The Portland daily press., 1885-10-21
INSURANCE CONTRACTS.
The New Hampshire Law Letter
from Commissioner PlIIsbury.


Colonel Martin V. Calvin, the member Of
the Georgia legislature who introduced the
recently defeated ''yalued policy" bill in the
legislature of that State, wrote to Insurance
Commissioner Pillsbury of New Hampshire
for his views on the subject Of valued poll
cy' legislation. Here is the reply in full as
it appeared in the Augusta (Ga) Chronicle:
INSURANCE COMMISSIONERS OFFICE,(
CONCORD, N. H., Sept. IL, 1885. !
The Hon. slfarti,a Y. Cabin, Member Of Le0ts-
Dear Sir,-Yours OF the 14th duly received. As
you suggest the people Of this state are IN an
surance company has cancelled its agencies,
called home supplies, and Withdrawn. from the
State and l am Just informed that above seventy
five other companies are pledged not to write 4
policy for citizen of this State. A few compa-
MES are caneelling policies, but this is yet gen
eral. For home companies we are limited TO one
stock and few small mutuals; consequently,
manufacturers traders, and business parties gen
orally, including the banks, who hold heavy
be, almost literally without insurance. strong
men of wealth, the accumulation of years OF IN
dustrious toll are soon to be at the mercy Of the
devouring element. The situation may be partial
ly imagined, but not easily described.
It is in contemplation among business men to
petition the governor to convene the legislature TO
repeal the law while average citizens. who have
only their shelters to insure largely oppose the
movement. The future, therefore, is In doubt. |
enclose copies of the recent enactments.
You will notice that they are compilation
the most OffenS1ve Legislation tOucnlng insurance
that exists in all the States, single State, ex-
cept this. having adopted the whole batch; still
the valued policy is the chief bone Of contention.
Insurance capital Is becoming very sensitive as
to the introduction of this principle. Their expe
riences in States where it has been adopted con-
firm their worst fears in relation to it, and they
feel compelled to make stand against it in self
defence and for the protection OF their customers
The valued policy has been put fotrh as RENE
dy for Over-insurance, which is unquestonably
great evil This, however. Is not the first instance
where a proposed remedy has aggravated the dis
ease. A little reflection must convince any one
that such law invites and facilitates the evil is
so desirable to abate; it provides that the sum
named in the policy as limit no matter now
many manipulations, misstatements, conceal
mentS or subterfugeS may have been devised TO
obtain it, shall be paid ali hOugh IT may be twice
the value of the property destroyed. know II Is
often hippantly said person should have all the
insurance he pays for, ignoring the idea OF lndem-
nifty. With the unrefecting this phrase passes
quite current, but will 1t bear moments tnyest-
CATION? Primarily, in nine cases out OF ten, the
owner is the best judge as to the value OF his
property; If he pays for more insurance than 1t Is
worth lie does so voluntarily, and for some pur-
pose; there is no compulsion, however derehct as
to his duty the agent may be- This soyer-insurance,
when obtained, at once takes away his interest In
the preservation of his property; it makes 1t
worth more to burn than to keep, and therefore
invites him to apply the torch. To substitute the
valued policy for the indemnity contract Is TO sub
sttute carelessness for care, incentive for precau
tion knayery for virtue and to increase the moral
Under this law dishonest agents and property
| owners may connive together, and sell undesira-
| value and the companies are practically est0pped
from exposing the fraud and protecting themselves
as well as the public who eventually do all the
paving for every fraud even enters into the pre-
miims we pay for insurance.
The valued policy proposes to change the sim
pie indemnity contract against loss, which mas
been the theory and practice OF insurance ever
since its origin, into speculative contract, and
is in direct opposition to the whole tenor OF the
decisions of courts in this country and In England.
which have uniformly held that the possible re-
covery Of more than the value of the property de-
ie nuhlir nOlieV and inuri-
Gus to public morals. This measure in effect of
fers premium for fraud. It furnishes the honest
portion of the community with increased burdens,
and shields the rogues with their fllg0tten booty.
| 1t makes contracts arbitrary which have hereto
| fore been opened to adjustment by disinterested
| neighbors, or on appeal to the courts where In
| surance companies especially rarely obtain mercy.
In this State, by the adoption OF the amendment
to chapter 172 of the statutes, all the stpulat1OnS,
covenants and agreements on the part of the In
sured found in ordinary policy contracts are swept
away so that, with his valued policy, he stands
complete master of the situation If embarrass-
ment presses him, or avarice allureS, or innate
deviltry tempts him, he has the staff in his own
hands, The poor boon of proving fraud before a
preiudced and therefore hostile jury, left the in
surance companies, is simply a bold indignity. /
danger to the public veal, debauching the public
morals, and as directly contrayening the petition,
LEAD us not into temptation"
Gases of Injustice do occur through over-zealous
agents and adjuSterS, for which L would be the
last apologize, butthese are the exceptions and
not the general rule. Thousands of losses may be
| and are literally adjusted and promptly paiu
| without exciting comment while single case Of
| injustice creates a tempest that sweeps through
| the whole community with electric speed. While
| I deprecate these isolated cases do not think
/ they Justify the enactment of this sweeping and
revolutionary measure, which WOULD upset all tOr
/ mer court decisions, changing the indemnity con-
/ tract so long the rule, into speculative wager
| and opening wide door for fraudulent operations
| that will inevitably increase the hre waste and
/ greatly endanger and oppress honest people that
| rogues may thrive.
| I have thus hastily described the situation in
| this State as you desired, and briefly given my
| views of the measure under consideration. hope
your honor able legislature will arrive at wise and
| lust conclusions whether l am in the right or in
| the wrong. Yours very truly,
OLIVER PILLsBURY.
Insurance Commissioner.