Making Sense of Insurance: A Consumer Guide to Regulatory Reform

Life, it is said, is full of uncertainties. Most of us prefer it that way. The business of living would be awfully dull if we knew in advance everything that was going to happen to us. Indeed, many of life’s greatest pleasures come in the form of surprises — and it is often the element of surprise that provides much of the joy and excitement we feel when something good happens. But uncertainty has its downside as well. Some of the surprises that a person experiences in life are anything but pleasant. The unplanned events that we refer to as “accidents” fit into this category — things ranging from a house fire, to a car crash, to a slip on an icy sidewalk. Natural calamities — such as hurricanes, floods, and earthquakes — that devastate our homes and communities are also among the surprises that most of us would just as soon do without. The same can be said for illness and disease.

Throughout much of human history, people believed that they were helpless in the face of life’s uncertainties. Whether bad things happened was simply a matter of “fate.” It was generally assumed that, since human beings were powerless to alter the course of life’s uncertainties, there was no point in “tempting fate” by trying to anticipate and plan for the future.

Eventually, however, people discovered that even though they might not be able to prevent bad things from happening, they could create financial arrangements to soften the impact of life’s misfortunes. These arrangements are what we know today as insurance.

Making Sense of Insurance:

A Consumer Guide to Regulatory Reform

(PDF format, 16 pp. 299 Kb)