Vehicle Insurance
Insurance, which quite simply is little more than a form of gambling, has been around since ancient times. Initially the insured were ships and cargoes, with the insurer, in consideration of a fee, promising to cover the insured’s losses in event any were incurred which were covered under the contract. Most vehicles that were insured were ships,along with their their cargoes. Benjamin Franklin introduced insurance to the United States, then still the British colonies in America, through the form of fire insurance in Philadelphia (he offered discounted rates to customers who purchased his lightning rods).
Vehicle insurance was not required of those who owned or operated horse drawn vehicles, and collisions between them were relatively rare, although accidents did occur, and with increasing frequency with the introduction of the automobile. From the beginning it was apparent that the automobile was more likely to be involved in an accident, either by itself or with another vehicle. One New York lawmaker opined that this was because the automobile lacked the advantage of the intelligence of the horse in avoiding accidents out of concern for its own safety.
Ohio was the epicenter of the earliest days of the automobile and it was there that a driver of a horse and carriage became concerned over the possibility of financial loss if he was involved in an accident with one of the new automobiles. The horseman, Gilbert L. Loomis, solicited the Traveler’s Insurance Company to issue him a policy covering damage caused by his horse and carriage. Traveler’s complied. Inspired by the possibility of a new line of business, Traveler’s began writing insurance policies for automobiles, the first being issued to Dr. Truman Martin in Buffalo, New York in 1898. These early policies were liability policies. Multi-line policies covering things such as collision damage came later.
The number of collisions between vehicles continued to rise, and issues such as determining fault were no guarantee that the injured party could collect damages. There was no mandatory proof of financial responsibility required to operate a car. Accordingly insurance companies did what they do best. They lobbied for changes to the law. Connecticut passed a financial responsibility law in 1925, the first in the nation. But it had little teeth, drivers weren’t required to show proof of financial responsibility until after being involved in an accident. Massachusetts followed, requiring proof of financial responsibility at the time of vehicle registration in 1927.
The Massachusetts law was the first compulsory insurance law in the United States. Today all fifty states require proof of financial responsibility when obtaining or renewing a driver’s license or when registering a vehicle. Most states require it be maintained in the vehicle whenever the vehicle is operating. The cost of today’s vehicles and the price of repairing them makes the idea of driving while uninsured unthinkable, but many still do it every day, hoping they get away with it. Maybe the New York legislator was right about some drivers needing the additional intelligence offered by a horse.
Where did we find this stuff? Here are our sources:
“Goodbye to the Interurban”, by William Middleton American Heritage Magazine April 1966
“The History of Travelers”, The Traveler’s Insurance Company online
“History”, American Automobile Association online
“The Fifties” by David Halberstam
“Railroad History, An Overview of the Past”. American-rails.com
“The truth about speed limits”, by James J. Baxter. National Motorists Association online
“America on the move: Licensing Cars and Drivers”, Amhistory.si.edu
“Portrait of an unhealthy city”, by David Rosner. Banhdc.org