Some Insurance History




Presented By:

Kathy Bayes Insurance Agency

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As in Europe, insurance in the New World began with the individual underwriter who was, in each case, the forerunner of corporations. The oldest known policy in the United States was written in Boston in 1745 for a Providence, Rhode Island merchant.

The first company to be formed was a mutual, the Friendly Society, modeled after its English namesake, to insure houses and tenements. It had its beginning on January 18, 1732, in Charles Town (now Charleston) South Carolina. On that day the South Carolina Gazette announced the organization of this company with a notice which read in part: "At a meeting of sundry of the Freeholder, of the Town at the House of Mr. Giguilliat, Proposals were offered for establishing an Insurance office against FIRE;…"

Farther north in Philadelphia, Benjamin Franklin, in his Pennsylvania Gazette, was calling attention to the need for fire-fighting equipment in the City of Brotherly Love. Later, in its February 18, 1752 issue, the Gazette announced the formation of the second fire insurance company in America as follows: "All persons inclined to subscribe to the articles of insurance of house from fire, in and near the city, are desired to appear at the court-house, where attendance will be given to take in their subscriptions every seventh day of the week, in the afternoon, until the thirteenth of April next, being the day appointed by said articles for electing twelve directors and a treasurer."

On that day the articles of agreement, called "a deed of settlement," were signed establishing the Philadelphia Contributorship for the Insurance of Houses from Loss by Fire. This was a mutual company, incorporating a principle of which Franklin had already expressed approval: the mutual idea "whereby every man might help another without any disservice to himself."

It was also the first company to make definite contributions toward fire prevention. It recognized certain hazards and either warned against them or simply refused to insure buildings where these risks existed. Wooden buildings, for example, were not accepted for insurance by this company. Homeowners were cautioned not to smoke meat in their houses, a common practice at that time. They were permitted to have either shade trees or insurance, but not both, as the former were considered definite risks, attracting lightning and interfering with firemen's efforts in fighting conflagrations.