Policyholders Do a Slow Burn

THE damage done in Florida by Hurricane Andrew was followed by a pathetic wail that insurance companies were grievously affected and some might be thrown into receivership as their resources were strained. At this news I took down my priceless Egyptian tear jug from the Valley of the Kings and withdrew to a discreet solitude where I had a good bawl. It was back in the early 1950s that I found out about insurance companies.

Innocent of the ways of business, I had come to own our small-town weekly newspaper. As proprietor for the first time of commercial property, I went to Judge Louis A. Jack and asked him to put fire insurance on the small building that housed our printshop and sanctum. He did, and thanked me. As municipal court justice, the Honorable Mr. Jack had a political sinecure that seldom required him to hold court, and his law practice otherwise consisted of a will or a deed now and then, and once to call a specia l town meeting when the municipal clerk was on vacation.

He would frequently quote Blackstone to the effect that "Lady Law brooketh no bedfellow," and then sell insurance. He had come to be owner of the Maine Mutual Group, which had offices throughout the state and made him wealthy. The next year when the premium came due, I spoke to Judge Jack and I said, "Seems to me I'm paying more than I should for insurance."

A year passed, and having no response, I spoke again, this time more directly. I said, "Why am I paying so much for so little coverage?" The judge meditated a moment and said, "You have a risky exposure."

"Do tell!" quoth I. "And what is that?"

"The blacksmith shop."

"What blacksmith shop?"

"The one next door. Blacksmith shops have a very high fire risk."

There was no blacksmith shop near my printing house. There was none, indeed, in our entire 15,000-acre township. The nearest one was 14 miles away in Lewiston. The judge said, "We have to go by the book."

"What book?"

"The manual of the insurance rating bureau."

To make a ridiculous story absurd, back in the middle 1800s there had been a blacksmith shop next to my building, but when Farrier Craig retired it had been moved up to High Street to make a woodshed for Tobias Goddard. Ever since, the insurance people had kept it extant in their rating book to keep premiums high. Judge Jack said I would have to make application to the rating bureau to have my exposure reviewed, and he would get a blank form for me to use.

"Why don't you do it?" I said, and he explained that it must be done by a policyholder. It then took a full year and seven months for the rating bureau to respond to my supplication and find that the Craig smithy had been nonexistent for something like 88 years.

There are a couple of other things that should be considered at this time.

Maynard Anderson, who had the hardware store next to my newspaper shop, was interested when I spoke to him about the blacksmith shop. He said, "Old Craig went out of business when my grandfather was a boy!" Maynard had been paying the premium on the residual exposure for years. But now, to gain his due, he had to make application himself and wait out the whole "review" again. The rating bureau kept this moneymaking figment going as long as it could.

But then a journalist's thought, rather than that of a businessman, teased me, and I wondered if a blacksmith shop anywhere ever caught fire. I never heard of one that did. I asked in my newspaper about it and had no response. I repeated the question from time to time, and some years passed and I had no information that anybody, anywhere, ever knew of a blacksmith shop to catch fire.

It was a good five years later that a blacksmith shop in Elmira, NY, one day burned to the ground. It was an early Elmira building, a smithy for three generations.

But the forge hadn't been lighted for some 35 years. Vacant, it had been struck by lightning.

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