Anyone who owns a property or makes a mortgage payment will be aware of home insurance. It’s the insurance you must take out if you want to finance a property – it’s a legal requirement.

If you’re like most people you just accept this as regulation and don’t think twice about it. But, there’s a reason it exists, a reason with a long history that reaches way back to 17th century England.

The Origin of Home Insurance

Although home insurance had existed before The Great Fire of London in 1666, it took the ultimate destruction of over 13,000 homes for the people to realize there had to be something in place to compensate those lost properties.

That’s when home insurance was born, although it wasn’t called home insurance at first. It was also not home insurance as we know it today: it only had one policy – only one thing could go wrong.

Since the great fire in the 17th century and the beginnings of the idea for homeowner’s insurance, people became more concerned about their homes. In those days, homes were made of wood and built-in close proximity. Furthermore, they were lighted and heated using open flames.

If insurance had not evolved over the years, we would now pay all our insurances separately, but thankfully times changed and nowadays, everything can be rolled into one policy under one company.

Its Journey to America

Although modern insurance practices began in 1666, it wasn’t until 1732 that the idea made it to the shores of America.

It primarily emerged in Charles Town which is now Charleston in contemporary South Carolina. Around this time, there was an influx of people from across the pond owing to the political and cultural environment of the time.

In Charles Town, a small broker opened and provided insurance to protect the new wooden built houses from fire damage and destruction.

Then, 20 years later, the entrepreneurial Benjamin Franklin accelerated the coverage of insurance policies all over the country. In 1752 Franklin began a company called the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. His company is still in business to this day.

Benjamin Franklin had seen an opportunity for both security and industry. His company was responsible for securing the homes of millions of people that would otherwise have been lost to fire.

His ingenuity helped establish the industry and set precedents for future policy. In the following century, the insurance business grew up and diversified into other forms of insurance, such as life, widow, child, and disability.

How Regulations Began

In the early 18th century, the insurance business was still in its wild West phase. There was virtually no regulation at all, and contracts were made on bits of paper that were often worthless.

The industry was a free-for-all, so it’s not surprising that some people took advantage. Monopolies formed and minority groups were excluded. Insurance brokers often charged exorbitant sums for services and were unable to payout.

It wasn’t until the beginning of the 20th century that regulations started to come in. It was apparent there was a need in the private sector for some form of government intervention to protect the rights and welfare of citizens from rogue borders and unfair practices.

The Social Security Act of 1935 was the formal start of this process. This act guaranteed the rights of citizens by shifting the government responsibility for insurance industries to State authorities.

This shift in responsibility meant that insurance companies were more closely monitored and tightly controlled; they could no longer do as they pleased but had to conform to regulations around pricing and practice.

This includes changes in discriminatory policies, more competitive rates, and guaranteed payouts on claims that could be verified. Since then, the insurance companies have been operating under stiff regulations and competing fiercely in a closed market.

The evolution of the insurance industry doesn’t stop here. In fact, it continues to evolve and unfold as we move into the middle of a new century.

The conflict now is less about fairness and regulation and more about price and efficiency. People want a better buying process, more accurate risk pricing, and damage avoidance solutions for expensive properties.

The Future of Home Insurance

If you could transport Benjamin Franklin into today’s world, what would he think? He would probably be excited and confused (sound familiar?) in equal measure, since he was a man of great ideas.

One thing he probably didn’t predict was the development of computer technology and the levels of efficiency and global integration on which the world now runs. After figuring a few things out, it would be long before he started to get some new ideas.

The insurance industry, like every industry, is being seriously altered by digital technology. Especially smartphone technology that allows people to bank, communicate, work, and buy insurance at any time wherever they are on the planet.

Smartphones and apps now allow us to buy policies and make claims in a frictionless and flexible way. This is becoming more the norm, and insurance brokers are using it to program instant payments when things go wrong.

In this new world of insurance integration, policyholders may expect certain events, such as lost luggage in the airport to trigger a process with their insurance company that will track the luggage and have it returned. That, or receive an instant bank payment for a compensatory sum.

In the case of home insurance, someone may be compensated for a break-in on their vacation, without realizing anything was amiss. The first indication their house has been robbed may be a notification on their phone.


As we move forward, the insurance business is expected to adapt more to the changing digital landscape as well as customer expectations.

Based on insights from big data, it’s likely that the insurance industry will create more personalized policies for customers and focus on loyalty and customer experience. What this means for consumers is they can expect better service with lower risk and lower prices.