The San Francisco call., 1906-06-30
PROGRESSIVE LESSONS IN INSURANCE.


Twenty foreign reinsurance companies have
served notice upon companies doing ordinary in
surance in this city that no loss due directly or
indirectly" to earthquake is to be paid This
action further complcates already badly COM
plicated situation But there is one feature OF
good about it: the insured has had il brought to
his attention that such things reinsurance COM
panies exist and that they are potent factor m
the insurance world In other words, San Fran
cisco, for two months at school in fire insurance,
has got over the primary lessons. and is open
ing the first book OF the advanced courses.
Before the fire nothing was more simple than
fire insurance Every man with property worth
iusuring had friend or two in the business. The
premium for year much, he was told.
But for TWO years premiums he could get three
years insurance. He usually took three years.
His property never burned up; he had no further
trouble or bother His friend had an od-fash-
toned way OF meeting his obligations; paid his
butcher bill and his grocery BILL and the hundred
and one other bills with which are all familiar
he could get accommodations at the bank if he
wanted to. The insured, in some way, got it into
his head that the principles that governed the
business transactions OF his friend obtained in FIRE
insurance or else his friend regarded. as matter
OF course, as a big in fire insurance circles,
wouldn't be connected with il. Such was fire in
IL.
came the San Francisco FIRE and established the
local school in insurance.
To the amazement and CONSERVATION of the in
sured the friend in the insurance business, the
tower OF strength upon which the Insured depend
ed, swept aside like a chip on an angry sea.
The insured found himself passed along gen
eral agent whom he didn't know. didn't care to
know and most assuredly didn't want to do bust
with But sooner had he swallowed his
prejudice and decided to do the best that he could
with the undesirable stranger than he found that
the general agent as helpless his friend
had proved to be. The real source of power, he
was told, was with the companies, the very names
o; which were unfamiliar to him, located in some
distant city in the East, in England even in
continental Europe. He supposed that this les
was the final one. But it developed that il
wasn't; he was only closing the first primer in
fire insurance. The advanced lessons opened yes
terday with the disquieting information that the
companies in which he insured, the principals
with whom he supposed he was dealing, are not
much better off than his insurance friend or the
general agent, but can be ordered TO do this and
not to do that by. foreign corporations with such
impossible names "a. ~Scnweizerische Ruc1versich-
erungs-Geselschaft in. Zurich, or Genforsikrings-
Aktieselskabet Scandinavia in Kopenhagen. He
found mo less than twenty foreign corporations in
the list, each with q name worse than the other,
ordering about the company in which he supposed
he was insured.
San Francisco in ashes has learned the lesson
that it is not only well for the insured 10 read his
policy, but that he also find out what is behind
the insurance friend who pays his butcher bill, to
be sure, but who becomes broken reed in fire in
surance emergency. The city in ashes has
learned to look behind the general agent and now
learns that it must look behind the insurance com
panes themselves The probability that it will have
TO find out what.is behind the distant reinsurance
companies is still disquieting possibility. But
this much is certain, namely. that fire insurance
isn't the simple business. proposition that San
Francisco thought it, If the rest of the. world will
learn the lesson that this city in its distress is
learning and unite to put fire insurance on safer
saner basis; the tremendous cost of il to San Fran
cisco will not~be lost The Call has held from the
beginning that the course of the insurance com
panies in this city has brought the whole nstitu-
ton OF FIRE insurance into question: The most
recent move of the companies the action of the
foreign reinsurance corporation, further empha-
srzes the weakness of the plan. under which modern
FIRE insurance is carried on.