The concept of insurance is a simple one, yet difficult for many to comprehend

Most buildings couldn't be built, and businesses couldn't get started because most require insurance or bonds in order to begin the construction process. Insurance provides those resources that, at Farmers, we refer to as "getting you back where you belong." It is simple in that everyone knows that, should the unfortunate happen, you need to be able to have the resources to replace items that are damaged, to pay medical bills or to compensate others for their damaged property. Without the availability of insurance, lenders would be reluctant or unable to loan money for automobiles or homes. When the impact of insurance in our society is considered, a person can easily realize how important it is. There's homeowner's insurance, life insurance and business insurance, among others. Of course, insurance isn't limited to automobiles. Insurance provides a degree of certainty in the lives of people or businesses.

The customer exchanges payment for two very important intangibles, peace of mind and the insurance company promise to pay should an unfortunate incident occur. That person doesn't know what the financial consequences of an accident would be, but, by having insurance, they would know that they would be able to meet their obligations up to the limit of insurance they buy. A person doesn't know, for example, whether or not he or she will get into an automobile accident, how much it's going to cost to repair the vehicle, to pay medical bills or how much somebody may sue for. The principle of insurance is to exchange an unknown (uncertainty about what may happen in the future) for a known (an insurance premium paid in advance, as a fee for transferring that uncertainty to someone else). Yet it is a difficult concept in that there is no tangible product that is sold, except for a promise to indemnify should the unfortunate happen. In 2003 alone, the insurance industry paid over $10 billion in federal income taxes, invested $645 billion in bonds that support communities we serve and another $187 billion in investments in other companies and enterprises.

And then there's the financial contributions the insurance industry makes to keep our great nation operating. The unknown liabilities are so great that they couldn't be factored into any plan. Without insurance to back major pieces of the economy - for example, to provide insurance on airplanes and on the lives of people who fly in them or, in our personal lives, to insure our homes, autos or small businesses - the modern economy couldn't function. Even the workers need to be insured, in case of injury on the job.