The history of car insurance goes back to ancient times when the idea of pooling together resources to safeguard hazards was first practiced in China, Greece, Babylon and a couple of other ancient civilizations. The main area that was insured was their marine interests and merchants would pool together to protect their merchandise from the dangers in the seas that ranged from pirates to storms and rough seas.
Later the practice would move through the Renaissance period and the idea of premiums was introduced and practiced in Venice and Florence and other cities that flourished in trade. The first official company to handle marine insurance was Lloyd's based in London back in the 1700's. In America, the idea of insurance can be traced back to an initiative started by Benjamin Franklin. In 1751, he got together a band of men who would pay money in a pool for security against fire on either their houses or businesses. About 143 policies were issued in the first year alone, and as more people joined business the demand and practice of insurance spread across the states.
However, car insurance would wait until after the invention of the gas-powered car in 1893 by Frank Duryea and Charles Duryea. While there were other cars before it and even for the years after its discovery, people found themselves covering the losses from accidents. And it was worse then than now as there were no licensing and traffic signs same as traffic cops.
In 1897, the first car insurance was issued by Travellers Insurance. Even then, there were no minimum insurance requirements by law, there was no driver training nor license tests. As result, the fatalities were high. In 1930 for example, about 110 people were killed daily due to road accidents. Compared to the figure in 2000 which had double the population, the fatalities increased only by 4. That means the fatalities per registered vehicle were almost ten times more in 1930. Massachusetts and Missouri had by this time established licensing laws only that all you had to do is show up at the local licensing office and pay a couple of cents for you to walk out the owner of a valid driving license. It was not until the 1950's that states began administering driving tests in order to grant a driving license.
The first state to establish a liability insurance minimum was Massachusetts which was some sort of a pioneer in the regulation of automobile industry. Soon, other states followed and the industry was revolutionized to its present state every year. Currently, only New Hampshire does not have a liability insurance minimum requirement.
The auto insurance policies moved from simply handwritten agreements to the complex booklets with several clauses one has to grasp and a lot of criteria used to decide qualification and the rates charged. The range of risks covered has also increased and more importantly, the ease with which one can get quotes and coverage.
The internet has changed the service and also introduced companies that are completely online based. One can calculate expected costs and get quotes from different companies in just a few clicks. Further, the automobile insurance has gone on to influence other insurance sectors with just about every asset being insured from a range of risks. The one unchanging aspect of insurance since ancient times has been the principle of pooling together resources to regularly as a cover against a risk to any member.