Chapter XX - Insurance Fire Accident

  • 1. Like a gambling risk.
  • 2. What is fire insurance?
  • 3. Premiums.
  • 4. Collecting.
  • 5. Insurable property.
  • 6. Mutual companies.
  • 7. Stock companies.
  • 8. Accident insurance.

We hear and know much about life insurance because, no doubt, it has to do directly with the individual, and so has a personal appeal; but there are other forms of insurance, forms that have to do with things material, that play an important part in the world's business.


The gambling spirit, like the desire for stimulants and the tobacco habit, seems to be well nigh universal.

Men bet on the turn of dice, the cutting of cards, or the tossing of a coin, and we very properly denounce it as gambling. We take money without giving an equivalent, or we part with it and have nothing to show for the transfer.

There are insurance companies in England and in other parts of Europe where they insure risks from life to fire, from ships to crops, and from the turning of a card to the tossing of a coin.

The English company, known the world over as "Lloyd's," is ready to insure an ocean liner, or to guarantee that the next child born into your family will be a boy or a girl; it will even insure that there will or will not be twins, and that, if twins, they will be boys or girls, or one of each.

Now, this looks like gambling, and you would be quite right in so classing it, yet it is founded on the well considered law of chance, and the premiums--call them bets--are calculated with a mathematical precision surprising to one who has not studied the matter.


Fire insurance is a contract between the insured and the company taking the risk, in which for a consideration called a "premium," the company agrees to pay to the insured a stated sum, should the property, named in the policy, be destroyed by fire.

If there should be a fire, during the life of the policy, and the damage is not total, the company pays only enough to cover the loss.

Should the property be totally destroyed the company pays up to the amount named in the policy.

No company cares to insure for the full amount of the property; that might be an incentive to incendiarism.

In taking a fire risk, the companies base their estimates on tables as carefully worked out and from experiences quite as well studied as those of the actuaries of life companies.

Fire companies are purely business corporations, and their conduct is subject to the inspection of the officials of the state from which they receive their charters.


As life companies have rates dependent on the age of the insured, so fire companies regulate their premiums by the location and other circumstances of the buildings; in other words, they calculate the probabilities, and charge accordingly.

There are buildings particularly subject to combustion on which American companies will not take a risk. Among these may be classed kerosene and turpentine stills, sulphur and powder mills, and the buildings in which these products are stored.

Buildings not used for the purposes named, but in close proximity to them, are often considered too dangerous to warrant the issuance of a policy.

In all cases, the company makes a careful survey of the property to be insured, and on this report the amount of the premium is based.

Premiums on fire policies must be paid in bulk and in advance.

Policies should be renewed some days before the expiration of the old ones.

Fire premiums, taking into consideration the amount to be paid, are much lower than life premiums. We know that a man must die, but a building may never burn down, therefore the risk is less.

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