By 1000 A.D., laws regulating insurance practices began to appear in Europe
After the 1866 Great Fire of London, Fire Insurance begins to be offered; life insurance coverage is expanded.
As the country industrialized and its population more urban, the demand for insurance coverage grew
1935 – Social Security Act established mandatory participation in an insurance program.
Most property owners and renters in the United States have some form of insurance that protects either the structure itself, the contents of the structure, or both. However, this coverage is often limited, with specific preclusions against certain natural and technological disasters.
Policies for specific catastrophic hazards can be purchased separately from basic insurance homeowners’ or renters’ policies, or as riders to these policies
only those people who are likely to suffer the specific loss defined in the policy are likely to purchase that type of policy, creating the need for much higher premiums than if the specific hazard policy were spread across a more general population Adverse Selection
Methods adopted to address the problems associated with adverse selection
The inclusion of these disasters in basic/comprehensive homeowner and renters’ policies, regardless of exposure or vulnerability .
The introduction of government backing on insurance coverage of catastrophic events .
Heavier reliance on international reinsurance companies.
prohibits Federal agencies from providing financial assistance for acquisition or construction of buildings and certain disaster assistance in the floodplains in any community that did not participate in the NFIP by July 1,1975, or within 1 year of being identified as flood-prone
Flood Disaster Protection Act of 1973 Federal agencies and federally insured or regulated lenders had to require flood insurance on all grants and loans for acquisition or construction of buildings in designated Special Flood Hazard Areas (SFHAs) in communities that participate in the NFIP