The History of Insurance in the US

history of insurance

The History of Insurance in the US

Insurance is such a prominent part of life that it almost feels like it has always existed; however, there was a time before it. We will be taking a look at the history of insurance in the United States and how the various types of insurance came to be.

Home insurance was the first type of insurance established. In 18th century Philadelphia, there was a huge fear of house fires. The homes were close together and built primarily out of wood, putting them at clear risk. In 1752, Benjamin Franklin and others banded together to create the first insurance company in America, The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. They operated like modern-day insurers. They would send out an inspector to determine if the house seeking coverage met their standards. For example, it had to be made of brick, not wood, and needed to be free of trees in the front since the hoses used in that day could not reach around them. If the houses were deemed insurable, the company would determine rates and create a seven-year renewal policy.

Life insurance followed soon after. Benjamin Franklin also aided in creating the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers, which was later shortened to the Presbyterian Minister’s Fund, in 1759. Religious officials at the time had some criticism over putting a dollar amount on human life but were calmed once they realized it would help widows and orphaned children.

Medical insurance was established in 1850 by the Franklin Health Assurance Company of Massachusetts. These plans were made to specifically cover injuries that occurred while traveling and they did not cover the cost of the medical care. Instead, they were expected to cover wages that were lost while recovering from illness or injury, which is quite different than most plans we have available today.

The first auto insurance policy was given by Travelers Insurance Company in 1898. It was given to a doctor named Truman J. Martin. In 1925, Massachusetts passed legislation that required auto insurance for drivers to be able to register a vehicle, and they were the only ones to do so for over 30 years after.

Insurance is an always changing industry, but it has maintained the same goal throughout its existence. It provides protection and comfort during the hard times in life.


We hope this information on the history of insurance in the US is helpful to you.

Empower Brokerage is dedicated to helping you educate your clients on the insurance they need and staying on top of their health. Whether it’s through webinar training, one-on-one calls, seminars, or marketing plans. We want you to be successful. Give us a call if you have any questions 888-539-1633.

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