EARTHQUAKE LOSSES.

Hokitika Guardian, 10 September 1923, Page 4

EARTHQUAKE LOSSES.

INSURANCE CO AfP A NTFS NOT LIABLE. AUCKLAND, September 7. | News of the calamity in Japan lias . caused considerable speculation as to how local iiismiice companies operating in that country are affected. It. is pointed out, however. Unit loss by fire arising out of an earthquake is specti- ' fieally excluded from insurance policies; , therefore the companies are not liable I in this instance under their tire risks, and the only liability is in respect of marine policies. This is no information yet about any loss sustained in shipping risks, blit it is not expected to amount to very much. According to | cablegrams, the majority of large steamers in Yokohama harbour steamed to safety before the tidal wave occurred. An interesting statement on the subject of non-liability in the case of lire following an earthquake was made by ATr P. 11. Upton, general manager of the South British Insurance Company. “The- position, going hack to the Satt Francisco earthquake,” said Akr Upton, “is that at that time the earthquake clause was only just being introduced into fire policies. Only two or three companies had the earthquake clause, and it is safe to say that if all the companies had had it, the Sail Francisco losses would never have been paid by them. One ease was brought, that of the Richmond Coat Company against the Commercial Union Assurance Company, for the destruction. of ecal stacked at the corner of a street in San Francisco. The insurance company’s policy contained a clause excluding liability from fire arising out of earthquakes. The Judge’s address was an outstanding example of fairmindeduess, and the jury returned a unanimous verdict for the insurance company. In 1907, the year following the Sail Francisco disaster, Jamaica was struck by an earthquake. At that time the earthquake clause had come into more general use. A test case was brought, the evidence of 54 witnesses was taken, and the jury gave a unanimous verdict for the insurance company. Since these occurrences fifteen years ago. it is now realised that an insurance company is not to be looked to to pay losses arising out of earthquakes. The stupendous nature of the disaster at Tokyo and Yokohama well illustrates how essential it is that the funds of the insurance companies, which after all are trust funds to protect property against accidental loss by fire, should not be jeopardised .by vast upheavals of Nature.