, 1872-12-30
Something About Its Nature
and Origin.
Who Were the First Underwriters,
and the "Chances " They
Took,
Fire Insurance in England, Ger
many, and France.

n it's action upon the elements. Statistics Of
experience in this branch of insurance are e1-
;eedingly meagre and unsatisfactory. It does
lot eeem probable that the calculations upon
which transactions arc based will ever approxi-
nate certainty go nearly rs do those which form
he basis OF life insurance. This very uncer-
:ainty, however, renders the protection
extended by fro insurance all the
more necessary to the mercantile community.
If no such provision against peril was made. COM
ncrce would be subjected to the most dangerous
and perplexing auctuations, owing to the de-
Btruction of valuable commodities. Insurance
is, therefore, the guardian OF commercial secur-
ity, end anticipating disasters the extent OF which
can only be roughly upproximeted, aggregates,
in advance, the resources OF the entire commu-
nifty for the protection Of each member. Thus,
losses which would work the ruin Of few, when
distributed over multitude become almost I'M |
The practice Of insurance differs considerably |
in different countries. In England most COM
panies transact all branches OF the business,
life, fire, and marine, while in Amcrica only the
last two are ever united, and in majority ot
instances even those departments are not con-
Quoted by the same company. The form Of con-
tract in the two countries is essentially the same
but it is likely that applications for fro insur~
ancc are scrutinized moro cloeely in England
than in this country. German companies in
sure against loss by theft during a fire, making
good all missing articles. while American
companies do not include such consequential
losses in the hazards insured against. In other
particulars the contracts are very nearly alike.
In some Of the German States, insurance is fur
nished by the Government, which causes the
value Of buildings to bo assessed, and tax
levied to provide for restoring that which may
be destroyed. Instead OF being humbly
entreated to insure by affable solicitor, h1ein
Herr is insured without any consultation Of his
wishes, and without having any voice il fixing
the price to bo paid. In case OF risks assumed
by companies, the law OF some OF the German
States provide that if any person shall procure
insurance in excess Of the value Of property in
surcd he shall forfeit all claims under the
policy.
In Franco q property-owner cannot obtain an
insurance against the direct losses sustained by
him. French companies specify in their policies
the classes Of risks assured by them as follows:
Tenants Risk; that ia to say, the effects OF the
responsibility for which the party insured iB
1874 Of the Code Napoleon. Claims Of Neigh
bors to-wit, the consequences Of any action
that neighbors may take against the insured on
the plea Of communicating fire to their property,
1854 OF tho same code. Claims of tenants
against the owner, for damage caused to their
furniture and goods, in nccordanae with the
cases provided for by Articles 1886 and ,721 Of
same code. The losses insured against being
indirect and consequential, a completely between
tenant and his landlord. or between two neigh
bors would be necessary in order to put up
game" on the companies. The French plan
would, therefore, soen. at first sight, the best
for companies and the community; but, as the
liability Of tho insured to his landlord neigh
bor iB fixed BY law, which, in this country, ia
| constantly being amended or changed, and as
| ires are more frequent occurrences among us
| owing to hastily-constructed buildings, such q
syEtom would doubtless givo 1lse to much htiga-
ton and endless perpleMty. The crime Of in
| cendlarisnl, however, needs some bettor check
most ye1atious problem with which underwriters
have to deal. Many suppose that this evil is Of
recent origin while, in fact, it is as old rs tho
introduction Of insurance. Over twenty
years ago it was estimated THAT
the small shopkoepcrsin in London Was an incendi-
ary fro" There seems but one sure remedy for
| this, and that would be provision III the poll
| cies requiring at least one~third Of the actual
loss to be borne by the assured This would
with honest insurers would be an incentive to
| greater caro- and watchfulncss. At present thero
Is little OF no difficulty in insuring property for
its full value, although the theory of course is,
| that the companies will only insure about th1eo-
| fourths.
The benefits Of fro insurance arc so apparent
that it is surprising it was not earlier adopted
The Saxon Guilds, about the close Of the eleventh
century seem to hnyo been the first to Gppreci
alto the leod OF some such protection. One o1
these e,cet1es had the following regulation
s'If member suffer from fire, water, robbery
or other calamity, the Guild is to lend him money
without interest" rule adopted By another
society was "NIen any member is about tt
70 abroad, each of his follow members shall con
tribute fiye-pence, and if any members houee il
burnt, one penny" Some Of tho first proposals
to organize FIRE insurance as 4 distinct institu
ton were stoutly opposed On the ground tina
such provision against contingent rerlls woult
/ be tempting Providence, and demorallzing to al
concerned. In the year 1GU9, m effort was mad
in Germany to induce the Lords Of Estates t.
insure the houses OF their subjects against fire
for which they we're to receive q premium Of
per cent upon tho valuation OF the property. I
| seonas to hayo been taken into account tha
heavy losses wero liable to occur at tn
very outset, but the movers of the en-
terpriso hoped that considerable fun
would gradually accumulate, more tha
sufficient to cover the average losses. An i'm
portant recommendation, which is equally az
plicablo to underwriting in our day, was tia
: only a portion Of the houses in each town DO in
: | cluded in tho Association. the value OF a
might constitute too hoavy risk. The supe,
stitious fears Of the reigning powers proyente
this excellent scheme from being carried Int
| effect. :,
The next attempt was made in England wit
better success. On tho 10th day Of soptombe
1851, prospectus was issued by, few 2rivas
9 individuals from their "otice, on IL
. back side OF the Royal Exchange
: in London, offering to insure brio
= houses against fire for sirpence, and timbt
houses for trelue pence in the pound, being I
: the rate of 21 per cent for brick, and per ce1
= for timber About tho same ti1no, it was pr
o q posed by others that the City Of London shou]
. undertake tho insurance of the property Of i
a citizens, and accordingly, on the 18th day OF Q
= tobor in the same year, an act was passed By II
; Court Of Common Council wherein the corpor
20 ton did "asreo and resolve to undertake ,
# insuring all houses within this city and hbe
= tyes from fro, and execute 80 same vii
= ali expedcion." Securities to the value
. one hundred thousand pounds were to be settle
= as nucleus for the fund, and rates of premiu
we're fixed at four per cent for brick houses, al
= eight per cent for modern Buildings. Tho .
= not being compulsory upon citizens, aud tt
municipal credit At the time being x ~, ,yory poo
u was abandoned in November, 1862, the e1isti1
contracts cancelled, aud the money paid +