The Press., 1895-08-01

there would be no moral hazard in his case, the company grants him insurance for $5, ,000. The house burns 1t is worth $5, ,0OO, and he receives $5;000. He has neither made dollar nor lost dollar by reason of the fire. He has been indemni- fled. His loss has been made good.
 Suppose, on the other hand the valued policy law had been in operation. In stead of his being able to obtain $5,000 insurance, the company, in order to guard against all possible depreciation, will, the property being in the city under fire pro- lection, grant him perhaps $3,500 insur- ance. The fire comes, the house is burn ed, he receives $3 800, and instead of, as under the indemnity policy, having neith- CT made nor lost a dollar, he has, under the valued policy, lost $1 800 cash. Which plan would have been the best for him?
 But suppose he lives in the country, outside of fire protection, and should de- sire to obtain insurance; what then Suppose he should desire to obtain mort gage from savings bank, could he Ob- tain one for over 50 per cent of it's ap- praised valuation? Certainly not. A valued policy in case of total loss becomes promissory note, and must be paid. | This being so, could company afford to l issue 8 policy for more than savings bank would issue a loan, namely, 50 per cent. of the appraised valuation of the property? Certainly not. Suppose, then, the house is worth, as was the other one, $5,O00; the company issues policy for $2, 800, one-half of it's present value; he receives $2,50O, and he has lost $2500 in cash; how much has he gained by reason
 wealthy, he can pocket his loss, and build again. But suppose that he is poor man, with large mortgage on his prop | erty, as alas is the case with too many.
 It will take his land and what he receives for his insurance to pay the mortgage.
 He has no money with which to build :; no one will lend him the necessary amount, as he has not sufficient security
 to offer. One more vacant cellar-hOle is added to the town; one more farm be-
 comes in time pasture the grand list
 of the town has been reduced to the eX-
 tent of the value of the ploperty one
 more farm owner in comfortable circum-
 stances, with bright hopes at set of sun,
 becomes in a night, by the accident of
 fire, farmless, tenant, and a day laborer
 for evermore, and all because of the val
 ued policy law. Is it, think you, after
 all, an unmitigated blessing? Again,
 farm property in the country towns in Connecticut is depreciating in value every
 year. It is not paying property for in
 surance companies. Every year fewer
 companies desire it, and if a valued policy
 law shall be enacted, few, if any, compa-
 nies will write upon it. Every building
 will have to be valued, and the assured
 must foot the bills. His rates will be in
 creased, and the protection afforded him
 will be reduced, in that he must of neces-
 sity suffer the loss of the difference be-
 bo foo of hiC and ho Inc
 of the property. It would be another il-
 lustration of the Irishman's rail in the
 gateway "Short at both ends" The
 companies would in some way protect
 themselves. The assured, under fire pro- lection, would not suffer as badly as those ! outside of fire protection; but to the as-
 sured, living in the country towns, il .-.~ld Uo simply ruinouo. In New Hamp. shire, which fIas HdUPt6d a vy5k k1ov4 r,es4ie.y
 law, hardly Connecticut GTmpany-if
 indeed, any-carries risks outside of fire protected districts.
 The valued policy has been condemned by all those who have most carefully ex- amined it's workings, from time immemo- , rial. The English parliament more than one hundred years ago enacted a law pro- ) hibitng all "wagcr'' contracts, and all English and American courts have held a
 valued policy to be wager contract. The insurance commissioners of the vari- Ous states have inveighed against it, and decried it's use. The governors of Illinois ) and Pennsylvania have vetoed it. Insur- } ance companies, speaking through their 2 officers, have shown it's injustice, and the , assured, wherever they have given the matter careful examination, have recog- 5 nized that they would be the principal f sufferers should it ever be adopted. Un- , 0nr if tba raCca1C IyO1116 rnaD 10 baOnfitC and the honest mel would pay the bills.
 CO-INsURANCE.
 Let us now examine the 80 per cent. CO ) insurance clause, that feature of insul. ! ance which leading member of the house , told his colleagues the other day was } recent invention of the devil.
 , What is the 80 per cent. clause? What t is it's origin, and what is it's province? Let us suppose that this capitol build ing is owned by a private individual, anC = is worth say $100,0OO. The owner de- 3 sireS insurance upon it, but he reasons that considering the character of the building and the excellence of the fire de 7 partment, there would not, in all proba } bility, be total loss he therefore takes } out insurance for only $1O,000. A fir( l takes place j; the owners prOgnOsticatiOns l are correct, and the fire is soon extin s guished the adjuSter comes, and while as far as the building is concerned, it is t only a partial loss, yet as far as the com
 pany is concerned, it is a total loss,
 damage of $1O,OOO having been incurred :, Does it take very brilliant intellec A to discover that if there had been a large :, insurance, divided probably, among diff D ferent companies, there would have beer e only a partial loss to the companies - Suppose, for instance, there had beel :. $8O,O0O insurance, divided among eigh 5 companies, each company would hay . lost only one-eighth of the amount of it !, policy, namely, $1,25O. Could not tn |, |, companies afford, in the latter case, t A take the risk at less rate, involving, 8 '- it in all probability would, only a partia 0 loss, than in the former case, involving
 as it in all probability would, total loss . Consequently, the company says to tn ' assured, 1.-The rate on your property ha
 been fixed on the assumption that yo
 would carry insurance on your property t e the extent of 80 per cent. of it's value. y you will agree to carry that amount, wei Il and goOd if not t,your rate will have to b
 changed to correspond with the amour IT you desire to carry. Suppose, for in s stance, that the rate on this building is It per cent. on the 80 per cent. basis. o you will agree to carry 90 per cent, you o rate will be 95 cents. If you only wish t e carry 70 per cent, your rate will be $1.1 J. if only 60 per cent, your rate will b 5- $1.2O; if only 50 per cent, your rate vii e be $1.30; if, however, you desire to carr B. only whatever amount you may choose
 with no agreement to carry any state l. amount, your rate will be $1.5O." Thi }, is fair, plain, straight, simple proposi IT tion. You can use the 80 per cent, o n any other per cent. clause, or no claus = at all, just as you prefer. It is not man
 datory, but simply and absolutely ques
 tion of rate, being solely at the option o
 the assured.
 What injury can it ever work to the as
 sured? Only in one way and that is, b,