The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1906-04-17
The messenger.
OUTRAGEOUS INSURANCE FRAUD.

plans are being suggested for the bet
ter protection of the policy holders
and for regulating the management
of all kinds of insurance companies,
almost anything on the subject or in
surance is of interest TO the people
Therefore we give space to the fol-
lowing from the New York Tribune.
It is a letter written to that paper by
Mr., P. Herter, of No $40 Park avenue,
Manhattan. That is the sigD'atureI
and address of the writer. If his
statement of facts and complaint
against a certain insurance company
be true that company is Tne of the
most frandulext concerns ever allowed
to do business under the protection Of
the law. The idea Of an insurance.
company being permittfd to repudiateI
one OF its policies when a loss occurs
under it because Of d printed clause
put IN it lty the conapsny is preposter-I
OILS. We are unable to see on what
presence of law o. equity such con-
tention can be sustained by 4heI
courts. No matte how carefully this
man had read his policy he would rot
have de- ected the alleged vifiating
clause. The lsbter to the Tribune
says:
Editor of The Tribune.
Sir: / want TO call your attention to,
a very interesting case for publication.
An insurance company of this city,
issued a policy in 1901 for one year
against loss or damage on a building
at that time to be erected in Chatham
Square. 1t was presented to me, the,
owner. as a contingency liability
policy" for which I paid $42 premium.
During the time for which the policy
was made an accident occurred where
a man fell into a hole in the street
and sued me Gas the oWner) for the
amount of $40. 900 damages, just the
amount to which the policy was limit
ed.
The summons and complaint Of this
case were handed over to the insur-
ance which tried the case
for me in the supreme court. in Brook
'yn, and when the Jury gave a verdict
of $1,000 against me l received he
next day "a letter from the attorney.
of the in which he stated
that the company refused to pay the
judgment, without explaining the rea-
son why. | paid the judgment, of ST.
286. transferred the claim to the Her
ter Realty Company, of which corpor-
alton | am the president. and sued
the company as such for the amount
OF 50. 600. the actual loss in this case.
On February Is. 1906, the case was
tried in Part XI before Justice New
burger, of the supreme court, and we
found that the attorney for the insur-
ance company admitted that l was the
owner and was insured in a policy linn
tied to $4,000. hat an accident &C.
CURED during the time mentioned in
the policy. that he himself tried the
case for the and that a ver-!
dict of $40 was given against me-!
and that he refused for the mpa
to pay it. He admitted that I paid the
1883 and that it therefore would be
just to pay the mount of $4,000 or
about 800 costs for lawyer fees and
other fees provided. however. that
the was liable under the
policy in question. He showed the
court (Justice N~ewburger) and ex-l
planned to the Justice that the conf
pany, during five years. had issued
policies under the name of "contln-l
gence'' policies. and gave the definition|
of said word ''c~ontfngence" as without
risk, SO that the ~policyholder was in-l
sured SO long as there was no a%ccident.l
but that the policy was null and void
so soon as an accident occurred; and
the Justice dismissed the case, on thel
ground that the higher courts had de-
cided in similar cases in favor of theI
company.
This was not done in Russia orr
China; this was done in the state of
New YOrk-that a policy has beenl
given to a policyholder. and $42 prem-l
jun has been accepted by an insurance.
under the tricky word con
~tingence," which made the policy
worthless. AS an example of this mis-l
cradle proposition and fraudulent ac-I
fiOn of tho cOTnnanV the attorney pX-I
planned to the court that the insurance.
had stopped issuing "contin-I
gence" policies last year, n that theI
did not deliver them anyi
more.
When Justice Newburger asked himI
if he did not think that it was actually
q fraud done by the company to me-
he promised to use his influence to set
tie this case with the Herter Realty
Company for me, and so l received
word from my lawyer about fourteenl
days ago thai the p would be-
willing to pay about $3.50 to settle the,
case.
My answer was that it is worth fully
$4,000 to me to put an example beforel
the people in which companies lay all
kinds of tricks in Insurance matters
and that l did not rare for the amount
here involved as long as l could take
any necessary step to prevent insur-l
ance companies from doing business,
IN such a fraudulent way.
In order that the fraud could not bel
discovered in the first five years it was
necessary that the company try these
cases as under the policy. and it was
necessary to wait fully five years toI
drag the policyholder from court to-
court. so to have a chance to make
hundreds of thousands of dollars on
premiums. and then it was time to give
the definition of the word "contin-!
eence." |
Now. put yourself into this position.l
You are going to build a house. Forl
me purpose of being insured for DAM
ages YOU go to an insurance company
and ask for a policy and YOU pay al
premium for same: you look into the
policy and YOU find that you are insur-I
ed from any accident to the amount
of $4,000. and five years after al ac-.