History of Auto Insurance

Everyone pays for car insurance. It’s so automatic that most people don’t even think about it! But how did we get to this point? Where did all this auto insurance craziness come from? Surely there was no car insurance at the start of the invention of the automobile. Well, we’re glad you asked because we decided to dig up the facts on where this all started from.

1866 The first automobile was invented by Richard Dudgeon in New York City. It was built with a steam engine.

1889 The first liability insurance for a car is taken out for Dr. Truman J. Martin. Liability insurance provides protection from claims arising from injuries or damage to other people or property.

1908 The Ford Model T is introduced, making the automobile affordable for most Americans and thus a popular product to own. Over 15 million were made.

1927 The state of Massachusetts starts requiring auto insurance as a law.

Late 1940s Most states being to adopt the same law requiring auto insurance after a spike in postwar car purchases.

1959 In an effort to make cars safer, the Volvo 122 includes a three point seat belt. Insurance rates for that vehicle understandably go down.

1968 President Johnson urges car insurance reform, saying the current system is “overburdened and unsatisfactory”. There are over 100 million drivers and 96 million cars on the road.

1970 The ever progressive Massachusetts passes a bill to try to limit premiums. Insurance companies threaten to leave the state.

1972 The Nixon Administration voices support for “no fault” insurance. Congress rejects a bill that would make it a federal law requiring it.

1973 Michigan becomes one of the first places to actually implement “no fault” insurance. This means that regardless of fault, someone who is insured is indemnified for their losses.

1974 The federal Cost of Living Council imposes a 60-day freeze on auto insurance rate increases.

1980s Citing studies that it would make insurance rates cheaper, states begin to enact laws requiring seatbelt usage.

1988 California passes Proposition 103, preventing massive increases in insurance premiums.

1993 SafeAuto is founded, bringing in a new era of state minimum insurance quality for an excellent price.

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