FIRE INSURANCE

Timaru Herald, Volume CXXXVII, Issue 19666, 7 December 1933, Page 8

FIRE INSURANCE

RIGHT TO RECOVER IN FULL | MR A. M. SAMUEL’S BILL JETTISONED By Telegraph—Presi Association WELLINGTON, December 6. Reporting on Mr A. M. Samuel’s Fire Insurance Companies Liability Bill, which sought to give insurers the right to recover in the event of total loss the sum on which they had paid premiums, the Statutes Revision Committee of the House recommended that the Bill be not allowed to proceed. The committee, however, recommended the Government to introduce legislation to provide: (1) That every fire insurance policy over buildings and every renewal notice should bear printed prominently thereon, a notice that the insurance policy was a contract of indemnity only, and that in the event of fire no greater sum could be recovered than the amount of the loss at the date of the fire, and that, in the event of the total loss of buildings, the insurance company would either reinstate the property destroyed or pay the value at the date of such destruction, such value to be determined by mutual agreement or reference to arbitration. (2) That in cases of total loss of buildings by fire, where the full amount of insurance stated in the policy is not paid, there should be an equitable refund of the excess amount of premiums paid. Mr W. E. Barnard (Lab., Napier) said that Mr Samuel was to be congratulated on having brought the matter before the House. There was no doubt that an amendment to the legislation was urgently desired, and he hoped the Committee’s recommendation would be treated seriously by the Government. False Sense of Security. Mr Samuel said he was entirely in accord with the Committee's recommendation. He had recognised at the outset that the Bill could not pass into law, but he had also recognised the necessity for some alteration in the law to protect the vast majority of insurers who had been living under a false sense of security so long. Mr M. J. Savage, Leader of the Opposition, said that in his opinion the Bill as originally drawn up would have been satisfactory. If he had paid premiums on a certain sum he would want, in, case of total loss, to receive the amount in respect of which he had paid premiums. Mr A. J. Stallworthy (1., Eden) said that he believed that insurance companies had collected millions of pounds for risks which were not covered in accordance with the terms of the policies. The Rev. Clyde Carr (Lab., Timaru) and Mr J. A. Lee (Lab., Grey Lynn), also urged the necessity for an amendment of the law. Mr W. P. Endean (C., Parnell) said that an insurance policy was not a contract but an- indemnity against loss. It was for the people who insured to see that they did not pay premiums on amounts which they would not recover. If the law were amended as proposed by the Bill, there would be an incentive- to fraud because there would be an opportunity for over insuring. Mr W. J. Broadfoot (chairman of the Statutes Revision Committee) said that the Bill had served a good purpose and had brought to notice certain defects in the system which should be corrected.

The report was referred to the Government for consideration.