FIRE INSURANCE. CHAPTER I. OF THE ORIGIN, HISTORY, AND IMPORTANCE OF FIRE INSURANCE. § 1. In policies of Marine Insurance, of which we have just given some account, there is usually, if not universally, contained an indemnity against loss or damage by fire during the voyage, or term for which the insurance was effected; and nothing is more natural or more reasonably to have been expected, than a conversion of the security which had long afforded protection against injuries to ships and vessels occasioned by fire, to the purpose of yielding protection to property on land. § 2. By the brief sketch of the history of Marine Insurance just adverted to, it appears, with the reasons for it, that this branch of the law of insurance was not practised to any considerable extent in England until the reign of Elizabeth, although it was there introduced many years before, by the Lombards.1 The insurance of houses and goods, &c., in London, begun in 1667, which was the year following the 1 See ante, § 4, 31, 32, 33. "great fire in London."1 The severely calamitous effects of that event inculcated the necessity of some general system of Fire Insurance, and the city on the fifteenth of October, 1681, resolved, that lands and ground rents to the value of £100,000 should be settled, together with the sums to be received for premiums, as a fund for the insurance of houses. This project having proved abortive, the scheme of a Mutual Insurance Office, which had been suggested as early as the year 1669,2 was substituted, and in 1696 an association, founded upon the simple principle of contribution, in the shape of annual premiums proportioned to the amount of the property insured, to a common fund, out of which the losses of its various members were to be made good, was established under the appropriate title of the "Hand in Hand, or Amicable Contribution Society." The utility of this institution was immediately acknowledged by the public, and in 1718, three thousand six hundred and sixty-six houses were insured by it. In Edinburgh, about the year 1670, there was erected a company for friendly insurance against fire, consisting of a number of private contributors, who agreed to insure each other. The insurance was not personal, like the modern fire insurance, but the interest and stock and benefit were inseparably annexed to the houses insured as long as the contribution was continued.3 The Sun Fire Office, in London, was established in 1710, being the next in point of date; and since that time, a great number of similar institutions have arisen in England.1 "In London," says Magens,5 "insurances from fire are obtainable at such easy rates, that there are few merchants, but choose to be insured for their own 1 Hayden's Dict. of Dates. tit. "Insurance;" Beckman's Hist. of Discoveries, vol. 1, p. 393. 2 Ibid. 31 Bell, Comm. 543. 4 Dowd. on Life and Fire Ins. 12, 13; 2 Marsh. on Ins. 786. 5 1 Magens' Essay on Insurance, published in 1755, p. 31. quiet; besides," he continues, "this precaution adds to their credit both at home and abroad, when it is known that their great capitals lying in their houses and warehouses are thus secured from the flames." § 3. In the other countries of Europe, Fire Insurance has not been as long introduced nor so extensively practised. In 1754, one of the companies established in Paris for marine insurances, obtained from the government permission to make insurances against fire, but it may be collected from Pothier,1 that they were comparatively little used on the continent in his time. Magens, who wrote in 1755, speaks of insurances against fire as having been introduced into several countries of Europe, though not everywhere under that denomination; and he says, that at Hamburg there is fire cassa of long standing wherein the principal houses are insured at the value of fifteen thousand marks, (or about £1,000 sterling,) to be paid in case of their being burnt. The same writer further says "he must hint, that it is not a little surprising that in so fine a place as Hamburg is, an insurance on merchandise from fire has not been settled, either by their fire cassa or some other society, since the risk there cannot be judged so great as elsewhere, by reason of the vast plenty of water; and the dispositions they have made for the extinguishing of fires."3 The people of Holland have also relied so much upon their own caution for the prevention of fires, that although insurance is not unknown among them, few of them have sought its protection. At the present moment, 1 Pothier, tit. Des Assurances, § 1. 2 Essay on Insurance, 213. 31 Magens, 31, and see 1 Weskett, 213. 4 2 Marsh. on Insurance, 785. This writer says "I have heard it confidently asserted by persons well acquainted with the cities both of London and Amsterdam, that after making all fair allowances, there is, upon an average, more property destroyed by fire in the former in one year, than in the latter in ten." the character and credit of the English Insurance Offices stand so high, that they are frequently, and it is believed very generally, resorted to by their continental neighbors.1 § 4. An insurance company, on the principle of the ancient London "Hand in Hand" company-the mutual contribution principle- existed in the city of New York for many years after the peace of 1783, and before incorporated companies, with capital stock, became very common. Formerly the English fire insurance companies were at liberty to insure property in that city, by the means of an agency established there. This, says Kent,2 was deemed by the citizens of New York as the safest source, owing to the great capitals of those English companies, to apply to for indemnity against fire. But a different policy afterwards prevailed with the legislature of the State of New York. A prohibitory act by them passed, applicable to such cases, was defeated in 1807, and again in 1809, by the objections of the Council of Revision, which were drawn and submitted to the Council, by the late Chancellor Kent, than a member of that Council. But on the 18th day of March, 1814, the prohibition passed into a law. The prohibition was originally confined to all foreign insurances against fire; by the act of the Legislature of the State of New York, of May 1st, 1829, c. 336, the prohibition was extended to marine insurance and bottomry, and this is still the existing law of that State; and this prohibition has been since relaxed, and reduced to a small tax on premiums. The great conflagration in the city of New York, on the night of the 16th and morning of the 17th of December, 1835, was unexampled in this country since fireinsurance was practised, in the "rapidity," says Chancellor 1 Dowd. on Fire and Life Ins. 13. 2 3 Kent, Comm. 371, note a, 5th ed. 3 See Rev. Statutes of New York, vol. i. 714; vol. iii. 557; Laws of New York, February 21, 1837, c. 30 Kent, "and violence of its ravages, and in the amount of the property destroyed. It of course absorbed the capital of many of the most solidly established Fire Insurance Companies, and rendered them insolvent. This was an extraordinary case, and without precedent, and was not within the reach of ordinary calculation." 1 In the extent of its transactions, Fire Insurance has, in England, far exceeded its prototype, Maritime Insurance; 2 and associations for insurance against fire, have extended their dealings to every part of the United States, and gained public confidence by the solidity of their capitals.3 § 5. The great utility both in a public and a private point of view of the contract of marine insurance, as an incentive to industry and enterprise, has already been commented on, and it is almost superfluous to enter upon a detail of the advantages which mankind have derived from the sort of insurance immediately under consideration; they are obvious, as Park says,5 to every understanding. "We may lay it down," says James," "as a maxim, that every one, possessed of either small or considerable property in houses or chattels should protect himself by means of a policy of fire insurance; for however careful himself or family may be, he is at no time free from the liability to danger, occasioned by the carelessness or misfortune of his neighbor; and accidents by fire are caused frequently by such trivial and unaccountable circumstances, that it is impossible wholly to fence against them. Reverting, says he, to the principles of Fire Insurance, it has been observed, that the theory of probabilities which are an essential element of Life Assurance, may also be applied to Fire Assurance, as, being based on registers of facts, it goes on the simple presumption, that what 1 3 Kent, Comm. 371, note a, 5th ed. 2 Dowd. on Fire and Life Ins. 13. 33 Kent, Comm. 371. 4 See ante, § 10. 5 Park on Ins. 441. 6 James on Life and Fire Ins. 85. |