A History of Auto Insurance

A History of Auto Insurance

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The first modern automobile is created in Germany by Karl Benz. As cars become more common, so do car accidents. The United States legal system decides to put the financial burden of an accident on whoever was at fault—a policy which has lasted to modern times.


The first auto insurance policy is issued to Gilbert J. Loomis in Dayton, Ohio. Loomis pays $1000 to the Travelers Insurance Company for his policy.


The first car insurance company, known today as Amica, was established in 1907 by A. T. Vigernon. It survives to modern day.


State Farm is founded in Bloomington, Illinois, by G. J. Mercherle, an insurance salesman and retired

State Farm statefarm building

Connecticut and Massachusetts are the first states to introduce auto insurance legislature. Connecticut’s 1925 law requires drivers to prove “financial responsibility” only after they are proven to be at fault in an accident.

The Massachusetts law, passed in 1925 but not effective until 1927, instead requires liability insurance before allowing drivers to register their cars. For a long time, Massachusetts is the only state with this requirement.


Allstate is founded as part of Sears, Roebuck, and Co., although it becomes a publically traded company two years later. In the late 1930s, the company introduces one of the first systems to reward safer drivers with better rates.


GEICO, originally known as the Government Employees Insurance Company, is established. It is specifically marketed to government employees and some enlisted military officers.


New Hampshire passes the first statute known as a “security law,” which requires drivers involved in an accident to immediately prove financial responsibility or lose their driving licenses. These types of laws become much more effective at encouraging drivers to purchase automobile insurance than previous legislature.

Progressive is founded outside of Cleveland, OH, and sets itself apart by offering “non-standard” insurance to cover drivers not accepted by other insurance companies.


In 1956, New York becomes the second U.S. state to enact a compulsory insurance law; North Carolina quickly follows in 1957.

Throughout the decades, many other states enact compulsory insurance laws as well as another type of required protection: uninsured motorist insurance, which protects customers from injuries inflicted on them by drivers without insurance.


24 states switch to no-fault insurance systems, no longer finding one driver "at fault" in an accident. Instead, all drivers involved in an accident file a claim with their insurance company and nobody is considered at fault. Only 12 states still have no-fault insurance in place.


Progressive creates the first auto insurance website.

Two years later it's the first insurance company to offer the option to purchase coverage online.

insurance website

GEICO first introduces the Gecko ad campaign, beginning the era of ever-present car insurance advertising.


Progressive creates "concierge-level" claims services, meaning the insurance company handles finding repairs and all other work related to the claim.


Texting-while-driving accidents are on the rise as insurance companies and legislators try to find ways to prevent these sorts of accidents.


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