Lines 11 to 30 contain provisions making the policy void if certain things are done or exist without the consent of the company. Briefly summarized they are as follows: (1) If there is other insurance; (2) if the plant is a manufacturing establishment and it is continued in operation later than ten at night; (3) if the hazard is increased without notifying the com pany; (4) if mechanics are employed more than fif teen days at one time for repairs; (5) if the interest in the property is not sole ownership; (6) if the in sured property stands on ground not owned in fee simple by the insured; (7) if the property insured is personal and there be a chattel mortgage; (8) if fore closure proceedings are commenced and notice of a sale given; (9) if there is a change in the title other than by death of the insured; (10) if the policy is as signed before a loss without notification to the com pany; (11) if illuminating gas is generated within the property; (12) if benzine or similar oils are al lowed on the premises; (13) if the building is vacant or unoccupied for ten days.
Each of the conditions above specified renders the property more hazardous than is contemplated in the usual run of risks. The company may be quite will ing to grant the privilege for any or all of these con ditions. As a matter of fact many are granted as a pure matter of form; if the insured wishes any of these privileges, it is necessary that the policy contain the proper indorsement.
3. Non-liability.—Lines 31 to 35 'mention causes such as invasion, insurrection or other circumstances when there is a suspension of the real civic authority from which, if losses occur, the insurance company is not liable. These lines also include the much vexed problem of loss from explosion. The policy provides that the company shall not be liable for loss by ex plosion unless there is a fire, and then only for the loss caused by the fire. It is needless to point out the difficulty of separating the two forms of loss.
Lines 36 and 37 make provision that the insurance shall immediately cease if the building fall. The com pany insures a complete construction and not a mass of rubbish; hence this provision.
4. 38 gives a list of items such as accounts, bills and currency, which the company may not insure. The difficulty of proving the loss in the case of money will be self-evident. If they could be insured the temptation to have such losses would be possibly too much for human nature. Many of the other items such as accounts and evi dences of debt have no real insurable value; they rep resent a certain legal right to property, a right which exists altho the evidence may be destroyed.
5. Specific 39 to 41 take up a set of items which the company may insure but which must be mentioned specifically—awnings, patterns, curios and things of that character. In the case of patterns,
there is the susceptibility to damage coupled with the fact that in many cases they may represent a value utterly disproportionate to the rest of the plant, as in the case of an iron foundry. The common practice in connection with patterns is to limit the insurance to not more than ten per cent of the face value of the policy. This is probably not a necessary procedure where the property is insured for its full value or eighty per cent of its value.
The latter part of lines 41 to 44 provides that no loss shall be paid by the company if the property is damaged or the loss increased thru a city ordinance. In some/cases, where a city ordinance forbids the erec tion of a frame building in a certain section of the city, so that when a frame building is destroyed or damaged by fire it may not be rebuilt in the same ter ritory, provision is made for this form of loss, but it is questionable whether it is a loss that is properly in surable under a fire policy. If the insured is obliged to erect a building of better character than the one he lost, then he has the value in the better building. In other words, it is not a loss that he has suffered.
6. lines 51 to 55, it is stipulated that the contract may be cancelled by either party— by the insured immediately, and by the company if it gives five days' notice. If the insured cancels the policy the company retains what is called the short rate, which is a higher percentage of the premium than the pro rata return would be. For instance, a policy written for one year would on a pro rata cancellation call for a return of six months' premium to the in sured if the company were to cancel in that time, but if the insured cancels the policy, the company is al lowed to retain seventy per cent of the actual pre mium. The five days' provision means five days from the receipt of the notice, and it is customary for the company, in order to be positive that the cancella tion notice is received, to send it by registered mail. The framers of the policy intended that, after the com pany has sent the cancellation notice, the insured would return the policy, and that the unearned pre mium should then be sent. The New York Court of Appeals has decided that the unearned premium must be tendered to the insured with a notice of cancella tion, but this has not been the decision where the ques tion has gone to the 'United States Courts. It has never been taken up to the Supreme Court, but the Circuit Court has rendered an opinion that the return premium need not be tendered with the cancellation notice.