FIRE INSURANCE RISKS

Otago Witness, Issue 3148, 15 July 1914, Page 55

FIRE INSURANCE RISKS

PAYMENT OF POLICIES

(Fbou Oub Own CoBBissroNDRNT,)

WELLINGTON, July 11. The subject of fire insurance risk and the question of compelling companies to pay out the full face value of policies in all cases was again raised in the House yesterday by Mr Buxton. He pointed out that he had put a question on this subject to the Minister in charge of Insurance (the Hon. Mr Fisher) on Wednesday, and he said that he had been informed in effect that “ a fire policy is an indemnity against loss on the part of the assured, and no one is entitled to obtain a sum greater than the actual value of the property detroyed by fire,” and that “ legislation in the direction suggested would be in direct antagonism to the universally recognised fundamental principles of fire insurance.”

Mr Buxton, who was not convinced by the reply, remarked that some companies accepted premiums for risks in excess of actual insurance values, and said nothing about reducing the amount until a fire took place, and then they took every possible means to reduce the amount of "the claim under the policy. In many cases workers, who could not afford, to contest their claims in a court, accepted the amount offered by the company. As a consequence insurance companies were receiving premiums on' risks in excess of insurable values.

The Minister said that while fire insurance companies reserved the right in their policies to rebuild property destroyed instead of paying cash, it did away with the incentive to men to set fire to their property when they wanted money in a hnrry. Many a man, if he could get cash on demand in the event of destruction by fire, might prefer to try incendiarism. It would also tend to over-insurance.