JAPANESE DISASTER.

Waikato Times, Volume 96, Issue 15358, 5 October 1923, Page 6

JAPANESE DISASTER.

YHE RIBKB OF EARTHQUAKES. UNDERWRITERS' ATTITUDE. A statement was published in the London Times on September 13 describing officially' and briefly the attitude of the British Are insurance companies towards the cost of the damage caused by the terrible earthquake in Japan. The point was made the subject of inquiry by the Post, which learned that, needless to say, managers of British fire insurance companies had followed the news of the disaster with the deepest sympathy. They realised how far-reaching the effect must be for Japan. The damage, it was recognised, exceeded anything that the insurance companies might have thought likely, yet the possibility of serious damage due to earthquake had been taken into consideration in Japanese Are insurance business. It was learned that for that reason they are understood rigorously to have excluded the earthquake risk from ordinary Are policies, and only to have accepted liability for such damage in return for a special premium, up to very moderate amounts. "They conceived, apparently, such limitation to be in the interest of all the policy-holders who insure with them against ordinary fire risks", remarked an underwriting authority, "and of the prudent conduct of insurance for the proprietors. That there was realisation in Japan that it might [be desirable to supplement the ordin- ! ary fire insurance with other policies covering earthquake, seems to have been shown by the effecting in a numj ber of cases of special earthquake insurances, of' which, as was indicated the other day, a close study has been made in certain quarters. "British Are insurance managers in New Zealand," it was added, "have noted in the message from Osaka, published in the Times recently that the case of the San Francisco earthquake | has been cited as a suggested precedent for the payment of losses under ordinary Are policies, due to the Japanese disaster. But they do not, if is now known, admit that San Francisco could provide any precedent. The great majority of the British Are insurance companies covering property at San Francisco had no special clause in their policies excepting the risk of earthquake, and they paid the claims. The results very costly indeed, and many years elapsed before some of the ofllces were able to reach as strong a position as they enjoyed before that great event. "The British fire insurance offices of -any standing maintain that they have never yet repudiated a claim for which they were liable, and they have no intention, of ever doing so," it was explained. ; "But they also assert that they can only hope to preserve that reputation if they conduct their business on lines of ordinary prudence; and the exclusion of liability' for earthquake damage under ordinary Are policies in areas suspectible to them is considered to be one of the essential provisos. Even at the time of the San Francisco disaster the risk of earthquake damage was specially excluded, as a rule, from the ordinary fire policies they issued in respect of Japanese business; and they were extremely careful after their experience at San Francisco to pay even more heed to the terms of Japanese policies." \

The following official statement has been made on the matter, respecting the attitude of the British Are insurance companies towards the cost of the damage by the earthquake in Japan:—(i) At a recent meeting of British insurance offices operating in Japan, it was unanimously resolved to adhere to the conditions common to all policies exempting the offices from liability for damage caused by earthquake or its consequences. (2) This condition appears in these policies in the most precise and deAnite terms and more particularly so since the San Francisco disaster.. (3) The regulations of the Japanese Fire Insurance Association prohibit insurance companies issuing policies which do not specifically exclude an earthquake lability. This risk can'-only be covered on the special request of the insured by separate policy, or endorsement and payment of a special. rate. (4) The conditions of all policies issued in Japan must be submitted to, and approved by, a Government Department. (5) There can be no moral obligation on an insurance company to undertake responsibility for losses resulting from a risk for which it has not received the additional premiums to which acceptance of that risk would have entitled it.