3. Automobile Insurance

Gilbert J. Loomis, a mechanic in Westfield, Massachusetts, built his own one-cylinder steam-powered car in 1896. He had an eye on starting his own automotive manufacturing company, but in order to get the ball rolling, he needed to drive his prototype over unmarked macadam roads to meet potential investors in various states. The potential for damage to his auto, oblivious pedestrians, and horse-drawn carriages during such extended journeys was huge, so he approached several insurance companies to purchase some sort of coverage for his vehicle. One company president expressed the feeling of many in the industry when he stated, “I’m not underwriting a gasoline can on wheels!” On October 20, 1897, Travelers Insurance took a chance on Loomis and sold him an automobile policy for $7.50 (about $190 in today’s dollars) which provided $1,000 in liability coverage.