FIRE LOSS AND FIRE INSURANCE.

Manawatu Herald, Volume LI, Issue 4447, 3 May 1930, Page 2

FIRE LOSS AND FIRE INSURANCE.

ADDRESS BY MIL I). MOHR,ISON. ‘■Eire Loss and Five Insurance” was the text of an interesting address delivered to the Fox ton Bunch Chit, oa Thursday by Air. D. Morrison, Manager ol the State Five <)!lice, Palmerston North. Fire insurance was lirst thought. ot two hundred years ago, said Mr. Movie on, til though .Marine Insurance was much older than that being mentioned in an Act ol' Parliament recorded in (Jueen Elizabeth's time. In Hititl, in the reign ol Charles 11, certain merchants ol London petitioned the King for permission to carry on the business ot lire insurance in .minion, hut the Common t ouncil, a_.lter deliberating on the matter turned the proposal down ami it was not again taken up privately until six years after the lire of Loudon. In ItiSO the Eire Ol’liec v. as formed and a copy of the prospectus of this company, which j, still on record, shows that the objects of the company were to take over the insurance business of one. Dr Bail,on. '.Memhers were char-

ged 5/- per (quarter, the agreement being that in the event ol a lire the. company was to put rbe building so (testroved up again. The company operated quite successfully and a vein: later the Common Council

of Bond,>n adopted a lire insurance .Municipal lines and as a result of the formation ot the new company competition was tor a time \ erv keen. The .Municipal concern, despite a considerable amount of publicity by an energetic agent, lasted only eighteen months and on closing down was not able to pay all claims. Tlie Eire Ol'iiee. however. Still nourished and several ,-omoanies started in the business, fhe Sim Ollicc, a branch ol which was to he found in Foxton to-day, commenced operations in 1710 when it

reduced I lie rate from f,/- to 2/ti but at the same time it altered the conditions of agreement to read that the risk was limited to .1500 and also added a clause to the effect tlml the claims would only h» paid if i tie re were suOieient funds in the hank to meet them. That.

,-iaiise, however, said Air. Morrison, amidst amusement., has since disappeared. In LUO7 the Jamaican earlliquako took place and at that lime lire insurance policies contained a ebiuse to Hie effect that the companies would not be liable for lire caused by earlhquakos. Claims were lodged as a result of l-he fires caused by the shake but the companies refused to pay out until a lesi ease was taken before the court when it was ruled that frhoy were liable. Similarly the eontpani, :, or most of them, paid out in

connection with the Frisco enrth.pinke lire-.. Those companies which I!.el llleir obliga 1 ions in that connection which included the English and \cu Zealand Companies then operating in the Slates, were called -■Dollar Companies" because they paid dollar for dollar on claims. Mil ihe oilier companies wiheh failed ill ibis res peel had to retire from the country. A policy for say £l.OOll is not a

contract to pay fit laid, said Air. Aforrisoii in touching on this phase ~f his address. It is merely a contra cl to make good-any loss by lire not to exceed ClffiH). If a five -rein's in connect ion with a £]oofi risk and only £BOO worth of damo' c is doin', then that is all that, .s paid out by the company concerned. Referring to fire toss, Mr.

Morrison said rln-n- were 43 fire insuram-e i-ouipelnies operating in New y.i-a 1.-nnl and m 1928 an aggro,.;ii|,,ss of j;:!::,miu was shown on ill,. •, our’s working. Twenl.v-nine of i hose -Id companies, said Lite sjn-aker, showed a loss ol £193,090

~r ;jd mu- i-em. of their turnover. Tin- other companies made the sulislantial prolil ol CI alt,ooo. la (tips the insiiram-e companies of X w /eula i l paid mil £22,000 in income lax - and this amount was nol as high as il usually was. The Si.-ile Fire Differ share of Ilia I amount was close on £IO,OOO. 11l IDP I SOO claims were paid out amounting to a million and a halt pounds, 'flic dairy export id this loiinlrv was somewhere in the vicinity of twenty millions annually mid possibly if people realised that approximalely one tenth of: this am went up in smoke in that year,

mul for that mailer almost every ■ear, perhaps they would begin lo realise the seriousness of New Zealand's lire losses. This loss was nothing short of a lax of a million and a half on (lie people of this i onnl.rv plus flic cost of collection, which was not small. Unfortiumtejv position was not getting any hi-tter. In 1 914 New Zealand s fire loss worked out at 14 (i per head ~! (lie population but in 1928 this

; -a, e hail risen to £1 tl/(i and it would rotiiimie to rise while the people of ibis country continued to • reel wooden buildings. Possibly, said Air. .Morrison, many of you noiieed a cable which appeared in the press on April nth and which referred to the tire loss in Pekin. Pekin held the record for the lowness of lire loss amongst the cities. II had a population of one million nml last year there were only forty tires in Pekin. The reason for this was that the houses and business premises in Pekin were cons true ted of brick or clay, the roofs were of tiles and the floors of stone, while high walls surrounded the. structure which served to cut off the spread of a lire when it occurred. These "alls were erected to keep out the devils ami they certainly answered i n admirable purpose in keeping out or in the fire devil.

The cause of an outbreak is not always ascertainable,, said Mr. Mor j'ison, but statistics show that in

1028, fives from known causes in this ocuntry totalled 3000. These were generally lives which were located early hat where a total loss occurred it was very difficult to ascertain the cause of the outbreak, in IO2S tires due to causes unknown totalled between 1000 and 1700 so that when the figures are studied the idea so prevalent that practically alt tires are crooked tires is disposed of. Some, of course, were undoubtedly of crooked origin and there always would he some under similar circumstances Imt it was very gratifying to note that- the .“rent majority were of accidental nature.

In touching on the steps taken to prevent iiiv loss in this country, Mr. Alorris.ni said that certain authorities and trades were doing much to assist. Fire Brigades and Fire Boards were carrying on an excellent Work and he shuddered to think why! conditions would be like without them. Firemen, niid particularly tin- volunteer firemen, do not receive the recognition due to them, said the speaker. The volunteer men are tremendously keen ou their work and stick to it fur years. They were a fine type and were doing great work in keeping down the lire loss of this country (applause). The various .local bodies do their part too, continued Air. .Morrison. They make by-laws and see that they are enforced and were alive to their duly in this respect. Central government did its shave also by carrying mu inspection of brigades and attending to storage of dangerous goods, etc. The five insurance companies also played a pari. Many years ago they did not < mn-erii themselves with this aspect ..! the business. They merely fixed rates ami paid claims and left the matter there but to-day they look <t much broader view and endeavoured wherever possible to pretent lire loss by giving reductions ter good constructions and by loading had ones. Architects and builders were also concerned. They helped by employing good tradesmen and seeing that the work was carried out welL and in such a manner ;is to obviate lire risk. Technical schools were instructing their pupils in the various trades and turning out skilled craftsmen which also helped l" lessen the risk while ihe police were always vigilant and working to reduce the tire loss of the various communities. The public as u whole, however, was not alive to tiie tire waste anil danger of this country and the speaker

doubled if if did much to alleviate the position. New Zealand had the world’s worst, reputation with regard to tires and until Lite public was stirred up to take a serious view of the shocking tire waste that was going on he did not see much chance of an improvement in the position. It appeared as if the position needed handling by some Body of men or some person who cmiUl co-ordinate tiie efforts of all those at present striving to keep the loss down. The country’s live loss to-day was in the vicinity of a million and a half and if this sum could l>e reduced to one million even it would be a big step and a great economic saving for tin: country. liev. \Y. 11. Walton, at the conclusion of Air. .Morrison’s address expressed pleasure that be had referred to the excellent work the brigades, and particularly the volunteer brigades were doing in this country. They worked sometimes raider tremendous difficulties and were deserving of every commendation in their laudable work. Eoxtou had benefited tremendously as a result of the formation of a brigade and lie was pleased to say that the Foxtail Brigade was as smart as any in New Zealand. (Applause).

Mr. ft. E. Garbett asked Mi - . Morrison how insurance companies assessed the damage done in a lire. Air. Morrison's reply was that the person insured had to prove the value of Ihe building or slock desIroved, if a person’s dwelling was insured for .Cl0(H) and damage only to the value of £7OO was done, then the insured only received £7OO. Where stock was destroyed a lot depended on the person’s books, if .satisfactory hooks had been kept liltle difficulty was encountered in arriving at the loss. In the case of small traders it was easy to pro-, uiir copies of invoices ami together

with information received from the bank it was quite an easy matter to arrive at a tigurc very close to l lie actual amount lost.

Air. F. 11. Murray in commenting on Air. Morrison's remarks in reference to some concerted effort Lo prevent fire loss, said that a good lien! eoiild be done in instructing the i liildi'cn in the schools with regard m ihe exercising of i-are with fire, etc.

Air. F. A. Mason endorsed this view and said the great thing was to educate the public up.to the economic loss to the country through lire loss. lit* considered instruction on the lines indicated in the si lmols would be an important step • a i lie right direction. At the conclusion of his address -Mr. .Morrison was accorded a vote ol thanks on the motion of Messrs .Mason and Smith.