| Auto Insurance
a timeline with icons representing the history of car insurance

It’s hard to imagine a world without auto insurance, but in the early days of motor vehicles, car insurance didn’t exist! So how did we get to a point where almost every state has laws requiring a minimum amount of coverage? Well, we’re doing a deep dive on the history of car insurance in America to find out! So, if you’ve ever wondered who invented car insurance, when was car insurance invented, or when did car insurance become mandatory, check out our timeline below.

an infographic showing the timeline of car insurance

A Timeline of Car Insurance

1891: The first known car accident occurs when James William Lambert, an automobile inventor, hits a tree root, causing him to lose control of his vehicle and hit a hitching post. Luckily, Lambert and his passenger escape without any serious injuries.1

1897: The very first auto insurance policy is issued to Gilbert J. Loomis of Dayton, Ohio. Loomis’ policy, purchased for $1,000, would provide financial protection if his vehicle hurt anyone or damaged any property.2

1903: Massachusetts and Missouri require drivers to obtain and carry a driver’s license, one of the earliest driving restrictions. Up to this point, anyone could put the pedal to the metal. In fact, many drivers were taught to drive by the person selling them their vehicle!3

1925: Connecticut becomes the first state to offer liability insurance to drivers as a way to comply with a new financial responsibility law.4

1927: Massachusetts makes auto insurance history by becoming the first state to require automobile owners to purchase car insurance. These Massachusetts lawmakers are forward-thinking—they are the only state to require car insurance for almost three decades.4

1956: 29 years later, other states begin to see the benefit of mandatory car insurance laws and follow Massachusetts’ lead. New York is the first state to follow suit, and North Carolina comes soon after.4

1991: Direct Auto Insurance is founded by William Adair. He envisioned a premier, non-standard automobile insurance company that served its customers better than any other insurer.

Today: Car insurance requirements vary state to state, and all but two, New Hampshire and Virginia, require mandatory (compulsory) car insurance. Those two states still require proof of financial responsibility and recommend purchasing auto coverage.

Direct Auto Insurance has been providing affordable coverage since 1991! We’re committed to giving you the coverage you need, the services you want, and the respect you deserve. Call 1-877-GO-DIRECT today for a fast and free auto insurance quote and to learn more about the insurance requirements in your state!


  1. “World’s First Automobile Accident”, Ohio History Central, December 2, 2021, https://ohiohistorycentral.org/w/World%27s_First_Automobile_Accident
  2. “World’s First Automobile Insurance Policy”, Ohio History Central, December 2, 2021, https://ohiohistorycentral.org/w/World%27s_First_Automobile_Insurance_Policy
  3. https://www.history.com/news/when-was-the-first-u-s-drivers-license-issued
  4. https://www.autoinsurance.org/when-did-auto-insurance-become-mandatory/
  5. https://www.bts.gov/content/motor-vehicle-safety-data