Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1879-03-15
mEDDLtNa LEGISLATION.
-f-nsarance Tiiilr' No. 2.

ennessee than another makes its
ppearaace in the halls of the Capt.
ii. There is certainly wide diff
renee between the two bills; the
rst indirectly favored over-insur-
nee, the second directly and abso-
ltely forbids it under penalty OF
he forfeiture of the amount insured
Or by the company and forfeiture
+ the policy by the holder of it, the
proceeds Of the penalty being APP
,ropriated to the support Of public
lchooIs. Then, having forbidden
Iver-insurance, the bill makes the
um named on the policy the meas
ire of indemnity, in all cases for
bidding, or rather voiding, all poll
les in which the actual amount of
oss is made the basis of settlement.
This measure, it appears, then,
eompeLs the insurance companies to
sppraise every building before in
iuring it and makes them response
pie under heavy penalties for the
correctness Of their valuation. We
pbiect to all such legislation on two
grounds. First on free trade princi-
ples. The circumstances under
which any contract should be made
&illegal are very rare indeed, and
should be limited to the two cases of
contracts involving immortality and
those which compromise the rights
Of helpless third parties. Under
the first head it is just to make void
gambling contracts, contracts for
extra cOnnubial cohabitation, ETC.,
4 and under the second, contracts
where a parent contracts for exces-
Il sive labor on the part of his chill
4 dren, or for employment for them
injurious to health or morals, or
such as to preclude the possibility
AOf due mental and moral training.
Excluding these and these only, we
are opposed to all interference with
the freedom of contract. We deem
it no more within the functions of
legislature to forbid q contract for
II insurance on the basis of cOmpensa-
ton for actual loss, than to prescribe
the rate of profit which merchant
1 shall demand for his goods, or to
determine whether he shall sell for
cash or on credit.
But we deprecate it secondly be-
cause it is obvious to us that it will
I increase the rates of insurance. The
necessity of a precise valuation of
every property insured will impose
large additional expense upon the
insurance companies. This will in
! fallibly fall ultimately upon persons
insuring their property, for the
companies cannot if they would in
crease their expenses without in
creasing their rates. We have said
before that the relation of rates and
profits to the estimate of risks and
calculation of expenses has been
counted so closely and adjusted
with such a nicely that increased
expenses impose the alternative of
increased rates or cessation of bust
ness. There is no margin for any
thing else, and legislature can no
y more compel an increase of expenses
: without an increase of charges in
, any business than it can compel the
sun to rise in the west.
So much for the bill now before
the Legislature. We undertook,
| however, in our last to discuss some
matters of interest relating to GER
tain questions Of equity in insurance
and think this favorable opportu-
nifty for doing so.
1t cannot be denied that there has
been a very general dissatisfaction
felt about the mode of assessing in
IDENTITIES, and where such exists,
whether just or not, it is always
desirable to go to the bottom of the
subject with thorough investiga-
J ton. We imagine that there have
been very few cases of intentional
Over-insurance here, and these being
exceptional may be set aside. The
instances where, after a fire, prop
erty has been adjudged to be worth
less than the sum specified in the
policy have been those where the
value of real estate has largely de-
clined since the time of the first
insurance, and probably a large
percentage of the Insured property
in this city at the time of our late
fire was in this condition, and con-
sequently, the contract being based
upon the principle of indemnity for
actual loss, less sum has been paid
than the face of the policy calls for.
1t is very desirable that when set
Elements take place both parties
should be satisfied. Let us try to
get at the source of the disSatislac-
ton arising in these cases. 1t is
difficult for men to understand the
specification of any particular sum
in a policy when the payment of
that sum depends upon circumstan-
ces that can only be determined
after destruction of the property.
Should property decline in value
the principle of indemnity only for
actual loss is alleged by the COM
pany, and an abatement from the
face Of the policy is made; but now
suppose the reverse, suppose the
value of property to rise, and the
value when destroyed to be greater
than it was at the time of insurance,
then the companies abandon the
principle of indemnity for actual
loss and claim that the insurance
was for a specified sum Independent
of the actual loss of the policy
holder, and the latter party sees in
the transaction nothing better on
the part of the companies than the
principle of "heads l win, tails you
lose.
r. 1.