How Insurance Came to Be in the United States
Insurance has been a system that is so present in everyday American life. We know we need it and most of us have it but have we ever thought about where it all began. We will be taking a look into how insurance came to be in the United States.
The first type of insurance to be established was home insurance. In the 18th century, citizens of Philadelphia were quite concerned about house fires. These fears were justified as most homes at the time were made of wood and within close proximity to one another. In 1752, Benjamin Franklin and others established the first insurance company, The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. They would send out an inspector to determine if the property was insurable. It had to be made of brick, not wood, and it needed to be clear of trees in the front as the fire hoses were shorter at that time and could not reach around them. If the property was deemed insurable, they would appoint a rate and draw up a 7-year renewal policy.
Life insurance was established soon after in 1759. Benjamin Franklin also had a hand in founding the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers, which would be shortened to the Presbyterian Minister’s Fund. The church thought it cruel to put a number amount to a person’s life but was soothed by the fact that it would aid widows and orphaned children.
Franklin Health Insurance Company of Massachusetts provided the first form of medical insurance in 1850. Their policy was meant to only cover injury that occurred while traveling and was not responsible for the cost of medical care. They only covered the wages that were lost while the patient was recovering from injury or illness.
Auto insurance came a while later in 1898. Travelers Insurance Company sold their first policy to a doctor by the name of Truman J. Martin. In 1925 Massachusetts became the first state to require a vehicle to be insured before getting a registration. It would be over 30 years before another state joined.
Even back then, people knew how important insurance was to everyday life. It offers protection and comfort during life’s toughest times.
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