The Farmington times. (Farmington, St. Francois County, Mo.) 1905-1926, 1921-01-21
Automobile Inter
Insurance Suits

Recent litigation involving the
members of the Illinois Automobile
Insurance Exchange of Bloomington
has revealed one Of the hidden dan
gers Of the inter-insurance idea. MOST
Of the members Of the numerous au-
tonobile inter-insurance concerns, go
into them to get what they regard as
cheap insurance, with no thought OF
the risks they run on the liability
they assume. Under the inter-insur-
ance plan they are the insurers as
well as the insured, and are under a
liability which may involve them IN
annoying and costly litigation as well
AS the danger of a Judgment. This
suit also reveals the fact that in case
tl,ey have a loss they cannot get 9
Judgment against the Exchange, ana
! TO get their money will be forced to
sue the individual members.
Edward c. Zulley, an East st. LOUIS
attorney, insured his roadster IN 1919
ia the Illinois Automobile Insurance
Exchange, and it was later destroyed
by FIRE. The Exchange refused to pay
the loss and Zulley sued for 81, ,50O
damages. The attorneys for the Ex-
change claimed that it was not a
corporation, eoudl not be sued as an
Exchange, and that Judgment could
not be entered against it. Zulley then
secured the names Of some OF the
other East st. Louis policy holders,
who were his intcr-insurers, and
amended his petition to include Ike
Cohen. the holder of a policy for $3.50.
The court entered Judgment for VI,
370,S3 for Zulley, holding that the
nolicvholders were liable for the to-
tai amount of the loss, which was to
be pro rated among them according to
the face value of their policies. Ihis
rate was established at 25 cents on
each one hundred dollars Of insurance,
and the first Judgment was for nine
two cents against Cohen. Zulley then
began suit against Judge \. Z: hra.
mer, also of East st. Louis, holder OF
policy for $1,640, against whom a
judgment of $4.10 was entered. Other
suits are pending, and Zulley threat
ems to begin more as fast as he gets
the names of other policyholders.
Similar troubles have been expert
enced by the holders of policies OF the
larger inter-insurers, dealing with
mercantile risks. G.. C. Martin & Co.,
wholesale grocers at Parkersburg, w.
Va, were forced to bring suit against
the members of the Whoiesals Groc-
ers Reciprocal Exchange of st. Louis
to rscover a loss of $4,000. The
members of the Exchange refused to
pay the claim, and also refused TO
furnish the addresses OF the other
members so that individual suits
could be brought. These members
were wholesale grocers scattered all
over the country, and their individual
share of the liability was in many
cases less than hundred dollars.
The automobile inter-insurers have
very much smaller amounts involved,
but the liability is the same and the
litigation would be annoying and ex-
pensive even if the Judgment was for
a triling amount. The fact remains
that the member, regarded as a
claimant, may have great trouble IN
collecting his loss, as he must sue the
individual members, while as the IN
surer of his fellow members he IS liza
BILE to be sued on any disputed claim
Business men should investigate these
concerns very carefully and should
look into the -of-attorney they
give the manager of the Exchange,
under which he can involve them in
enormous liabilities. They will find
that any promised saving in cost is
more than offset by lack of security
and by risks and financial liabilities OF
which they had no idea.
The wisest plan. Judging from the
above, is to buy standard old-line in
surance.