Monday, March 16, 2015

Where Did Insurance Come From?


Some visitors to Degginger McIntosh and Associates inquiring about Seattle insurance quotes also ask "Where did insurance come from?" This is a great question because most people simply take its existence for granted. But a look back into history reveals an interesting evolution of the now familiar product and its journey all the way from ancient cultures to our modern smart phones.

The Origins of Insurance

As early civilizations and economies developed, the idea for insurance was born. Many merchants had their businesses ruined because of unforeseen events like weather, civil unrest, and accidents.

Around 3000 BC, Chinese merchants were growing tired of losing their valuable trade goods in shipwrecks. They developed the idea of spreading around the risk by evenly dividing their goods among multiple ships, so that every ship carried a blend of cargo from more than one merchant.

As a result, a shipwreck meant a small loss for all parties, rather than a devastating one for a single merchant. The principle of "Safety in Numbers" is still the basic principle behind insurance today, whether it is Seattle family insurance or business liability insurance.

Insurance Evolves

Our story picks up in ancient Babylon. In 1790 BC, Babylonian merchants were facing the problems that come with caravan and ship trading -- storms, pirates, and bandits. King Hammurabi created a new form of insurance to help alleviate these problems.

Inquisitive visitors to Degginger McIntosh and Associates were further interested to learn that King Hammurabi also invented the concept of "bottomry", which meant merchants could finance their shipping costs using loans. The loans were paid back with interest only when the goods arrived safely. However, if the trade goods were lost in transit, the merchants owed nothing.

Car Insurance

Those looking for Seattle insurance quotes, Seattle family insurance, and others have also asked about the origins of car insurance.

Modern car insurance began shortly after Henry Ford popularized the automobile. Unpaved roads and newbie motorists made it a very dangerous activity. The state of Connecticut helped mitigate this risk by making any driver who caused over $100 in damage pay restitution.


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