When Auto Insurance Began
Are you curious as to where auto insurance began? Tracing the history of general insurance isn’t an easy task, but some say that it all started around 1750 BC with the Code of Hammurabi.
Early Mediterranean sailing merchants often paid a lender a certain sum of money in order to insure that their cargo would not be stolen. The lender (once paid) guaranteed that the cargo would be safe throughout the voyage, or the loan amount would be cancelled. Of course, this resulted in a lot of borrowed money, stolen goods, and effective cancelling of loans, but it doesn’t quite work that way today. Following those sailors and their stolen goods, Achaemenian monarchs in Iran picked up the practice of insuring their people. To find out when auto insurance began, we must follow the trail of those monarchs and their interesting insurance policies.
These monarchs were the first in recorded history to insure their people. The leaders of ethnic and tribal groups would often send gifts to the monarchs at the beginning of each year. The gifts that were the most valuable were set in a special place, and these gifts were also given a special ceremony. The idea behind the gift giving was that the court would protect anyone that gave them a gift. In short, if an ethnic group was in trouble, they would send a gift to the court in exchange for protection...but the amount of protection received was largely dependent upon the worth of the gift. As far as life and health insurance goes, the Greeks and the Roman are to blame (or praise) for this kind of policy.
Both the Greeks and Romans established “benevolent societies” that cared for certain families and paid for certain expenses. Most of these expenses were related to death and funeral services. Eventually, nearly every society had some sort of insurance relating to death and life, but how do you find out when auto insurance began? Well, before the invention of the automobile, a type of insurance known as “marine insurance” existed. Marine insurance largely began with the help of Samuel Lloyd in 1688. Lloyd founded a coffee shop that became a hot spot for insurance trades amongst merchants. Eventually, a list of vessels and valuables was composed. This list was known as “Lloyd’s List,” and it still remains the most important shipping list within the marine industry today.
Lloyd’s of London originated from that early coffee shop, and the first standard marine policy was composed and agreed upon over a cup of hot coffee. Today, merchants still meet at Lloyd’s to discuss insurance deals -- if you can equate automobiles with shipping vessels, than the first automobile coverage began at Lloyd’s of London in 1688.
Still trying to find out when auto insurance began as we know it? Well, nobody really knows for sure. If you are up for a bit of an investigation, Lloyd’s of London would be a good starting point, and then you’d have to wrestle up some information beginning with man named Henry Ford.