Final answer:
Early colonists who were wealthy and involved in trade may have considered insurance, a service to protect shipped goods, a necessity rather than a luxury. However, for the average colonist, insurance was not common and was indeed a luxury available to those with disposable income to protect their economic interests.
Step-by-step explanation:
The notion that insurance was a luxury for early colonists carries some truth. During the colonial period, Hartford established one of the country's first insurance companies mainly due to its strategic location and the need to protect valuable cargo shipped across the Atlantic. This was a luxury because insurance at the time was not a common or widely accessible service, and it reflects the economic activities and concerns of wealthy merchants and landowners rather than the average colonist.
Additionally, the economic environment under mercantilism created conditions where colonists, especially the more affluent ones, had more disposable income to spend on what were considered luxury items in Europe, such as manufactured cloth and ceramic cups. Thus, while early colonists were largely self-sufficient, the consumption of luxury goods and services was certainly a part of colonial life for those with the means. Insurance, being such a service, would also fall under this category for those who sought to protect their investments and trade goods.
However, it's worth acknowledging that economic growth and lower tax rates in colonial America did provide for an improving standard of living which made certain luxuries more accessible over time, even though initially, such services as insurance were reserved for the wealthier classes.