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 Fire Insurance
Originally conceived as an offshoot of marine insurance, and designed mainly for people who lived in highly concentrated urban environments, fire insurance was originally provided by mutual societies - investment groups where each member owned a share of the risk, and they were actually outgrowths of the fire department itself. While the very first mutual insurance company only lasted six years (before a large fire put it out of business), by the 1780's other fire insurance mutuals had formed in Baltimore, Boston, Charleston, New York, Norwich, Philadelphia, Providence and Richmond. On their heels however, were joint-stock companies, which raised their capital by selling shares, rather than equal initial investments. The first of these was the Insurance Company of North America, and it was formed in 1792, to sell marine, life, and fire insurance. 22 years later, in 1810, more than seventy insurance companies had been chartered, almost all of them starting with marine insurance, and then branching out to fire and life. In 1875, after major fires in Boston and Chicago had caused more damage than insurance companies had the financial ability to cover, regulation of the insurance system became stringent, and many of the practices begun then, like local, rather than corporate, decisions about what rates should be, continue today. What has changed today is that fire insurance, now more commonly called homeowners insurance, property insurance or hazard insurance, because it doesn't cover ONLY fire damage, is required when financing a home, rather than being an optional protection. Mortgage lenders will not fund loans until buyers have provided proof of insurance, and your first year's insurance premium is generally considered one of the reasonable and customary closing costs, while an estimated monthly premium is factored into your qualifying ratios when you are applying for a loan. Insuring your property is that important. |
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Like automobile insurance hazard insurance rates vary from state to state, and are influenced by your credit scores, and previous track record with the insurance company, if you have one and the size of your deductible. Discounts are given for bundling auto or life insurance with the fire insurance policy, having an alarm system, and having smoke alarms and an indoor sprinkler system or fire extinguishers, and sometimes even for setting up automatic electronic payments. Insurance policies generally have a coverage period of either six months or a year, and while you generally have to pay the first year up front, after that you can choose to pay monthly, quarterly semi-annually, or annually. While basic hazard insurance covers your home in the event of a fire, as well as other small events, there are supplementary types of insurance that you can add, depending on where you live. Flood insurance, for example, is a good addition if you live in a flood zone - and may be required depending on which flood zone you live in. Earthquake policies are popular in places like California, while people in that part of the country referred to as "tornado alley" often add specific coverage for wind and hail damage. There is even a form of fire insurance for renters and condominium dwellers. Called "renters insurance" it covers the contents of your home if the building is destroyed by fire. Homeowners can also boost their contents coverage if they own a lot of art, jewelry or electronic equipment. From Benjamin Franklin, to the fire department, to you, fire insurance is as old as the country itself. The next time you hear about wildfires in the news, or watch a lightning storm in the sky, be glad that you have insurance on your home - or start shopping for it if you don't. |
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Depending on how old you are and where you live, you might have fire insurance, hazard insurance, or property insurance on your home, but whatever you call it, the type of insurance that protects you in the event of damage to your home can be traced back to the 1700's, and Ben Franklin. Yes, that Ben Franklin. [ Home
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