The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1893-01-25

Ine mhIIer correctly. III Ine merchant
had maintained S16,0 900 insurance
eighty per cent of the value OF his
stock-and had lost $4,000 or $4,000 or
any sum not exceeding $4,000, he
would be allowed the full amount of
such loss. But if at some season, like
the holidays, calling for temporary
expansion of bis stock--to S25 900, for
example, he should suffer a loss with.
out having had the forethought or OPP
portunity TO add $4,000 TO his insur-
ance, then the co.ineurauce squeez,
would be applied in the adjustment of
the loss. He could recover but four
fifths of the loss and would himself
carry the remaining one.fifh. If the
| damage to his stock should be SIS 900,
he could recover only $4,000, although
he has bought and paid for GIG 900 in
surance. 1t is worthy of note further in
this connection, if co.insurance is the
beautiful thing it seems to be, that, but
for the addition of $4,000 to his stock
just before his loss, and had the loss
still been $4,000, the merchant would
have been entitled to recover the full
amount. So at the point of adjustment
of loss, between the quirks of the CO.
insurance clause, questions as to in
ventories, adjusters' claims and man
dates, etc, etc, the insured will be
likely to find himself between the devil
and the deep sea.
In its practical application, co.insur-
ance appears to be a device to enable
Insurance companies to exc out their
finances by evading the payment of
their full liability in a case of partial
loss, If one has bought and paid for
thing, he is apt to have an old-fashoned
notion that he has right to it's free
possession and enjoyment, whether the
thing is lands, merchandise or fire in
surance. Processes of financial leger-
demain by which ii may be demon
strated that he is not entitled to his
own may entertain a mans senses,
but they do not convince his
judgment. If the merchant or man.
ufacturer has bought and paid for
$4,000 fire insurance aud has been
damaged $4,000, he is entitled to his
security-not to one.half, or five
eighths, or four-iifths, or any other frac-
ton of thunder whatever plausible
theory of co-insurance, or what not, the
defalcation of fraction may be iusti-
fed. Insurance companies calculate
upon partial losses; they make their
rates upon expectation of such losses,
and they should pay them. The owner
of property in a community having
adequate fire protection counts on a
partial loss and carries such insurance
as in his judgment will fairly and legit-
imately remunerate him if his property
should be damaged by fire. The man
Of sinister purpose is the one tcho is liable
to insure TOR the full UaIue Of his property.
Well-managed companies guard against
over-insurance. With some, two-thirds
value is the outer limit. Such compa.
MES in taking risk have regard for the
moral hazard as we'll as the physical.
This eighty per cent requirement of the
New England Insurance Exchange,
and particularly its offer of five per
cent deduction from the tariff rate if the
assured guarantees TO carry insurance
to the extent of ninety per cent of the
value of his property, looks like direct
encouragement and Indictment to over
insurance, with its incidental frauds
and crimes.
In the matter Of insurance against
loss by fire, the insured demands GER
tainty and definiteness. With him it is
less question of rates than of assur-
ance that if his property is damaged or
destroyed by fire, partially or wholly,
the prote elton written in his policy and
for which he has paid his money shall
be Jorthcoming
La the emergency presented by the
action of the New England Insurance
Exchange there is for the people of
Vermont, in quest of sure and reason
able protection against loss by fire, one
abiding refuge-their own local com
panies. These, as we understand, are
not members of the exchange, and are
not governed or influenced by that as
sociation.
Ex.President Hayes.