INSURANCE PRINCIPLES.

Waikato Times, Volume 102, Issue 17218, 29 September 1927, Page 4

INSURANCE PRINCIPLES.

CONTRACTS AND CLAIMS. ADDRESS TO CORSMERCIAL MEN. At the second of the series of monthly lunoheons promoted by the Te Awamutu Chamber of Commerce, the Chamber -was well represented, Mr R. A. Coyne presided In the absence of Mr W. Jeffrey( president), who is indisposed. ■Rio chairman cordially welcomed Mr F. H. Pope, who had come from Auckland to give an address on the principles of insurance. Mr Pope said he would confine him-' self to fire insurance contracts, In relation to claims for damage to property insured. There are thousands of people in all walks of life in this Dominion whose life savings are represented In tangible property —buildings, stock-in-trade, etc. That some people do not insure is as amazingly appalling as it is appallingly amazing to insurance men and students of economics.

Insurance contracts are based on good faith, and have been carefully drawn up with this as the principal basis. An insurer has a bounden duty placed upon his shoulders to give the company the fullest possible information upon the proposal. For instance, if a person knew there were attempts to burn down his premises he should tell, the company, because if after a fire it were found to be a fact that the insurer was possessed of that knowledge the contract would be void. On the other hand, if the company took a premium well-knowing that any claim would be recoverable it would be culpably liable. Then there was the case of people insuring for an amount exceeding the value of the goods insured. That was foolish and wrong. A policy, which was a binding contract, required the company to pay up to the value of the goods lost, not necessarily to the full extent of the policy. He would gladly travel the length and breadth of the Dominion to convince the people of that fact, for more trouble and heartburning was caused by a misconception on that score than on any other that he could think of.

Onus on Insurer. The proof of loss is cast on the insurer, and rightly so, for he is liable' to say the amount of his loss. Companies are not valuers, they arc merely insurers. If companies were to undertake to pay fully on proposals accepted, they would have to raise premiums 500 per cent, because they would have to retain a very large staff of valuers all experts in a wide variety of goods. The greatest amount of misconception In these days is in respect to claims for losses. There is nothing requiring insurance companies to-inspect properties on which they hold policies. They insert a clause in the contract requiring insurers to bear a proportion of the risk, in the form of a measure of indemnity. Thus an insurer would not be likely to deliberately or negligently cause a fire that would entail a loss to him. . Any proponent should first decide just what he desires to insure against, said Mr Pope in further reference to the subject. He referred to stock-in-trade as an item covering a wide range in the average man's mind. But legally stock-in-trade is merely the goods actually sold by the latter, plus the article used for delivering it to the public. As an instance, a bottle of medicine is stockin-trade, but the big receptacle containing bulk stock of the particular medicines is not stock-in-trade. Such receptacles should have been insured separately. " An insurer should be freed of any need for going cap-in-hand to the company; he should have a full knowledge of ail his stock insured, and give details of the goods he desires insured wh f " n r.:.king the proposaL

(VJatter of Fixtures. Then again, the term fixtures is not generally understood. He said that in Te Awamutu there are probably £20,000 worth of fixtures in the business area, yet he hazarded the guess that half-a-dozen business men have insured their fixtures. A movable building, one on sleds, was not a fixture, but if piles or blocks are used under the building and the structure nailed thereto, the latter is a fixture. Speaking generally, the lecturer said that the fixtures installed by a tenant or lessee may be removed at the end of tenancy, but he knew of one Arm in Auckland that had spent £B,BOO in fixtures, yet it had not one penny of insurable value .in them. Mr. Pope gave other instances, to stress the necessity of one knowing that he had a sound claim, to fixtures installed by him. The companies required an insurer to prove his loss, and the adjuster has to satisfy himself that the loss is genuine, and the claim fair and reasonable. In ins 30 years' experience he had yet to learn of a real case of evasion by the insurance companies ol just dues. Companies did, and do, resist claims at times. Now Zealand s fire loss is the highest in the world per capita, and there is a certain amount of criminality in fire claims. He placed this at round about 15 per cent.; and the companies were not run as sound businesses if they did not investigate cases where there is suggestion of trickerv. Companies were, lie was convinced, far too ready to pay claims without full ■ investigation. IMS opened an avenue for fraud that should not be possible.