Vehicle Insurance History

March 22, 2009 | By admin |

If you’re driving, you need insurance. Car insurance is an expense that every driver needs – and its history dates back to several millennia before cars were even an idea.

Vehicle insurance has been around for thousands of years. Some reports show the ancient Babylonians practicing forms of insurance involving shipping, where payment would only be made on goods once they arrived safely. This form of insurance, called “bottomry,” may have existed as early as 4000 B.C., according to the Encyclopedia Britannica.

Other reports have the Chinese practicing a form of marine insurance as early as 3000 B.C. These forms of insurance usually involved shipping goods along rivers in boats. This version of insurance was known as “loss control,” spreading goods among several boats to make sure that if there was some sort of unforeseen calamity, they would not lose their entire transport stock.

One of the earliest forms of formal maritime insurance came from the Minoan civilization during the times of the Phoenician civilization. The Phoenician civilization was based on a barter system where the Phoenicians would pledge a certain amount of goods, such as wood and other ship-building supplies, to the ship owners as insurance toward the ships’ safe arrival at their destination. Records of this type of trade have been found in Babylonian documents dating back to the 5th century B.C. The Roman Emperor Justinian created a variation on this system, where the ship owner would be paid before setting out on his trip, as opposed to on his arrival.

As trade with other countries became an increasingly important part of business planning, marine insurance became a major part of transporting goods and services through vehicles. The oldest known maritime insurance policy dates to 1329, as part of a series of conventions established between Italian merchants as part of their shipping agreements. Over the next few centuries, marine insurance contracts became more and more commonplace as part of everyday business. This led to the formation of the first “insurance circle” in Italy in 1552.

The first formal insurance company was established in 1686 in France. It was known as The General Company for Insurance and Bottomry Ventures of France. It was later dissolved after the French Revolution.

Formal insurance companies as we know them got started in, of all places, a coffee shop. As England moved into a more industrial era, many brokers began meeting at a coffee house run by Edward Lloyd. So many people took to finalizing deals over Lloyd’s coffee that they became nicknamed “Lloyds.” Many years after Lloyd’s death, the building was converted into a formal marketplace called “Lloyd’s of London.” Lloyd’s helped provide a venue for these insurance workers to help create a formal standard for insurance policies, and Lloyd’s of London remains a powerful force in international shipping to this day.

Once automobiles became part of the world landscape, it was only natural that vehicle insurance would extend to them as well. But the roots of car insurance go back much, much further than the history of cars themselves.

The author also recommends that you read this site:
http://www.autocarinsurancequotes.com/history.htm

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