Rebuilding: when buildings are burnt down, the company invariably reserve to themselves the right of requiring the reinstatement of the building, instead of paying over the money. As a general rule, the whole cost of rebuilding is not recoverable, as the insured is only entitled to be indemnified for his loss, and the value of a new building would usually be greater than that of an old one.
In a case where a steam-roller belonging to the Brighton Corporation broke the gas-pipes in a street and caused an explosion in one of the houses, the tenants of the house obtained compensation from the Corporation for the damage done to the premises, and set to work to repair them, as they were bound to do by the terms of the lease. But the landlord, who had also insured the house, ignored the fact that his tenants were rebuilding it, and claimed the amount of his policy from the company, which was paid. It was held, however, in an action subsequently brought against the landlord by the company, when they heard that the premises had been reinstated by the tenants, that the landlord would not merely be indemnified - he would be paid twice over if he were allowed to retain the money.
If a person, therefore, insures his property with two or more companies, he cannot recover the full value of the property from each of them, but some arrangement must be made between them to pay him pro rata, and the calculation sometimes is rather complicated.
Of course, as regards the person insured, each office is, in the first instance, liable for payment of the whole amount of the insurance.
When a tenant has failed to insure the premises against fire by breaking the covenant he may have made himself liable to forfeiture. In such a case, relief will generally be granted the first time of breaking, where no loss by fire has actually happened, and where there is an insurance on foot at the time of the application for relief.
The occupier of premises on which a fire occurs may find himself liable for a greater loss than the value of the goods destroyed upon his own premises if the fire spreads to his neighbours' dwellings. In such a case, if the fire originates through his fault, or that of his servants, he will be liable for the losses sustained thereby by other people. This risk can also be insured against, but, as a matter of practice, people generally content themselves with insuring their own houses, and not troubling about those of their neighbours. The liability, however, has now been modified, and no action can be maintained against any person in whose house, chamber, stable, barn or other building or on whose estate any fire accidentally begins. But should the fire arise through negligence, the liability will not be excluded by pleading that it is covered by. the expression "accidentally." The owner of the premises upon which the fire breaks out must show that its spreading to neighbouring premises was not owing to any fault of his.
Rent which is payable by a tenant, whether the premises are standing or not, and which he must continue to pay even though the house is destroyed, is insurable, and should always be included in the policy. Prospective profits are not covered by the ordinary policy, but can be specially insured, if thought desirable. Such policies, however, are uncommon, except in the case of shops, who insure against loss of profits caused by interruption of business.
If the owner is fully insured, and his claim is admitted as a total loss, any salvage belongs to the company; if the owner is not fully insured he is entitled to the salvage, after receiving payment from the insurers. The person who is insured is not entitled to abandon undamaged goods to the. company, and insist on being paid the full amount for which they are insured; he can only recover the value of such goods as are damaged or destroyed. The company cannot claim the salvage unless the amount they have paid under the policy is the full value. As a rule, the loss of cash, notes, or cheques is not covered by a fire policy.
When the company has paid the loss, they are entitled to stand in the place of the person who was insured, and any legal remedies or securities that he had against third parties may be enforced by them. As, for example, the right of action against the hundred for damages due to riot or arson or against the occupier of neighbouring property for negligently allowing a fire to spread. Such actions formerly could only be brought in the name of the person who was insured, but may now be brought by the company in their own name.
If the person insured enforces his rights against third persons, and receives payment or other benefit from them, or if he voluntarily relinquishes such benefit or payment, the company are not deprived of their right to be subrogated to him, but can recover from him the amount which, but for his act, they could claim from the other parties.
The law relating to insurance against burglary is practically the same as that against fire. The contract is one of indemnity, and the assured cannot recover more than the amount of his loss, the alarm and shock caused to himself and his family, or the scaring away of his servants, not being taken into account.
The ordinary rates for the contents of a dwelling-house, if insured to their full value, average from is. 6d. to 2s. per cent., the latter covering not only loss and damage by burglary and house-breaking, but also larceny, including collusion and theft by servants. Not the least valuable part of the insurance is that against damage caused by burglars to the property or to the premises which would otherwise have to be remedied by the insured.
The ordinary policy does not protect bicycles kept in an outhouse, chickens, etc., which can, however, be specially included, but the personal property of members of the insured and family, and of his domestic servants permanently residing in the house, is covered under the policy. Also the property is usually covered when removed by the insured to other premises in which he is temporarily residing. Fifteen days of grace are allowed for the renewal of the premium, and, in the absence of any important alteration in the premises, or material increase of risk, it is not customary to issue a fresh policy.