How Did auto insurance Start?

History of Car Insurance - How Did it All Start?

Auto insurance is one of the most popular types of insurances. It is compulsory for drivers almost everywhere in the world to possess car insurance. It is serviceable to all kinds of vehicles and usually covers the physical damage caused to the vehicle due to an accident or other mishaps.

Auto insurance also covers liability protection, which means that, if you or another person is injured in an accident, then the firm will cover a part of the medical expense.

The earliest record of any kind of insurance was first recorded in the ancient civilization of Babylon. The Code of Hammurabi set apart advance money known as “bottomry” for the security of a ships against marine dangers. The investors were covered from debt by paying a 20% premium in case of loss or damage to the cargo.

The origins of the meaning of insurance may also be traced back to ancient Chinese ships. The cargo ships, which used to travel over the Atlantic Ocean to the colonies, would oftentimes get either drown or were attacked by pirates. Later, to save their ships, some investors decided to insure the ship & the cargo by paying a premium amount. it is now known as marine investment. Auto insurance was derived from this strategy.

Auto insurance was developed after it was decided by policy makers that operative a motor vehicle on public property was a privilege. Hence, it was decided that auto owners must purchase insurance to protect innocent people against injury and damage to property.

A British company wrote the first auto insurance policy that offered liability coverage in 1895. The first liability auto insurance policy written in the United States took place in 1898 & it was for Dr. Truman J. Martin.

The first mandatory auto insurance law was introduced in Massachusetts in 1927. However, auto insurance policies had come into existence much earlier. In fact, the policies started almost 100 years before the introduction of the motor vehicles in the United States in 1908.

Nowadays, every state in the United States has a mandatory auto insurance requirement. Although auto insurance obligations different from state to state, they all need a minimum of liability coverage to save victims from injury.

Auto insurance is a necessity. Should you ever be involved in a car accident, it may save you thousands of dollars. The insurance plan is simple on the budget, as most insurance firms offer monthly payment plans.