WTF Fun Fact 13227 – The First Insurance Company

The first insurance company was established in the city of Genoa, Italy in the late 14th century. It provided coverage for ship captains and merchants in case their cargo was lost at sea.

Technically, it was the first modern insurance company, since insurance goes back to roughly 2000 BC.

What do we know about the first insurance company?

The city of Genoa, Italy was a center of commerce and trade in the 15th century. That’s partly because it was a natural stop for merchants and ship captains traveling across the Mediterranean to trade goods.

With so much trade and commerce taking place, loss was inevitable – especially at sea. it was only natural that a system of risk management would develop to protect merchants and ship captains from financial loss. In fact, these types of contracts had existed for over 1000 years, but had previously been tied to loans.

While we don’t know much about the group that constituted the first insurance company Genoa in the late 14th century, it appears to have been created as a mutual aid society. In other words, members paid premiums and shared the cost of losses in case their cargo was lost at sea.

By the mid-15th century, insurance was a well-established industry in Genoa, and the city became known as a hub of insurance and risk management.

However, the insurance industry did face challenges at the start. For example, the city and its docks were at constant risk from attacks by pirates and other thieves. As a result, insurance companies had to find ways to provide coverage in the midst of many unpredictable dangers.

Of course, the insurance industry became incredibly lucrative. So much so that the government subjected it to hefty taxes.

Much of what we know about the details of Genoa’s early insurance days comes from two contracts. They were signed by seafarers in 1343 and 1347. These were the first insurance contracts not to be tied to marine loans. This made them unique by tying them to a company that solely dealt in risk management. In other words, the first insurance company.

The first insurance contracts

But insurance itself doesn’t begin in Genoa.

Insurance contracts have a long history, dating back to ancient civilizations. Over 2000 years ago, people would pool their resources to protect against financial loss. The loss could have been caused by unforeseen events such as fire, theft, or death. While it’s unlike the modern contracts offered by insurance companies today, this concept of mutual protection and risk sharing is considered to be the earliest form of insurance.

We know this took place in ancient Babylon because we still have fragments of the stones the contracts were chiseled into. They indicate that merchants would pool resources to protect against losses from shipping and trade. If a merchant’s goods were lost or damaged during transit, the other members of the pool would share the cost of the loss.

Merchants in the Roman Empire also used mutual aid insurance to protect against the loss of cargo and ships during sea voyages. Merchants would form associations to share the risk of loss.

While this may seem benevolent in terms of modern life, a person who engaged in mutual aid could rest easier knowing that it was unlikely that one event would cost them everything.

These early forms of insurance were informal. Many times, there were no formal contracts or regulations, and the terms and conditions of the insurance arrangements were often defined by custom and tradition.

 WTF fun facts

Source: “The Earliest Insurance Contract. A New Discovery” — The Journal of Risk and Insurance

WTF Fun Fact 12716 – Insurance Pays For Man’s Dishonesty

We’re not even sure where to begin here. But one thing is for sure – if you know you have a sexually transmitted infection, that’s something you tell your partner.

Of course, we’re not sure a Missouri man has learned his lesson after failing to tell his girlfriend he had human papillomavirus (HPV), an STD that can cause cervical and other types of cancers. That’s because it’s his car insurance company, GEICO, who will be paying the $5.2 million in damages for his transgression.

We’ll let Yahoo News explain:

“According to court papers, the woman, identified in court records only as M.O., notified GEICO in February 2021 of her intention to seek monetary damages, alleging she contracted HPV, the human papillomavirus, from an insured member in his automobile. She contended the man caused her to be infected with the STD despite being aware of his condition and the risks of unprotected sex. The insurance company declined the settlement, sending the case to arbitration.”

Of course, GEICO appealed the verdict, but the Missouri Court of Appeals just upheld the settlement and their liability.

“In an opinion issued Tuesday, a three-judge panel found that the judgment entered against GEICO General Insurance Company through earlier arbitration proceedings was valid. The insurance companies sought to undo the action, claiming errors were made in Jackson County Circuit Court and the settlement agreement was not done in line with Missouri law,” writes Yahoo News.

The verdict was first handed down in May 2021, when an arbitrator found that “the man and woman had sex inside his vehicle that ‘directly caused, or directly contributed to cause’ the HPV infection. The man was found liable for not disclosing his infection status and the woman was awarded $5.2 million for damages and injuries to be paid by GEICO.”

The appeals court simply found that GEICO had no legal standing to try to relitigate the case. — WTF fun facts

Source: “Jackson County woman says she caught STD in car. Auto insurance to pay out $5.2 million” — Yahoo News

WTF Fun Fact 12439 – Alien Abduction Insurance

After noticing his homeowners insurance didn’t cover alien abduction, Florida insurance agent Mike St. Lawrence (of the St. Lawrence Agency) decided to offer it. You can purchase limited coverage for $19.95 or comprehensive alien abduction insurance for $24.95.

St. Lawrence has sold over 6000 policies to those who “want to believe.”

According to WFLA News, “Each policy includes $10 million worth of coverage as well as outpatient psychiatric care, sarcasm coverage, and double identity coverage. Policyholders can claim to be eligible for double the standard coverage, but that payout would be based on verifiable and extreme circumstances.”

“I take a very opened mind approach to this, whether it’s happening or not. But if you get one of our policies, show you have a sense of humor about it,” said St. Lawrence. 

In order to start the process of filing a claim, a person will have to obtain a signature from an “authorized, on-board alien.”

“Some way, you have to be able to prove it, and I have had a couple exceptions where they didn’t get a signature,” St. Lawrence told WFLA.

Alas, there’s another downside hidden in the fine print. The payout to you or your beneficiaries comes in the form of $1.00/year for 10 million years.  

Believe it or not, St. Lawrence has paid at least two claims. He told WFLA that a policyholder submitted a Polaroid picture with alleged aliens as proof.  – WTF fun facts 

Source: “Don’t sweat alien threat” — SF Gate