The San Francisco call., 1906-06-25
North German, New York,
Awaits Word From
. Reinsurers.
Latter Believes Earth
quake Clause " Alb
solves Them.
Whether San Francisco
Is to Lose Millions
Lies With Courts.

The North German Fire Insurance
Company of New York will not pay
one cent of it's San Francisco losses un-
I'll 1t is informed by its reinsuring COM
panies what legal stand they will take
regarding the earthquake clause" in
cluded in all of the North German
policies. 1t is adjusting its losses at
the present time, but 1t is not making a
proposition of settlement to any of it's
policy-holders- When it does settle 1t
will, so declare Its agent and adjusters,
settle upon one honest basis and not
favor one and squeeze a less fortunate
individual.
The North German Fire Insurance
Company has already withdrawn from
the State of California, as far as writ
ing new business is concerned. and has
so notified Insurance Commissioner
Wolf. 1t has at the present time a cap
ltal or 100000 and a surplus of ss3, ,S06
This combined capital and surplus does
not begin to cover Its losses in San
francisco, which are in the neighbor-
mood or 100000. 1t is a fact however.
that large per cent of this $500 900
Is retnsured with German companies
Probably 10 per cent is covered in this
way. If these reinsurance companies
pay up the North German Fire will be
In position to pay its losses dollar for
dollar and remain in business as a live
insurance corporation.
MAY REFUSE TO PAY.
The reinsurance companies, however
are contemplating refusing to pay any
of the losses caused by. the fire in San
Francisco because of the EARTHQUAKE
clause" in the policies of the North Ger
man Fire. This clause is identical with
that included in the policies of some
fourteen other companies, and on it's
lace relieves the company from liability
when the fire results from earthquake
The reinsurance companies believe that
the earthquake which shook San Fran
cisco and started the first fires was
cause near enough to absolve them from
payment in case the battle is waged In
the courts They have not yet fully de-
cided what course they will take, but
they are considering refusing to pay
any OF the San Francisco losses.
In the meantime the "earthouake
clause" companies cannot act Many
of them will be ruined if the reinsur-
ance money does not come. 1t will be
impossible for them to pay more, than
a small part of their losses, even if
they are willing to waive the earth
quake clause" and the possible protec-
tion it gives to them. They are wait
Ing anxiously for the word to come from
the reinsurance companies so that they
will know where they stand
j. H Ankele, Pacific Coast agent for
the North German Fire Insurance Com
pany of New York, yesterday received
word from the home Office advising him
of the position of that company. The
letter requested him not to act until the
reinsurance companies had definitely
stated the position they would take on
the earthquake clause"
MUST AWAIT REINSURERs.
-1 do not know what the North Ger
man will do" said Ankele yesterday
I'VE have thousands of policy holders
here anxious to find out where we stand
and 1 cannot tell them. / know that
the reinsurance companies are contem-
plating the refusal to pay any San
Francisco losses. The people here
claim the earthquake was so remote a
cause of the fire that the earthquake
clause does not protect the company
This will be the question which will
have to be decided 1t has been held in
the courts that where one building fell
because of an earthquake and then
caught fire because of an overturned
stove we were not liable. That is plain
because the building fell. But the
court also held that where the house
across the street was uninjured by the
earthquake, but was destroyed by the
spread of flames from the first house,
then the company was also not liable.
Compare this with what happened in
San Francisco and you will see that it
is a grave question as to our liability
for any of these losses"