The Portland daily press., 1885-09-09
New Hampshire Insurance Law.

10 the Editor Of the Press:
Your correspondent L. carefully evades
the real argument in favor of valued insur-
ance policy law Allow me to state it again.
1t is that it compels the insurer and the in
sured to agree upon the value of buildings in
sured at the time the policy is issued. If
this is done the rights of both are protected.
The insured and the insurer alike receive
and pay value for value. If, however the
company, wilfully or negligently, insures a
building for more than its worth it only suf-
fers the consequence of its own wrong if it is
obliged to stand to its contract If the emoney
of the widows and orphans who are stock
holders is lost, it is lost simply and solely by
the fraud or folly of the officers of the COM
pany.
L. says the valued policy law is calculated
to promote fraud. How? l.. says by allow
ing property holders to over-insure their
buildings and then set them on fire. The
answer to this is so plain it has not escaped
the notice of uninterested parties. 1t seems
to them that the valued policy law hinders
instead of promoting fraud, because it ascer
tains the value of the building at a time when
it can be seen and examined. Suppose under
that law person wants to defraud the COM
pany. He goes to an agent and asks for in
surance for double its value. The opportu-
nifty to detect the fraud or error is then pres
ent, and the agent after examination either
refuses the risk or reduces the amount. I'm
der our present system the agent takes the
risk, and after fire, if there is a contest over
the value it must be decided by the light of
testimony which is necessarily uncertain and
often contradictory. The present system Of
fers greater opportunities for fraud on the
company than the system proposed by the
valued policy law.
Why, then, do the insurance companies OPP
pose such law? The answer is not far to
seek We may illustrate thus: Suppose any
Portland agency writes insurance during the
year, on which the premiums amount to
$4,000; that the percentage gives the agency
an income of $1,000, and every policy Is for
sum precisely the actual value OF the house
insured by it. Now suppose the policy hold
ers can be induced to increase their lnsur-
ance twenty-five per cent. the income both OF
the companies and OF the agency Is increased
in like proportion, while the liability incurred
is no greater This whole cry of fraud is,
however, disposed of by the provision that
fraud vitiates the contract and can always be
shown.
InaG IL. Is DOI W6ll lulOIlllcQ upon Oilc ouU-
ject is shown by his statement that when
mans house is burned the cost OF replacing
il as good as before the fire is the sum the
companies desire to pay. ASK the farmers
of Maine whose buildings have been burned
if they have not uniformly claimed such a
rule and if the companies have not as uni
formly rejected it?
1t would seem to be equitable to allow the
companies to transfer their cases to the
United States courts, but the trouble is that
the privilege is abused merely for 0ppres-
sion. A man in the centre of the State
brings suit against foreign company on
policy of $1000in the local State court There
is no valid defense to the suit, but plenty of
prentense about over insurance, so that the
| insured must attend at the place of trial with
witnesses. This he can do at the shire town
of his own county without great expense /;
| but when the company transfers the suit TO
| Portland the expense is more serious ques-
| tion. In effect the company says to the In
| Sured, eve have no proof that your loss is
not just one, but it will cost you large
sum to fight a law suit at distance from
| your home; now we will pay you half or
| three-quarters of the insurance to settle,
and the poor man takes it to avoid spending
| his all in distant litigation with great and
| sOulleSs corporation.
| In all fairness the corporation came to this
vicinity and domiciled itself there for busi-
ness Why should not 1t be subject to the
| courts of that same vicinity?
/
/ the Immense sums of money paid out for
losses by the companies. Ihave just seen an
advertisement of several companies repre-
sented by l.. in this city. The assets OF mos1
of them were stated to be from one to three
| millions. Eighteen years ago the assets OF
none Of them exceeded three quarters OF q
Million | have made diligent inquiry and
cannot ascertain that within this time the
stockholders have ever paid in any money to
| increase the capital stock. In 1879 the stock
| inc aonnanipc 0f Connecticut maid In
losses So, ,754, ,715 and dividends to stockhold-
ers 81. .327, 800. That is, the amount paid In
dividends was more than one-thlrd the
amount paid for losses. The cash premiums
received by the companies were Sc, SIC, PIG, Ol
nearly double the amount of the losses. The
amount of capital stock of these companies
was SIS, ,301, 800, and of this much was earned
by the companies but the dividend upon this
| capital was more than sixteen per cent
These figures show that If the companies
have paid many millions of dollars for losse:
in the State the people of the State have pai6
to the companies nearly twice as many mil
lions of dollars.
l have selected these companies from Con
necticut because they do business largely il
Maine and fairly represent the rest.
There never was a more absurd claim thai
that the insurance companies are to be al
lowed to dictate to state what laws 1t shall
pass because out of the millions of dollars
collected from their policy holders they hav'
returned to them little more than one-half
| am not however, concerned about tn
withdrawal of the companies from New
Hampshire. 1t will be well if they do no
return for them the money sent out Of th
State to be paid in fat salaries to the officer
and high dividends to the stockholders will b.
kept within its own borders. They will how
ever return and conform to the laws wheI
they find that their arrogance is of no effect
When laborers have combined to strike
and obtain better wages from their employ
ers they have been freely censured, but thi
strike of the corporations against lay
which can do them no harm if they will fl,
values upon buildings when they insur
them but which will benefit the people b.
stopping the payment of premiums. for n
insurance and also by preventing litigation
for two-thirds of insurance litigation turn
on over valuation which should have bee
settled at first, this strike calls forth no pub
lie rebuke, thought has caused much privat
indignation.
have no private grievance and have eA
pressed the views above indicated becaus
/ believe them to be just and sound and thin
that the similar law which has been ofte
asked for in this State and as often defeate
by the companies ought to be agitated fC
until the agitation is successful.