For 115 years,
operators of vehicles in the United States have considered it a good idea to
carry auto insurance on their horseless carriages. The first policyholder
purportedly was a Massachusetts man named Gilbert J. Loomis who in 1897 paid
$7.50 for a $1,000 policy.
EDGE AUTO INSURANCE QUOTES
The Travelers policy
insured Loomis against the eventuality of him running his home-built,
one-cylinder car into a horse while traveling the road; such rude encounters
were not unknown in those days. If Loomis had killed a horse or rammed into the
side of a house, the property damage would have been covered. If he had
bloodied his nose or broken his neck in the crash, however, he would have been
on his own because personal injury insurance was a few years from being
introduced.
Insurance rates ranged
widely in the early days because there was no actuarial basis for setting
rates. That is, too few accidents and circumstances had been recorded to
statistically predict risk. Not until the 1920s did the industry begin to find
common ground and develop insurance premiums linked to actual experience.
Today, auto insurance
customers in Florida and elsewhere operate in an entirely different market
environment. A safe driver can benefit from the wealth of statistical knowledge
that has been accumulated. This compiled information lets insurers project with
some degree of accuracy what individual categories of drivers will do behind
the wheel and insurance rates accurately reflect those actuarial projections.
Good drivers=good rates.
On the other hand, the
numbers also single out higher risk categories of drivers who history has shown
are prone to drive more recklessly or otherwise experience more claims on
policies. If you are a single male living in a city, for example, you often can
expect to pay more than would a person of different gender and circumstances.
However, individual safe driving records and low claims experience can reduce a
premium differential over time.
AUTO INSURANCE PROTECTS PEOPLE
The value of insurance
has been demonstrated time and time again when drivers and property owners
experience unexpected loss and are made whole. Accidents happen and every
person in the end is powerless to prevent them. This is why government policies
require vehicle operators to carry auto insurance and states closely regulate
the industry. In 2012, it is all about
protecting people, not horses.
