Homeowners Insurance: The Beginning


Homeowners insurance is a required purchase today, unless you don’t have a mortgage. In fact, it is standard to the point it has become part of the home-buying process. The purpose is to ensure that the mortgage company will be able to recover financially if you have a loss from fire or natural disaster, since your house is their collateral for the loan.

It all started in America with the formation of the first insurance company in 1732 in Charleston (then known as Charles Town), South Carolina. Little was known about this new, unknown industry, until a fire in Philadelphia encouraged 29-year-old Benjamin Franklin to write an article in the Philadelphia Gazette about fire prevention, fire safety, and “societies” of men who belonged to fire engines in other communities. These “societies” met monthly and established procedures to improve their skills. Franklin’s article resulted in Philadelphia establishing a volunteer fire department. The Union Fire Company, sometimes called Benjamin Franklin’s Bucket Brigade, was formed in 1736.

Encouraging fire safety

Franklin encouraged fire safety; in fact, his interest in fire prevention is why he invented the Pennsylvania Fire-Place. This fireplace is more commonly known as the Franklin Stove. Many believed that the stove was designed to allow for larger fires; however, it was really created to contain the fire’s flames which prevented embers from shooting out onto the floor. His continued efforts to understand how fires start and how they can be reduced also resulted in the invention of the lightning rod.

Always seeking ways to help protect people and buildings from fires, it is natural that he became known as the “Father of American Insurance” to assist in financial recovery after a loss. Franklin founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire, and the first policy was sold in 1752. Before insurance was granted, buildings were inspected. Those that were believed to be too great of a fire risk (all-wood structures) were denied coverage.

Slow growth of the insurance industry

For the next 30 years, the Philadelphia Contributionship was the only fire insurance company. Obviously, the idea of insurance took a while to take hold. There were other more pressing issues, such as the Revolutionary War, forming a national government, and a resulting severe currency crisis. This slow time was valuable, though, as it allowed for development, testing, assessing, and then perfecting the concept and validity of the insurance industry.

The growth and maturity of the insurance market has been phenomenal. Helping the asset inventory industry to take hold, insurance companies and their agents continue to recommend a contents inventory for homeowners, renters, and business owners to help ensure a maximized claim settlement.

Cindy Hartman is President of Hartman Inventory LLC, a woman-owned business. Visit her website at http://www.HartmanInventory.com to discover the many reasons you need a business or home inventory. While visiting the website, sign up to receive her newsletter for more information about the inventory industry.

Cindy is also a freelance writer, covering topics of business ownership, entrepreneurship, networking, marketing, small business and product reviews.

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