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A Brief History of Homeowners Insurance

Your home is not only one of the biggest purchases you make but arguably one of the most important ones, providing shelter and protection for your family as well as safety. For this reason, homeowners' insurance was created.

The first homeowners' policy of record in this country was sold in 1734 and only gave protection against one peril: fire. It was called the "Friendly Society for the Mutual Insurance of Houses against Fire."

But the insurance company selling it soon went out of business when the great fire of Charles Towne (known today as "Charleston"), South Carolina wiped out nearly the entire town.

Soon after, new insurers began popping up to sell homeowners' insurance and this time they considered the home's building materials flammability in determining the price of the policy. Yet each policy's terms and conditions varied greatly while still only protecting from fire damage.

If a homeowner needed insurance protection from wind damage he would have to buy a separate policy for wind and he may have to buy it from another insurer since not all companies sold policies covering wind.

Then in 1918, almost 200 years later, the "165-line New York Standard Fire Policy" was written and became the basis of all personal property policies today as a basic form in many states. However it's so basic that it still only covers fire and lightning and by endorsement also covers windstorm, hail, explosion, riot, air craft, vehicle damage, smoke damage, and sometimes vandalism and malicious mischief.

In the 1940's insurers began offering a policy that added liability protection as well as property protection. Over the years it was revised quite a bit and then in 1976, the "Homeowners 76" policy came along, unifying policies by simplifying the contract language and organizing it into five parts:

  • Definitions
  • Coverage
  • Perils Insured
  • Exclusions
  • Conditions

The "Homeowners' 91" policy came along in 1982, and was revised in 1984 and again in 1991, covering an owner occupied dwelling and a dwelling residence to no more than two families and not more than two renters or boarders. The policy was only for dwellings of residential use, not business, and not for farm houses or mobile homes either.

And then in 2000, the policy was changed again, this time making over 50 changes, the most significant of which was the complete withdrawal of the Basic Form.

If you own a home today, chances are you have a homeowners' policy laying around somewhere. And you can bet, it covers a whole lot more than it did back in 1734 when all you could buy was fire coverage.