Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
12
The Music Trade Review
DECEMBER, 1930
Contrasted to this is the three-fourths loss
clause. With such a clause only three-fourths
of the loss developing is paid. In the foregoing
(Continued from page 3)
illustration, for instance, the property is worth
$60,0O0/$30O,O0O of $100,000 the amount of in-
"The per diem liability under this policy dur- $12,000, but with the three-fourths value clause
surance carried. This would be 1/5 of $100,000, ing the time of a partial suspension of business attached only $9,000 in insurance was carried
or $20,000, in insurance applying to building shall be limited to the 'Actual Loss Sustained,' and paid for, and in the event of a total loss
only $9,000 could be collected, and in the event
three, wherein the total values are $60,000. This not exceeding that proportion of the per diem
of a partial loss the full partial loss. However,
liability that would have been incurred by a
is arrived at, as explained, by applying the
with the three-fourths loss clause the value of
pro rata distribution average cause. But now co- total suspension of business which the actual
the property could be $12,000 and if a total loss
insurance must be next applied. With $300,000 per diem loss sustained, during the time of such
occurred only $9,000 could be collected. But
in values instead of $200,000 the assured be- partial suspension, bears to the per diem loss
if an $8,000 loss occurred than only 3/4 of
which would have been sustained by a total
comes a co-insurer, for he has only $100,000 in
that loss, or $6,000, would be collected. There
suspension of business, for the same time, or all
insurance and should have $150,000. So we go
is an important difference between these two
back to building three—the values are $60,000. properties described herein, due consideration
clauses.
being given to the experience of the business
Applying the 50 per cent co-insurance clause
Co-insurance Clause
he should have $30,000 insurance on building before the loss and the probable experience
thereafter."
The functions of this clause have been ex-
three. The pro rata distribution clause pro-
plained many times and represent the funda-
vides only $20,000. In the event of a total loss
This partial loss provision is a co-insurance
he collects $20,000, but if there is a partial loss
control in itself and only permits you to col- mental of fire insurance and the basis for the
premium charge. The higher the co-insurance
such as $10,000 he collects 20,000/30,000 (what
lect in the proportion that the amount of in-
the less your rate. The credits vary by states
surance carried bears to the total earnings in-
the amount of insurance applying on that build-
but the lowest rate is when you insure fully to
ing bears to the amount which should have volved. As partial losses are more frequent
value—sometimes the rate is reduced as much
than total losses it would not 'be fair to write
been carried in keeping with the agreement to
as 35 per cent for 100 per cent co-insurance.
the policy without this stipulation, for other-
insure 50 per cent to value) of $10,000, or $6,666.
Generally there is a flat rate, an 80 per
wise you could insure for a small per diem
With most fire insurance risks the 80 per cent
cent co-insurance rate which is from 20 per
and 90 per cent co-insurance clauses are used, sum and receive the same proportion as the fire
policyholder who insures his earnings one hun- cent to 40 per cent lower than the flat rate.
but on riot, explosion, windstorm and other
For 90 per cent co-insurance 10 per cent off
coverages 50 per cent co-insurance is common. dred per cent.
the 80 per cent rate is allowed—and 5 per cent
To further clarify the operation of this par-
This only when you insure all of your loca-
more allowed for 100 per cent co-insurance.
tial suspension clause the following example is
tions, buildings or contents under one blanket
Notwithstanding, very few insurance buyers as
given:
policy covering over all. If you take out a
yet
seem to grasp the workings of the clause, a
The per diem limit under a Use and Occu-
separate policy for each, there is no pro rata
great many music dealers believe that when you
pancy policy on your business, we will say, is
distribution clause, but there is the co-insur-
$1,000. You suffer a fire and the actual per attach the 80* per cent co-insurance clause, for
ance clause which is explained later.
instance, you only collect 80 per cent of
diem or per day loss is $200.
How r ever, the
The adjustment of partial losses under the
the loss. This is wrong. In accepting the co-
per diem loss which would have been incurred
per diem form of the "interrupted earnings" or
insurance clause, sometimes known as the "re-
in
the
event
of
a
total
suspension
of
your
busi-
Use and Occupancy contract is seldom under-
duced rate contribution clause," you agree to
ness is $1,200. ($200 more than the limit for
stood by retail music dealers. This clause is
keep your .property insured up to a certain per-
which
the
policy
happens
to
be
written.)
There-
found in every Use and Occupancy policy. There
centage of its value. If you comply with this
fore, as a co-insurance control and in keeping
is no charge for it and it cannot be excluded.
condition you will collect all of your losses in
with
the
partial
suspension
clause,
the
loss
paid
Use and Occupancy insurance costs about 20
full, either partial or total, not exceeding the
would be the proportion that the actual limit,
per cent less than the rate for your straight
face amount of the policy. If at the time of
$1,000,
bore
to
the
limit
which
should
have
fire insurance policy. To take care of these
loss your insurance is less than the percentage
been
carried,
$1,200,
or
$1,000
to
$1,200,
which
partial losses the Use and Occupancy contract
of the value which you agreed to insure then
in fractions is reduced to 5/6 and therefore
states as follows:
you are penalized.
5/6 of $200 would be the loss paid, or $166.65.
If you insured your store for $1,200 per day,
As a practical example, if your store is valued
all losses would be paid in full.
at $10,000 and you attach the 80 per cent co-
insurance clause, you agree to keep your build-
Three-fourths Value Clause
ings insured up to 80 per cent of its value, or
On many fire insurance contracts issued on $8,000. If there is a loss of $5,000 you collect $5,000
music stores the three-fourths value clause is
or any other amount of loss not exceeding the
attached. There is usually a credit in your
face amount of the policy, or $8,000. Of course,
premium for this clause—ranging in different
if you have a $9,000 loss you only collect $8,000,
States from 5 to 10 per cent off. In the event
i* you have a $10,000 loss you only collect $8,000.
df a loss and ttlso as a basis on which the rate of
Hut if you have a $7,500 loss or a $1,500 loss
premium is fixed the insurance company holds or any other amount less than $8,000 you collect
itself liable for only three-fourths of the actual
in full. The theory is that partial losses are
cash value of the properly in the event of a
more frequent than total losses, and therefore
loss. If your building, or contents, is worth
it is not necessary to insure to full value. But
$12,000 and is totally destroyed by fire, the
if you fail to keep your promise and when a loss
settlement under a three-fourths value clause
occurs you only have $5,000 in insurance in-
would be $9,000. Furthermore, in the -event that
stead of $8,000 you agreed to carry, then the
there is any other insurance on the property,
insurance company will pay only what the
a policy with the three-fourths value clause amount of the insurance, $5,000, bears to the
contributes pro rata only for the proportion of
amount of insurance which you should have
the three-fourths of the value. If by chance
carried, $8,000, or 5/8 of the loss.
the liability of the insurance company happens
The insurance company would pay in the event
to be less on the property than the amount
For generations Poehlmann Music
of
a $5,000 loss," 5/8 or $3,125, and you would
of insurance, and a premium has been paid to
Wire and Fly Brand Tuning Pins
have to stand the remaining 3/8 or $1,875 be-
the
insurance
company,
it
will
on
demand
refund
have made many pianos famous for
cause you failed to keep insured 80 per cent
the difference for the full term of the policy on
their renowned tonal qualities.
to value. Most fire insurance policies are writ-
the difference between the amount insured and
ten with 80 per cent or 90 per cent co-insurance,
the amount paid for the total loss.
but windstorm and explosion policies and other
allied fire insurance lines are frequently written
with 50 per cent co-insurance, and sometimes
The continued prestige of Fly Brand Pins and
Poehlmann Wire is due solely to quality. Every
as low as 25 per cent or 10 per cent.
detail is watched minutely. Made from special
In Case of Fire How's Your Insurance?
DISTINCTIVE
TONE QUALITY
drawn wire by men who have done nothing else
for a lifetime, they embody every known requisite
for quality. That is why many manufacturers of
high-grade pianos demand Poehlmann Wire and
Fly Brand Pins.
Samuel 1). Metz, for twenty-five years man-
ager of the Jersey City, N. J., store of Jacob
Doll & Sons, with John D. Rademacher has
organized the United Piano & Radio Co., with
a store at 1 Newark avenue, Jersey City.
SOLE AGENT U. S. A.
American Piano Supply Co.
Division of
HAMMACHER-SCHLEMMER & CO.
104-106 East 13th St.
New York, N. Y.
'Known for Tone"
MATHUSHEK PIANO MFG. CO.
79 Alexander Ave.
-
NEW YORK
Mills Music, Inc., has secured the American-
Canadian rights to the new fox-trot success,
"He's My Secret Passion," by Val Valentine
and Arthur Young.