The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-04-21
Many Insurance Companies
May Have to Quit.
10 IN EUROPE ANO 10 HERE.
All But One or Two will Pay San
Francisco Claims.

O .OOO-P1ans Already Begun for
Adjustment and Speedy Payment
london VIII Send Cash, Not Reducing
Funds on Deposit in America-Opinlons
Divided on the Earthquake Immunity
Clause, but Foreign Companies Not
Likely tn Take Advantage OF It-CaL.
rornia Underwriters Very Hard Hit.
Revised estimates Of the loss 10 the los
Insurance companies involved in the San
Francisco disaster were made in this city
Yesterday, and the executive officers Of
the companies agreed pretty generally
that the total insurance carried in the
stricken city was $500 900, 900. Estimates
as 10 what portion of that the companies
r4Il have to pay differed, but the minimum
mentioned was SIPS 100000, the estimate
Of E. Fl. A. Correa. vice-president Of the
Home Insurance Company.
Another point upon which everybody in
the business agreed yesterday was that
at least fifteen \of the smaller companies
will have to retire from business altogether
after paying their losses, and that two
or three Of the American companies will
fail altogether and go into the hands OF
receivers without paying the San Fran
cisco claims against them.
IF any company is unable to continue
business because of this conhagration, .
eaid Mr.. Correa, 1T will be futile for it to
try 10 stave of the inevitable by fighting
the claims on earthquake technicalities
Any company doing that in face Of the
present suffering on the Pacific Coast will
be as completely ruined by public con-
tempt as if every dollar Of its assets had
gone out"
Preliminary plans for adjusting the
losses are being made, and it is hoped that
many settlements will have been made
within two months.
W. W. Windle of the Norwich Union
explained yesterday what the procedure
would be.
A general committee, " said Mr.. Windle,
will be appointed by the los companies.
All losses will be reported to that com
mittee with a list Of the companies in
tereeted in each case. Thu committee will
then appoint a subcommittee for each
loss there will be hundreds of thesel, COM
posed OF adjusters representing the com
panies interested In the particular case
under investigation. All the sub-com-
mittees will report their findings back to
the general committee.
The subcommittee ought to get to
work by the end Of next week, and 1t is
likely that so per cent. of the losses will
be determined within six weeks. The rest
will drag along, some of them for months.
The work of the general committee will
cloee with the adjustment of the losses.
In no case will it attempt to fix the liability,
as each company must do thai for itself.
The earthquake factor will hardly pre-
sent a new issue, as the points raised in the
various cases will be practically the same
as those always involved where there has
been an explosion.
The losses will be classified unde three
heads, as folio ws First, entire loss by earth
quake; second, partial loss by earthquake,
followed by fire destruction; and, third,
straight fire loss"
Losses under the first class in Mr.. Windle's
division will offer no difficulties, because
the companies will have nothing to settle.
As explained in THE Sun On Thursday, the
New York standard form of policy, which
Is in use in California, provides that "f a
building or any part thereof falls, except
as a result of fire, all ms urance by this
policy on such building or its contents
shall Immediately close
1t is in the settling of cases under the
second head that the trouble will come,
and that quibbling, If there is any. will come
in; and Yesterday it was suggested that
some companies may be inclined TO avoid
the payment Of claims on losses of the third
class, that is, by fire alone. In support Of
that theory Section 262s of the California
revised insurance laws was dug up and
quoted as authority. This is it:
Section 2s2s- Excepted Perils-Where a
peril is specially excepted in a contract OF
Insurance a loss which would not have oc-
Cured but for such a peril is thereby ex-
cepted, although the immediate cause OF the
loss vas a peril which was not excepted.
some of the com panies, so far as their
California business is concerned, have put
'Ni'lH4udh Nc Al u tAClhp1 SA"NSC I'M
policies, thereby making it a specially
excepted peril" A few of them are ex-
rected 10 at least test the strength Of SEQ
hon 1928 in the courts and TO argue that
although fire may have been the immediate
Cause Of the losses at issue the preliminary
cause was a specially excepted peril, that
Is, the earthquake.
One Of the small companies that specially
provides against earthquake liability is
the North German of New York. which Of
recent years has had no connection with
the North German of Hamburg. although
the same persons were formerly interested
IN both companies. The North German of
Hamburg is heavily involved in the San
Francisco disaster. Its premium income
from business in that city in 1905 was SIS, 946,
winch means that it has insurance out OH
the whole city amounting to approximately
{4hOo,oOO.
Louis L. Loeb, secretary and general
manager of the North German of New
York, at ? Liberty street, was very en-
phatic Yesterday in explaining that his
company had no connection whatever with
the Hamburg company,
We operate in California" said Mr..