Mutual insurance in America 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. 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 tremendous fire that consumed over three hundred houses, besides storehouses, stables, and several wharves. The losses sustained by the Friendly Society were far too great, and the organization failed.
At the same time, Founding Father Benjamin Franklin, with the help of others, formed a pure volunteer firefighting association in 1735 called the "Union Fire Company in Philadelphia." This precipitated the formation of other firefighting associations to service the entire city. In spite of the inherent value of having firefighting associations, Franklin realized that fire was as inevitable as death and taxes and concluded that an insurance plan was needed to make up for the losses caused by fire.
Franklin set out to form an insurance company patterned after the Amicable Contributionship. The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire was organizedin 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 as the "Hand-in-Hand."
Fire marks, or house badges, were used in England to identify the buildings insured by a particular insurance company so their firefighting brigades would know which dwellings they were to protect. In America, however, the volunteer firefighters were pledged to the public good and responded to any fire, regardless of who insured the property. Fire marks in America were perhaps used to advertise 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." This company was organized by former policyholders of the Philadelphia Contributionship because, in 1781, the PC had decided to no longer insure any building that had trees near it. Trees, they felt, were a fire hazard and interfered with the firefighters' efforts. The fire mark selected by The
Mutual Assurance Company was a tree in full foliage and the company 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 ceased operations as a mutual insurance company. The Baltimore Equitable Society was formed in April 1794 in Baltimore, Maryland, and was generally patterned after Franklin’s plan of mutual insurance. 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 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. As a result, the Society did not commence business until December 1795 and did not issue its first policy until February 1796. Like many other 18th-century companies, the Society’s extremely long name became shortened, and the Society was commonly known as Mutual Assurance Society and the Old Mutual until its name was officially changed in 1982 to Mutual Assurance Society of Virginia. The Society did not adopt a fire mark at its
inception because Virginia's fire brigades were for all its citizens regardless of insurance status. However, on the occasion of its 200th anniversary in 1994, the Society did create 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 it on their homes.
Many of Virginia's Founding Fathers insured their homes with Mutual Assurance beginning in the early 1800s. Mt. Vernon, Monticello, Ashlawn, Marshall House, Stratford Hall, and Scotchtown are just a few of the houses across Virginia the Society protected. By the late 1820s, mutual insurance companies were 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 mutualsforming through the grassroots 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 as they are the company. There are no stockholders. Each policyholder has a voice in the affairs of the company and collectively elects 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 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 have been and forever will be.
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
At Mutual Assurance, we are proud to have served Virginians for over 225 years. To learn more about the Mutual Assurance Society of Virginia and its rich history, open our 32-page bicentennial history “Founded Upon Benevolence.”