“I’ll tell you how all this started,” Penelope said, popping open a can of high-content protein. “Back before you were born there were insurance companies. At first they were started to insure your life, and⁠—”

“Your life!” Mark frowned. “How⁠—”

“Never mind. Also, they insured you against loss by fire. Then it was loss by collision of vehicles⁠—you’ve never seen an auto, of course⁠—and so on. Finally they got to insuring you against hurting yourself when you slipped on a cake of soap in the bathtub, and then they insured against a suit for damages by someone who might stub his toe and fall down and break a leg on your sidewalk. Follow me?”

“I think so,” said Mark doubtfully.

“Well, there were all kinds of lawsuits. Two men would be in an accident. Both hurt. Their insurance companies would sue each other. Suppose A knocked over a ladder and B fell down on top of him. B’s fall broke A’s arm and it broke his own leg. A could sue B for breaking his arm. B could sue A for making him fall. Well, suppose A was insured by company X, and B was insured by company Y. A and B filed claims against each other’s companies, and everybody went to court.”

“You mean they didn’t agree on damages?” Mark asked incredulously.

“Exactly.” Penelope cut off the top of a bottle of enzymes. “It was pretty dumb. But pretty soon the companies got wise. They formed working agreements.

“When two companies carried insurance on two persons involved in an accident, the companies just presented their claims to each other, and the one with the biggest claim against him paid the difference, while each company paid off the claim of the one it represented. You can see what eventually happened.”

She punched a button and a dinette table popped out of the wall.