In support of this value, invoices or any other necessary documents must be produced. If the property is furniture, the only question remaining will be its depreciation from cost price through age, Ivear and tear, which will be deducted. If a stock-in-trade of manufactured goods, deductions from the invoice price will be possible in respect of discounts, length of time in stock, variation of fashion in its relation to particular goods, and general deprecia tion caused by shop-wear. If general merchandise, the criterion of its value will be the current market-price; and if the stock of a manufacturer, the value will be the cost of materials, labour, rent, and perhaps interest on capital. Farming stock is generally valued by the market-price of the day, less the cost of preparing aml taking to market. Goods partially damaged should be referred to the company, when it will be probably agreed between the parties that they are to be sold by auction ; under which circumstance the value to be claimed in respect thereof will be the difference between their value calculated as above, and the amount realised by the sale after deduct ing the auctioneer's and his incidental expenses.
We have now seen how, generally, to estimate the value of the property insured. Generally as to point (c), it may be stated that the valuation of an article in the policy does not mean that the company acknowledges its value as specified. It rests still with the assured to prove the value. Though a portrait by Reynolds of some person indifferent to the assured may be easily proved to be of the specified value, yet a portrait of a relation of the assured, highly and affectionately regarded as such, but not painted by an artist of any repute, could be valued at a nominal sum only. And this would be so, even though specified in the policy at a high value. And in no case can the over-sufficiency of one item supply the deficiency of another. Thus any over-sufficiency in the amount of the insurance of the above portrait could not be set off against the amount, perhaps insufficient, at which the ordinary furniture has been insured.
But the points (c) and (d) also coming under consideration as average, the only part of the particulars now to be dealt with is the amount to be claimed. If the values of all the items in the claim have been fairly arrived at, including the amounts available for claim under the average clauses, there should be no difficulty in arriving at the total amount. It should in fact be merely a sum in compound addition. But human nature being what it is, there is always an effort, notwithstanding any knowledge as to the limits of his rights possessed by the assured, to try and get in something as a solatium to cover an indefinable and really unknown item which may, perhaps, have been forgotten. Against such an effort, reasonably made, no one can complain ; and not even the insurance companies are likely to resist it. But the total amount of the claim must be reasonable. Some policies have a condition that any attempt at fraud in making an excessive claim, or any false declaration in supporting it, will forfeit all right of claim there under. There is therefore good reason for the assumd to be careful in this respect. Though a mere claim for a larger amount than is ultimately allowed is not either an attempt at fraud or an excessive claim, yet, on the other hand, an unfair, unreasonable, mala fide claim for an excessive amount is undoubtedly evidence of an attempt to defraud. EffOrts, therefore, of the latter class may end in entire lose of the benefit of the policy. At least they may cause the resistance by the company of the claim, and the eonse quext delay and expense in litigation to the assured. And referring to litigation suggests the high probability of there being an arbitration clause in the policy. In cases, therefore, where the company and the assured, or
their assessors, cannot come to terms, recourse should be had to arbitration. The assured must be careful to see that he has as his own arbitrator a man with a good technical knowledge of the property and of its varying values. The procedure in arbitration will be found under that head.
It only now remains to point out that in an arbitration respecting loss by fire each party has generally to pay his own costs, and half the fees for the award. The arbitration is precedent to any action at law, and it in no way affects a plea of fraud afterwards. Thus the company may await the assured taking up the award, and subsequently taking action thereon, and may then resist the claim, and base its defence upon any fraud it may consider the circumstances of the case have disclosed.
Loss of Buildings.—Hitherto our attention has been confined mainly to the valuation of property in the nature of goods and chattels. But though the principles thereof apply equally in the case of buildings, it will be convenient to consider sonic special points relating to the latter. In 1865 an Act was passed with the expressed intention of deterring and hindering ill-minded persons from wilfully setting their houses or other buildings on fire, with a view to gaining for themselves the insurance money ; as a consequence of which the lives and fortunes of many families, continues the Act, were likely to be lost or endangered. This Act recognised to the full that the only safe principle of fire insurguce was that of mere indemnity, and that once a profit or any advantage could be obtained as a consequence of fire, not only would the safety of the person and of property be greatly jeopardised, but the insurance offices themselves would become a source of public danger. Insurance offices were therefore authorised and required, upon the request of any person interested in any building which might be burned down or damaged, to apply the insurance money towards the rebuilding, reinstating, or repairing of such buildings. This is also to be done if the insurance offices have a suspicion that the owner or occupier or any other person who has insured the same has been guilty of fraud, or of wilfully setting fire to the premises. But in both, these cases the money must be paid over to the assured, if within sixty days after the adjustment of his claim he gives a sufficient security to the Insurance company that the money will be laid out in rebuilding, reinstating, or repairing the premises. In view, therefore, of the strong legal position in which fire insurance companies are placed, the assured must not be surprised if he is required to furnish the most detailed particulars of his loss, and verify the value most closely. The indemnity will only be such as will place the assured in the same position as that he enjoyed immediately prior to the fire ; the state of repair, age, general condition, and bye-laws of construction being all carefully taken into account. If local bye-laws require. upon rebuilding, certain alterations or improvements in structure or otherwise, the cost and expenses thereof will not be covered by the policy. In fact, the insurance office will take every lawful precaution against the occurrence of a fire becoming a desirable event to the assured. If the company is going to reinstate, it may use all material on the premises. If it is going to pay the money over, it may deduct therefrom the value of any standing material apparently available for construction, even though in consequence of bye-laws or other contingen cies such material cannot be used, or have any value at all for the purposes of such construction. And the criterion for the valuation of• the material may even be its availability.