The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1896-12-23
THE PROPOSED VALUED POLICY
LAW.

cal campaign the newspapers o. kSpnb-
lean faith throughout the state argued
against the election OF the Populist state
ticket, on the ground that the slection
OF PopuHst governor and legislature
would De nurtful 10 the best interests OF
the state and its people by driving capt.
tai from our doors Nevertheless "A P0pu-
hst majority was returned. and a Popu-
Ilst governor elected. We then scanned
the situation closely, and decided We had
elected q fusion legislature. having none
or the Ialnts OF Kansas PopuEsm, and that
10 radical legislation was 20 be feared
from 1t. We so advertised TO cur East
ern friends. and told them 70 come on with
their money; that we could make splen-
did use OF IL, and in the end return IL with
Eoo1 interest, and give them no cause OF
anxiety IN tbs meantime. IL seems,
however, that we need not go as far as
PopuAsm 70 look for the beginning Of the
radical legislation anticipated. as I see
by your issue OF December that senator
elect Narourton, OF this city, announces
hls intention OF introducing a valued
venes. and require the insurance COM
panies TO pay the face OF their policies
on buildings in event Of total destruction.
regardless OF values.
At first glance the measure would seem
70 be understandable, but II given the
amount of study II deserves there may
passage OF such a bill would be unwise.
Gov. Pattison. OF Pennsylvania. IN Veto
ing similar bill a few years ago. gave
some very excellent reasons for his action.
and would respectfully refer Senator
Warourton to the veto message OF the
pennsylvania governor before ne intro
dnces his bill. I think I have the mes
sage somewhere about me. and can place
II in his hands II he so desires.
me bil proposed is by no means new.
II has been introduced in every state In
ed IN others, and vetoed In the remainder.
Only few years ago Idaho passed such
Dill. but at the next session OF the leg
islature the members OF that body almost
fell over each other in their haste TO re-
peal 1t, because the insurance companies
mad Withdrawn from the state in body
when the act became operative. and refus-
ed 10 write a dollar OF insurance on any
building in the state.
The insurance contract Is generally sup
pc sed 10 be a contract OF indemnity"
but Senator Warburton proposes 70 up
set this theory and make loss by fire on
building an actual profit TO its owner, TX
insurance in excess Of the buildings value.
In support of this notion he says: III
the property Is over-insured. the policy
holder has paid for the difference IN
premiums, and receives no benefit from
this outlay OF money" Whose fault is it
IL a building is over-insurcd? l think most
reasonable men win agree that the owner
OF building should have better knowl-
edge OF its value than the Insurance agent
who is asked 10 insure Il. and II he will
fully. over-values his property. he should
stand the loss X anybody must. To re-
quire the retur1 of the excess premium to
the assured would perhaps be fair
enough. but II would be maaifestly unfair
To require an insurance company 10 pay
800 more than the actual loss by fire. sim
ply because the owner of building has
paid 81 more premium than he should have
paid. A law requiring this would be OPP
posed to public policy because IL would
be a premium on incendlarism; IL would
beget fraud and reward rascality. But II
such a bill be passed and receives the ex-
ecutivs approval what then? There are
several courses open TO the insurance
companies. They may decide to quit writ
t. H. kaaf 5t ~
Washington; they may add TO the rate of
premiums charged TO make up the extra
losses sure TO come, or they may limit the
amount OF Insurance to be carried to q
very small proportion OF the value OF
| buildings, to be sure TO be on the safe side.
| If the last measure Is adopted. you may
depend upon hearing a great howl from
| the mortgage companies and monied insti-
| tutions generally. because OF insufficient
| insurance as collateral 10 their loans.
Most of the money put into this state
| was placed here during the good times OF
few years ago, when land was worth
something and when buildings cost more
! money TO erect than they can be replaced
| for today. The loan agents made their es-
| Inmates on the basis of higher valuations
| and placed their loans accordingly. Today.
| through shrinkage in values, the loan
F., companies are in a hole with great many
| OF their foans. and would be with a great
| many more II they did not have insurance
| policies covering on buildings TO the iaSt
| dollar of valuation but this must all
/ change with n valued policy law in force
| IL the companies elect to continue busi-
| ness, II Will be AZ an advance In the rate
Of premiums. This Is just as sure "a that
/ the sun will rise tomorrow morning. II
will be simply a case OF rewarding the
fire fend not from the capital or resources
/ OF the insurance companies. but from tho
rockets OF the people of the state, respon-
| sible for this legislation. The four lead
| ing states Of the Union that have this law
on their books are Wisconsin. Ohio. Ms
| souri, and Texas. What has been their ex-
! perience with rates Of premiums since the
enactment Of the law? 1 will give 1t to
/ Won: