INSURANCE.

652. Insurance is indemnity secured against loss or damage. It is of two kinds: Property Insurance and Personal Insurance.

653. Property Insurance includes:

1. Fire Insurance, or indemnity for loss of or damage to property by fire. 2. Marine Insurance, or indemnity for loss of or damage to a ship or its cargo, by any specified casualty, at sea or on inland waters.

3. Live Stock Insurance, or indemnity for loss of or damage to horses, cattle, etc., from lightning or other casualty.

654. The Insured Party is usually the owner of the property insured, but may be any person having a financial insurable interest in the property.

655. The Insuring Parties are called Insurers or Underwriters, and are usually incorporated companies.

656. Insurance Companies are distinguished by the way in which they are organized; as Stock Insurance Companies, Mutual Insurance Companies.

657. A Stock Insurance Company is one whose capital has been contributed and is owned by stockholders, who share the profits and are liable for the losses.

658. A Mutual Insurance Company is one in which the profits and losses are shared by the insured parties.

REMARKS.-1. Some companies combine the features of both stock and mutual companies, and are called Mixed Companies.

2. In mixed companies, all profits above a limited dividend to the stockholders are divided among the policy-holders.

659.

Transit Insurance refers to risks taken on goods being transported from place to place, either by rail or water or both.

660. The Policy is the contract between the insurance company and the person whose property is insured, and contains a description of the insured property, the amount of the insurance, and the conditions under which the risk. is taken.

661. The Premium is the consideration in the contract, or the sum paid for insurance.

662. The Term of Insurance is the period of time for which the risk is taken, or the property insured.

REMARKS.-1. Premium rates are usually given as so much per $100 of the sum insured, and depend upon the nature of the risk and the length of time for which the policy is issued; insurance is usually effected for a year or a term of years.

2. Short Rates are for terms less than one year.

3. It is usual to make an added charge for the policy.

4. Insurance is frequently effected upon plate glass, the acts of employees, etc.

663. An Insurance Agent is one who acts for an insurance company, in obtaining insurance, collecting premiums, adjusting losses, reinsuring, etc.

664. An Insurance Broker is a person who negotiates insurance for others, for which he receives a brokerage from the company taking the risk; he is considered, however, an agent of the insured, not of the company.

REMARK.-A Floating Policy is one which covers goods stored in different places, and generally such as are moved from place to place in process of manufacture.

665. Losses may be total or partial.

666. Fire Insurance Losses are usually adjusted by the insurance company paying the full amount of the loss, provided such loss does not exceed the sum insured; if the policy, however, contains the "average clause," the payment made is such proportion of the loss as the amount of insurance bears to the total value of the property.

667. When a loss occurs to a vessel, the insurance company pays only such a proportion of the loss as the policy is of the entire value of the vessel.

668. It is an established rule in marine insurance, that insurers shall be allowed one-third for the superior value of the new material, as sails, masts, etc., used in repair of damage; that is, "one-third off new for old.”

REMARK.-Marine policies usually contain the "average clause."

669. In case a policy is terminated at the request of the insured, he is charged the "short rate" premium; if, however, it be terminated at the option of the company, the lower long rate will be charged, and the company refund the premium for the unexpired time of the policy.

670. A Valued or Closed Policy is the ordinary form, and contains a fixed valuation of the thing insured.

671. An Open Policy is one upon which additional insurances may be entered at any time from port to port, at rates and under conditions agreed upon. 672. Policies on Cargoes are issued for a certain voyage, and on vessels for a voyage or for a specified time.

673. Salvage is an allowance made to those rendering voluntary aid in saving vessels or cargoes from marine casualties.

REMARKS.-1. Insurance companies usually reserve the privilege of rebuilding, replacing, or repairing damaged property.

2. Insurance policies ordinarily state that the loss, if becoming a charge upon the company, will be paid 30 days or 60 days after due notice and proof of loss. If not then paid, the amount of the claim becomes interest-bearing.

674. The computations in Property Insurance are performed the same as in Percentage, and the terms compare as follows:

The Amount Insured the Base.
TheRate % of Premium = the Rate.

The Premium the Percentage.

675. To find the Cost of Insurance.

EXAMPLE.—The mixed stock in a country store is insured for $750.

What

is the cost of insurance for one year, at 11% premium, if $1.25 is charged for the policy?

Rule.-Multiply the amount of insurance by the rate per cent. of premium, and add extra charges, if any.

676. To find the Amount Insured, the Premium and Per Cent. of Premium being given.

If

EXAMPLE.-I paid $141.50 to insure a stock of goods for three months. the charge for the policy was $1.50, and the rate of premium 3%, for what amount was the policy issued?

Rule. From the full cost of insurance, subtract the extra charges, if any; divide the remainder by the per cent. of premium, and the quotient will be the face of the policy.

EXAMPLES FOR PRACTICE.

677. 1. How much insurance, at 14%, can be procured for $62.50?

2. A ranchman paid a premium of $75.20 for insuring of his herd of cattle, at 604 per $100. If the cattle were valued at $40 per head, how many

had he?

3. The loss on a property was $6000, of which $2000 was insured in the Home, $3000 in the Phoenix, and $2500 in the Hartford. How much did each company contribute?

4. If it cost $663 to insure a certain block for $44200, what will be the cost, at the same rate, to insure a block valued at $105000, if $1.50 extra be charged for the policy in the latter case?

5. How much will it cost to insure a factory for $42000, at %, and its machinery for $16500, at 14%, charge for policy and survey being $2.50?

6. A gentleman paid $35.60 per annum for insuring his house, at 2% on two fifths of its value. What was the value of the house?

7. If a store and its contents are valued at $27000, for how much must it be insured, at 1%, to cover loss and premium in case of total destruction?

8. A cargo of teas, valued at $33000, was insured for $18000, in a policy containing an "average clause." In case of damage to the amount of $21000, how much should the company pay?

9. The steamer Norseman, valued at $90000, is insured for $75000, at 21%. What will be the actual loss to the insurance company, in case the steamer is damaged to the amount of $20000?

10. A speculator bought 2000 barrels of its cost, at 31%, paying a premium of $429. to make a net profit of 10%?

flour, and had it insured for 80%. of At what price must he sell the flour,

11. I insured my grocery store, valued at $13500, and its contents, valued at $33000, and paid $350 for premium and policy. If the policy cost $1.25, what was the rate per cent. of premium?

12. A canal-boat load of 8400 bushels of wheat, worth 904 per bushel, is insured for three-fourths of its value, at 13% premium. In case of the total destruction of the wheat, how much will the owner lose?

13. A stock of goods, valued at $30000, was insured for 18 months, at 14%; at the end of 12 months the owner surrendered the policy. If the "short rate'

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for 6 months was 65¢ per $100, what should be the return premium? 14. For how much must a house worth $6000, and furniture worth $2000, be insured, at 1 per cent., to cover the cost of the policy, which was $2, the amount of premium paid, and of the value of the property?

15. A man owning of a ship, insured of his interest, at 11%, and paid $91.50 for premium and a policy charge of $1.50. If the ship becomes damaged to the extent of $12000, how much can be recovered on the policy?

16.

A schooner is valued at $10500, and has a cargo of 3500 barrels of apples, worth $2.10 per barrel. What amount of insurance must be obtained, at 21%, to provide, in case of loss, for the value of the property, the premium, and $5 additional which the owner paid for survey and policy?

17. A block of stores and contents was insured for $220000, and became damaged by fire and water to the amount of $150000. Of the risk, $40000 was taken by the Hartford Co., $65000 by the Manhattan, $35000 by the Ætna, and the remainder was divided equally between the `Phoenix and the Provident. What was the net loss of each company, if the premium paid was 13%?

18. The furniture in my house is estimated at one-half the value of the house. I got both insured for 5 years, at 21%, and find that in case of total destruction the face of the policy will be full indemnity for both the property and premium. Find the value of the house, if the face of the policy and the premium amount to $7687.50.

19. A factory worth $45000 is insured, with its contents, for $62500; $30000 of the insurance is on the building, $12500 on machinery worth $20000, and $20000 on stock worth $35000. A fire occurs by which the building and the machinery are both damaged, each to the amount of $15000, and the stock is entirely destroyed. How much is the claim against the company, if the risk is covered by an "ordinary" policy? How much if the policy contains the “average clause?"

20. The German Insurance Company insured the Field block for $105000, at 60¢ per $100; but thinking the risk too great, it re-insured $40,000 in the IIome, at %, and $45000 more in the Mutual, at %. How much premium did each company receive? What was the gain or loss of the German? What per cent. of premium did it receive for the part of the risk not re-insured?

PERSONAL INSURANCE.

678. Personal Insurance is the insurance of persons. It includes:

1. Life Insurance, or indemnity for loss of life.

2. Accident Insurance, or indemnity for loss from disability occasionedby accident.

3. Health Insurance, or indemnity for loss occasioned by sickness.

679. Policies of Life Insurance are usually either Life Policies or Endowment Policies.

680. A Life Policy stipulates to pay to the beneficiaries named in it a fixed sum of money on the death of the insured.

681. An Endowment Policy guarantees the payment of a fixed sum of money at a specified time, or at death, if the death occurs before the specified time.

682. Life insurance companies are known as Stock, Mutual, Mixed, and Co-Operative.

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683. Losses sustained by Stock and Mixed companies are paid either from reserve funds' or by assessment on the stockholders; those sustained by Mutual and Co-Operative companies are paid by pro-rata or fixed contributions of the policy holders.

REMARKS.-1. The money may be made payable to any one named by the insured; if made payable to himself, at his death it becomes a part of his estate and is liable for his debts, if payable to another, that other cannot be deprived of the benefit of the insurance, either by the will of the person taking out the insurance, or by his creditors.

2. A person may insure his life in as many companies as he pleases, and to any amount. 3. Any one having an insurable interest in the life of another, may take out, hold, and be benefited by a policy of insurance upon the life of the other; or he may take out a policy in his own name, and then assign it to any creditor or to any one having an insurable interest.

4. The practical workings of life insurance are fully set forth in documents in general circulation, and all matters of premiums to be paid, cash value of policies surrendered, and manner of becoming insured, are determined from such documents, rendering it unnecessary to require the solution of problems under life insurance,