DESTRUCTION BY ENEMY

Dominion, Volume 34, Issue 113, 6 February 1941, Page 6

DESTRUCTION BY ENEMY

No Insurance Cover

POSITION IN NEW

ZEALAND

What Britain Is Doing

Holders of lire insurance policies in New Zealand may not all be aware that, if their property is destroyed or damaged by fire as a result, either directly or indirectly, of enemy action, their loss is uncovered. Perusal of the conditions printed on the back of the policy will, however, make this plain.

The form used by oue large company contains the following clause: “This insurance does not cover any loss or damage which either in origin or extent is directly or indirectly, proximately or remotely, occasioned by or contributed to by any of the following occurrences, or which, either iu origin or extent directly or indirectly, proximately or remotely, arises out of or in connexion with any of such occurrences.” Among the occurrences listed are “war, invasion, act, of foreign euemy, hostilities or warlike operations (whether war be declared or not).” Policies issued by other companies contain a similar stipulation. An official of the company stated yesterday that he knew of no office that would give insurance against any war risk on land, no matter what premium was offered. “The risk would be too great, as you can see if you consider what would happen if a whole city was razed to the ground,” he said. His firm would provide marine war risk insurance for clients from whom it had other business-' seme offices would not even do that. Action in Britain. In Britain the Prime Minister has announced that a Bill is being drafted, providing for compulsory insurance oi property in the United Kingdom against damage by enemy action. “This,” says a writer in the “Accountants’ Journal,” “indicates a reversal of the Government’s attitude. Since the beginning of the war there has been considerable pressure from the public and the Press for the institution of such a scheme. The Government, following the report of the Weir Committee has hitherto adopted the attitude that the risks are so huge and incalculable that no scheme of insurance would be practicable, but this attitude has been modified in the light of actual air raid experience. Evidently the damage to property is on a much less serious scale than had been expected. “A charge will be levied on the capital value of buildings and other structures, from which an insurance fund will be built up, which, if necessary, will be supplemented by Government contributions. The scheme is to operate retrospectively from the beginning of the war. Compensation will be payable at the end of the war, or earlier, and arrangements will be made under which urgent necessary repairs may be carried out. “The scheme will also embrace industrial plant, machinery, household effects, and other movable property and personal possessions. “No details are yet available, but suggestions have appeared in the Press that the rate of premium may be in the neighbourhood of 2/6 per cent, per annum. “This scheme is supplementary to that brought into operation in September, 1939, under which the insurance against war risks of certain commodities of national importance was made compulsory. It has recently been disclosed that the premiums received under the Commodity Risk Insurance Scheme to the eud of September, 1940, amounted to just under £40,000,00(1, and the magnitude of this Commodity Scheme is indicated by the fact that this amount exceeds the annual premiums collected by all the fire insurance companies in this country in respect of property in the United Kingdom. For reasons of national security the amount of claims on the commodity scheme has not been disclosed, but discussion of the possibility of an increase in the rate of premium beyond the present 5/- per cent, a month seems to Indicate that the amount has approached that of the premiums received.”