New-York tribune., 1906-04-09
SAYS POLICY WAS FAKE" j"
Builder Paid Premium on Insurance
Which Did Not Insure.

TO the Editor Of The Tribune.
Sir: want to call your attention to very In
teresting case for publication
During the investigation OF the business affairs
OF tho life insurance companies In New York thore
had been discovered many things which aston
ished the pollcyholders and the people in general
but in the whole investigation it never had been
proved that any OF the insurance companies had
accepted premiums fraudulent policies.
In other words It came out that q COM
pany issued policies and refused to pay the amount
Of same when the died when the policy
expired Therefore it must be very interesting
for you 20 know that We have yet other insurance
companies, which have done since the last fifteen
years immense business In this and other states
by accepting hundreds Of thousands Of dollars on
premiums for worthless policies.
Before the case is explained to you in detail
have to say that have put the case before sena-
tor Elsberg and that received an answer from
him stating that he has laid the affair IN the hands
of Senator Armstrong for further investigation.
An insurance company Of this city issued a poi
icy in 1901 for one year against loss Of damage
a building at that time to be erected IN Chatham
Square. 1t was presented to me. the owner.
Contingency liability policy for which paid
S42 premium. During the time for which tho pol
icy made accident occurred where man
fell into hole in the street and sued me cas-
the OWner) for the amount Of $4,000 damages, just
the amount to which the policy was limited
The summons and complaint Of this case were
handed over TO the insurance company. which tried
the for me in the Supreme Court, in Brooklyn.
and when the jury gave verdict of 81 900 against
me I received the next day letter from the attor
ney Of the company, in which he stated that the
company refused to pay the judgment without
planning the reason why. paid the judgment Of
$1.3ss transferred the claim to the Herter Realty
Company, of which corporation am the president.
and sued the company as such for the amount Of
$4,000, the actual loss in this case.
On February 15 1906. the case tried in Part
XI before Justice Newburger, Of the Supreme
Court, and found that the attorney for the in
surance company admitted that I was the owner
and was insured in a policy limited to $4,000 that
an accident occurred during the time mentioned in
the policy, that he himself tried the case for the
company. and that verdict OF 5000 was given
against me. and that he refused for the company
to pay it, He admitted that paid the S1SS3, and
that 1t therefore would be just to pay the amount
OF $780, about $500 costs for lawyer fees and
other fees. provided however. that the company
was liable under the policy in question. He showed
the court Gustice Newburger) and explained to the
! justice that the company, during five years. had
| issued policies under the Of 'contingence'
policies and gave the definition of said word con
tingence'' without risk that the poliCyhoIder
! was insured so long there no accident, but
! that the policy was null and void so an
accident occurred; and the justice dismissed the
case, on the ground that the higher courts had de-
| cided in similar cases in favor of the company.
! This was not done in Russia China; this was
! done in the State Of New York-that policy has
| been given to policyholder, and $2 premium has
neen accepted by an insurance company under tne
|
worthless. As an example of this miserable propo-
sition and fraudulent action of the company. the
attorney explained to the that the insurance
company had stopped issuing 'contingence' policies
! last year, and that the company did not deliver
| them any more
When Justice Newburger asked him il he did not
| think that 1t was actually fraud done by the
| company me- he promised to his influence
! to settle this with the Herter Realty Com
pany for me, and I received word from my lawyer
about fourteen days ago that the company would
| be willing to pay about $3.50 to settle the case
My answer that 1t is worth fully 5000 to me
to put an example before the people In which com
panieS lay all kinds of tricks in insurance matters
| and that I did not for the amount here in
volved long could take any necessary SteI
to prevent insurance companies from doing business
in such a fraudulent way
order that the fraud could not be discovered II
the first five years II was necessary that the com
pany try these cases under the policy, and L
was necessary to wait fully five years to drag the
policyholder from court court, to have
chance to make hundreds of thousands of dollars
premiums. and then it was time to give the dehnl
ton Of the word 'contingence.''
Now, put yourself into this position. You arr
going to build a house. For the purpose of being
pany and ask for a policy and you pay premium
for same; you look into the policy and you find thai
you insured from any accident to the amount
$1,000. and five years after accident comes VI
in case, which had been tried by the company
said company has the courage to stand in court anC
declare openly that word "contingence'' gave
them a right to call the policy null and VOID ant
that the poliCyhOder was fooled and paid premium
for nothing
cent people will not suffer the as I did, and
therefore I lay it before you. Yours very truly:
P. HERTER.
No $40 Park avenue Manhattan, April s.