Auto insurance wasn’t really “invented.” It evolved out of a need to protect drivers and pedestrians from those newfangled contraptions called automobiles.
When people first started driving cars, there were no laws or regulations to dictate how drivers should take to the road. Cars were so new and rare that most drivers just governed themselves.
There were, however, private agreements between drivers and companies early on to help cover damages caused by automobiles, but it wasn’t until the end of the 1800s that the first official auto insurance policy was offered in the United States.
History is a little fuzzy on which company was the first to issue an auto insurance policy and to whom. According to the Ohio Historical Society, the first third-party automobile insurance policy was issued in Dayton, Ohio in 1897 to Gilbert J. Loomis. Loomis purchased the policy from Travelers Insurance Company for $1,000 worth of coverage.
The first policy was pretty basic. It only offered liability protection if Loomis’ car killed or injured a person or damaged their property.
It wasn’t until 1902 that auto insurance for fire and theft was created, according to the International Risk Management Institute. Collision coverage didn’t come until even later.
As you can see, the answer to “Who invented auto insurance?” is not an easy one to answer because there really was no specific inventor. Auto insurance grew out of necessity. As long as cars are on the road, auto insurance policies will be around to cover them.