AUTOMOBILE INSURANCE. A con tract of indemnity (1) against loss or expense by reason of the liability imposed by law upon owners or users of automobiles, for bodily injuries, including death, suffered by any per son as the result of the ownership, maintenance or use of such automobiles; (2) against loss or damage by fire, theft or robbery, or trans portation of automobiles; (3) against loss or expense by reason of the liability of owners of automobiles for damage to or destruction of property of others, except while in charge of the assured; (4) against loss by reason of the damage to or destruction of automobiles of the assured caused solely by collision 'with another object, either moving or stationery, ex cept loss or damage by fire; or by striking any portion of the roadbed; or by striking steam or street railroad rails or ties.
Automobile insurance is divided into two principal classes: First, insurance of cars of the private and pleasure type; and second, of public vehicles, taxicabs and livery vehicles in gen eral; commercial vehicles for transportation or delivery of goods or merchandise; cars used for demonstrating, testing and similar pur poses by manufacturers, sales agencies, garages and service stations.
The premium charge for liability insurance in the case of private and pleasure cars is based upon the insurable horse-power, which is deter mined by a standard recognized formula of rating; the premium charge for public and livery vehicles is based upon the carrying capac ity of the vehicle or is a fixed sum per car; the premium charge for commercial cars is based on the nature of the assured's business; the premium charge for cars used for demonstrat ing and testing and by garages, sales agencies and service stations is based upon the pay roll of all employees, including executive officers and office force, or on the number of chauffeurs named in the policy, or upon the number of cars specifically insured by manufacturer's number. In every case, the amount of premium is dependent upon the locality where the cars are principally maintained and used. The premium charged in the case of fire, theft and transportation insurance of automobiles is based upon the original list price as well as the year of model of the car, and the rate of premium increases with the age of the car and decreases as the list price becomes higher. A small in crease in rate is also made for cars bought sec ond hand in place of new. The amount of insurance granted is likewise dependent upon the list price and year of model and varies from 100 per cent of the actual cost of the car plus the equipment, in the case of new cars, to less than 25 per cent of the cost of cars more than five years old.
Automobile liability insurance has been writ ten for only 10 years in this country, but in that comparatively short period, the business has grown rapidly and has reached substantial proportions. A few companies only ventured into this field of underwriting at first, and for two or three years the business was confined to the larger organizations, but as the demand developed, and the field for this form of pro tection broadened, other companies essayed the business, until at the close of the year 1916, 43 companies were insuring under a single pol icy against liability for loss of life or personal injury; against liability for property damage; and against loss or damage resulting from collision. The premiums received and losses
paid are unfortunately not available, for the reason that automobile liability is included un der the general heading of liability insurance, in the statements and reports of casualty com panies, and no separation is made by any of the companies of the figures pertaining to the automobile business alone, excepting in the single case of property damage premiums and losses that are reported together with an allied branch of insurance, known as Teams Property Damage. Some idea, however, of the volume of business transacted annually by these com panies may be gained when it is known that during the year 1916, the premiums received for automobile and teams property damage amounted to $9,558,590 and losses paid to $3,853,763. As these figures represent only a relatively small percentage of automobile liability premiums and losses, it is easily conceivable that the volume of such business will in a few years exceed most other forms of liability insurance.
Automobile fire insurance covers the haz ards of (1) fire, from external causes, self ignition, explosion or lightning; (2) transporta tion; (3) theft; (4) property damage (5) collision damage. Ninety-five companies trans acted this kind of insurance during 1916, whereas several years ago such insurance was entirely unknown in this country. An innova tion was introduced within the last few years by the issue of a °joint)) policy, consisting on one side of a contract of fire insurance, by some well-known company, and of liability insurance, by some equally prominent company, on the other side. The main advantage claimed for this dual contract was that complete coverage was thereby afforded in one policy, but the plan did not meet with unqualified success, and the greater part of the business is now written in separate policies. The fire insurance policy usually includes fire and theft and collision damage and the liability policy covers personal injuries and property damage.. In 1918 the National Automobile Underwriters' Association recommended that fire and theft motor insur ance be included in one policy, with a distinc tion in rates, and providing that only half the insured value shall be recovered in case of theft, but not affecting the fire insurance for which full value is assured.
The rapid growth of automobile fire insur ance and the great possibilities for its future development are best indicated by the results achieved by the companies in 1916, which show net premiums received $17,320,342; net losses incurred $7,829,369. These figures, taken to gether with the automobile business transacted by the casualty companies during the year, in dicate a total volume of premiums received exceeding $50,000,000, and of losses incurred of over $22,000,000.