FARMEES MUTUAL INSURANCE COMPANIES' UNION, 357 



SHOULD A MUTUAL INSURANCE COMPANY PAY PARTIAL 



LOSSES IN FULL? 



D. F. CLARK, MULBERRY. 



That which is right, I think we ought to adopt as our rule in insurance 

 business, just as we do in other wallcs of life. Now we came right up to 

 the edge of this question yesterday, yet I have not heard any man mention 

 the mode of insurance. I think the mode of insurance figures very largely 

 into the adjustment question. If j'ou insured all property for its full cash 

 value, there is no question in my mind but that all losses should be paid 

 in full. As a rule we insure buildings for two-thirds of their cash value. 

 One brother said yesterday that in the majority of the companies in 

 Indiana personal property was insured for its full value. We all have con- 

 stitutions and by-laws to govern us in these matters. Our constitution says 

 that no building shall be insured for more than two-thirds of its fair cash 

 value. The contents of the buildings, grain, grain stacks on the farm and 

 stock may be insured in our company for a fair cash value. Then when 

 we come to that part of the constitution which provides for adjustment 

 we go on and say that in case of a loss on buildings we will pay two-thirds 

 of that loss, because we insure two-thirds of the value of that building. 

 When we come to the contents we pay in full, because we have insured 

 for the full value; that is, of course, up to the amount of the insurance 

 in each case. 



Now, let us throw these safeguards around us and examine the ques- 

 tion from that standpoint. Take a house that is worth $900, and we all 

 understand that it can not be insured for more than $G00. That house 

 may catch fire and two-thirds of it be burned. Of course if .we have a 

 partial loss we must stop somewhere. I am going to say in this case it 

 stopped at two-thirds the value of the house. Suppose a neighbor had a 

 similar house, insured for the same amount, and it was entirely burned 

 down the same night. Now, under the theory that partial losses should be 

 paid in full each man would get the same amount. The man who lost his 

 entire house could get but $000, because that was all the insurance he had, 

 but he lost $900. Now it is going to be a very hard matter to make the 

 man who has lost $900 believe he is being treated fairly when he finds out 

 that his neighbor, who has only lost two-thirds as much as he has and 

 still retains one-third of his property, gets the same amount of insurance 

 as he does. 



Another phase of this question is this: You put a valuation upon a 

 building and then you put an insurance on that building. We agree in all 

 of our laws everywhere to pay the insurance in case of loss. We agree 

 nowhere to pay valuation; but when you pay partial losses in full you pay 

 valuation instead of insurance. When you insure a house for two-thirds 



