A deposit of 200,000 Kroner in Danish Government bonds has to be made by the companies. Bonds are to be deposited with the Ministry of Justice, and the company cannot operate on this amount except with the consent of the Ministry. The Ministry can use the deposit in payment of unpaid claims, and if this be done the deposit must be made up to the original amount by the company. Should an insured complain to the Ministry that a company has not paid an insurance claim, the Ministry may use this deposit for such payment if the company does not pay the claim within a specified time fixed by the Ministry.

If the amount of the claim be paid to the insured instead of the third party this is done at the company’s own risk; and if the insured does not pay the third party the company is still liable. The company must agree to the suspension of the insurance on a car during such time as the car is not in use. The insured must give the company a declaration to the effect that he will give the company notice as soon as the car is again used. If the insured omits to give this notice and a public liability claim occurs while the car is in use, the company is liable for this claim in accordance with (1) above, but it has the right to a counter-claim against the insured.

If the company wishes to participate in the insurance of foreign cars that enter the country, the company must agree to the provisions and instructions laid down by the Ministry of Justice in Paragraph 9 of the Statement of the Accomplishment of Public Liability Insurances. If the car remains in the country and ordinary public liability insurance is effected, the necessary declaration mentioned in Paragraph (3) of the above statement must be sent to the state’s police instead of the director of police for the district.

A foreign company must be registered in the country and its representatives must be authorized to act and receive service on behalf of the company.
This acknowledgment may at any time be withdrawn. Such withdrawal does not entitle to the release of the deposit until the Ministry has decided that such a period has elapsed that no further claim may be made on the company. If the acknowledgment is withdrawn, all legal public liability insurances effected with the company are cancelled and premiums for the remaining period of insurances are repaid to the insured.
The company shall send two copies of its account each year to the Ministry of Justice, together with a statement showing number and amounts of premiums obtained during year.

All liability in accordance with the above law is the liability of the company and the fact that the assured omits to perform his liability to the company shall not entitle the company to refuse any payment to a third party entitled to payment. The company must place an endorsement on their policy which will show that they have agreed to the above law.

The endorsement must be so worded that any existing conditions on the policy which do not conform to the above law are suspended, with the exception that the company can make a condition that it has the right of counter-claim against the insured if the insured acts against or neglects to fulfill his obligations to the company. The insurance is to date from the receipt of the signed proposal by the company or its representative, unless the insured stipulate otherwise.

Joint stock companies must accept insurances from all persons who apply if those persons be willing to accept the necessary conditions imposed by the insurance company and the alterations made by these Government conditions. Mutual are also bound in the same way to accept members, and all members are liable one for all and all for one for the liability of the mutual company. No member can withdraw with less than fourteen days’ notice, and such withdrawal does not terminate their liability until the expiration of the period of their insurance.

I have been unable to check up the various states in order to determine what proposals have been made to the various legislatures, but in my own state, Massachusetts, during the past several years, the matter has been seriously under consideration both by the legislature and by special com-missions appointed from time to time to consider the whole question.

Practically every remedy suggested either by commissions or introduced to the various legislatures has been based on the theory that automobiles, being dangerous engines of destruction, are being operated on our public highways by those who do not even fear being compelled to pay damages for the injuries they cause, and, therefore, it is the duty of the state to require every person who operates an automobile or motor vehicle to furnish protection to the public against injuries.

This is within the constitutional power of the legislature, for it has been held that a motor vehicle can only be operated on the public highways by permission of the state, and one who operates a motor vehicle without that permission is an outlaw.

If adopted, they might well obviate the necessity of countrywide compulsory insurance, which is almost inevitable otherwise. But even if these measures are adopted, the need for carrying insurance is not done away with. All the forces of education and publicity should be employed to induce the owners and drivers of automobiles to carry insurance designed to protect themselves as well as others. Indeed, it is difficult to conceive how any law- abiding person has the hardihood to own or operate an automobile without such essential protection from loss.

The prevention of accidents and the solution of traffic problems have many strictly engineering features. But the human and regulatory aspects are just as important. Gradually the law must close down not only upon the reckless but equally upon the financially irresponsible driver.

One fact emerges crystal-clear: the impelling necessity for substantially uniform regulations in these matters. The automobile is in no sense intrastate; it moves across state boundaries at will. It is a very saddening confession of our incompetence to handle our own inventions that in one state anyone can step into an automobile and drive it off, and in another state the strictest of physical and mental examinations are required. Uniformity and universality of laws and regulations to banish reckless and financially irresponsible drivers from the road are crying needs of the day.

The remaining states are watching with a great deal of interest the results of the Massachusetts plan, which is in the nature of an experiment. There is little doubt, however, that compulsory laws of one kind or another will be passed in many of the other states; these states are not so much uncertain of the need for legislation as of the precise kind of law which will best serve the purpose.
It is gratifying that the automobile associations are devoting so much attention to an investigation of the basic principles of safety and responsibility in the operation of motor cars. The automobile is still in its comparatively early days, and, as in the case of the steam railroad and other mechanical inventions, is at times destructive of life and property in this preliminary stage.

Progress was attained in the case of the railroad and factory machinery not by prohibiting the inventions but by minimizing as far as possible their injurious consequences. After years of improvement, railroad accidents were brought down to very small percentages, and in the factory all manner of devices were designed to protect the laborer, while workmen’s compensation and accident insurance reimbursed him if accidents did occur.

The automobiles of the United States take a heavy toll in human life and loss of earning power. The annual bill for the cancellation of so much earning capacity alone, without regard for damage to property, is not less than $600,000,000. The primary step, everyone agrees, is to attempt to reduce this sum as rapidly as possible.

That the total can be reduced a great deal is questionable, unless we assume that the population of the country will remain at a standstill in the future and that the present number of automobiles per capita will not be increased. In the meantime, what is to be the procedure for those automobile accidents to persons which either cannot be or will not be eliminated?

Shall we continue the present system, or modification of it, which treats the matter of loss indemnity as a private matter, to be adjudicated between the immediate parties to the accident; or, as is being projected by an increasingly vociferous group, should the state interfere in the name of its police power and take steps to make more certain the indemnity of those injured who have valid claims against the automobile operator?

The country was enjoying the fruits of war-time prosperity; mechanics and small tradesmen had incomes greater than ever before; women, entering industry during the period when man power was scarce, had almost doubled the domestic earning power; and if any family did not join the crowd on the highways in some sort of motor driven conveyance, it was rarely because of financial reasons.

The automobile, to everyone but the revenue collector, has left the luxury list and has become one of our prime necessities. The manufacturers of motor vehicles have increased production to a point where the United States now makes more than 80 per cent of the automobiles of the world. Allowing the high average of three hundred working days per year, the daily production is approximately fifteen thousand. No device of adroit financing or clever advertising has been overlooked in the campaign to sell a car to everyone who can possibly scrape up the first payment. Putting the world on wheels seems to be an ambition in a fair way of achievement.

Congestion in our big cities, due to inadequate transportation service, the building of factories far away from the centers of urban population, the general recognition of the automobile as a source of whole family enjoyment—all these have conspired to make “sales resistance” a feeble thing. The desire to own a car is liable to be gratified, even at the cost of shouldering what previously were considered impossible obligations. With the advent of large numbers of so-called installment buyers, began the sentiment which is apparently crystalized in the present cry for compulsory automobile liability insurance. The narrow financial margin—sometimes only an imaginary line—upon which this installment buyer operated left no place for an extra expense such as insurance beyond the fire and theft coverage included in the contract primarily to protect the dealer until the car was completely paid for.

The insurance agent, though himself awake to the advantages of property damage, liability and collision insurance did not strive for business among the less prosperous owners because he realized from experience that they were being pretty well pushed toward the financial edge by the payments and unexpectedly expensive upkeep of the automobile.

It would appear to be merely an academic exercise to attempt to separate the two functions or to ascribe more importance to one than to the other. As a practical matter, however, it may be necessary to stress one aspect to the exclusion of the other. Insurance men look upon automobile liability insurance almost exclusively as protection for the insured motorist’s assets and earning power against the claims of third parties for injuries actually or allegedly sustained through the fault of the insured. As one writer recently put it, “All automobile liability insurance is self- protection. The purpose of automobile insurance is to protect the person who carries it, and not someone with whom he may collide.”

The insurance industry “manufactures” and distributes automobile liability insurance in the form of individual policies or contracts entered into between the insured motorist and the insurer. The motorist buys or is sold this contract in terms of his own interests. It is doubtful whether insurers have ever sold an automobile insurance policy as a public welfare measure. The injured victim is not a party to the contract.

The insured in most states is free to discontinue his liability insurance at any time he chooses without consulting the public’s interest. He continues to insure or not, as he views his need for liability protection against alternative uses for his premium money.
However, one might consider this hypothetical but decisive question: Suppose that all or a large proportion of motorists elected to discontinue their automobile liability insurance (outside the compulsory states of Massachusetts, New York, and North Carolina).

What would happen ? Undoubtedly, prompt legislative action would be taken to compel all motorists to insure. Why? To protect the uninsured motorist? Or to combat the rapid increase in uncompensated victims? The answer is self-evident.

The insurance man and the individual motorist will continue to look upon automobile liability insurance as “self-protection.” Society and its legislative representatives will look increasingly upon it as protection for the innocent accident victim under a legal system of recovery based on fault. However regarded by these several groups, the institution itself will remain what it has always been—a protection for both sides.

Non-Ownership Automobile Liability coverage for commercial and public automobiles is available only to an assured who contracts with independent persons, firms, or corporations for the use of such automobiles with drivers, where the complete control or supervision of such automobiles and drivers remains with the independent persons, firms or corporations and does not pass to the assured. All such risks shall be submitted to the company for rating with an application blank filled out and signed in ink by the assured. The coverage granted shall be for the Named Assured only and shall not apply to automobiles over which the assured may have control or supervision.

Foreign 20 A policy issued to cover cars in Continental Coverage United States (exclusive of Alaska, Hawaii,
Porto Rico, Philippine Islands, Guam, Samoa, Canal Zone, Virgin Islands and other “possessions”) and Canada may be extended to cover the operations of any insured car in any one of these excluded possessions of the United States or in any foreign country upon request to the company, and at an additional premium charge to be determined by the company.

This section contains specific rules relating to the insurance of Private Passenger automobiles. For definitions, coverages and general policy terms, see the General Rules Section; for rules applying not only to Private Passenger automobiles, but also to Commercial and Public automobiles, see the Miscellaneous Rules Section.

To ascertain the premiums for Public Liability (P.L.) and Property Damage (P.D.) for a Private Passenger automobile first refer to the List of Automobiles, appearing immediately after the Miscellaneous Rate Section of this Manual, in order to determine the P.L. and P.D. symbol applying to the car to be covered. Then refer to the Territory Sheets for individual states to ascertain the schedule number of the territory in which the automobile will be principally operated and garaged (territory schedules are designated by Roman numerals, thus—I, II, III, etc.). The proper rate will then be found i n the State Rate Sheet.

The premiums for Collision insurance may be ascertained in the same manner as the premiums for P.L. and P.D. It will be noted from the List of Automobiles that the Collision symbols are designated A to Q. Collision premiums are influenced by the age of the car. It will be necessary, therefore, to refer to the Miscellaneous Rate Section of the Manual in order to determine the age group definitions.

Electric automobiles shall be written at a reduction of 25% from the lowest symbol gasoline automobile premiums. Collision premiums on electrics are 25% less than the corresponding gasoline premiums.

Upon expiration of this policy, the earned premium due the company shall be equal to the advance premium modified by the adjustments as hereinbefore provided. If the earned premium is greater than the advance premium the Named Assured shall pay the difference to the company; if the advance premium is greater than the earned premium, the Company shall return the difference to the Named Assured.

The Company or any of its authorized agents shall be permitted to examine the Named Assured’s books and other records at any time during the term of this insurance, or any extension thereof, or within two years after its final expiration.

Policy is hereby eliminated as respects the coverage provided under this endorsement and it is agreed, anything in the policy to the contrary notwithstanding, that the policy does not cover and shall not be construed to cover the liability of any person, firm or corporation other than the Named Assured.
policy is hereby eliminated as respects the coverage provided under this endorsement and it is understood and agreed that if there exists, at the time of the accident, a policy of insurance taken out by or affected on behalf of any one other than the Named Assured and under the terms of which policy the Named Assured is entitled to protection and coverage, then this endorsement shall operate only as excess insurance over and above the amount of such valid and collectible insurance.

Subject otherwise to all the terms, limits and conditions of the policy to which this endorsement is attached.” Every risk involving 500 or more employees whether compensated on a salary and/or commission basis shall be submitted to the company for rating, regardless of the extent of coverage desired, with an application blank filled out and signed in ink by the assured.