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This Month in Business History

Homeowners Insurance

Gulnar Nagashybayeva
Business Reference Section
March 2009

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Overview

In September 1950 the Insurance Company of North America (INA), the largest and oldest company of its kind in the United States, introduced a profoundly innovative idea that transformed the insurance industry. INA's new multiline or package homeowner's policy offered coverage for almost anything that could happen to a house and cost 20% less than the combined premiums on separate policies homeowners had to buy for similar coverage.1

Newspaper ads that promoted the new policy in early 1950s read:

  • "Brand-new idea in insurance! The new Homeowners Policy of the North America Companies protects you against loss caused by fire, theft, lightning, wind, explosion, hail, riot, vehicle damage, vandalism and smoke."2
  • "Here, in a single policy, homeowners are provided with essential insurance at a price considerably less than the four separate policies it replaces."3

 

Insurance Co. of North America building, Philadelphia

Above:
Insurance Co. of North America, Building, Arch St., Philadelphia, PA. 1962.
From the Gottscho-Schleisner Collection
Prints & Photographs Division
Library of Congress
Reproduction number: LC-G613-77857

The estimated cost for a five-year policy under the new "package" in 1950 ranged between $88 and $100 while separate policies would cost $125. 4 The new package policies were an immediate success with homeowners for the cost savings and simplicity. They were also welcomed by insurance agents as they were easier to explain and sell to consumers.

The event had a tremendous impact not only for the insurance industry, but for banking, savings and loan, and the home building industries as well. This protection for homes and businesses, offered by the new comprehensive policies, provided more security to lenders' financial stakes in real estate market. The less expensive coverage made home ownership affordable to many Americans which in turn boosted the building industry and ultimately, the U.S. economy.

It was not long before other insurance companies followed INA's leadership into the new era of modernized and streamlined insurance 5

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Internet Resources

American Insurance Association
http://www.aiadc.org/ External Link

Institute for Business & Home Safety
https://www.disastersafety.org/ External Link

Insurance Information Institute
http://www.iii.org/ External Link

National Association of Insurance Commissioners
http://www.naic.org/ External Link

National Association of Professional Insurance Agents
http://www.pianet.com/ External Link

National Flood Insurance Program
http://www.floodsmart.gov/floodsmart/

Print Resources

"160 Years Young." Newsweek, April 13, 1953, 78-82.
LC Call Number: AP2 .N6772 April 1953
Catalog Record: 35009615

Carr, William H. A. Perils, Named and Unnamed: The Story of the Insurance Company of North America. New York: McGraw-Hill, 1967.
LC Call Number: HG8540.I62 C3
Catalog Record: 67030658

"INA Ties Itself in a Package." Business Week, January 9, 1965, 52-58.
LC Call Number: HF5001 .B89 January 1965
Catalog Record: 31006225

James, Marquis Biography of a Business, 1792-1942: Insurance Company of North America. Indianapolis, Ind.: Bobbs-Merrill, 1942.
LC Call Number: HG8540.I62 J3
Catalog Record: 42025688

Landmarks in Modern American Business., edited by The Editors of Salem Press. Vol. 2, Salem Press, Inc. Pasadena, CA. pp. 343-344.
LC Call Number: HF3021 .L36 2000
Catalog Record: 00032962

Montgomery, Thomas Harrison. A history of the Insurance Company of North America of Philadelphia: the oldest fire and marine insurance company in America. Philadelphia : Press of Review Publishing and Printing Company, 1885.
LC Call Number: HG9780.I5 M5
Catalog Record: 01005087
Online edition: http://www.americanterm.com/history-insurance-co-north-america External Link

"Packaged Policies Catch On." Fortune, Volume 42, July 1950. pp. 77-81, 108-114.
LC Call Number: HF5001 .F7 1950 July 1950
Catalog Record: 31007716

"The Underwriters: When the Supreme Court Said Insurance Was Commerce, Their World Turned Upside Down." Business Week, January 9, 1965, 52-58.
LC Call Number: HF5001 .B89 January 1965
Catalog Record: 31006225

Library of Congress Catalog Searches

Additional works on this topic in the Library of Congress may be identified by searching the Online Catalog under appropriate Library of Congress subject headings. Choose the topics you wish to search from the following list of Library of Congress subject headings to link directly to the Catalog and automatically execute a search for the subject selected. Please be aware that during periods of heavy use you may encounter delays in accessing the catalog. For assistance in locating other subject headings which relate to this subject, please consult a reference librarian.

Homeowners insurance

Homeowners insurance policies--United States

Insurance companies--United States

Property insurance--United States


 1. Landmarks in Modern American Business, edited by The Editors of Salem Press. Vol. 2, Salem Press, Inc. Pasadena, CA. pp. 343-344

 2. Display Ad 64 -- No Title. (1954, October 31). Los Angeles Times (1886-Current File), p. B11. Retrieved February 13, 2009, from ProQuest Historical Newspapers. Los Angeles Times (1881 - 1986) database. (Document ID: 434803142).

 3. Display Ad 61 -- No Title. (1953, September 14). Wall Street Journal (1889-Current file), p. 15. Retrieved February 13, 2009, from ProQuest Historical Newspapers. The Wall Street Journal (1889 - 1991) database. (Document ID: 104565129).

 4. Thomas P. Swift. (1950, September 17). "Single Insurance Offered on Homes: Fire, Theft, Liability and Other Hazards Are Covered in Inclusive Transaction New Policy Offers in a 'Package.' Coverage of Most Home Risks." New York Times (1857-Current file),131. Retrieved February 13, 2009, from ProQuest Historical Newspapers. The New York Times (1851 - 2005) database. (Document ID: 87052919).

 5. Landmarks in Modern American Business, p. 345

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