policy. To avoid litigation such tender is invariably made to the insured. The cancellation notice1 usually takes some such form as shown in Fig. 6.

Short Rate Tables.-As already observed the standard policy provides that, in case the company cancels the policy the unearned portion of the premium shall be returned in full. In case, however, the insured cancels the policy, the company may retain the customary "short rate." To do otherwise would enable a property owner to evade the proper charges for short risks, since, if he could receive back all premiums on the pro-rata basis, he could take a policy for a year and cancel it when no longer wanted.

As examples of the short rates which fire-insurance companies are in the habit of retaining when policies are cancelled by the insured, the following tables are given, the first being that adopted by the New York Fire Insurance Ex

1In view of Supreme Court decisions, the following note is frequently attached to the cancellation notice for the guidance of the company's agents:

CANCELLATION NOTICE.

NOTE. Serve this form of notice personally, if practicable, or by registered letter, keeping memorandum on this stub, so that positive proof of service on the insured can be made. The date of terminating policy should be at least five days after service or receipt by the insured of notice. In cases when quick and positive cancellation is desired, as when ordered by Company, etc., and when premium has been paid, make a tender of the unearned premium with service of notice and erase last three lines of notice and add "The pro rata unearned return premium is herewith tendered." The courts hold that such tender is required for a legal cancellation.

If loss is payable to a third party, mortgagee, or otherwise, notice should be served on such party. If risk came through broker, or other agents, give notice also to them.

SECURE THE POLICY AT THE END OF THE FIVE DAYS. Policy No..

Notice Dated..

Insured....
191

Served by....

change for one-year policies, and the second a table adopted by the "Western Union," designed for policies running longer than one year. Except in the case of policies on contents of listed storage stores and grain elevators, which can be cancelled for less than one month at short rates for the fractional

This is to notify you that in accordance with the conditions of said policy (see in particular lines 51 to 55 of policy), said Company elects to cancel and terminate its liability under same at noon of the.. ...day of.... 191.., and by virtue of said conditions and this notice thereunder, such liability will cease and terminate at that date.

The pro rata unearned premium, if the premium has actually been paid, is held subject to your order on surrender of said policy to the undersigned Agent of said Company.

part of a month, all policies written for a month or more are subject to the rule "that fractional parts of a month shall be charged the full month's premium; no return to be made on a policy written for a period of less than one month."

SHORT RATE TABLE ADOPTED BY THE NEW YORK

FIRE EXCHANGE

Annual rate. 1 day..

25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 110 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2

1 month.

2 months.

3 months.

4 months.. 5 months.

6 months..

7 months.

8 months.

9 months.

10 months. 11 months.

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 8 911 12 14 15 17 18 20 21 23 24 26 27 29 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 13 15 18 20 23 25 28 30 33 35 38 40 43 45 48 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 18 21 25 28 32 35 39 42 46 49 53 56 60 63 67 19 23 26 30 34 38 41 45 49 53 56 60 64 68 71 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 22 26 30 34 38 43 47 51 55 60 64 68 72 77 81 23 27 32 36 41 45 50 54 59 63 68 72 77 81 86 24 29 33 38 43 45 52 57 62 67 71 76 81 86 90

Annual rate.... 125 150 175 200 225 250 275 300 325 350 375 400 450 500

1 day..

2 days.. 3 days.

4 days.

5 days.

10 days.

15 days.

20 days.

1 month.. 2 months.

3 months.

4 months. 5 months.. 6 months. 7 months. 8 months. 9 months. 10 months. 11 months.

5 5 6 6 7 7 8 8 9 10

9 10 11 12 13 14 15 16 18 20 6 8 9 10 11 11 13 15 16 18 19 20 23 25 8 9 11 12 14 15 17 18 20 21 23 24 27 30 10 12 13 15 17 18 20 22 23 25 27 30 33 13 15 18 20 23 25 28 30 33 35 38 40 45 50 17 20 23 27 30 33 37 40 43 47 50 53 60 67 21 25 29 33 38 42 46 50 54 58 63 67 75 83 25 30 35 40 45 50 55 60 65 70 75 80 90 100 38 45 53 60 68 75 83 90 98 105 113 120 135 150 50 60 70 80 90 100 110 120 130 140 150 160 180 200 63 75 88 100 113 125 138 150 163 175 188 200 225 250 75 90 105 122 135 150 165 180 195 210 225 240 270 300 88 105 123 140 158 175 193 210 228 245 263 280 315 350

94 113 131 150 169 188 206 225 244 263 281 300 338 375 100 120 140 160 180 200 220 240 260 280 300 320 360 400 106 128 149 170 191 213 234 255 276 298 319 340 383 425 113 135 158 180 203 225 248 270 293 315 338 360 405 450 119 143 166 190 214 238 261 285 309 333 356 380 428 475

SHORT RATE TABLE ADOPTED BY THE "WESTERN UNION" FOR TERM RISKS

CHAPTER X

OTHER INSURANCE

WITH reference to "other insurance" (the terms “double insurance," "overinsurance," and "multiple insurance" are also often used to indicate the procuring of more than one policy upon the same interest in a property) the standard fire policy contains the following provision (lines 11 to 13): "This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the insured now has, or shall hereafter, make or procure any other contract of insurance, whether valid or not, on property insured in whole or in part by this policy." This clause, or one very similar to it in wording, is found in every modern fire-insurance policy. Its object is not to prevent different persons from insuring their respective interests in a given property, but simply to make impossible the taking out of more than one policy on a single interest, except with the knowledge and sanction of the insurer. Writers on this phase of the fire-insurance business all emphasize the importance of using as much caution in restricting the total amount of insurance written on a property under a number of policies as when all the insurance is carried in one policy. The clause has been declared reasonable and valid. It is important to the company, in that it makes overinsurance difficult, and greatly lessens the moral hazard. Because of its general use, incendiarism is lessened, and the public is benefited by a decrease in the loss resulting from carelessness on the part of property owners who know that their property is fully or more than fully insured.