Wausau pilot. [volume] (Wausau, Wis.) 1896-1940, 1915-09-21


term of policy. rate of premium, |
amount of policy and restrictions.
Some states have a standard form OF |
policy, where all the body of the |
policy is alike with every company |
and the wording is prescribed by law.
Where there is no state standard |
policy the policy adopted by the state
OF New York is almost universally |
used.
Paste TO or attached to the body of |
the policy is the form" or descrip-
tive portion. This describes the risk,
tells what the policy covers and appor-
tions the amount that apply to each
item insured. for example so much on
building, so much on fixtures. and so
much on stock, etc.
Still further attached to the policy
are "riders'' permits and clauses that
supercede or nullify the policy proyi-
sions With which they conflict. These
riders, clauses and permits are varied
and numerous. A few of them are
the gasoline permit. electric permit,
cC-insurance clause, vacancy permit
and mortgage clause They are
adapted to different forms of prop
erty and vary in different states.
1t is in the construction of the
'formr and the attachment of the
riders, permits and clauses that the
knowledge and ingenuity of the agent
is required. A policy holder desires
to know that all his property is well
covered as to each and every item.
Where business concern has large
plant, consisting Of various buildings
and varying values in each, an agent
should be able to adapt the form to
cover each section or item, so that if
a loss occurs there will be no ques-
ton. All required or desirable riders,
proper protection, should be at the
fingers end of the agent.
When a policy is cancelled by re-
quest of the assured it must be at
short rates; when cancelled at the re-
quest of the company at pro rata rate.
Tables are in use for figuring what is
due either the assured or company in
case of cancellation. Short rate cam
collation. is higher proportiOnally than
pro rata. Take $1,000 premium for
one year. If, at the end of six months,
the company cancels the policy or the
policy is cancelled to be rewritten
for some reason, the assured would
have refund of $1,000 coming to him.
If the assured cancelled it, the short
rate table would be applied and he
would receive but S. 90 as rebate,
The reason short rate cancellation is
used is to prevent pOlicyhOlders can
ceiling for no good reason and trans
ferring the insurance to some other
agent. 1t costs company certain
specific sum to place policy on its
books, no matter how long it is to
run. The policy holder is penaliZed
if ne cancels and drops insurance in
that company. A company does not
cancel unless it fears greater physi-
cal hazard exists than when it issued
the policy or is afraid the assured will
try TO burn out and realize on his in
surance.
! There are two main hazards an in
surance company recognizes. The.
physical hazard is the hazard of con-
struction in buildings, the hazard of
! exposure to other buildings, the haz-
ard of occupancy, the hazard that go
with certain trades or processes Of
manufacture. Some stocks are much
more susceptible to damage from fife
and smoke than other. Some prop
erty owners keep their premises clean
! and have fire prevention equipment;
others let rubbish accumulate, others
keep large quantities of violate oils
on hand which all add to the physical
hazard
Moral hazard is the danger of loss
from either intentional or careless
neglect of physical hazards or by
arson. 1t is the hazard which arises,
not from the physical condition of
the property, its occupancy or expos
ures, but from the moral nature of
the owner or tenant, from his indif-
ference or desire that the property
should burn, because he will prorit or
at least not lose thereby. Where an
insurance company feels such haz-
ard exists it will not insure the prop
erty.
The clause least understood is the
co-insurance clause. For the use of
| this clause reduced rate is given.
Under its terms policyholder agrees
to carry certain percentage of insur-
ance to the value of his building or
contents, 10 per cent, so per cent or
80 per cent, for example, and failing
to do so becomes co-insurer to the
amount OF the deficit if the loss is
less than the required percentage.
Let me illustrate the use of the so
per cent co-insurance clause:
Value of property. $4,000
Insurance carried ....... 5000
Insurance required. ...... 5000
| Loss. ......... 0,OOO
Company pays. ............. 5000
Another example:
Value of building. $4,000
insurance carried. ... 5000
Insurance required. ........ 5000
Deficiency. ................ 1900
Amount of loss. 5000
Apportionment:
Company'S proportion 6-S or 81, 500
Assures s. % or 1900
The co-insurance clause is equitable
because one man may be carrying an
adequate amount of insurance to
value and paying a premium on it
Ii L. L.