance can work. In this manner the community can even out the extreme differences in insurability that exist among its members. Some further justification is also provided by invoking the moral hazard of explicit insurance contracts.
In the United Kingdom, The Crown did not insure property such as government buildings. If a government building was damaged, the cost of repair would be met from public funds because, in the long run, this was cheaper than paying insurance premiums. Since many UK government buildings have been sold to property companies and rented back, this arrangement is now less common.
Insurance companies may sell any combination of insurance types, but are often classified into three groups:
General insurance companies can be further divided into these sub categories.
- Standard lines
- Excess lines
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Lemonade Home Insurance Reviews
In our review process, we scoured Lemonades third-party ratings and customer reviews. Lemonade is not accredited by the Better Business Bureau and has an F rating from the organization. This could be related to Lemonades current class-action lawsuit alleging consumer privacy violations. In the lawsuit, plaintiffs allege that Lemonade collects and stores customers biometric data, including retina and face scans, without their consent.
Lemonade declined to provide us with a comment on ongoing litigation. The lawsuit, filed in August 2021 in the New York Southern District Court, was still pending as of January 2022. Based on Lemonades many attractive featuresincluding its affordable plans, charitable giveback program, and user-friendly mobile appwe still recommend the company as a legitimate and reputable provider.
While its BBB rating is poor, Lemonade has a higher review average than most competitors. Here is what some customers have had to say in their Lemonade Insurance reviews on the BBB.
Elina Pinkhasova said:
Very poor customer service. I was allured by the missions and business model, but was very disappointed when emailing support for clarification on my policy that they dodge and avoid easy questions. When I got their phone number I called, but nobody picks up and voicemails are not returned.
Insurance Crosses The Pond
Fast forward to 1732. Insurance has made its way to Charles Town South Carolina, where the first company to cover fire insurance was founded. It wasnt until 20 years later that noted insurance entrepreneur Benjamin Franklin popularized the coverage. His company, Philadelphia Contributionship for the Insurance of Houses from Loss by Fire was formed in 1752. The company was instrumental in helping people prevent fires and setting industry precedents.
In the next century, insurance took off around the United States. What began as just insuring the home against fire quickly blossomed into a full fledged, lucrative sector: life , theft, disability, commercial, and auto insurance to name a few.
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How Home Insurance Got Its Start
The concept of insurance dates back several centuries. The Great Fire of London , when more than 13,000 homes were destroyed, is regarded as the genesis of modern insurance. Insurance existed in various forms before this, but it lacked the rigor and formality of todays policies. In the 17th century, each policy only covered one peril .
If insurance had not changed, a modern homeowner would need separate policies for fire insurance, lightning insurance, burglary insurance, and so on. Today, all of these are now covered by a basic homeowners insurance policy.
Itâs important to note that during the time homeowners insurance originated, homes were primarily made of wood. Wood structures burn easily, which posed a problem. To compound that problem, developers built homes closer and closer together as the population grew, which increased the fire risk. People began to understand the importance of protecting their homes.
Who Invented Insurance Anyway
In the year 1666, the Great Fire of London destroyed over 30,000 homes. Shortly thereafter, modern insurance as we know it was born with an upstart building and fire insurance company created by Nicholas Barbon.
Less than 100 years later, Benjamin Franklin would popularize insurance in the United States after he co-founded the Philadelphia Contributorship. But the concept of insurance and risk management predate these events by almost 5,000 years.
Babylon and China
The Code of Hammurabi, inscribed around 1750 BC, is an ancient legal text comprised of 282 rules that standardized commercial interactions. Among the rules written were loss mitigation methods. The Code prescribed merchants who received a loan could pay an additional cost for the guarantee that if their goods were stolen the loan would be cancelled.
In Persia, the Achaemenian monarchs are known to be the first to insure individuals. The process involved various ethnic groups who would present a gift at the beginning of the year in exchange for protection from the Persian government. Government notary offices would register each transaction formally binding the agreement.
Life and Health
Stand Alone Policies
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Insurance Industry And Rent
Certain insurance products and practices have been described as rent-seeking by critics. That is, some insurance products or practices are useful primarily because of legal benefits, such as reducing taxes, as opposed to providing protection against risks of adverse events. Under United States tax law, for example, most owners of variable annuities and variable life insurance can invest their premium payments in the stock market and defer or eliminate paying any taxes on their investments until withdrawals are made. Sometimes this tax deferral is the only reason people use these products. Another example is the legal infrastructure which allows life insurance to be held in an irrevocable trust which is used to pay an estate tax while the proceeds themselves are immune from the estate tax.
What Is The History Of Insurance
If risk is like a smoldering coal that may spark a fire at any moment, insurance is civilization’s fire extinguisher. The main concept of insurancethat of spreading risk among manyis as old as human existence. Whether it was hunting giant elk in a group to spread the risk of being the one gored to death or shipping cargo in several different caravans to avoid losing the whole shipment to a marauding tribe, people have always been wary of risk. Countries and their citizens need to spread risk among large numbers of people and to move risk to entities that can handle it. This is how insurance emerged.
The First Title Insurance Company
The judgment, and subsequent loss to the purchaser, then prompted a group of Philadelphia conveyancers to establish a way to protect the innocent buyers of real property. In 1876, this group formed the first title insurance company, whose mission it was to protect the purchasers of real estate and mortgages against losses from defective title, liens and encumbrances, and added, through these facilities, transfer of real estate and real estate securities can be made more speedily and with greater security than heretofore.
Shortly thereafter, title insurance companies became established in other large metros throughout the United States, including New York City, Chicago, Minneapolis, San Francisco and Los Angeles.
History Of Life Insurance
Life insurance began to emerge in the 16th and 17th centuries in England, France, and Holland. The first known life insurance policy in England was issued in 1583. But, lacking the tools to properly assess the risk involved, many of the groups that offered insurance ultimately failed. That started to change in 1693, when the first modern mortality table was developed by the astronomer and mathematician Edmund Halley, best known today as the namesake of Halley’s Comet.
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Chicago And Boston Fires
The Great Chicago Fire of October 9 and 10, 1871 destroyed over 2,000 acres of the city. With close to 18,000 buildings burned, including 1,500 substantial business structures, 100,000 people were left homeless and thousands jobless. Insurance losses totaled between $90 and $100 million. Many firms losses exceeded their available assets.
About 200 fire insurance companies did business in Chicago at the time. The fire bankrupted 68 of them. At least one-half of the property in the burnt district was covered by insurance, but as a result of the insurance company failures, Chicago policyholders recovered only about 40 percent of what they were owed.
A year later, on November 9 and 10, 1872, a fire destroyed Bostons entire mercantile district, an area of 40 acres. Insured losses in this case totaled more than $50 million, bankrupting an additional 32 companies. The rate of insurance coverage was higher in Boston, where commercial property, everywhere more likely to be insured, happened to bear the brunt of the fire. Some 75 percent of ruined buildings and their contents were insured against fire. In this case, policyholders recovered about 70 percent of their insured losses.
Historical Development Of Insurance
Insurance in some form is as old as historical society. So-called bottomry contracts were known to merchants of Babylon as early as 40003000 bce. Bottomry was also practiced by the Hindus in 600 bce and was well understood in ancient Greece as early as the 4th century bce. Under a bottomry contract, loans were granted to merchants with the provision that if the shipment was lost at sea the loan did not have to be repaid. The interest on the loan covered the insurance risk. Ancient Roman law recognized the bottomry contract in which an article of agreement was drawn up and funds were deposited with a money changer. Marine insurance became highly developed in the 15th century.
In Rome there were also burial societies that paid funeral costs of their members out of monthly dues.
The insurance contract also developed early. It was known in ancient Greece and among other maritime nations in commercial contact with Greece.
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References And Further Reading:
Bainbridge, John. Biography of an Idea: The Story of Mutual Fire and Casualty Insurance. New York: Doubleday, 1952.
Baranoff, Dalit. Shaped By Risk: Fire Insurance in America 1790-1920. Ph.D. dissertation, Johns Hopkins University, 2003.
Brearley, Harry Chase. Fifty Years of a Civilizing Force: An Historical and Critical Study of the Work of the National Board of Fire Underwriters. New York: Frederick A. Stokes Company, 1916.
Grant, H. Roger. Insurance Reform: Consumer Action in the Progressive Era. Ames: Iowa State University Press, 1979.
Harrington, Scott E. Insurance Rate Regulation in the Twentieth Century. Journal of Risk and Insurance 19, no. 2 : 204-18.
Lilly, Claude C. A History of Insurance Regulation in the United States.CPCU Annals 29 : 99-115.
Perkins, Edwin J. American Public Finance and Financial Services, 1700-1815. Columbus: Ohio State University Press, 1994.
Pomeroy, Earl and Carole Olson Gates. State and Federal Regulation of the Business of Insurance.Journal of Risk and Insurance 19, no. 2 : 179-88.
Tebeau, Mark. Eating Smoke: Fire in Urban America, 1800-1950. Baltimore: Johns Hopkins University Press, 2003.
Wagner, Tim. Insurance Rating Bureaus.Journal of Risk and Insurance 19, no. 2 : 189-203.
1 The name appears in various sources as either the Contributionship or the Contributorship.
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- The first insurance policy was designed to protect other types of vehicles, like ships
- Herbert Stanley Morrison authored the Road Traffic Act in 1930
- Travelers wrote the first liability car insurance policy in 1897
Some believe that the credit should go to Herbert Stanley Morrison. Because of the Road Traffic Act he authored and helped to push through in 1930, the US made car insurance a requirement in every state.
Other people credit Travelers for writing the first liability car insurance policy in 1897. While Travelers doesnt take credit for this, according to Ohio History Central, which offers a documented his, this is the first known auto insurance policy written in the US.
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The History Of Homeowners Insurance In America
Wed Nov 15 2017
We now take insurance for granted in many ways. We would argue that many carriers take their clients for granted as well, but thats a topic for another post. At one point, though, the idea of insurance was revolutionary: pooling risk so that anyone impacted by a catastrophe was able to rebuild their home without being put on the street. Today, an insurer will cover almost anything for the right price.
The Beginning Of Insurance
It is believed that the concept of insurance is as old as humanity itself. Insurance policies can even be traced all the way back to ancient Babylonia when merchants who had loans paid lenders an additional sum to provide a guarantee against losses if their commodities were lost or harmed during shipping.
Here in the U.S., Benjamin Franklin is credited for kickstarting the insurance industry when he formed Philadelphia Contributionship, which was the first company in the country to offer fire insurance.
Of course, as societies have grown and advances have continued throughout various industries, insurance has had to adapt to all the changes. Now it seems you can insure almost anything. For our purposes, were going to focus on the history of car insurance.
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A Short History Of American Medical Insurance
Author, An Empire of Wealth: The Epic History of American Economic Power
The following is adapted from a talk delivered on board the Crystal Symphony on July 25, 2018, during a Hillsdale College educational cruise to Hawaii.
Perhaps the most astonishing thing about modern medicine is just how very modern it is. More than 90 percent of the medicine being practiced today did not exist in 1950. Two centuries ago medicine was still an art, not a science at all. As recently as the 1920s, long after the birth of modern medicine, there was usually little the medical profession could do, once disease set in, other than alleviate some of the symptoms and let nature take its course. It was the patients immune system that cured himor that didnt.
Then there is the question of how to pay for modern medicine, the costs of which are rising faster than any other major national expenditure. In 1930, Americans spent $2.8 billion on health care$23 per person and 3.5 percent of the Gross Domestic Product. In 2015 we spent about $3 trillion$9,536 per person and 15 percent of GDP. Adjusted for inflation, this means that per capita medical costs in the United States have risen by a factor of 30 in 90 years.
Whenever one segment of an economy exhibits, year after year, inflation above the general rate, and when there is no constraint on supply, then either a cartel is in operation or there is a lack of price transparencyor both, as is the case with American medical care.
Lemonade Home Insurance Coverage
Since Lemonade features one of the fastest quote tools on the market that has AI technology to help walk you through the process, you can get signed up for a policy in 90 seconds or less.
Unlike other providers that require you to speak to an agent before enrolling in coverage, you can get insured by Lemonade without making any phone calls or dealing with agents or sales representatives.
Heres a little more about what Lemonade covers:
Lemonade home insurance covers damage or destruction caused by the following 16 named perils:
- Fire or lightning
- Weight of ice, snow, or sleet
- Accidental discharge or overflow of water or steam
- Sudden and accidental tearing, cracking, burning, or bulging
- Sudden and accidental damage due to short circuiting
- Volcanic eruption
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