The morning news. [volume] (Savannah, Ga.) 1887-1900, 1895-12-01
MUST PAY THE FULL POLICY.
THE NEW INSURANCE. LAW AND ITS
OPERATION.

I The Fire Underwriters Very Much
/ Dissatisfied With It-One of Them
Gives Reasons Why the Law VIII
| Prove Unsatisfactory in Its Opera
/ tIOns-The Companies VIII He Conn
PEELED to Make Troublesome Re
quIrements of the Assured, He
| Says. and an Increase in Rates Is
Almost Certain.
The new insurance law passed by the
| legislature and signed by the governor
I is Of general interest to property owners
/ in Savannah. as well as to insurance M
/ derwriters. The law. as has been stated
in the Morning News, requires the com
panies TO pay the fun amount Of the
policies in case Of the total destruction
Z of the property. On this account it is
known as the valued policy law.
The effort to pass such a law has been
made at every session Of the legislature
for the last several years, but it was
not successful until this year. Prominent
business men have requested the Morning
News TO publish the law in full The
law is short II is as follows:
An act to be entitled an act to compel
insurance companies TO pay she fun
amount of loss sustained upon property
covered By policies of Insurance up to
the amount expressed in the policy, not
outstanding any stipulatiOns of such
policies to the contrary.
Section J. Be it enacted by the general
assembly of the state of Georgia ana by
the authority of the same, that from and
after the passage of this act all insuring
companies issuing policies on property in
this state shall pay to their policy holders
the full amount of loss sustained upon
the property issued by them. Provided,
said amount of loss does not exceed the
amount Of insurance expressed in the
policy, and that all stipulations in such
policy TO the contrary shall be null and
void. Provided, that in cases of losses
on stocks of goods and merchandise and
other species of personal property, chang
ing in specifics and quantity by the usual
customs of trade, only the actual value
of the property at the time of the loss
may be recovered.
The insurance men are very much dis
gruntled over this law, and claim that it
will prove very unsatisfactory in its work
ings, both to the companies and the in
surers. They say that this would be es
pecially the case with cotton.
Let me give you an example Of this
said an insurance man yesterday. Take
a large cotton firm on the bay, having
cotton stored in several warehouses, and
carrying a million dollars of insurance,
That insurance covers all the cotton OF
the firm in all of the warehouses, and
whatever loss is suffered by the firm at
any fire is paid. Now cotton losses do not
average more than % per cent. OF the
value involved. This firm may reason
that with it's cotton divided into several
warehouses it is practically certain that
] warehouses;
any one time. and that in case of "A fire
at any one warehouse the cotton viii not
be totally destroyed. As under this new
law, the firm would be able to collect the
fun amount of the policy, If the loss
amounted to so much, the firm might de-
eide that instead of carrying Sl,WOOJO OF
insurance, it would only carry $4,000.
With 100000 of cotton involved in fire
at any one warehouse then and $4,000
full amount of the loss, just
as with the larger policy. Now
the records show that the com
! panies have not made any money on cotton
| insurance under the old conditions. They
| certainly cannot make any should the in
| surance be cut to one-fourth of its present
amount. The result will be simply that
| the companies will decline to take such in
surance on the old basis. When a cotton
merchant comes to us and asks for $780,,
600 OF insurance on cotton valued at three
| or four times that amount we shall simply
| tell him that he must give us the number
and mark of every bale to be insured,
| Otherwise we cannot insure him. This
! will put the cotton merchants to a great
| deal of trouble. but we will have to re-
/ quire 1t to protect ourselves. We cannot
| simply give so much insurance on so many
| bales of cotton, as formerly In case of
a fire we will pay, the loss only on those
| bales specified in the policy"
| 1t will be the same way with the whole
| sale merchants" he continued. In the
fire at the Savannah, Florida and West
ern railway yard the other day, many
/ merchants did not know how much stuff
| they had there, or what warehouse it was
in, but they felt easy, because they had
had been required to enumerate each
| separate lot of stuff and the warehouse
| in which 1t was stored, they would have
found 1t very difficult matter. That
| is what Ii is very likely they will be re-
| quired to do hereafter"
How about dwelling house property?"
| he was asked.
There have been no restrictions on
| dwelling houses heretofore. he replied.
| "A man could insure his residence for as
| much as he pleased and in case of a fire
he received the actual amount of the loss.
| Under this new law a man with a resi-
| dence worth 5000 can insure il for three or
| four times that amount and if it burns
down he can recover the full amount OF
| the policies To protect themselves the
| companies will have to set a limit upon
/ the amount of insurance allowed to be
/ carried on residence property, and each
| policy will be required to show how much
insurance is at that time outstanding on
| the property. The country insurers are
going to find themselves in the cold as the
result of this law. Heretofore the three
quarter clause policy has been enforced in
the country, making the insured a coin
surer to the extent of one-quarter Of the
value of the property. Now there is moth
ing to prevent a man in the country
who is so disposed. from insuring his
house for two or three times its value.
setting fire to it and burning il down.
and then collecting the fun amount OF
the policy The companies have no PRO
lection in the country and the result VIII
be that the reliable companies viii shut
down on country insurance altogether
The law is certain to be unsatisfactory m
its workings, especially as one result
viii be an increase in rates all along the
line"