Nowadays car insurance can rightfully be said to be one of the most prevalent types of insurance. Anywhere there are passable roads where cars and vehicles of all types travel daily. Most jurisdictions all over the world require drivers to have car insurance.

Car insurance in general covers all kinds of transport vehicles. It provides indemnity for physical damages sustained either by the insurance holder’s car or those others that he might meet on the road. Apart from this, car insurance also comes with a liability clause. This means that your insurance can help cover any expenses you might be liable for if you ever get involved in an accident ñ and this includes property damage as well as medical expenses for injuries.

Insurance throughout History

Modern day car insurance actually evolved from a very long history, back when cars didn’t even exist. Centuries ago, most goods were transported long distances over water. In ancient China, trade flourished and supplies and cargo were sent on board ships across the Atlantic.

Of course, given that this all took place a long time ago, there was always a possibility of losing precious cargo on the trip ñ either by natural causes like storms or by man-made causes such as pirates or thieves on the high seas. Hence the ship owners, usually a group of investors, sought ways to minimize their financial risks. This was how Marine insurance was born.

Over the years, the concept of risk minimization through insurance evolved, and expanded into other fields where there is a possibility of loss. Cars, of course, carried the potential to cause accidents, injuries and property damage. Policymakers determined that driving a car on a public road is a privilege, not a right and validly came under legal restrictions. Hence, motorists were ordered to purchase car insurance as a means of public protection.

The History of Car Insurance

The first ever car insurance policy was issued in 1895 in England. Three years later, the first liability insurance policy in the United States was issued in 1898. It was several years later, however, when the first mandatory car insurance law went into effect. This was in 1927 in Massachusetts.

Nowadays, all states, and most countries the world over, have mandatory car insurance laws. At a minimum, almost all require liability coverage.

The importance of car insurance is so well-recognized simply because there is such a great possibility of vehicular accidents. Such accidents would later on involve large amounts of medical and property costs. It is a measure of protection not only for the car owner and operator, but also for innocent victims of such accidents.