36 LOGGING 



INSURANCE OF STANDING TIMBER 



So far no standing timber in the United States has been 

 insured. 



Since timber bonds have been on the market there has been a 

 demand on the part of investors for insurance protection but 

 no active steps have been taken toward meeting it. Forest fire 

 insurance will probably not be offered by reliable companies at 

 a reasonable rate until better fire protection prevails and the 

 practice of forestry is widespread. A company would have to 

 carry a large amount of insurance scattered over a wide range 

 of conditions in order that heavy losses in a particular region 

 would not seriously embarrass it. 



Even though some of the more prominent European companies 

 insure timberlands they do not regard such risks as especially 

 desirable. The Gladbach Fire Insurance Company of Munich 

 estabhshed a forest fire insurance department in 1895. Its rates 

 are regulated by the age, species, character of stand and general 

 fire risk. On large, well-managed forest properties the premiums 

 vary from 4 marks to a minimum of 0.45 mark per 1000 marks 

 value, with an increase where the danger is great. The rate on 

 forest plantations and protection forests is adjusted for each 

 particular tract and the premiums often exceed 4 marks per 

 thousand. Only forests that have a definite form of manage- 

 ment and in which a sustained yield takes place are accepted 

 as risks and then for minimum periods of ten years. The in- 

 surance value of the property is preferably determined by an 

 expert appraiser, although the valuation of young timber may 

 be made by the owner from tables of cost furnished by the 

 company. In case of disagreement as to the basis of settlement 

 between insurer and insured, provision is made for a board of 

 referees whose judgment is final. 



In case the property is over-insured, the company holds itself 

 liable only for the actual value. The policy contains various 

 clauses regarding the obligations of the insured to exercise due 

 care in preventing fires, the use of steam engines in the forest, 

 brush burning, etc. 



