Auto insurance history
Auto Insurance History can be traced to ancient Chinese by name of Marine Insurance. Here the owners of the ship would meet the investors before the ship set for sail. The investors would place a gamble that they would be paid a premium of the ship reaches the shores safely. Some of the ship failed to reach due to sinking or piracy. This type of insurance existed way back in 3000 B.C. The loss of cargo was controlled by spreading it across several ships.
Another type of insurance that existed during the civilization of Babylon was called bottomry. This was advance money paid towards security of the vehicle to protect it against perils at the sea. This protected the traders from debt in the event of loss of cargo. This practice was prevalent in the Mediterranean region. Roman emperor Justinian reduced the bottomry amount to 12%.
General Average was another term found in the ancient Greek and Phoenician traders. This concept was popular in Rhodian Law. Justinian made further changes in the General Average by including the law that whenever a ship wrecked or was sunk, whatever the owner saved he shall keep it to himself.
There was further development in Marine Insurance with Danish sailors forming guilds. These guilds used to protect its members from losses at sea. Later premiums were used in marine insurance. This practice emerged in the cities of Venice, Florence and Lombardy. Written records started being used which had the principals of mutual insurance and the contributions to be given for loss on wrecks or pillage.
Lombards were the first to frame the basic concepts of Marine Insurance. This was used in Europe and England in the 13th Century. Lloyds of London Association emerged as the leading center for marine insurance by the 17th Century.
Lloyds was formed as an informal organization in a coffee shop in London, founded by Samuel Lloyd in 1688. This served as a meeting place for merchants and underwriters.
With growth and development rules were framed and policy workings were formed. In 1906 Marine Insurance act was formed
Car Insurance
Marine Insurance later branched out to include cards and other automobiles in their foray. The development came into force as policymakers decided that the motorists were using public property as a privilege. Potential danger was in store for third parties life and property due to these vehicles. Hence insurance is compulsory for these vehicles; it was used mainly for protection for the third party.
In 1895, Liability coverage was included in the car insurance policy. The first liability car insurance was written in 1898 for Mr. Truman J. Martin.
Massachusetts introduced the first mandatory car insurance in 1927, though car insurance policies were introduced much earlier.
All the states in United States have made car insurance mandatory though the requirements vary from state to state. Owning car insurance is not only mandatory but safe as it ensures you are protected from legal and medical expenses occurring from an accident in event of an accident.
Car Insurance is safe but for those who want protection while driving and Auto Insurnace history says it was made for that only.
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