Interesting Facts About Insurances

Get to know about Insurance and Interesting facts about health, auto, homeowners, life, renters and pet insurance. Insurance plays an important role in our lives by providing financial protection and peace of mind against risks. Though insurance may seem boring to some, there are some fascinating facts and histories behind different types of insurance.

A Brief History of Insurance

Insurance has been around for thousands of years in one form or another. Some of the earliest records of insurance date back to Babylonian traders in the ancient Mesopotamian kingdom who would pay an additional sum to lenders to guarantee the safe arrival of goods being shipped. Modern insurance practices started emerging in the late Middle Ages. In the 1600s, coffee houses in England served as places where merchants, ship owners and underwriters would gather to discuss insurance contracts. The first insurance company, The Insurance Office, was founded in London in 1681. Since then, insurance has continued to evolve into the wide variety of policies we have today.

Interesting Facts About Insurance

  • The first automobile insurance policy was purchased in Westfield, MA in 1897 for $11.25, offering $5,000 liability coverage.
  • The term “blue chip” originates from the blue chips given to investors who invested in early insurance companies in the 1800s. The blue chips indicated financial stability.
  • The insurance industry employs around 2.7 million people in the United States.
  • China became the second largest insurance market in the world based on total premiums in 2020, surpassing Japan.
  • The average auto insurance premium in the United States is $565 per year. Florida has the most expensive average premium at $2,560 per year.
  • Life insurance penetration (total value of policies divided by GDP) in the United States is 3.1%, compared to 11.7% in Taiwan, highest in the world.
  • Friday the 13th is considered an unlucky day and there are typically more insurance claims on those days.
  • Strange insurance policies exist covering body parts, alien abductions, overnight kidnapping and more.

Types of Insurance

There are several common types of insurance coverage. Here are some fascinating facts about the different insurance options:

Interesting Facts About Health Insurance

  • The earliest forms of health insurance started in the late 19th century. In 1890, a group of employees started the first plan to cover sickness expenses at the Montgomery Ward department store.
  • The average annual premium for employer-sponsored health insurance in 2021 was $7,739 for single coverage and $22,221 for family coverage.
  • About 49% of Americans get their health insurance through their employer.
  • Medicare spends around 20% of its budget on beneficiaries in their final year of life.
  • The United States spends over $3 trillion annually on healthcare, averaging $10,000 per person.

Interesting Facts About Auto Insurance

  • It’s estimated that uninsured drivers cause nearly $1 billion in insurance claims each year. Around 13% of drivers are uninsured.
  • The first laws requiring auto insurance were passed in Connecticut and Massachusetts in 1925.
  • General liability coverage, covering bodily injury and property damage, is required in all U.S. states except New Hampshire.
  • The top 5 most expensive states for car insurance are Michigan, Louisiana, Florida, Kentucky and Nevada.
  • Hawaii has the cheapest average annual premiums at $879 per year. Maine is the most expensive at $1,233 per year.

Interesting Facts About Homeowners Insurance

  • In 2018, there were over 5 million residential fires in the United States resulting in 2,718 civilian deaths and $25.6 billion in property damage.
  • The average homeowners insurance premium is $1,249 per year. Rates vary significantly by state and risk factors like location and age of home.
  • Hurricane Katrina in 2005 was the costliest hurricane, causing over $41 billion in insured losses. Hurricane Andrew in 1992 previously held the record.
  • Flood damage makes up around 90% of all general property damage in the United States each year. Standard homeowners policies do not cover flood damage.
  • Settlement of property claims is typically on an actual cash value basis, not replacement cost. This means the insurer will deduct depreciation.

Interesting Facts About Life Insurance

  • The first life insurance policies were issued in ancient Rome around 600 AD and provided burial expenses for members of guilds.
  • The first life insurance company in the United States was the Presbyterian Ministers’ Fund, founded in 1759 to insure ministers and their widows.
  • The average life insurance policy in the U.S. has a face value of $167,000.
  • As of 2018, there was over $12.7 trillion of life insurance coverage in force in the United States.
  • The top 5 life insurance companies by premium volume are New York Life, Northwestern Mutual, MassMutual, MetLife, and State Farm.

Interesting Facts About Renters Insurance

  • Over 43 million U.S. households rent their home, with an average annual premium of $179 per year for renters insurance.
  • Renters insurance provides liability protection for damage to the rental property for around $100,000. Liability coverage also extends to injuries of guests.
  • Theft claims make up around 81% of all renters insurance claims. Fire damage claims make up 9.6% of claims.
  • The top 5 states for renters insurance claims are New York, California, Texas, Florida and New Jersey.
  • Renters policies cover property away from home, making it advantageous for covering laptops, phones, jewelry and other portable valuables.

Interesting Facts About Pet Insurance

  • The first pet insurance policy was written in 1890 by Claes Virgin, founder of Länsförsäkrings Alliance, covering a dog injured while hunting.
  • As of 2020, North America accounted for over 90% of global pet insurance premiums. There are over 2 million insured pets in the U.S. and Canada.
  • Average annual premiums for pet insurance plans with accident and illness coverage are around $594 for dogs and $342 for cats.
  • Pet insurance can cover veterinary fees for accidents and illnesses, advertising for lost pets, burial costs and even pet theft.
  • Pre-existing conditions are typically excluded from coverage on pet insurance plans.

Conclusion

While insurance is not the most entertaining topic, it does have some fascinating facts behind it. Insurance plays an important role for individuals and businesses by providing financial protection for health, vehicles, property and liability risks. Understanding the history and key facts about insurance can help consumers make wise choices when purchasing policies.

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