INSURANCE

INSURANCE. If damage be sustained, the extent is proved by an examination of the subject damaged, at the ship's arrival; and the cause by the evidence of the crew.

If the ship be stranded, evidence must be taken at the place where stranded.

Documents of loss must be laid before the underwriters, with all convenient speed; and, if these be sufficiently clear, the loss should be immediately settled. The underwriters generally grant their notes at a month or six weeks date for their proportions.

If a ship be not heard of for a certain time, it is presumed lost; and the underwriters are liable to pay the sums insured, the property being abandoned to them in the event of the ship's return. Six months are allowed for a voyage to any part of Europe, a year to America, and two years to the East Indies.

By the ordinance of Hamburg, if a ship be three months beyond the usual time of performing a voyage, the underwriters may be desired to pay 92 per cent. on an abandon. If they decline it, they are allowed 14 months more, and then they must pay the full value.

A ship insured against the hazards of the sea, but not against the enemy, if never heard of, is presumed lost at sea.

Fifthly. In order that the manner of settling losses may be understood, we must explain what is meant by covering property. We mentioned already, that insurances for greater sums than the insured had really at stake, were contrary to law: but some latitude is allowed in that respect; for if the owner were to insure no more than the exact value of his property, he would lose the premium of insurance, and the abatement, if any was agreed on.

For example, if he has goods on board to the value of 100l. and insures the same at 5 per cent. to abate 2 per cent. in case of loss; then, if a total loss happen, he recovers 98l. from the insurers, of which 5l. being applied to re-place the premium, the nett sum saved is only 93l.; but, if the value on board be only 93l. and the sum insured 100l. he would be fully indemnified for the loss; and his property, in that case, is said to be covered.

To find how much should be insured to cover any sum, subtract the amount of the premium and abatement (if any) from 100l. As the remainder is to 100l. so is the value to the sum which covers it.

In case of a total loss, if the sum insured be not greater than that which covers the property, the insurers must pay it all. If greater, they pay what covers the property, and return the premium on the overplus.

Partial losses are regulated by this principle, that whereas the owner is not fully indemnified, in case of a total loss, unless he covers his property, therefore he should only be indemnified for a partial loss in the same proportion; and, if it be not fully insured, he is considered as insurer himself, for the part not covered, and must bear a suitable proportion of the loss. Therefore the value of the property is proved, and the sum required to cover it computed. If that sum be all insured, the underwriters pay the whole damage; if only part be insured, they pay their share, which is computed by the following rule: As the sum which covers the property is to the sum insured, so is the whole damage to the

Insurance. the part for which the insurers are liable.—For example, if the value of the property be 360l. the sum insured 300l. the premium 8 per cent. and abatement 2 per cent. then the sum which should be insured to cover the property is 400l.; and, if damage be sustained to the extent of 200l. the owners will recover 150l.

If a voyage is insured out and home, the premium outward must be considered as part of the value on the homeward property, and the sum necessary to cover it computed accordingly. For example, to insure 100l. out and home, at 5 per cent. each voyage, abatement 2 per cent. we compute thus:

93 : 100 :: L. 100 : L. 107 : 10 : 6, to be insured outward, premium on L. 107 : 10 : 6 outwards, at 5 per cent. L. 5 : 7 : 6 : 93 : 100 :: L. 105 : 7 : 6 : L. 113 : 6s. to be insured home; the premium on which is L. 5 : 13 : 6; and, if the ship be lost on the homeward voyage,