The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1893-03-15

each carrying stock Of $4,000. The phys
ical hazard In each case Is the same and the
rate one per cent. "a" carries 80 per cent
of insurance, $1,000. "B" carries 40 per
cent, $4,000 A fire comes, damaging each
stock alike, say $1,000 Under the "old
method" "A" would pay $50 premium and
draw $4,000, and 4" b " $40 and draw same
amount, $4,000. The loss ratio in the one
case would be 37l per cent and In the other
rs per cent. Here under the "old methods"
was an inequality. The risk which ~"
asked the company to carry promised a
higher loss ratio than the risk of "a" yet
the rate was the same in each case. Coin
surance remedies this 1t asks " b., whose
risk is the greater, to pay an advance OF 90
per cent over "A's" rate, or one and one
half per cent, or, in the contingency of
loss, by his own contribution, to place the
company insuring him in same position as
to loss. ratio and salvage as the company in
surfing GA" Is this anything but fair as
between " b and the company? Can any
thing be fairer as among the insured them
selves than that each should be asked to
pay for what he has. guild pro quo.
Man proposes, but higher power dis
poses. During the progress of the fire
the company insuring b was probably
facilitating itself that It's risk was only
81 900, and the company insuring A
would have gladly surrendered all its
premium to be placed in the shoes of the
company insuring B. AS high insurance
made him serene, and B was sad in view
of his low insurance. Each company
received premiums in exact proportion
to its risk. If the loss should be total,
the company insuring B would be the
lucky one; if partial, the company in.
surfing A would have the advantage.
Insurance is good deal of lottery, in
which insured and insurers must take
their chances.
But settle this loss under the CO.
insurance clause, which, like death, is a
great leveler and evens up all Unequal
tiles in the insurance world. The
company insuring A would pay him
$4,000, his full loss. Co-insurance,
Mr.. Mcfarland says, casks B, whose
risk is the greater, to pay an advance of
fifty per cent over AS rate, or one and
one. half per cent?; BIS premium would
then be $50; the addition of fifty per
cent has evened things up and he has
an equitable claim on the full amount
of his loss. Co-insurance asks B to pay
this increased premium, cor, in the
contingency of loss, by his own con-
tribution to place the company insur.
ing him." etc.-that is to say, to accept
the eighty per cent co-insurance clause,
and under that clause the company
would contribute $1,000 to pay BIS loss,
and would contribute 1901 Under
the first alternative B pays 500 add-
tional premium and becomes entitled
to the full amount of his loss, $4,000;
under the second-the eighty per cent
co-insurance clause-he receives 81 500
and contributes $500. And still Mr..
Mcfarland undertakes to maintain that
"advance in present tariff rates cannot
be made in more equitable manner,
as between the insured themselves,
than along the lines of coinsurance ~!
Here is our quarrel with co-insurance.
1t is scheme of robbery, and the
country is in rebellion against it. If
rates are not sufficiently high, raise
them, we repeat, man fashion and bust.
ness.fashion.