Chapter One
The Cost Arrives First
Mara puts a towel against the cupboard, turns the water off and moves a stack of books out of reach. She has not yet read a word of her policy. The first decisions have arrived anyway. A damaged pipe does not wait for someone to settle a definition. A wet room asks for time, attention and perhaps money long before the bill is known.
There are several losses in the room, and they are not identical. There is the pipe, the floor, the books and the use of the kitchen while it dries. There may be the cost of finding the leak. There may be hours away from paid work. There is the worry that the patch of water extends beyond what she can see. One event can produce a cluster of costs with different causes and different treatment under a policy. Saying that the kitchen is insured does not tell us which of them the insurer will pay.
That distinction is the beginning of financial literacy about insurance. A policy is not a promise that a bad day will become a good day. It is a contract under which an insurer takes responsibility for certain defined financial consequences of certain events. The events, the property, the people, the dates and the amount all matter. Losses outside those definitions remain with someone else, often the person who paid the premium.
