Insurance came late in the U.S. one of the primary reason was the presence of too many risks. But when it finally came in the country it was supported by Benjamin Franklin, one of the most famous Americans in the history of the country. Franklin, an author, scientist, inventor, statesman added the title of insurer in his collection of titles.
The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire was the first mutual fire insurance company to be launched in America in 1752. The primary reason for the launch of this insurance was that houses were mostly made of wood and settlements were built close to one another. The company set new standards for building of houses and refused to insure houses that were prone to fire hazards. After seven years, Franklin played an important role in launching the first life insurance company, the Presbyterian Ministers' Fund.
The launch of insurance companies faced many criticisms from religious authorities who were against the idea of setting a value on human life. But slowly all criticisms cooled down when people found that insurances benefited orphans and widows too. With the industrial revolution, the demand for business and disability insurance increased. In 1864, the Travelers Insurance Company sold its first accident insurance. In 1889, came the first auto insurance policy.
The insurance industry met with scandal and fraud charges after few years of its launch. This happened because many insurance companies did not have the capital to pay claims. Instead, charged high premiums from insurers and forced out competitors to monopolize the industry. Many state laws were passed to curb this problem.
The Social Security Act of 1935 provided unemployment compensation and old-age benefits. In 1944, the Federal court passed a ruling that brought the insurance under the federal regulation. But the McCarran-Ferguson Act of 1945 by the Congress brought the insurance industry under the control of the state. Even today, the control remains in the hands of the state.