State Farm Mutual Automobile Insurance Company

“ The insurance company that makes advances for rescue expenses within the liability limit of the mandatory motor vehicle insurance shall be entitled to be reimbursed by the person liable for the traffic accident. ”

“ Many hardship cases developed among people who were dependent on the use of the highways for a living. There was a proposal that California go into the insurance business and insure these and other risks. The insurance companies countered by adopting a voluntary assigned risk plan under which all automobile insurance companies doing business in California undertook to insure some, though not all, of the groups unable to obtain insurance. ”

“ Full coverage under automobile policies involves several hazards, contracts being written to cover the risk of fire, theft, damage to the insured's automobile through collision, liability for damage to the property of others, and liability for personal injury. Fire and theft insurance are written by fire and marine companies, personal liability by casualty companies, while collision and property-damage insurance are written by both. In the West and South there are many specialized automobile insurance companies writing all forms of coverage. ”

“ If we say New York may step into the beneficiary's shoes and collect his unclaimed insurance proceeds solely because the insured lived in New York when the policy issued for delivery there, how can we deny the claim of another state to escheat the same fund when its claim is asserted under any one or more of the following circumstances: (1) It is the state in which the insured has died or where some other contingency occurred which brought the claim to maturity. ”

“ On the other hand, the average man is convinced that there is, and so certainly is the man who takes out a policy of accident insurance. It is his reading of the policy that is to be accepted as our guide, with the help of the established rule that ambiguities and uncertainties are to be resolved against the company. ”

“ Now, let us suppose that he applies to and is insured in a stock company; he gets his policy for $1,000, and pays for it one per cent., $10. He is entitled to the same indemnity in case of a loss as he was in the mutual company; but when he pays his premium, he ceases to have any further interest in the successful operation of the company; he is the insured, but not the insurer; and whether the company make gains of suffer losses, matters not to him, provided the company continues solvent. ”

“ The policy must, we think, be held to be a valued policy.' And, after referring to a policy of insurance obtained by a sister on her brother's life, where no question seemed to have been made as to the amount, but only whether it was an interest which the law would recognize, the court said: 'So, in every case, where a person on his own account insures the life of a relative, if the sum named in the policy is not to be the rule of damages, we inquire what is? ”

“ On the twenty-seventh of December, the complainants tendered their note for the agreed premium, and demanded the policy of reinsurance. The defendants declined to make the policy. Several grounds have been insisted on in support of this refusal:
The first is, that by force of a statute of the State of Massachusetts, (Rev. Stats., ch. 37, secs. 12, 13,) insurance corporations can make valid policies of insurance only by having them signed by the president and countersigned by the secretary. ”

“ In the fall of 1937 applicant was forced to pay several substantial damage claims arising from accidents during the period when its insurance policy was in effect with Central Mutual. These payments seriously impaired its working capital. Furthermore, applicant was confronted with approximately 175 additional claims for personal injury and property damage. These were estimated at about $200,000 and arose during the period when applicant was insured by Central Mutual. Applicant settled some of these claims. ”

“ Article 76 Where motor vehicles are involved in a traffic accident which causes casualties and property losses, the insurance company shall make compensation within the limit of the compulsory third party liability insurance for motor vehicles. ”

“ According to the reports of the insurance departments of the states, as summarized in the 661 Spectator Company’s Year-Book, more than half of the cash premiums of mutual insurance companies are collected in the two manufacturing states of Massachusetts and Rhode Island.
It is, after all, only within a very limited field that the mutual principle can be adopted. The essential principle of fire insurance is the distribution of loss. It does not aim, directly at least, at the prevention and only in a secondary way even at the minimizing of loss ”

“ Its outstanding policies were not affected thereby, and it continued to collect the premiums upon them and to pay the losses arising thereunder, and it was doing so at the time of the service of process upon its agent.'
'It cannot be said with truth, as we think, that an insurance company does no business within a state unless it have agents therein who are continuously seeking new risks, and it is continuing to issue new policies upon such risks. ”

“ It can never be an equivalent for a premium note, unless the sum is as large as that expressed in the premium note. In the case I have supposed, it would be $100 on an insurance of $1,000. Was it a supposable case that such a sum would be paid, and were it within the spirit of the act, that would be an equivalent; but the idea that any sane man would ever take an insurance in a mutual company, and pay for it anything over the ordinary cash rates of a sound stock company, is preposterous, and requires no answer. ”

“ However, premium-institutions are more easily capable of extending the circle of their business; [237a-10] which of itself decreases the general expenses and strengthens their insuring power. Premium-insurance supposes a greater development of capitalistic speculation than does mutual insurance. But, even in the highest stages of civilization, the competition of some mutual insurance companies is desirable to protect the insured from a too high rate of profit to the insurers. ”

“ Thus assessment insurance has gradually placed itself upon a higher and more scientific basis, until it has commended itself to the most intelligent and thoughtful, and in its wonderful growth outstripped its older and less popular rival, until its obligations to the families of the insured exceed those of level premium insurance to the amount of about two thousand millions of dollars. ”

“ The theory of a mutual insurance company is, that the premiums paid by each member for the insurance of his property constitute a common fund, devoted to the payment of any losses that may occur. Now, the cash premium may as well represent the insured in the common fund as the premium note; and this class of companies has been so long engaged in the business of insurance, it may well be that they can determine, with sufficient certainty for all practical purposes, the just difference in the rates of premium between cash and notes. ”

“ Zachariah Allen, of Providence, established mutual insurance among the mills of Rhode Island, the rates charged by stock companies varied from 11/2 to 21/2 per cent. Even at these high figures the business was unprofitable, and the placing of risks often a matter of difficulty. Within the fifty years since 1835, the cost of insurance to the factories of New England has been reduced to two-sevenths of one per cent. This, too, while the ordinary rate of insurance throughout the United States is nearly one per cent on property considered to be on an average less hazardous in character. ”

“ It was formed to write automobile insurance to a select group of members at a lower cost than the then prevailing rate. A California law requiring proof of financial responsibility from certain people before issuing them a license to drive a car, provides that a person who does not pay a judgment of $100 or more arising out of an automobile accident has his driver's license suspended, and the suspension can be lifted only by paying the judgment and establishing his ability to pay claims arising from future accidents. ”

“ Mutual companies, as the name implies, are organized and are meant to be managed for the benefit of the policy holders, who are also regarded as stock holders, with the right to vote in the election of officers and other company affairs.
Aiming to create a strong reserve fund to secure the policy holders, the mutual life insurance companies usually charge a little more in the way of premiums.
Many rich men have their lives insured for great amounts. This is done that their heirs may not be forced to break up the estate, at death, in order to settle the ordinary liabilities. ”

“ The premiums on an endowment policy are necessarily greater than those on a regular life, and the premiums increase with the shortness of the time.
MUTUAL INSURANCE SOCIETIES Seeing the vast sums accumulated by what are known as "the old line companies," despite their high salaries and great expenses, working men throughout the world, but more particularly in the United States, have banded together and formed mutual insurance companies. ”

“ Where there is mutual insurance or municipal insurance in its best sense, the losses by fire and the costs of the protection are often booked in one account, and the better protection up to a certain point should mean a smaller individual annual share. Where there is company insurance the municipal rates are increased to cover the cost of extra protection, while a proportionate decrease is expected in the insurance premiums. Competition and public opinion generally impose this decrease of the insurance rates as soon as there is a greater immunity from fire. ”

“ The Missouri statute provided that such policies as the present, after three annual payments, should not become void for non payment of premiums, but that three-fourths of the net value of the policy after deducting certain liabilities should be taken as a premium for temporary insurance for the full amount written in the policy. It is not disputed that if this statute governs the case, the plaintiff stood as having a policy for the original amount at the death of Mr. Blees. In New York Life Insurance Co. ”

“ We therefore emphasize the proposition that a system of insurance that relieves the insurer of one half the pecuniary burden he is compelled to bear under the level premium system, is one that is worthy of fair treatment on the part of a discriminating public, and that the people cannot afford to have impeded in its usefulness by ignorance, prejudice, or moneyed monopolies. We repeat the claim for assessment insurance that it is natural as against artificial insurance. ”

“ If fires destroy a million of dollars’ worth in property insured for its full value, and a million’s worth more in property insured for one-tenth of its value, the insurers will pay $1,000,000 upon the first group and more than $750,000 upon the second. But if all the insurance is taken at the same rate the insurers will have received premiums ten times as great on the former group as upon the latter. ”

“ Where the motor vehicle cannot be located, is not covered by the compulsory insurance, or the rescue expenses exceed the limit of liability of the compulsory motor vehicle insurance, and payment needs to be made against the rescue, funeral, and other expenses incurred as a result of the death or bodily injury of the infringed person, such payment shall be paid from the Social Assistance Fund for Road Traffic Accidents. ”

“ The agent of the company at Baltimore, who negotiated this insurance, the defendants being a New York company, states that when applications are made to enter risks on running policies, they are endorsed at once by him, and the report of such endorsement transmitted to the company in New York, which names the premium, and this is communicated to the assured; that the premiums specified in the body of the policies are nominal, and the true premiums to be charged are fixed by increasing or reducing the nominal premiums when the risks are reported ”

“ In every level, or uniform premium, there is a provision for the payment to the company of the rate of insurance at the actual present age, (no matter at what age the insurance was affected) on the net amount at risk.
The great danger for co-oporative or assessment companies lies in the facility with which such institutions may be organized, and by men without capital, character, experience or financial ability, who may thus be ushered into corporate existence by the indulgent laws of different states. ”

“ There are many state laws that apply to insurance companies as well as to other entities. Such laws may regulate some aspects of the insurance business, but do not require one to be an insurance company in order to be subject to their terms. Pennsylvania's Motor Vehicle Financial Responsibility Law is such a law. ”

“ For all that appears the insured may have been advised and may have assumed that the coverage clause of the policy gave protection in such a case as is here involved and may not have desired to continue to pay the additional premium for the other losses described. We are not called upon to speculate as to the state of mind of the insured's officers and one asserted ambiguity is not to be cured by another. If the general coverage clause permits recovery, we see nothing to defeat it in what was done in connection with the rider. ”