Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1888-02-15

pose we insure a dwelling worth $1,000
for 81 900. and il is burned, the fire being
possibly superinduced by the greater
need for the money than for the house
the assured RECEIVERS the $1,000 and the
State loses its interest in the house OF
$3.50, for which it gets nothing for even
if it may safely follow the assured and
get tax on the 81 900 it loses the value OF
It's interest of 25 per cent. IN the house
that was DESTROYED from having 80 much
less of insurance assets to tax or from
which to derive tax or income.
Now the proposed bill actually at
tacks this principle OF co-insurance or
limitation of the insured value by which
the assured is made to carry part OF
the risk himself, and the State thus
abandons the strongest ground for It's
own safety as well as the true incentive
70 make insurance lawful and benitl-
cent calling, which it can never be suiii-
GENTLY without the aid of the State in
enforcing proper rules in respect TO
value for insurance, since the reckless
competition for business among the III
snrance companies induces concessions
to the assured of every sort till the
poor insurance companies are more OBJ
iects of pity and legislative clemency
than of censoriOus enactments.
In conclusion, it would be well to
show YOU the nature of the conditions
referred TO in the bill, while it should at
the same time he remarked that the bill
is not clear in its wording.
Bv the clause complained of in the
bill. which it should be stated Is used
bv the companies in policies on the spe-
cialy hazardous risks in villages and
sections uDprovided with water supply
and fire protection, the assured is re-
ouired to share one fourth of the loss.
The losses on such risks are usually
total-that is, the whole property IS
burned, and as insurance is designed to
be restricted to three iourths of the
value at risk, the insured in total loss
(where the actual value is what he states
it to bel loses his one fourth and the COM
panv their three fourths. For instance,
the assured states the value OF his
goods or other property to he S2,OUO.
The company will take $1,000. II the
whole is burned and the value has been
correctly given, the company pays
81, 5O0-the full amount of its policy
and the assured loses $500 but in case
of partial loss the like relations between
insured and insurer are maintained.
Say, If the loss is $1,000, instead OF
$4,000, then the company pays three
fourths of 81 500, which Is Sl,2OO, and
the assured loses 800, which is Just
what he has agreed TO do. But it may
be complained that his policy is for
81 800. Admit it, but it is no fault Of
the company that he did not keep up
his stock. Besides, if the stock was at
any time s., 900, the company had during
that time incurred the risk OF losing
the 81, 500 and it had, according to law
and usage, earned the whole premium.
If before loss the policy had been can
celled at the request of either party
the surrender value of the premium
would have been returned to the as
snred but the loss Occurring concludes
all questions. This application of the
principle of the reefourthsloss
clause, which is simply a subs St
ing co-insurance clause, seems plain
enough. and is based upon the
value to the insurers OF such con-
tinuing relations as a guarantee to them
of the fidelity and precaution of the as
sured Of nothing else) IN taking care OF
the property, and they feel that where
assured has lost his one fourth there
cannot be ground OF suspicion or COM
plant against him. But suppose the
clause ignored and the stock was re-
duced to 81, 800, what co-insurance in
terest would the assured have when he
is TO recover the whole 81, 500? and thus
this important principle recognized by
the civilized world of the virtue and pro-
priety OF the assured sharing in the loss
Is abandoned ard rendered nugatory
There is one other view in which the
three-fourths-loss or co-insurance clause
NAV be considered, and it is this Sup
pose the insurance exists as before
stated-that is, for 81, 500 on a declared
value at risk of S2,000-and slight fire
occurs by which damage results Of 300.
The assured would recover $50 aud still
lose his one fourth $3.50 of the whole
loss and yet this is no hardship to him.
We cannot have the clause based upon
fair consideration of the whole risk
and rate of premium modified to equita-
bly, compensate the assured for his as
suming his one fourth of the loss, and
then treat the matter argumentatiyely or
practically as if the clause was unjust
and did not exist, or that it exists only
in cases OF total loss. To be OF value to
the companies, the public, and the State
the utility and proprety OF this condi-
ton of insurance is only 10 be maintain
cd by uniform application of it, and the
insured suffers no greater hardship in the
instances OF partial loss than in those
of total loss, and none that he has not
plainly and willingly accepted.
The experience OF the companies is
based upon all the contingencies of loss,
and if assured wants a policy the effect
of which will be to vary these experiences
he would have to pay for it proper
/ toned to the conditions he desires to
secure. The assured can insure against
total loss only, or against loss that in no
case shall exceed so per cent. of the
value at risk, and in such cases he would
pay rate proportional to the change Of
the hazard to the company.
Non-occupancy occurring during the
term OF the policy increases the risk to
the companies-and usually occasions 9
limitation of the liability of the com
psny--aud so clause to this end has to
be applied; for they cannot afford to in
cur an increase OF hazard without COM
pensation either by increased premium
or reduction OF amount insured. But
the "bill " prohibits all limitation
clauses. AS the good will OF the public
and the just regards OF the Legislative
body is the reasonable ambition of the
insurance fraternity, the seeming want
Of knowledge OF insurance business is
much to be regretted asa stumbling
block in the way Of such consideration.
The three-fourths clause is O fair and