Insurance helps eliminate risks and spreads the risks from the individual or single company to the larger number of people or entities who can handle it. Let's take a look at the history of insurance in the U.S.
Colonial
Benjamin Franklin popularized the idea of insurance especially property insurance.
Philadelphia Contributionship for the Insurance of Houses from Loss by Fire was established in 1752 became the first mutual fire insurance company in America. The company provided insurance cover to buildings that faced fire risk.
Life insurance evolved in U.S in late 1760s and more than two dozen life insurances companies were established between 1787 and 1837 but only a few survived.
19th century
Many insurance companies like New York Life Insurance, Baltimore Life Insurance Company and Trust Company in upstate New York started expanding in 1830s in different cities. The companies employed agents to develop their market and judging the health conditions of the customers. Later doctors were appointed for this job. Insurance also faced criticism with religious authorities objecting at the practice of putting a value for human life. But soon matters cooled down when it was seen that insurance was providing coverage to widows. The first auto insurance policy came in 1889 and then many new types of insurances came into existence.
Scandal, Fraud and Regulation
With the growing insurance market, the companies also became concerned with the fact that people were lying in order to get insurance claims. People started lying in the applications, faking their death so that the family can get the insurance benefit etc.
To avoid these problems and to prevent monopoly of insurance companies, Social Security Act was passed in 1935 which provided unemployment compensation and old-age benefits. After the World War II, the insurance companies grew and started offering group life and health insurance. The Supreme Court ruled in 1944 that insurance should come under federal regulation but in 1945, Congress passed McCarran-Ferguson Act and returned the control of insurance to state-level.
In 1970s and 1980s, the requirement for drivers to have insurance since an automobile accident causes lot of damage. Later car insurance became mandatory for all drivers.
Insurance is always in demand as a means to minimize the risks. Internet has become a blessing for those seeking insurance. People can now go online and find the cheapest insurance quotes and also compare quotes of various insurance companies. The size of insurance companies continues to grow becoming more affordable for public and offering large number of financial services. The insurance market in U.S. has developed tremendously and has given insurance companies a wider customer base.
