A Brief History of Car Insurance for Those Interested in Auto Body Estimator Training

We can’t imagine a world without insurance, and especially not for our cars! Ever since Benjamin Franklin pioneered the concept of insurance in 1751, there has been a desire for insurance on many different aspects of life, such as homes and health. This also includes vehicles, and the history of auto insurance dates back to a much, much simpler time—we’re talking a time where driver’s licenses weren’t even necessary to receive it. Fast forward to now, and car insurance is an inextricable part of the process of buying a new vehicle, and car owners are very happy it is. But how did we get here?

Here’s what you need to know about the history of car insurance.

The Beginning of Auto Insurance, Starting All the Way Back in 1897

Car insurance as we know it today did not become a reality until the very end of the 19th century, when The Travelers Companies wrote the first auto insurance policy in the world to a man from Massachusetts (though it is often mistaken as Dayton, Ohio) named Gilbert Loomis on October 20, 1897. Loomis had a career as a mechanic, and even built the car he received insurance for, which was a single-cylinder vehicle. This came six years after the first car crash in world history had taken place in Ohio. The insurance policy protected Loomis financially from potential damage, and was bought for $1,000 USD (this would amount to $41,615 in Canadian dollars today). However, it took 30 years after this for the state of Massachusetts to make auto insurance mandatory for new car owners.

The first car insurance policy was written to a man in Massachusetts in 1897

Later Developments for Auto Insurance in Countries Around the World

Those with auto careers should know that, during the 20th century, there would be further developments in the realm of car insurance. This would take place both within the United States and around the world. For example, the United Kingdom made auto insurance—and particularly third-party liability insurance—mandatory for car owners three years after Massachusetts did, enacting the Road Traffic Act in 1930. Countries such as Germany and the Republic of Ireland would follow suit later that decade. Auto insurance regulations also vary depending on countries: an example of this is in Norway, where drivers can still be covered by insurance if they have an accident while driving a car that isn’t theirs.

In Norway, car insurance can cover you if you crash someone else’s car

Auto Insurance in Canada, Explained for Those with Auto Careers

While a more specific timeline for details about the history of auto insurance within Canada is hard to come by, students in auto body estimator training should be aware of what Canadian auto insurance regulations look like. Canada’s Automobile Insurance Rate Stability Act would come into effect within Canada in 1996, enforcing minimum standards for car insurance within the provinces. Although many provinces offer private auto insurance, several others (including British Columbia) provide it publicly to their citizens. Auto insurance is compulsory within Canada (though exact rules vary by province), and anyone caught driving without it on purpose can be fined at least $25,000.

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