Difference between revisions of "Insurance Definition"

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Revision as of 02:20, 26 June 2022

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The threat introduced by any given particular person is assumed collectively by the community who all bear the cost of rebuilding lost property and supporting people whose needs are all of a sudden higher after a lack of some type. In supportive communities where others can be trusted to comply with neighborhood leaders, this tacit type of insurance can work. In this way the group can even out the extreme variations in insurability that exist amongst its members. Some further justification is also offered by invoking the moral hazard of express insurance contracts.