FIRE INSURANCE LIABILITIES.

Wellington Independent, Volume XVI, Issue 1600, 16 July 1861, Page 5

FI RE INSURANCE LIABILITIES.

yy A. case of disputed liability to make '- ; go6d;'l6ss by fire is now pending, which has a most important interest to the ..,».■ public. A few weeks since the premises of Messrs. Taylor, Watt, & Co., at Wangaiiui, were destroyed. In one warehouse o goods to the value of £4000 were stored on which an Insurance to the extent of * \£iS()o only had been effected. From .. they.warehouse there were saved goods to the value of £5.00. The Liverpool and /L6 : hdori Insurance Company's Agents, , claim either " average" or " salvage," — at any rate a share of the goods thus saved,— and instead of paying the £1500, offer to pay £1313 only. Such are the facts, as stated in the Wanganui Chronicle, and they are not attempted to be denied — reference has however been , ma f de Jo the Head Office in Sydney, and .meanwhile £1000 has been paid on ■ account.

The public ought always to know distinctly the extent to which their policy •covers risk, and wherever the customary procedure of the English companies is departed from, it cannot be too widely made known. In England a policy is nofr-tiften effected " liable to average." It is done so in peculiar cases ; say for

instance, where half a dozen buildings ' "contain the material of a manufacture ; . one, week the whole of the material may •< be ito one building, while next week it . .may ]i)e distributed throughout them. To _ effect an Insurance on^ each of these * buildings for a sum suflicient to cover , thes .highest risk would be too expensive. y.To eject a proportionate insurance on "each building would not ensure security, ** as a fire might happen in one building when another alone contained the stock. In such cases " average" is resorted to. Only the exact value is insured and the proportion which the stock in the building destroyed bears to the whole stock insured, is calculated and paid by the Insurance Company; but no resort to average can be had without the policy specially states it. It is not, however, .go much " average" as "salvage" on which -jMessrs. Bowler, & Co., claim. In * doing ;so they are decidedly wrong. The Home] '.rule $s that no salvage can be 'taken -except on goods wholly paid for * -by the 1- Insurance Company. No Comj -panf o^xo3 how much more a building contains than it is insured for, all it cares about { is that it does not contain less. ' When 'a fire occurs the Inspector ascer-

taina the value insured for is

• burnt; 'if so the amount is paid. The ** Insurance covers the first loss, and Eng/Jish Insurers know that if property to the value of £4000 is insured to the extent of

£1500, and £1500 or less is burnt, the In- * surance Oompany makes it good. Salvage • 'occurs 'where the goods whose full value ' 'has been paid for by the Insurance Company are only partially destroyed. Thus if a merchant whose. stock was insured had : * fifty sacks of flour damaged by a fire "tiiat broke out and was speedily got under, the Insurance Company would »- pay the full value of the fifty sacks and sell for its own benefit ; that which had _ " Jbeeri damaged.. If the curtains of a room '^catching fire, the carpet and a chair or two are injured, the Insurance Company ' would pay' the value of a new carpet and '"".a. new^fc'of dhairs, but it would sell the v " old' for 'its dm benefit. This is the

meaning of salvage. It does not' mean refusing to pay the amount insured for ■when that amount has been destroyed, because a portion of an additional and uninsured stock has been saved. Where the stock is insured in two offices, then of course this salvage is divided between them, in proportion to the amount insured in or paid by each office. In the case at Wanganui the Insurance Company have not a leg to stand on. Had the goods been insured for £4,000 and only partially destroyed; Messrs. Bowler & Co., would of course have been justified in selling all that was saved for) the Company's benefit after they had' paid the amount insured for ; but having been insured for £1500 only, and £3,500 haying been burnt, there can be no claim, for salvage or anything else. *