February 1, 1898, marks the date The Travelers Insurance Company issued the very first automobile insurance policy in the United States. The policy was issued to Dr. Truman J. Martin, a physician from Buffalo, NY, for about $12, covering $5,000-$10,000 liability.
Travelers Insurance Company was founded in 1864 by the businessman James Batterson. James G. Batterson crossed paths with local banker James E. Bolter who had heard that Batterson and several others were working on introducing accident insurance to the United States. He asked Batterson how much he would charge to insure him for his four-block walk home. “Two cents,” Batterson said.And today, that two-cent is a souvenir treasured by Travelers. Batterson served as president of Travelers from April 1, 1864, until his death in 1901.
Before this, insurance policies were usually designed for horse-drawn carriages. In fact, the very first auto policy was actually written on a form intended for horses and wagons. The company simply crossed out the words related to horses and typed in the details for the motor vehicle.
At that time, cars were becoming more popular but Insurance was not a legal requirement, It was a choice made by owners who were worried about the risks of the road. It took many years for the government to step in and make insurance mandatory. Massachusetts became the first state to pass a law requiring drivers to have auto insurance, but that didn’t happen until 1925, nearly 30 years after Dr. Martin’s first policy.
The Travelers Insurance Company, which was founded in 1864, not only did they issue the first auto policy, but they also issued the first commercial airline passenger insurance and even the first insurance for space travel for the Apollo 11 astronauts.
Today, the growth of auto insurance shows just how important the car has become to our daily lives. What began as a single policy with a tiny amount of money has grown into a massive industry, in the United States and worldwide.
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