Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1879-02-22
The New Insurance Law.

some discussion of the principles OF fire in
surance. The law provides, with due res
trictions, that where insured property is de-
stroyed by fire "the amount written upon
the policy as the value of said property shall
be taken conclusively a. its value when in
sured and the measure of damages when de.
stroyed." That is the main principle of the
bill and the only one we propose discussing.
Our first and controlling principle in the
matter is that we have always been and al
ways expect 10 be In favor of perfect free
dom of contract on all subjects the present
act proposes TO render all contracts except
one Illegal /; in other words to prescribe to
both insurance compa les and TO insurers
only one condition of insurance, whatever
may be the wish of either the insurers or the
insured. This alone inspires in us a strong
prediction against the measure. We want
men free on both sides to make what con-
tracts they like.
We are in possession of circular printed
for distribution among our Legislators, in
which the underwriters succinctly sum up
the objections to this measure.
Their leading obj ection is that it would give
greatly increased facilities for OUer Insurance.
SO far as this practice is objected to we are
entirely with them where men are allow
ed to insure without refe ence to value, the
transaction becomes simply a bet upon a
certain event-the destruction of house by
fire. The insurance company bets the sum
insured that the event will not occur, the
owner of the property bets his annual pre-
MUM that it will, and he, If he has over in
sured, is liable to be tempted into careless
ness as to danger by fire, and (as has recent
ly been shown into actual arson in order to
determine the bet in his favor.
But this question does not quite meet the
question practically; the real question is,
shall the insurance agent or the purchaser
of policy become responsible for security
against over in urance? The question re-
ally resolves itself into the alternative as to
whether the property shall be valued at the
time of insurance or at the time of its des-
truction. As a question CT expense the lat
ter undoubtedly seems preferable. In the
former case every house which is insured
would have to b. valued in the latter case
only those which are destroyed. The circu-
lar we have spoken of illustrates this very
neatly thus. Out of $780, SIS dwelling houses
insured in a year $50 were burned. Suppo-
sing the fee for appraising a house to be $40,
this win make the expense for appraising
over two millions and halfif all have to
be appraised, but less than four Thousand if
only the houses burned are estimated. And
it will not avail to say that this expense
would fall on the insurance companies and
not hurt the policy buyers. 1t would all
come back on them ia the 70. M of in
creased rates of insurance. The ratio of pre-
miums to risks and expenses is now thing
so closely calculated, with a margin of prof
its so finely adjusted by means of unlimited
competition, that the slightest difference in
either profit, expenses or risk necessitates
a change in the rate of insurance or loss;
and, as no one will carry on business at a
loss, this means cessation of business. In
creased expense of any kind must, therefore,
ultimately fall upon policy-holders.
We notice in an article in the Memphis
Appeal ON this subject a rumor that in the
event of the passage of the bill certain in
surance companies to the number of about
thirty, representing insurance indemnity
to an amount of over one hundred and
twenty-five millions, will withdraw their
agents from this State. AS this is only given
as q rumor, and that in an er porte argument
in behalf of the underwriters, We of course
do not give it unqualified credence. Among
other things we should desire to be Informed
whether any considerable number of agents
have been withdrawn from Wisconsin, in
which State a similar measure has been en-
acted. If the rumor be Well founded we
should esteem such withdrawal misfortune
to the State. 1t is true, no doubt, that in
this case plenty OF other companies nearer
home would take risks in Tennessee, and
many new companies would be organized
for the purpose; but this concentrating of
companies on a small area would very much
impair the security for indemnity in case of
great CONGREGATIONS. Imagine that all the
houses consumed in the great Chicago fire
had been insured in Illinois companies
alone Every such company would have
become bankrupt and scarcely any inden-
nifty would have been paid at all. Even in
our GAINESVILLE fire. if all our assurances had
been in Tennessee companies we shrewdly
suspect that many a mans chance of in
demnity would have gone up with the
smoke of the confiagration.
But, as we said, we form no opinion
whether these agencies would be with
drawn. We do entertain very decided one
that If they are not, then the other alterna-
tive will be adOpted-that of a considerable
increase in rates of insurance.
And this must terminate our argument,
which is all against altering the mode of in
surance by legislation. We did propose to
discuss the equity of the present modes; on
which head our views would not have been
exactly in accordance with those of our
friends, the underwriters, but space tails US
and we reserve the subject for future con-
sideration.
Erhe insurance hill on which the above re-
marks We're based was returned to the House
of Representatives with the Governors veto
on Thursday whereupon some discussion
followed, and on a motion by Mr.. Dining
to pass the bill over the veto Ii was rejected
by a vote of 81 to 80. The Governors mes
sage accompanying the vetois an able paper
and win be printed in our next issue.l
WE are on for Guthrie to-day to join the
teachers meeting, at the Halltonian Acade-
my. We believe that all the educational in
situations In this city viii be represented
there.
We are glad to be able to state that Miss
Lizzie SCOTS class In calisthenics Is rapidly