Note 237d-3 — Chapter III

If the valuation were made to depend on the purchase price or on the cost of replacing or restoring the damaged property, even this would be some temptation to not entirely upright men. Hence the Baden law of 1840 expressly provides that instead of this, the selling price shall be the basis; the law of 1852, § 17, the medium cost of the combustible parts, after deduction made of the diminution in value caused by age. The fixing of premiums in the case of houses should be repeated from time to time on account of wear. According to the Calenb. Grubenh. law of 1823, § 21, every 10 years. According to the Baden law of 1852, § 28, 33, and the Württemberg law of 1853, § 12, the city council should examine annually in what cases a new valuation was necessary. The more certainly over-insurance is avoided, the less need is there of the superintendence policy adapted to a rather barbarous state of insurance, that only a part of the value shall be made good. The Phœnix fire insurance company in Baden for the insurance of movable property has reserved the right to investigate at any time and to satisfy itself as to the value of the insured object, and to lower the amount insured in accordance with its own opinion. The provision that the valuation shall be made by the authorities of the place, or that it shall be approved by them is frequently found. In Saxony, for instance (law of Nov. 14, 1835), the Leipzig city council gives its approval when it finds the amount insured in keeping with the means of the insured, and entertains no suspicions as to his honesty. To what a bad state of things a less liberal course leads, see in Masius, loc. cit., 85. This indeed is only difficult in large cities. It is also to be considered that it is not so much the many small amounts, but the few large ones that are dangerous to insurance. The Prussian scheme wanted to give up the police superintendence of insurance, but to punish over-insurance of more than 5 per cent. of the common value, by imposing a fine equal to the amount of over-insurance on the insured, the agents, and on the conductors of the business. (Jacobi, in II. Ergänzhefte der Preuss. Statist. Ztschr., 1869.) The provision that the amount paid as damages for a burned house shall be immediately employed in rebuilding, is to be explained in part by requisite A; in part also by the same police-guardianship against presumed negligence which introduced compulsory insurance.