It is desirable, on occasion, for an insurer to secure a policy covering property indefinitely located, as, for instance, covering merchandise, being received at and shipped from freight depots and docks. Or on rented pianos beyond the control of the owner. Or on merchandise being manufactured and in the hands of tailors or other artisans. In such cases, and they are numerous, it is usually possible to secure a "floating policy," covering anywhere, with some reasonable restriction as to the amount for which the company shall be liable in one fire, and a further provision as to the percentage of insurance to be carried. Such floating policies are usually at a relatively high rate, because of the uncertain and indefinite liability assumed by the company.

It is often convenient for a merchant occupying two or more buildings, or a manufacturer with a plant consisting of several buildings, to secure a policy covering stock in the several buildings or covering the entire manufacturing plant and its contents. This can ordinarily be done under what is termed "a blanket policy" which is written to cover the entire subject of the insurance in or on the several buildings. The rate for a blanket policy is arrived at by calculating the premium on the value in or on each specific building at its individual rate, and dividing the aggregate premium thus obtained by the total amount of insurance. The result would be the average rate.

An insurance contract is not, as some think, a "promise to pay" a specified sum in case of fire. Neither is it, as some would have it appear, a one-sided contract by which the company can avoid a legitimate claim. In the nature of the case an insurance contract is drawn in general terms to be used in a variety of conditions, and it cannot have the directness or brevity of a single and ordinary contract between two parties. There are a few general features, however, of an insurance policy or contract, which, if known, would assist greatly in a clear understanding of its terms, and do much toward the avoidance of possible differences. At the outset let it be understood that the insurance contract is personal. It insures somebody (not anybody) against loss by fire. Any change in ownership must be consented to by the company in writing. The subject of the insurance must be definitely set forth in the written portion of the contract. A policy on a stock of boots and shoes, for instance, does not cover groceries or dry goods. Any change in the character of the property insured should be immediately and fully endorsed in writing on the policy.

In lines 16 and 17 of the New York Standard Policy, it is stated that the entire policy shall be void "if the interest of the insured be other than unconditional and sole ownership," "unless otherwise provided by agreement endorsed hereon." Failure to conform to this provision of the contract is prolific of trouble. If the ownership is not sole and unconditional, the character of the ownership should be fully set forth. For illustration, if a building stands on leased ground, if the ownership of property is partial or contingent, if the property is incumbered or under contract, these facts should be clearly stated in the policy.

The policy also provides that any change in title or possession of the property will render the policy void unless consent of the Company is first obtained in writing. The object of this requirement is to place the Company in possession of all facts relative to each risk. If a change is made for any cause then the party insured should notify the Company through its local agent and obtain written consent to the change. If the party insured disposes of his interest in any property covered by a policy of insurance it is absolutely necessary that the policy should be assigned to the purchaser and consent of the Company obtained to the transfer or the policy will become void. A change from an individual ownership to that of a copartnership, or to an incorporated company, or where one partner retires from a firm or a new partner is admitted to the firm, is a change of ownership of firm property and affects the insurance at once, making the policy void unless the company is notified and its consent obtained in writing.

In lines 39 to 44, inclusive, of the New York Standard Policy are set forth certain articles which are not insured unless specifically named:

"Unless liability is specifically assumed hereon, no loss to awnings, bullion, casts, curiosities, drawings, dies, implements, jewels, manuscripts, medals, models, patterns, pictures, scientific apparatus, signs, store or office furniture or fixtures, sculpture, tools; nor property held on storage or for repairs; nor, beyond the actual value destroyed by fire; nor loss occasioned by ordinance or law regulating construction or repair of buildings; nor by interruption of business, manufacturing processes, nor otherwise; nor for any greater proportion of the value of plate glass, frescoes, and decorations than that which this policy shall bear to the whole insurance on the building described."

If any of these are to be insured, they must be incorporated in the written portion of the policy. With the exception of certain floating policies, already described, an insurance policy covers property "all while contained," in a certain specified building or buildings. Any change of location therefore should be at once endorsed on the policy.

Lines 11 to 30 of the Standard Policy set forth certain conditions under which the policy is voided, unless consent is endorsed in writing. Generally stated (and excepting reference to title, already explained) these conditions are: The procurement of other insurance, the operation of a factory after 10 P. M. or ceasing to operate for more than ten consecutive days, any increase of hazard within the control or knowledge of the insured, the making of extraordinary alterations or repairs, the use or storage of volatile products of petroleum or other explosive or highly inflammable substances, the vacancy or non-occupancy of a building for more than ten consecutive days. Permission for any of these may be obtained, in ordinary cases, on application to the agent of the company, which permission should be fully endorsed in writing on the policy. It should always be remembered that a fire insurance policy is a contract, subject to the general law of contracts, that usage does not nullify its conditions and that once voided, it can only be revived by the consent of both parties.

When it is desired to place a policy of fire insurance as collateral security with a bank, or with a mortgagee no written assignment is necessary, but in such cases the policy should contain a clause "loss, if any, payable to as his interest may appear." This is the "loss payable clause" and is usually made in favor of the trustee of the trust deed securing the loan. This clause must be inserted by the company or its agent.

Among Insurance Companies it is the custom for some companies to issue a policy for a larger amount than they desire to carry themselves and in order to reduce their line on the risk they ask some other company or companies to re-insure their liability under the policy for a certain amount, and for this they pay the other company a consideration called the premium. The original insured has no claim on the re-insurance, his contract being with the company whose policy he holds.

Comparatively few policy holders sustain a fire loss. Otherwise the companies could not afford to issue $1,000 policies at an average premium of about $10. There must be a goodly percentage of "safe risks." Nevertheless there is but one way to transact fire insurance business, i. e., on the theory that there will be a loss and at once. A fire insurance company conducting its business on any other theory would become insolvent and a merchant or manufacturer who is careless, negligent or tardy about his fire insurance will very likely come to grief. It behooves a man to place insurance at once when the need for it arises, have the policy issued, examined, paid for and put away for safekeeping with the same care and promptness that marks his banking or other important business.

When a loss comes, there is a natural and regular order to pursue, attention to which will save time and expense to the insured and company alike. First, notify the company or its agent. Then set about diligently to protect the property from further loss. After doing this set out to carefully ascertain the amount of the loss. If the property is a building, have competent persons furnish an estimate of the cost of repairing the damage. If the property is personal, prepare a schedule, setting forth in one column the sound value, and in the other your opinion of the loss or damage. With specific information of this character in your possession you are in a position to negotiate with the company's adjuster intelligently and promptly. In case of disagreement with the company as to the amount of loss the policy provides for an appraisal by three competent and disinterested persons; one to be selected by the insured; one by the company, the two thus selected choosing the third. If the property is personal and totally consumed by fire, the value of a good set of books and a complete inventory cannot be overestimated.