The History of Car Insurance
By: Good2GoPublished: June 1, 2015
The concept of eliminating risk has been around as long as modern humans. Humans are neurologically programmed to be wary of risk. That may mean hunting dangerous animals in a group rather than solo, shipping cargo across a desert with extra camels added to the caravan, and the modern-day form of insurance everyone knows that deals more with individuals and their property rather than just merchants traveling a trade route.
The first general insurance policy ever recorded was carved into stone by King Hammurabi of ancient Babylon. Hammurabi’s policy stated that a debtor did not need to pay back his loans if property damage, natural disaster, injury, or death prevented him from doing so. There was not much structure behind it and it was more of a commandment than anything else, but it still granted a sense of insurance for the lender.
In America, Benjamin Franklin founded the first property insurance company, The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire, in 1752. He started the company due to the growing problem of fast-spreading fires in closely packed towns that would, decades later, grow into cities.
The concept of auto insurance evolved most closely from the ancient Chinese system of insuring cargo to ensure the risk of losing their valuable cargo to pirates or sinking was spread out over multiple ships.
Fast forward 127 years, a new form of insurance was needed. In 1889, the first working model of an automobile was built in Germany by Gottlieb Daimler and Wilhelm Maybach and had a top speed of ten miles per hour. That same year, another car was built by a man named Karl Benz. These cars were expensive and were far from being mass-produced. The first car produced in quantity was the Curved Dash Oldsmobile in 1901 by Ransom E. Olds. Henry Ford was the first to mass-produce his car, the Model T in 1908. With the spike in automobile ownership that occurred just after the turn of the century, the demand for another type of property and casualty insurance was heard.
So the first insurance policy was written around 3000 years ago by a Babylonian king, but the first official auto insurance policy was issued to Gilbert J. Loomis of Dayton, Ohio in 1897, making Ohio the first state to issue car insurance. Loomis purchased a $1,000 liability insurance policy to protect him in case another person was to be harmed by his car.
Today, most Americans have auto insurance and every state (plus the District of Columbia) has mandatory minimum auto insurance requirements. The minimum premiums motorists have to pay differ from state-to-state, but every state does have a general requirement.
As youthful as car insurance may sound, it is undeniably very important. There are cars everywhere today and travel across cities, regions, and entire countries has been democratized and made possible thanks to the automobile. But with more cars on the road comes a greater risk for more accidents to happen. The Property Casualty Insurers Association of America found that 20% of the fatal crashes in the United States involve uninsured motorists. Not only is your car being protected from damaged, but you and your loved ones are also protected. Good2Go Auto Insurance has made affordable car insurance a priority of theirs in serving you, with policy options including minimum and comprehensive collision coverage. 118 years is enough time to grow a whole new type of insurance and a quarter of a century is enough time to ensure customers get that insurance in a quality and affordable package. Click here to get a free quote right now and become a part of the growing history of Good2Go Car Insurance!