This is a distinct branch of insurance business, the object being to compensate a person in case of pecuniary loss through the accidental burning of his property. By paying annually a com- paratively small amount in the shape of pre- mium, a person may insure that in case of the destruction by fire of such of his goods as may be specified in a fire policy, issued by the Insur- ance Company, he will be recouped their value. Nearly all the Fire Insurance offices are agreed in charging a certain rate of premium, which is called the tariff rate. For dwelling-houses built of brick or stone with slate or tile roof, the rate is only 1s. 6d. for every £100. For more hazard- ous buildings such as thatched houses, ware- houses, inns, shops, &c., the rates are higher, according to the nature of the risk. Household furniture and the other contents of a brick or stone house can be insured at various rates, or they may be included in one insurance with the house, when the rate would be 2s. per cent. for the whole.
It should be remembered that there is a limit, usually of 5 per cent., of the whole sum so in- sured, placed on any one work of art which may be destroyed.
For instance, a picture valued at £200 maybe burnt in a house which, with the contents, is insured for £2,000 If the picture were alone destroyed, the office would only compensate to the extent of £100, being 5 per cent. on the £2,000, the total amount of the insurance. Any particular picture or work of art may, however, be specially insured by itself.
Insurances should never be made for a greater sum than the value of the property insured, as it would be paying more premium for no purpose. The offices take good care that they pay no more than the actual value of the property destroyed, which they have the means of ascertaining with some degree of accuracy.
It has been found necessary to subject the insurance of farming stock to special conditions. A farmer having stock of the value, say, of £1,000, might reason in this way: "My ricks, implements, crops, &c., are situated widely apart, and it is difficult to imagine that all could be consumed in one and the same fire; therefore, I will insure the whole stock for £500 only, then I shall have to pay only half the amount in the premium I should be liable for in case I insured to the full value." The offices are, however, quite alive to this kind of reasoning, and frustrate the intention by inserting what is called the "average" clause in the policy, the effect of which is that in the event of a claim being made for loss by fire, only one half of the value would be made because only one half of the value of the stock was insured. Live stock, however, may be separately insured without the average clause, and animals killed by lightning are paid for if insured against loss by fire.
There are other offices which insure against loss by special contingencies, such as damage to glass houses, and cattle, and garden produce, by hailstorms; destruction of boilers by explosion, of plate glass, and from accident or disease affecting cattle. There are companies, too, which insure against accidents sustained by rail, road, or water, guaranteeing a specified sum in case of death, and compensation in case of injury. Also societies which take the place of sureties and guarantee an insurer against loss or default by anyone in his employ; and companies which undertake to make good any loss arising from burglary or larceny. In all cases, of course, the liability of the office is limited to a certain declared amount.
CHAPTER X. BUILDING SOCIETIES.
THE main object of a Building Society is to aid a man to become proprietor of his own dwelling. This can be accomplished by means of the society in two different ways:- 1, by depositing with the society periodical money savings until, with the interest allowed, enough has been accumu- lated to buy a house; 2, by borrowing from the society a sufficient sum to purchase a house and repaying the loan, with interest, by instal- ments spread over a term of years. A person desiring to become a depositor must qualify for membership of the society by paying an entrance fee of; say, 2s. 6d. He then takes up a share and, by paying periodical instalments according to the tables, he becomes entitled at the end of the appointed time to receive £100.
The same applies proportionately to a half share of £50 or to a quarter share of £25. For example, as regards the whole share, a person paying 13s. a month regularly to the society is entitled, at the end of ten years, to be repaid a lump sum of £100, and any bonus added thereto which the profits of the society may afford. If the term be fifteen years, then, to secure £100, he will have to pay only 7s. 7d. every month, and if twenty-one years, then a monthly payment of 4s. 7d. The terms vary in different societies, but those quoted have been adopted by an exist- ing institution of repute. If the term of ten years is selected, the depositor will have saved and paid to the society (with added interest) £78 in all; if the term of fifteen years is chosen he will have paid £68 5s. in all; and if twenty-one years be adopted, £57 15s. In either case, at the end of the term he has selected, the depositor will be paid back £100. Thus any one taking a share for £100, and keeping up the instalments for twenty-one years, will in the end have paid only £57 15s. for it — the difference being met by the interest paid by borrowers from the society. The following table shows particulars of other terms and the monthly subscription payable:-
———————————————————————- | Term | Monthly Sub- | Term | Monthly Sub- | | of |scription for a| of |scription for a| |Years.| £100 share. |Years.| £100 share. | |———|———————-|———|———————-| | | £ s. d. | | £ s. d. | | 3 | 2 12 10 | 13 | 0 9 1 | | 4 | 1 18 8 | 14 | 0 8 4 | | 5 | 1 10 2 | 15 | 0 7 7 | | 6 | 1 4 6 | 16 | 0 6 11 | | 7 | 1 0 6 | 17 | 0 6 4 | | 8 | 0 17 6 | 18 | 0 5 10 | | 9 | 0 15 2 | 19 | 0 5 4 | | 10 | 0 13 0 | 20 | 0 5 0 | | 11 | 0 11 8 | 21 | 0 4 7 | | 12 | 0 10 6 | | | ———————————————————————-