Chapter 16: Roles and Responsibilities

History of Insurance

First Property Insurance in the US

Benjamin Franklin founded the first property insurance company in the US in 1752. He and his fellow firefighters opened The Philadelphia Contributionship to help protect property owners from losses due to fires. The full name of this new business was The Philadelphia Contributionship for the Insuring of Houses from Loss by Fire.

Some 20 years earlier, Franklin wrote about fire safety in his newspaper, the Gazette. One of his suggestions regarded the buckets that homeowners used to carry hot coals from one room to another for heating. He suggested the bucket be kept shut, or "Scraps of Fire may fall into Chinks and make no Appearance until Midnight; when your Stairs being in Flames, you may be forced, (as I once was) to leap out of your Windows, and hazard your Necks to avoid being oven-roasted."

Franklin's focus on fire safety came on the heels of Philadelphia's worst-ever fire in 1730. The fire caused much destruction. Franklin commented in his paper that if the city had fire equipment, the loss would have been contained. So, the city imported fire equipment from England.

Franklin also wrote in his Gazette of how people of all sizes and abilities would show up at fires to do what they could to combat them. Recognizing this ragtag approach was not sufficient, Franklin proposed a "Society of Active Men" to rush to fires as they occurred. This led to the formation of the first volunteer fire company in Philadelphia.

Years later, when people bought insurance policies from The Contributionship, they would hang a "fire mark" on their buildings to designate their coverage. While these building were of higher priority to the firefighters, they still put out fires involving uninsured buildings. They typically sent a bill to the owners, however.