One of our clients asked us about the history of insurance in our country - great question and interesting answer from Investopedia. We thought we would share what we learned.
Benjamin Franklin and American Insurance
Not content with the titles of statesman, scientist, inventor, or author, Benjamin Franklin added insurer to his collection. In 1752, the Philadelphia Contributorship for the Insurance of House from Loss by Fire became the first mutual fire insurance company in America.
Insurance was a latecomer to the American landscape, largely because there were just too many known risks, and even more unknown ones. When it finally did make it over, it was supported by one of the most famous Americans in history. Let's take a look at the history of insurance in the U.S.
Much like London in the 1600s, houses at this time were made almost entirely out of wood. worse yet, the settlements that grew into cities were built close together. This was originally done for security reasons, but as cities grew, developers built homes very close to each other for the same reasons they do today - to fit as many homes as possible on their development plots.
The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire set new standards for building houses because it refused to insure houses they considered fire hazards. The criteria they used to evaluated buildings would one day be reworked into both building codes and zoning laws. Seven years later, Franklin was also instrumental in getting the first life insurance company, the Presbyterian Ministers' Fund, off the ground.
Throughout history, the types of insurance offered have been expanded in reaction to new risks. 1964 saw the Travelers Insurance Company sell its first accident policy. As time progressed, new types of insurance were being offered to keep up with the risks of increasingly modern life.
The various religious authorities at the time were outraged at the practice of putting a value on human life, but criticism cooled when it was seen that insurance worked to protect widows and orphans. The Industrial Revolution then brought the necessity of both business insurance and disability insurance to the forefront.
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Our thanks to Benjamin Franklin for his contribution to the insurance industry in our country. We welcome your call, questions, and comments.
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