tal were necessary to furnish the security demanded by the public. Hence it came about that corporations everywhere began to supplant individuals as underwriters.

At first these corporations solicited insurance directly from their home office. But with the growth of competition between the many companies that were springing up in all the leading Eastern cities, greater and greater reliance had to be placed upon the agency system. Representatives of the companies had to be stationed in the various towns so as to be easily and promptly accessible to property owners. The result was that with the spread of its underwriting activities over a larger geographic area, the company was exposed on the one hand to possible dishonesty or incompetency on the part of the local agent, and, on the other, to an increased moral hazard on the part of the insured. With the creation of agencies in all business communities it was only natural that the company should seek to protect itself and the public against the wilful destruction of property by those who could not now be carefully watched. Many promissory and restrictive provisions had to be incorporated in the policy which would lessen the insured's motive for the destruction of his property. It was essential that the policy should now contain a full description of the property, and, on penalty of forfeiture, prevent concealment of facts prior to the issuance of the policy, and wrongful conduct in the maintenance and care of the property after the owner had secured the policy.

The incorporation of such restrictive provisions tended at this time not only to make the fire-insurance policy a very voluminous contract, but all semblance of uniformity in the wording of different policies seemed to disappear. Each company had a policy of its own. In fact, the policy was local in character, one form prevailing in Boston, another in Philadelphia, and still another in New York. No cooperation of importance existed between the several companies, and the problem was made worse on the one hand, by the

desire of some companies to enhance their business by the issuance of attractive special policies, and, on the other, by the desire of a certain number of companies to defraud the insured of his rightful claim by the strict application of a skilfully drawn policy. The multifarious character of policy forms at this time is well described in a court decision in the following words: 1

This utter lack of uniformity in fire policies proved to be exceedingly unfortunate for both insured and insurer. The

'Delancy vs. Rockingham Farmers Mutual Fire Insurance Co., 52 N. H., 581. This decision is also very extensively quoted on pages 182-83 of the "Annals of the American Academy," September, 1905.

"Forms of applications and policies (like those used in this case), of a most complicated and elaborate structure, were prepared and filled with covenants, exceptions, stipulations, provisos, rules, regulations, and conditions, rendering the policy void in a great number of contingencies. These provisions were of such bulk and character that they would not be understood by men in general, even if subjected to a careful and laborious study; by men in general they were sure not to be studied at all. The study of them was rendered particularly unattractive by a profuse intermixture of discourses on subjects in which a premium payer would have no interest. The compound, if read by him, would, unless he were an extraordinary man, be an inexplicable riddle, a mere flood of darkness and confusion. Some of the most material stipulations were concealed in a mass of rubbish on the back side of the policy and the following page, where few would expect to find anything more than a dull appendix and where scarcely anyone would think of looking for information so important as that the company claimed a special exemption from the operation of the general law of the land relating to the only business in which the company professed to be engaged. As if it were feared that notwithstanding these discouraging circumstances, some extremely eccentric person might attempt to examine and understand the meaning of the involved and intricate net in which he was to be entangled, it was printed in such small type and in lines so long and so crowded, that the perusal of it was made physically difficult, painful, and injurious.'

policy-holder, scarcely once in a hundred times, carefully studies the policy he procures. When every company issued its own special policy, many of them models of ambiguity, it frequently happened that the insured, when a loss occurred, found himself deprived of the indemnity on which he had confidently relied. The companies, on the other hand, had to contend with a multiplicity of court decisions in the various states, many of which were in direct opposition to others, although dealing with the same subject. Everywhere the courts were called upon to pass on the interpretation of loosely drawn policies, and in their efforts to give the benefit of the doubt to the insured, and prevent a forfeiture on a poorly or skilfully drawn contract, as the case might be, helped to develop a system of court law in insurance, which for its conflicting opinions has probably no parallel in any other line of business. The effect of these decisions is marked even at the present day, although nearly everywhere the same policy is in use. "It would be well," writes Mr. F. C. Moore, "in all cases of lawsuits to bear in mind that when decisions are glibly quoted to sustain interpretations of particular phrases, that the policy in question before the court may have been very differently worded from the standard form now in use."1 Again, when large fires occurred, and several policies had been written on the property, it was common to find that they were unlike in their terms and application, thus making a settlement of the loss among the several companies impossible, except by an unsatisfactory compromise.

With such inconveniences resulting from a lack of uniformity in the terms, it was only natural that a sentiment should develop for the establishment of a "standard" policy, which when universally used by all companies would in the course of time be definitely interpreted by the courts, thus

"Fire Insurance and How to Build," p. 556.

enabling the policy-holder to be sure of its meaning. The first important attempt to adopt such a standard policy was undertaken by the National Board of Underwriters in 1867 and 1868. Then followed the law of 1873 in the State of Massachusetts, providing for a standard form of policy, which in 1880 was made obligatory for all companies writing business in the State. Six years later a standard form was adopted by the legislature of New York, and made obligatory in the following year, 1887. This policy, going under the name of the "New York Standard Fire Policy," has been adopted as a statute in a number of other states, and is used wherever permitted by most of the largest companies. (See folder, Fig. 1.) Quite a number of states1 have adopted special forms of standard policies, differing somewhat but not radically from the New York form. In most of the other states, although not made mandatory by law, the New York policy is generally used by nearly all the companies. It was carefully prepared with reference to past experience, and to quote one who was instrumental in its making "those who framed it brought to their task an honest desire to make a policy which should not only protect the rights of underwriters, but be just to all honest claimants, and the phraseology of the contract was specially designed to meet the construction which had been placed upon ambiguous phrases by the courts of highest resort. " 2

The Grouping of Provisions in the Policy.-For purposes of discussion the many provisions of the standard policy may be conveniently classified under the following groups: 1. The parties to the contract.

2. The term of the contract, involving renewal and cancellation.

3. The risk assumed.

1Maine, Massachusetts, New Hampshire, Michigan, Missouri, Virginia, and Wisconsin.

2F. C. Moore, "Fire Insurance and How to Build," p. 556.

4. The description of the property insured.

5. Other insurance on the same property, involving contribution.

6. The privileges, which if desired, must be indorsed on the policy.

7. Policy provisions going into effect after a loss has occurred

As regards each of these groups, the provisions of the standard policy will be discussed in the following chapters with reference to their purpose and meaning, and the interpretation which has been placed upon them by the courts.