Over Insurance.

Wairarapa Standard, Volume XVIII, Issue 1744, 9 October 1885, Page 2

Over Insurance.

Beauing in mind the number of fires which have taken place in the Wairarapa and other parts of the colony within the last few months, some interest attaches to Ihe question of “over insurance” which is now being discussed in the columns of the Evening Post. On one part, it is contended that a merchant, who gives large credit to a storekeeper should insist on the stock and trade of the latter being insured to a fair margin on its value. On the other hand, it is pointed out that it becomes the duty of ihe Insurance agents to see that no insurances are effected in excess of value, so that it will not be the interest of any one to make a fire and gel the insurance money- On this point, however, a correspondent under the signature of “Trader, pithily remarks : —ln practice, inaur* ance agents seldom, before accepting a risk, trouble to ascertain whether there is value ; often they do not trouble even afterwards, but if they then enquire, and dislike the risk, they rely on re-inanrance, a present quarrel amongst companies being the discovery that one company has occasionally been re-insnring the whole risk. Next, they rely on resisting the claim, disputing that there ever was the value, and, as recently, calling on a client to prove by a crude analysis of his transactions for a couple of years back that the value insured existed. Insurance should be a protection to well meaning citizens, but conducted on present lines it has become a source of danger to the community ; for while accidental fires no doubt often occur, yet the frequency of fires is very probably the indirect result of the extreme carelessness with which risks are undertaken. To restore the business to a basis profitable to shareholders it is necessary not to conduct business relying on further combination so resist payment of loss, but rather by directorates combining to insist on a rigid examination of all risks, and the rejection of many that are now accepted.” This is sound reasoning, and it would be highly desirable that insurance business should be conducted on the principles laid down by this correspondent.