News and citizen. [volume] (Morrisville, Vt. ;) 1881-current, 1893-02-16

L
ance clause is attached to such poll
cy, the rate would be three per cent.
Before proceeding to illustrate the
application of the rule, it may be
well to say that it does not apply to
risks not specifically rated in the tar
iff, the larger class of which is farm
buildings and private dwellings, not
exposed by more hazardous property,
nor does it apply to policies written
prior to January /, 1898.
"In its application the Co-Insurance Clause
has no effect in the adjustment of losses
under either of the following circumstances;
that is, the assured would recover the same
amount in case of loss, as under a similar
policy without the Co-Insurance Clause
(a) When the guarantee is complied with,
that is, when the amount of insurance car
ried is equal to, or greater than, the guaran-
teed per cent. of the value of the insured
property at the time of the loss
(NoTE.-This is true whether the loss be
partial or totul.)
EXAMPLE No. 1.
The so per cent. Clause being attached to
policies:-
Value OF property insured ,............. $4,000
Insurance carried, not less than. 5000
Loss, whatever it may be, say. 5000
AIuOuuI ludU assured WOulu receive o,OOO
THAT is, the assured would receive the
amount of his loss up to the amount of his
polcy.)
(b) When the loss on the property is
equal to or greater than the guaranteed per
cent. of the value of the insured property at
the time of the loss.
(NoTE.-This is true whether the amount
carried is equal to the per cent. guaranteed
or not.)
EXAMPLE No. 2.
The so per cent. Clause being attached to
policies:-
Value of property insured, .......... $4,000
Insurance, any amount, say. 1000
Loss, not less than so per cent, say 5000
Amount that assured would receive 1000
| THAT is, the assured would receive the face
| of his policy, although he did not carry the
| per cent. guaranteed, because his loss was
not less than that per cent?
| But the Co-Insurance Clause has an effect
on the adjustment of losses, and the assured
| would be called upon to contribute with the
companies in the following case only
When both the loss and amount of insur-
ance carried are less than the guaranteed
| per cent. of the value of the insured property
| at the time of the loss.
EXAMPLE No. 3.
The 80 per cent. Clause being attached TO
| polcies:-
Value of property insured ,............. $4,000
Insurance less than 80 per cent. say 6,0O0
Amount tho nssured would receive a,ooC
(That is, he carries three-fourths as much
insurance as he guarantees, and therefore
receives three-fourths of his loss.)"
At the expense of repeating myself
would say that it should always
be borne in mind that the coin
surance clause does not compel the
insured to carry the per cent. OF
insurance named in the clause. In
fact, it does not compel him to carry
any particular amount of insurance.
1t simply is an agreement on the
part of the assured that if he does
not carry a certain percentage to the
value of the property at the time OF
any loss, he shall be considered a CO.
insurer, and will bear a part of the
loss himself, as he always has
done when under insured, in the
payment of total losses.
1t was not my purpose in the out
set to attack or defend the principles
of co-insurance. My purpose was
only to give the people of the coun-
ty an understanding, so far as
might. of what co-insurance is. But
| have allowed myself to be lead
along until now | cannot refrain
from considering briefly some argu
ments that are being urged against it
1t is claimed by some that coin
surance is a device on the part of the
insurance companies, to enable them
to avoid the full measure of their liza.
bility in case of partial losses, to
cheat the honest insurer out of what
is justly his own-what he has
bought and paid for. Believing in
the theory of co-insurance, but with.
out committing myself to the posi-
ton that the percentages as now
laid down are equitable in every in
stance, it seems to me that these ar.
guments are specious and are ad.
dressed rather to sentiment than to
sound business Judgment.
In the first place the applicant for
insurance may buy such insurance as
he likes. He may buy that which in
) sures most and in any contingency,
and pay for it, or he may buy that
which is sold for a less price and car
ries with it correspondingly less de-
gree of protection. 1t is a two.fold
question of prudence and cost which
the applicant must settle for himself.
But having settled it, having gone
into the insurance mart with eyes
wide open and bought that insurance
which requires him to contribute in
the event of a partial loss, simply be-
cause he could buy it cheaper, he
should not be heard to say that he
has not his own, should the con-
= tigency of his contribution become a
fact. This would be childish. He has
his own. He bought that insurance
which made him in certain contin-
gencies a co-insurer and took his
chance with the companies. III he
has total loss, he gains; If loss
which is less than 80 per cent. of
the value of the property, he loses.
To illustrate: Suppose "A' has prop
erty worth $1,000, on which the rate
is one per cent. He desires to in
sure for $500. He is told that with
the 80 per cent. co-insurance clause
attached his policy will cost him
$500, but that he can have a policy
without the co-insurance clause at
tached, a policy as certain and def
mite as he could wish, at 1.50 per
!, cent. rate or $3.50 cost. His cupid.
ity overmasters his prudence and he
! takes the $500 policy with its con
t ditions. A total loss comes. He
, draws $500 under his policy and has
: saved $3.50 in the cost. Tb,
: chance was with him. He does not
= complain. A partial loss comes, say
$500. He draws X of the amount
of the policy, or $333h. He loseI
4 because he did not know that h,
: would have a fire. He complains he
cause the company would not Civ,
him both ends of the lever. Shal
!, he be heard to complain that he can
not get his own, what he bought an,
j paid for? To say that he has not
e and cannot get his own at the hands
of insurance companies in Vermont
n is "a reflection on our laws and theii
Q execution, To say that he may buy