Insurance is defined as a promise to provide compensation for potential future losses in exchange for periodic payments. There are different types of deductibles such as fixed amounts or percentages of total loss. The history of insurance dates back centuries to ancient Babylon and Rome, with the modern insurance industry developing in Europe in the 1000s AD and expanding in the US in the 1900s. Insurance provides benefits such as distributing losses equitably and protecting policyholders, but also has limitations like unavailability in high-risk areas.