When Did Homeowners Insurance Start?

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Andrew Lee is insurance content writer and editor for BudgetMethod.com. Andrew holds a Bachelor's degree from Ryerson University and has extensive experience of writing content for financial websites. His expertise is especially strong in home and auto insurance.

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Every property has a level of damage risk associated with them, and for property owners, mitigating these risks sound like the prudent thing to do. This is why insurance policies exist. While everyone knows about the car, health, and life insurance, homeowners insurance is less often talked about.

This brief article delves into the concept of homeowners insurance, its meaning, and its historical beginnings. Hopefully, at the end of this piece, you’ll better understand what homeowners insurance is and how it works.

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A Quick Recap: What is Homeowners Insurance?

Generally, homeowner insurance is a type of insurance that protects your home and properties from damage, theft, or destruction. Homeowner insurance also covers damage to a residence’s interior and exterior, the loss or theft of possessions, and personal liability for harm to others.

Most mortgage companies now require borrowers to insure their properties and would not provide loan facilities without proof of such insurance coverage. This type of insurance isn’t only limited to homeowners alone; many landlords require that their tenants maintain renter’s insurance coverage. Thus, required or not, having insurance covering your home and properties is always smart.

Now that we’ve established what homeowner insurance is, let’s take a quick look at its history.

When Did it Start: Brief History of Homeowners Insurance

The concept of having coverage that covers your home and protects your belongings isn’t new. The concept dates back several centuries to the aftermath of the Great Fire of London in 1666, which destroyed over 13,200 dwellings and 87 church parishes.

But the insurance policy then is quite different from what we have now in terms of coverage and structure. In the 17th century, insurance policies were not regulated and had no formal structure as we have today; each policy only covered one potential problem. This means that to protect your home or properties, you would have to get separate insurance policies (one for fire hazards, another for lightning, another for burglary, etc.), unlike now, when all are covered under a basic homeowners insurance policy.

The Beginnings of Homeowners Insurance in the United States

The first insurance company in the U.S was established in 1735 during the colonial period in Charleston, South Carolina. We really can talk about the history of insurance in the United states without mentioning Benjamin Franklin, an Insurance entrepreneur who co-founded the Philadelphia Contributionship and popularized insuring houses from loss by fire. The company played an important role in helping people prevent fires and setting precedents in the industry.

Within the next century, insurance became a huge deal in the United States. What became a safety net against loss by fire quickly metamorphosized into a full-fledged industry with regulations. As expected, people took advantage of this opportunity to make money. Monopolies were formed, and minority groups were excluded, making insurance a luxury only the wealthy could afford.

20th Century to Our Time

As more time has passed, the Government realized there had to be an intervention to protect citizens’ rights and welfare from unfair practices and rogue borders. In the early 1920s, the Government took steps toward regulating the private insurance sector, and two notable laws were enacted:

  • The Social Security Act of 1935 secured citizens’ rights to unemployment insurance
  • The McCarran-Ferguson Act of 1945 shifted governance for the industry to the states.

This meant that insurance companies were regulated and controlled more closely. With these laws and many others, insurance companies have now made the necessary adjustments, desist from discriminatory practices, and offer more fair prices that would enable everyone to access insurance policies.

Additionally, these laws gave more formality to the industry and guaranteed easy payouts on claims that could be verified.


The insurance industry has undergone a transformation since the Great Fire of London. With technology, access to insurance policies has become easier. Apps and smartphones now allow us to buy policies and make claims at an impressive speed.

During this modern era of digital transformation, we would witness a faster and easier buying process, way more accurate risk-pricing, and more personalized policies for every customer.

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Andrew Lee is insurance content writer and editor for BudgetMethod.com. Andrew holds a Bachelor's degree from Ryerson University and has extensive experience of writing content for financial websites. His expertise is especially strong in home and auto insurance.