Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1902-02-20
VAL sp POLICY IS WRONG.

7 bottom of the heap.
VALUED POLICY is WRONG.
The valued policy bill has again been
introduced in the Iowa legislature and
II will be interesting to see what be-
comes of it. The purpose of the bill Is
| 10 make fire insurance companies pay
the insured the face value of the policy
in case of a total loss, regardless OF the
actual value of the property destroyed
AT present the companies are insuring
against loss up to the amount of the
policy and when q fire destroys proper
" the value of the property is APP
praised and the loss paid. The present
laws make the amount Of the policy
lpresumptive evidence of the real value
of the property. so that an insurance
company refusing TO pay the full
amount of the policy in case of total
loss on the ground that the property
DESTROYED was not worth that amount
is charged with the burden of proof to
show to the jury that the property was
actually over-insured. The valued poll
Icy bill proposes to make the companies
pay the full face of the policy no mat
ter whether the property was worth
that amount or not.
All insurance should rightfully be
Hooked upon as guarantee of indem-
nifty in case of loss, not as speculative
Investment. At present policy con-
trnc, of $4,000 on a building is held rs
an insurance company's contract to
make good to the holder all fire losses
sustained on that building up to $40
600. When fire occurs the loss Is APP
praised and the actual damage paid, up
to the limit of the policy. No insurance
can be recovered above the actual dam
age done 10 the property. hence there
Is no incentive TO over-insure or insure
for more than the property is worth.
and no inducement to dishonest persons
TO burn their property for the insur-
ance. Fire losses are consequently kept
at minimum number and fire insur-
ance is sold at very low rate.
on the other hand. should the valued
policy bill become a law, Immediately
there would be great reward estab-
!ished for Ginning and dishonest per-
sons 10 connive with agents, or misrep-
resent the value of their property SO as
10 get 1t insured for more than II was
worth. Then by accident or otherwise
a fire would occur and the law would
compel the insurance company to pay
the face of the policy, even tho the
holder got $1,000 or $4,000 more than
his property was worth. With such
nrlzes up for dishonesty and arson fire
losses would greatly increase In num-
Der and rates of fire insurance would
have to rise. The honest man who
seeks only indemnity for his losses,
would have 10 pay the cost of the dis
honest mans speculation.
That this view of the effect of a
valued policy law is not merely the
ory but well establishedin fact has been
demonstrated by experience in other
states. AT the last session of the Iowa
Iegisla ture the same bill passed both
houses but met defeat by the gov
ernor's veto The L r.. took occasion at
tho time to commend the governors
action for we believed 1t the most SEN
s,ble thing Governor Shaw ever did.
UNFORTUNATELY Gov Shaw has been
so radically wrong on other corporation
vs public controversies that he has
made himself exceedingly unpopular
with the people and the fact that he
vetoed the bill will probably be used
as an argument in its favor now. But
Governor Shaw did not act hastily in
his veto He sent out representatives
To collect evidence of actual facts to
prove what his keen business judgment
told him must he so. He found that
upon comparison the Continentai IN
surance Company was writing insur-
ance in Lee county, Iowa, on the Mis-
souri, line, at rate of 40 cents per
annum on farm property, while in Mis-
souri, with ony the Des Moines river
dividing the two counties but valued
policy law in force the company was
getting 66 2-3 cents per annum on farm
property occupied by the owner and
SO 1-3 cents per annum when occupied
by tenant, showing that the rates
were from &C per cent TO los per cent
higher than the same company asked
just across the river in Iowa where no
valued policy law was IN force.
1t was also found that in Putnam
county. Mo-, the rate on farm property