From the ashes of the city of London rose the first property insurance policies.
On 2 September 1666, a devastating fire ripped through London. It raged for four days and devoured 13,000 houses, 89 churches and 52 guild halls. While there were only 16 recorded deaths, 430 acres – or four-fifths of the city – was razed and it is estimated the fire destroyed property valued at £10,000,000 (or £1.5 billion in today’s money).
In the mid-1600s many buildings were made out of wood and the brick and stone houses had thatched roofs too. Even the footpaths were made of wood with no fire-stops inside them. To stop fires spreading, houses in the path of the fire were destroyed, creating ‘fire breaks’ and depriving the flames of fuel. London had a history of fires, so much so that when the fire broke out in Pudding Lane on 2 September the Lord Mayor was so unconcerned he went back to bed. No-one was prepared for the devastation that would ensue. (The only upside to the fire was that it effectively halted the spread of the plague that had gripped the city the previous year!)
More than 100,000 people were left homeless and the city had to be rebuilt. The 1667 Rebuilding Act aimed to eradicate risks which had helped the fire take hold and a slew of building and ‘fire prevention’ regulations were enforced, such as dictating building materials: “No man whatsoever shall presume to erect any house or building, whether great or small, but of brick or stone”.
At the time, tenants (not landlords) were liable for repairs to the property and were also expected to pay rent while rebuilding their homes. As a result, property disputes were common and the Fire Court was set up to decide who should pay, based on ability to pay (the judges could also cancel contracts). The first court session was held on 27 February 1667 and the last in September 1672. The court enabled Londoners to rebuild as soon as possible.
Following the fire, a law was passed allowing for an organisation to be incorporated that would indemnify for losses due to fire. So, from the ashes of the Great Fire of London rose the first insurance company, Insurance Office for Houses, in 1680.
Catering for brick and frame houses, an initial 5,000 homes were insured by Nicholas Barbon and his 11 associates in the Insurance Office. The success of this venture resulted in many similar companies being founded and by 1690 one in ten houses in London was insured.
It’s been 350 years since the Great Fire of London ravaged the city and led to the creation of the first property insurance policies. Home and contents cover is now standard and in the 1990s EBM introduced its first landlord policies. Today, RentCover is the leader in the Australian market with more than 120,000 rental properties under cover with protection for more than just fires.