At the end of the term a period of fifteen days is generally allowed for payment of the renewal premium, and if a loss is incurred within these fifteen days the person insured can protect himself by paying the premium, and the office will be obliged to accept it and to make good his loss. The company are not, however, bound to give notice that a renewal premium is due, and after the fifteen days have passed the policy may expire. If a loss has occurred during the days of grace and a tender of premium is made after they have ended when the loss is discovered, the renewal will be fraudulent unless notice of the loss is given to the office; but if the loss is unknown to both parties the contract will be void, being founded on mistake, and the person insured will be entitled to the repayment of the premium.
In order to enable the person insured to maintain a claim there must have been a loss by fire. The mere overheating of a stove which causes damage without ignition is not enough. The cause of the injury must also be directly traceable to fire. In the case of an explosion occurring in. consequence of an outbreak of fire on the insured premises the company are bound to pay for the damage done; but if the injury is caused by some distant explosion, and not directly traceable to fire, it will not come within the terms of the ordinary policy. In some offices, however, damage by the explosion of coal-gas and loss or damage by lightning, whether the property insured is set on fire or not, are covered by the policy. In a case where goods were destroyed by a mob attracted by a fire on neighbouring premises the Court held that the mob, and not the fire, caused the injury, although but for the fire the mob would not probably have assembled.
In the metropolis the damage done by the Metropolitan Fire Brigade in the execution of their duties is deemed to be damage by fire. Therefore the company will be liable for goods damaged by water, or by the hatchets of the firemen, or for the destruction of adjoining premises, if insured, pulled down by the Brigade in order to prevent the fire from spreading.
The fact that the fire is occasioned by the relatives or servants of the person insured does not relieve the company of their liability under the policy, unless in either case they are expressly excepted.
A very good example of this is the case of a gentleman rejoicing in the not uncommon patronymic of Smith, who insured his house and its contents with the Midland , Insurance Company. Living on the premises, and, in fact, in charge of them, with the full approbation of Mr. Smith, was his lawful wedded spouse, and this lady, being of an enterprising disposition and not overscrupulous, deliberately set the place on fire, without the knowledge or sanction of her husband, for the purpose of obtaining the insurance money. Mrs. Smith was duly convicted of arson, but this did not disentitle Mr. Smith from recovering the amount of his loss.
Fire insurance companies, in order to encourage the general public to insure their property against fire with them, make a practice of seldom resisting small claims, or even of inquiring into them, if they believe that they are honestly made.
Given an unprotected gas-jet left burning by a careless maid in the vicinity of a pair of lace curtains and an open window, it is not surprising that the draught through the window should have drawn the curtains into the gas-burner, with the result that not only were the curtains set alight, but the whole house stood a very good chance of being burnt down, had not the servant girl, attracted by the smell of the burning room, arrived in time to extinguish the conflagration. In this instance, the company not only cheerfully made good the damage which was caused, but rewarded the author of the mischief for her successful efforts in putting out the fire. In another instance, the insured himself set fire to his umbrella by carelessly dropping a lighted match into it, and his claim was admitted.
Notice of the loss must be given to the company within a limited time of the outbreak (for which, consult the policy) in order that they may have an opportunity of inquiring into the circumstances and satisfying themselves of the damage occasioned to the insured. The person insured must also produce some evidence of the amount of the loss actually sustained by producing bills or otherwise when required to do so. The original cost of the goods, or the cost of replacing them in many cases would not be a true test of their value, and unless the value of the property insured has been agreed upon at the time of effecting the insurance - which may be done, but in practice is hardly ever done - and a dispute arises, it is generally stipulated that the amount is to be settled by arbitration. And the clause is usually so worded as to make the award a condition precedent to maintaining an action for the sum due under the policy. To be continued.