A History of Insurance: from Pirates to Providers

When the pirates landed, they were often disappointed by the booty. Along with Captain Jack Sparrow, they were always yelling, “Why is the rum always gone?” St. Augustine, Florida, the oldest European city established in the United States, was set up in 1513 as a military outpost to protect shipping interests in the region. As with maritime trading, locals needed this outpost because of the frequent pirates raiding ships. For the first two hundred years, the little inlet city in Florida was quite the hot spot of conflict, with pirates, Spain, and England competing for the area. Merchants were pulling gold and other New World goods out of the region and shipping them back to their different markets. But how did these different markets protect themselves against the risk? What is the history of insurance?

Risky Business

Today if we live in St. Augustine, we may check out a website or call someone to get Florida insurance quotes. However, these companies weren’t always bedrock institutions in a culture. As a concept, insurance refers to the Chinese and others who first discovered the sea as a conduit for moving goods and services. At its core, the history of insurance means that a person wants to reduce the risk. So for the Chinese and others, when they used multiple ships, they would try to spread the more valuable assets across their boats so that if a pirate or accident sunk one ship, they didn’t lose all the precious cargo.

Soon enough, people who wanted to sponsor a shipment of goods wanted some way to mitigate lost money if the ship sunk. That led to financial backers loaning the money on a voyage as long as they got a fee or premium on the loaned money. Lloyd’s of London, although not a historical insurance company, traces its roots back to a coffee house opened by Mr. Lloyd in the late 1680s. Frequented by merchants and seamen, it became the best source for shipping news, and someone often struck deals over a cup of Joe. Underwriting came directly from Lloyd’s, where the backers wrote their name under the risk information on a form Lloyd’s generated for these transactions.

Accidents and Acts of God

But what if the person in St. Augustine calls for Florida insurance quotes just had an accident? Other people took on ways of trying to help their fellow men when they didn’t have to make a shipping voyage. Sometimes it has been through governmental intervention. Other times, it has been through commerce. Ancient monarchs would receive tribute gifts from all their tribal groups in their confederation. They would register a specific cache of more than 10,000 gold pieces in the treasury from each tribe. It was important for each of these tribes to make this donation because if something went wrong in the tribe and they needed help, their representative would approach the monarch about lending aid to cover the damages. If their name were in that register, then the monarch would help.

But in more modern times, the same person in St. Augustine asking for Florida insurance quotes would have to look back to London again in the late 1600s. Due to the Great Fire of London of 1666, an enterprising merchant named Nicholas Baryon took it upon himself to ensure buildings against loss. This endeavor was England’s first fire insurance company.

More History of Insurance

Whether it was the ancient monarch or Nicholas Baryon, insurance operates to generate a large number of capital reserves to draw against in the event of a loss due to an accident. Insurance companies throughout history have developed considerable resources to help their clients in an accident. Especially now, however, they still fall under the bounds of a contract and are governed by specialized legal situations. At a base level, an act of God speaks to an impossible event that occurs, not allowing one party to fulfill their end of the bargain. For instance, if a car dealer promises to sell a customized car to a client, and a tornado rips through the area the next day, the car dealer may argue that the tornado made that impossible. In addition, a judge could legally let them out of the deal.

Insurance companies, like Floridainsurancequotes.net, make these impossible events their business on a limited basis. Fire insurance often deemed an accident, spread to other types of natural disasters like flooding and crop failure. Within their structured rules, modern companies have written policies to help protect people’s property if one of these events occurs. However, customers must purchase these specialized insurance policies outside the typical homeowner’s coverage.

Just for the Health of It

So now the St. Augustine person sniffles and calls for Florida insurance quotes? Where did that start? Chancellor Otto von Bismarck of Germany popularized plans that offered accident, different workers’ medical, and life coverage for other precursors to many governmental insurance expectations among our modern systems in Europe and the U.S.

Like many other systems, however, these first started as mutual aid societies where everyone pitched in. In 1887, some African-American workers in Iowa donated a dollar toward a fund where they all worked in a company town. Members could access the fund for medical needs. The more extensive system we know now developed when individual hospitals offered the same model by letting consumers pre-pay into a fund if they needed help. That has expanded into our current model of using a network of providers for our various health needs. So, from pirates to providers, we all use insurance for multiple reasons. Hopefully, you will find the services you need.