Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1888-02-10
FRIDAY. FEBRUARY 10, 1893.
Insurance Laws.

Insurance Laws.
Insurance agents tell MS that expe-
rienoe proves that when times are hard
fires are numerous-in other words, that
there is IN any given community cor
respondence between the losses by fires
and the condition of business. On the
other hand, the insured are constantly
invoking the strong arm of the Govern
ment to aid them in getting the money
10 which under their contracts with the
insurance companies they are undoubt-
edly entitled.
The rates of insurance are so low that
il would seem incredible that there can
he any large number of what are called
bad moral risks the phrase "moral
risks referring of course TO the charac-
ter of the insured. A good moral risk Is
one where the insured is man who
would scorn TO burn up his property In
order TO get the insurance money. A bad
moral risk is one where the insurance
companies have, or think they have,
some reason to believe that the insured
wouldn't cry if his property were de-
stroyed by fire.
But insurance companies are not com
PEELED to accept all the risks offered
them. They ought TO do as men in all
other kinds of business do-judge for
themselves and pay the penalty them
selves if they do not Judge Alright. If a
merchant sells goods on credit to dis
honest customer he has nevertheless to
stand up to his bargain. Acting upon
this theory, the New Hampshire Legis-
lature two years ago passed "valued
policy" law This law, as we under
stand the matter, made it obliga- |
tory upon the insurance companies
10 pay in case of fire whatever sum
r they had insured q building or other
property for. That is, the law was based |
upon the theory that after house had !
been burned it was too late to plead that |
it had been insured for too large "A sum,
and upon the further theory that the |
companies ought to be held to be bound
by the acts of their agents. If they re-
lied upon their agents Judgment TO such |
a degree as to accept the premium pay |
able upon large sum they ought to be |
made to rely upon their agents iudg- |
ment as TO the value of the property in
sured. OF course this law was SO framed |
as to protect the insurance companies
against patent frauds, or frauds as to
which there could be no doubt.
What were the results? The New |
York Times summarizes them as follows
at is the people of the State who |
have suffered, and not the great outside |
insurance companies at which the law |
was aimed. The people have suffered in
many ways-in being compelled to pay |
higher rates than ever before in loss OF |
insurance placed by wildcat companies
in loss of money invested in new local |
companies in cost of new plant for the |
protection of property in the exclusion |
OF capital from the State, and the dis
couragement of manufacturers, whose |
inability to procure satisfactory lnsu-
rance has caused them to look for other
locations"
In other words, the people of New
Hampshire are so dishonest that the out
side we'll established insurance companies |
chose to abandon all their business in
that State rather than to trust them
We might read our northern friends
lecture upon the subject of their heinous
wickedness but we refrain. We are SO
much surprised to learn how low the con-
dition of morals is in New England that !
we fear we might be equally surprised to |
learn that the people of some of the |
southern States could not be trusted to |
insure their property at fair price nor |
10 take care of it after it was insured. |
Ii has long been a cherished belief Of !
osrs that nine men out OF ten, if not |
ninety-nine out OF a hundred, were
honest. But it appears that this is not
true OF the people OF New Hampshire.
Surely it is true of the people of Virginia.
But We quote the Times again:
&" In 1856 the fire loss was only S574,-
sos. while the average for ten years had
been SS72, 62S. This decrease was said
to have been caused by the exercise of
grester caution on the part OF property
ownois VINO had been deprived of in
surance, The supporters Of the law
eagerly pointed 70 the change as evil
deDce that home insurance and the
valued policy had saved the State q
great deal of money. But liz 1887 the
fire loss rose to the sum Of $1,000 l1.
on which there was insurance amount
Ing 20 1928, 59l. Here is an increase of
nearly 200 per cent. over the loss of
1886. aud OF 80 per cent. over the annual
average for decade.
The Times says that since the
"yslued policy law was enacted in
New Hampshire bills embodying the
same requirements have been pressed be-
fore the Legislature of five other States
and rejected by them all.
What shall be said OF such facts
Would our General Assembly be afraid TO
put the people OF Virginia to the same
test? Whatever anybody may say upon
the subject, all thoughtful persons must
agree that in legislating to prevent
wrong, great care must be taken not 10
do wrong he that comes into court
OF equity must come with clean hands