The New York herald., 1922-12-24
INSURANCE IS
MOST IMPORTANT
Expert Goes Thoroughly Into
Subject and Describes the
Various Forms.
by FRANK l.. GARDNER.

With the number Of automobiles in
service increasing every day and the
record Of accidents growing correspond
ingly It behooves the motor car owner to
read his insurance policy and make
sure that he is properly protected 1t
would be wise also for him to check UP
the company In which he carries insur-
ance and make certain that it Is "A
sound one. When a claim develops 1t
frequently occurs that the policyholdei
discovers himself to have been laboring
under misunderstanding as to his
protection.
Public liability, a form of coverage
much needed nowadays. protects the
owner of an automobile against almost
any conceivable kind of claim or suit
that may be brought against him be-
cause OF personal injury done by his
automobile. The policy. however. does;
not offer protection while the car is be-
ing operated in q race or speed contest
nor while II is being driven by person
under sixteen years of age. 1t also ex-
cludes- -coverage while the car Is being
used as a taxicab or bus. unless the
owner has paid the proper premium
covering this special hazard
AS ordinarily written, public la
will pay any loss uP~to $4,000 for In
jurles To more than one person in any
one accident, subject, however, to limit
OF IS, 600 for single person. BY paying
25 per cent. moro premium the owner
can get twice as much insurance cover
age and about ten times as much by
paying approximately 45 per cent. more
premium. Most Of the losses are small
ones, 90 that 1t naturally takes more
premium to cover the hrst so:ooo tnan
it does to cover the next $4,000, and sc
on up the scale.
The property damage coverage pro-
tects the owner against liability for
whatever damage his car does 60 other
peoples property. The same exclusions
appear in this policy as in that covering
public liability and, in addition, coVerage
is excluded for any property carried III
or upon the insured automobile. The
standard limit for a property damage
policy is $1,000, although higher limits
may be purchased.
Collision insurance protects the owner
against damage to his own car. This
policy is printed in three forms--full
coveragc. which protects for every col.
lision loss. no matter how small; $50
deductible," which is sold at a much
cheaper rate and requires the owner tc
pay his own loss up to $50. and to pay
the first $50 of any larger loss. The
"sl00 deductible" coverage. which sells
at a still cheaper rate. requires the
owner to pay the first 500 of each loss
Where an owner driven only policy
is issued there Is a reduction OF 20 pei
cent. from the basic pleasure car rates
where an automobile is owned by one
person and the driving Is not only Inn
| tied to private purposes but also to the
owner. The thought Is that this re-
striction materially reduces the risk
with a corresponding Improvement II
the hazard from an insurance stand
point. Il is assumed that In such cases
the car will be In the garage or safely
parked while the assured Is in his Office
attending to his customary duties.
| should be clearly understood that al
"owner driven only policy moan JUS
what II says, and that the company ma,
| deny liability If an accident occurs while
the car Is being driven by some persor
| other than the assured. even though the
latter may be a passenger In The car a.
| the time.
! Fire and theft insurance are self-ex
planatory, but some policies exclude th'
small equipment losses, such as the thief
of spare tires or motormeters. Som'
require that the owner stand one-quar
| ter Of the loss. while others provide ful
coverage. These restrictions have tegr
put into effect principally during th'
! last year or two because the fire anl
theft losses were becoming excessive
The object has been to induce the as
sured TO be more careful OF his property
by making him stand part of each loss
Tho theft rates depend primarily OF
the type of car being insured. Pop
ular makes are stolen much moro frc
| quently than cars that are seldom
heard of. first, because It harder II
detect the thief and. secondly, because
the thief finds It easier to dispose oi
a popular car. Consequently. the theft
rate on q Ford automobile. for exam
pie, may be ten times as high as tn,
theft rate on a Sterling car.
The point of moral hazard is one thai
has received considerable mention, and
as customarily used. applies only Il
bad moral riks--indivicuals who con
spire to defraud the insurance com
panies Sometimes when a man pur'
chases a car during a period OF high
prices and insures the vehicle at it'
full value, he Is tempted later. wher
prices have been reduced and the cal
is no longer new, 10 destroy the cal
and collect his insurance. A good
many dishonest individuals have at
tempted this. There have been more
than twice as many cars burned upor
lonely country roads during the pas
two years than ever before. Similarly
a great many cars have been stolen
that never would have been had no
the owner over insured his car. Ever
where an owner does not deliberately
connive with criminals 10 have his cal
stolen he sometimes will be as care
le6s as he knows how to be In the hope
that someone will happen along and
appropriate his conveyance.
The insurance companies feel that the
remedy lies in requiring the owner tc
insure his car for less than II Is worth
SO that he will always have an In
ducemcnt 10 protect his property.