The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1900-09-23
INSURANCE COMPANIES LOSS
GALVESTON STORM RAISES MANY
PERPLExING QUESTIONS.
ne Preccdcnt-The Proof
of Loss.

NOW OFIehn5 FlCayune.
The Galveston storm has raised many in
terest'ng insurance questions which the COM
panies and courts will eventually have to de-
eide. These are interesting from many dit
ferent points OF view. For instance. take the
question CT the cancellation e policies OF
irs insurance Every policy contains
clause prescribing the manner in WHICH
pohcy may ba caace.ed al lhe option of ths
assured or the company. IL the assured
Nispes to cancel the puiioy he can do 50
az any uine by PAYING mo snort rat. ihaG
Is 70 say. no pays he regular pr.ce that
"ouio nave been charged II tne policy mad
ORIGINALLY been taken out Tor the sBorr time
IoG "hicn II has been in force. On the
othsr hand, II the company wishes to can
cel = policy 1t can do 50 by charging pro
rata only Of the pre.nium propOi donate 10
tie tine Tor which the policy has ran ieck-
( ohed with the whole Time .or which 1t was
Issued. Another clause of he regular nre
! policy provloes that wnen a house lails or
y damaged by other means than ~ are,
the policy at once ceases and becomes OF
no rorce 1t can readily seen how
STRICT construction OF these two clauses will
weston.
! one has already arisen not in Gal
| weston, but In Houston. anu under the Same
! circumstances exactly which might arise
any time IN Galveston. The Houston oil
mills which were damaged very greatly by
tie storm. but not TO the extent OF complete
demolition. they not even being blown down,
were completely destroyed by IRE day or
Z Two since The question which Will give
tbs adjuster trouble and cause dispute per
/ haps, Is Just what damage TIE storm id and
what damage was done by Arc 1t can read
ilv be seen what Il complicated question THIS
weston
The question OF cancellation of policies
alone is one which might cause endless
trouble. What should the companies charge
the short rate or the pro rate? This does
NOT mean much in tho individual case, but
IN the aggregate 1t means hundreds oil thou
sands On the other hand tho companies
might not care to cancel the policies at all.
They might contend that the demolition OF
he house acted as avoidance OF the policy
and hold the premium paid. 1t makes no
difference how the policies may be Cancelled
, and premiums settled, whether short rate or
pro rala the storm means great loss to
the IRE Insurance companies, In the matter
of premiums returned and renewals lost by
reason OF the destruction OF the RISKS. There
Is ono class OF policy on which the loss
| Will he large and that is the so-called tor
nado clause policy. which ia ssled by few
issued. and In most cases where companies
issue tornado policies they confine their
Operations to territory where there is lesl
, danger than at Galveston. However, there
must have been some tornado policies in
Galveston, and these were in all probability
a total loss.
Under the most modern methods Of marin,
! insurance cotton and wheat are insured from
q the zine that they are loaded upon the carr
The first time until they reach the mil
where they are manufactured into the I'm
! ished product These marine policies, there
fore would cover the cotton wheat Il
elevators the docks or on bOard shil
. in port. The loss to marine insurance com
. panies from this source must have beei
enormous.
The question has been asked by a grea
l many people how are life insurance com
I psnies affected by the disaster. This ma
r he answered in two ways, First, 1t may b
>, said that they are not affected at ALL q
they figure from averages taken for ION
period OF time. ard In these figures sue
E. q sasters are taken into consideration, S
A that K may be said that for the great com
/. panies the results on their longtime police
;, will not be changed by the losses % Gal
u weston. For local companies this VIII nc
hold true. however as their territory
limited and their figures are made on N
!, same basis az those OF the companies thi
- DO business throughout the world The
q losses would be much greater in proporuo
u TO bhe number OF policies in force than hos
Of the great companies, and after all IS sa
r the loss Is mere matter of proportion
"A The accident and casualty companies WI
he the greatest sufferers as rhelr policies al
T. franz cd to cover exactly this kind OF cas-
Is and the proof OF loss under such policies
& from It's very nature Of. a more easy NJ
ture and less susceptible to contest. In Il
=, cnse of life policies the proof Of loss VII
" In great many cases, be very dHhcult,
sF not practically impossible, until lapse
Is time shall have raised the legal presuml
ton of death while in the case of acclds
policies the presumption of death will ART
from the circumstances much sooner vi
the more liberal construction Of the law
such cases.
will all suffer considerable loss, If not d
iectly at least by the return of premium
cy and the loss OF renewals, in every elias
r. and certainly directly in the case OF marin
tornado, life and accident insurance.