The San Francisco call., 1906-09-21
Salvage Gouging'
Made Plain by
the Figures.

With adjustments reached on all but
Ito losses in San Francisco that will
come before the adjusting bureau OF
the Board of Fire Underwriters, the
total salvage discovered is $500 600
which is but 1913 per cent of the amount
involved in insurance on 1912 burned
properties and little more than per
cent of the sound value of the same
properties as carefully ascertained.
The figures will cause great amount
Of surprise among the insured in view
of other facts and of claims that in
surance companies have made to keep
up their credit in the East while
welching in San Francisco. On the
basis of figures sworn to before the
insurance department of New York the
gross salyages of the companies that
made semi-annual reports this year
dated June 80 amounted to S60,000,000.
The adjusting bureau of the Board of
Fire Underwriters deals with the large
properties in the insuring of which six
or more insurance companies were in
yolved. Ten -eleyepths of the total
number of large losses are found to
carry but $500, 900 In actual salvage.
If the proportion of salvage to the
total number of losses handled by the
bureau continues to the end of the ad-
justments the total of real salvage will
be ,$9,3S1, 900. Expert insurance ad-
justers estimate that the losses on
smaller properties. by reason of their
number, about total in their aggregate
the losses that pass through the ad-
justing bureau. But the smaller losses
represent the dwelling houses. which
in nineteen cases out of twenty, to-
gether with their contents, were entire
ly destroyed. They are of the class
known preferred risks" because
they carry special rates for insuring.
If the loss on such properties
amounts to $11S,000.000 the amount of
sound value that the bureau has found,
the salvage on them can hardly be
more than half the amount discovered
by loss committees acting for the Board
of Fire Underwriters. This showing
certainly would make a total real sal
wage of not more than 1882, 900 in all
San Francisco. The difference between
this amount and the amount of the
total salvage from the losses as sworn
to by insurance companies at New York
is s40,000,000 in round figures.
Insurance men smile significantly
when they are asked how the discrep-
ancy between SIS, 900, 900 actual salvage
and S60.000,000 estimated salvage can
be accounted for. The explanation is
that the estimated salvage" reported
was largely made up of the amount
that the welchers expected to be able
10 DUH the people OF san FRANCISCO
into giving up in making settlements.
In this total the German companies
that have not paid San Francisco losers
come in for a total of something like
$4,000, 900 saved by welching. There
are several noteworthy instances in
which insurance companies that are
under a, cloud by reason of their ad-
justments and settlements in San Fran
cisco have made it appear that their
'isalvages'' were a large percentage of
values to be deducted from their total
losses.
The Milwaukee Mechanics. for in
stance, has claimed salvage of $794,000
out of a total loss of $3.50, 600,
or more than 25 per cent. and has made
cut very much larger than % per
cent in settling with its San Francisco
creditors. The Dutchess Insurance Com
pany of Poughkeepsie claimed to have
$474,000 salvage on s1,130,000 loss, or
more than 80 per cent. This company
has distinguished itself unpleasantly.
The Eagle Company of New York
claimed salvage of S242,000 with total
loss of but 1871, 900, or 20 per cent ap
proximately. The Williamsburgh City
claims $1,414,000 salvage, with total
loss of but s1,S9l,000.
Similar Instances might be multi
piled, but the foregoing sufficiently IL
lustrate the situation and prove the
methods of welchers to be as described
when the salvages, as ascertained by
loss committees, taking all the large
losses together, amount to only little
more than 10 per cent.