|
|
|
|
|
|
Mutual insurance in America, as we have come to know it, really began in London,
England in 1696 with the formation of Contributors for Insuring Houses, Chambers
or Rooms from Loss by Fire by Amicable Contributionship. For obvious reasons it
became more commonly known as the Amicable Contributionship and ultimately as the
Hand-in-Hand, a reference to the organization's fire mark, one hand clasping another
hand, reflecting aid and assistance.
|
|
|
|
Like so many other ideas of its time, travelers from England to the colonies brought
stories and accounts of various insurance plans and schemes. Probably as a result,
the first attempt at a fire insurance plan in America was in Charleston, South Carolina
in 1736 with the formation of the Friendly Society of Charleston (Charles Town).
Unfortunately, in 1740 Charleston suffered a conflagration that is said to have
consumed over three hundred houses besides storehouses, stables and several wharves.
The losses sustained by the Friendly Society were far too great for its fledgling
operation and the organization failed.
|
|
|
|
At about the same time that the Friendly Society was trying to get started, the
esteemed Benjamin Franklin resided in Philadelphia and was continuing his long-standing
interest in fire prevention. With the help of others he formed a purely volunteer
fire fighting association in 1735 called the Union Fire Company. Because of the
social aspects of this type association it precipitated the formation of other fire
fighting associations thus to the benefit of all citizens of Philadelphia. However,
in spite of the inherent value of having firefighting associations, Franklin came
to realize that fire was as inevitable as death and taxes and concluded that a plan
of insurance was needed to make up the losses caused by fire.
|
|
|
|
With that realization, Franklin set out to form an insurance company patterned after
the Amicable Contributionship, an organization he may have become familiar with
while working in England as a journeyman printer. The Philadelphia Contributionship
for the Insurance of Houses from Loss by Fire was organized by Benjamin Franklin
and his colleagues in March 1752 and remains today the oldest mutual fire insurance
company in business in America. The Philadelphia Contributionship selected as its
fire mark four hands crossed and clasped in a form commonly known as "Jacob's Chair".
As was the case with the Amicable Contributionship, the Philadelphia Contributionship
also became known in America as the Hand-in-Hand.
|
|
|
|
Fire marks were used in England to identify the houses insured by a particular insurance
company so that their fire fighting brigades would know which dwellings were supposed
to be protected by them. In America, however, the fire fighters were volunteers
pledged to the public good by responding to any fire regardless of who insured the
property. Fire marks in America were simply used to identify property insured by
a company, perhaps in an early effort at advertising the insurance protection they
provided.
|
|
|
|
In 1784 a second mutual fire insurance company was formed in Philadelphia, The Mutual
Assurance Company for Insuring Houses from Loss by Fire. The Mutual Assurance Company
was organized by former policyholders of the Philadelphia Contributionship because
in 1781 it had decided to no longer insure any building that had trees near it.
The Philadelphia Contributionship felt that trees were a fire hazard and interfered
with the fire fighters efforts. The fire mark selected by The Mutual Assurance Company
was a tree in full foliage and the company quickly became known as the Green Tree.
The Mutual Assurance Company merged into the National Grange Mutual Insurance Company
in 1996.
|
|
|
|
The Mutual Assurance Company for Insuring Houses from Loss by Fire in New York was
formed in New York City in 1787 but the Company was chartered into a stock insurance
company in 1809 and thus ceased operations as a mutual insurance company.
|
|
|
|
The Baltimore Equitable Society was formed in February 1794 in Baltimore Maryland
generally patterned after Franklin's plan of mutual insurance in Philadelphia. The
Baltimore Equitable Society's fire mark is two clasped hands. Clasped hands have
been a part of many fire marks in England and America and have become something
of a universal symbol of mutual insurance. The Baltimore Equitable Society remains
the second oldest mutual fire insurance company still in business in America.
|
|
|
|
Just to the South of Baltimore in December 1794, the Mutual Assurance Society Against
Fire on Buildings of the State of Virginia was incorporated by a Special Act of
the Virginia General Assembly. Unlike the aforementioned companies, the Society
was proposed as a statewide insurance company. Because of its planned scope of operation
the Virginia General Assembly imposed a $ 3 million fire insurance subscription
requirement in the Society's Articles of Incorporation. Thus, the Society did not
commence business until December 1795 and didn't issue its first policy until February
1796. As was the case with other 18th century companies, the Society's extremely
long name became shortened through use and the Society was commonly known as the
Mutual Assurance Society and the Old Mutual until its name was officially changed
in 1982 to the Mutual Assurance Society of Virginia. The Society did not adopt a
fire mark at its inception because fire fighting capabilities developed in Virginia
were for all its citizens regardless of whether or not insurance was purchased.
However, on the occasion of its 200th anniversary in 1994, the Society did adopt
a bicentennial fire mark reaffirming the mutual commitment of the Society and
its member policyholders, each to the other. Many policyholders have elected to
display this handsome fire mark on their insured homes.
For a more detailed history of the Mutual Assurance Society of Virginia, click here to open our 32 page bicentennial history "Founded Upon Benevolence". This Adobe Acrobat Reader document will be more easily read when printed.
|
|
|
|
By the late 1820's mutual insurance was developing rapidly, especially in the New
England area, and would follow the westward development of America into the Midwest
and Plains states with literally hundreds of town and county farm mutuals being
formed through the grass roots efforts of local citizens. The characteristics of
a mutual insurance company are as valid today as when the first company was founded
in America. A mutual insurance company is owned and operated by its policyholders.
It is run for their exclusive benefit. They are the company. There are no stockholders.
Each policyholder has a voice in the affairs of the company. Collectively they elect
its board of directors who, in turn, elect the officers who serve as the active
managers of the business. Pure mutuals continue to operate in substantially the
same manner they did when they began. Today's economic challenges and technological
changes must still be addressed, but the underlying concepts and principles remain
as they always have been and forever will be.
|
|
|
|
References:
|
|
|
|
|
Biography of an Idea-The Story of Mutual Fire and Casualty Insurance
|
|
By John Bainbridge, Doubleday & Company, Inc., 1952
|
|
|
|
Footprints of Assurance
|
|
By Alwin E. Bulau, The Macmillan Company, 1953
|
|
|
|
|
|
|
|