A PROPOSAL FOR INSURING HOUSES BY THE FRIENDLY SOCIETY
Michael Sean Quinn, Ph.D. & J.D.
The “Friendly Society” (“FS”) began insuring houses as early as 1684, around the time of Great London Fire according to the Proposal discussed here. FS, like the few other homeowners insurance policies that came into existence around that time, began by issuing “PROPOSALS.” They appear to be partly ads, partly offers, and partly public relations ploys.
What follows here are some passages from this document and some summaries. I have changed/updated capitalizations and spellings. I issue no warranty of absolute correctness and guarantee incompleteness.
The first topic of the document is the length of the life of the policy and how payments are handled
A policy could be as long as 7 years, but it could shorter. Money is paid-in by an insured’s making a deposit with the insurer
. It may be returned at the end of the policy depending on losses paid out to the insured or others that are part of what might be called the “mutual group.” In order to obtain a return of the deposit (or part thereof), the insured must demand it before a specified date. (The Proposal uses the term “mutual” at at-least one point.)
The amounts to be deposited are to some degree clearly specified: one amount for brick homes and twice that amount for those made of wood. There appear to be variations.
There is an obscure or arcane discussion of how much may be paid out and how that will affect the insured’s (aka “member’s”) right to what we might call a refund. It’s almost like the two sides (Friendly and its insured) are investing in each other, with the insured something like lending the Society money which is held in trust but also used for specified purposes. FS goes out of its way to indicate what kind of security it has.
FS also indicates it also has its own fire brigade to be used to limit or extinguish fires. FS not only pays losses, but it “also keeps in livery, with Silvery Badges, about 10 [?] men, who, on occasion, have power to employ any other number that may be necessary, to extinguish fires, and are all at the charge of the Undertakers, and are not members of the Society, as it is in the Hand in Hand office. . . . [The intent here to take a swipe at another insurer “Hand in Hand” which in successive forms exists to this day.]
The Proposal also states the coverage at least in part: “If any house insured is demolished by or by reason of fire (which it is accounted to be, when from the first floor upward, and [the] roof are burnt or fallen in) the whole sum insured is paid in sixty days after, or sooner, if sound requires [s]; but if the house is only damnified [partly damaged], the Office [i.e., the insurer] do [will] immediately repair and put it in as good condition as the same was when injured; upon notice of such loss given to the Office. “
The Proposal contains a number of “Notes.” They are largely a series of attacks on Phoenix [Assurance], another instance company that has lasted for several centuries. Here are some of the “Notes”:
“That what the Phoenix Office pretend[s] as to contributions [premiums] being less in their Office than the Friendly Society, for the same loss, it is utterly false and an imposition on the public, the Society having the Phoenix own accounts to show the contrary. [Size premiums?]
“Also, that the Phoenix Office never settled and Fund for insuring by way of contributing. . . , and not a farthing returned, but the Friendly Society covenant to return. . . . [More efficient and honorable organization?]
“Thirdly, that on these and other accounts[,] one of the Phoenix principal proprietors insured [a large sum or high house] in Friendly-Society, as another of their undertakers (lately deceased) did several hundreds.
“And there are several Advantages, besides those above, by insuring in this first society of Mutual Contributors. . . .”
This Proposal is to be found at pp. 113-115 of an anthology of policies edited by David Jenkins and Takau Yoneyama, entitled HISTORY OF INSURANCE
, Volume 1, FIRE. (LONDON: PICKERING & CHATTO 2000)