RETURN OF PREMIUMS.

A return of premium is claimable, unless precluded by any illegality in the transaction, (1) when there has been no risk upon the policy, and it thus becomes wholly cancelled; (2) when there has been an over-insurance, forming what is called a short interest; (3) when the conditions of the policy prescribe such return, as, for instance, if the voyage is shorter than the whole distance which is covered by the full or long premium, or if the goods that are shipped are of a preferable quality, as indigo or silk in what is called a sugar risk.

In estimating the amount of the return of premium, either for cancelment of the policy or for short interest, the rate or the amount of the return is to be according to what the insurers or underwriters have received, or deducting the previous allowances they have made.

In making returns of premium, as well as in other settlements of insurances, a distinction is often made in policies as being either valued or open.

A VALUED POLICY.

A Valued Policy is one in which either the whole of the insured interest is valued at a given sum, or the various portions into which the interest may be divided are estimated from a pro ratâ valuation. In any averment of fraudulent over-valuation, the burden of proof lies on the underwriter.

AN OPEN POLICY.

An Open Policy is one in which, at the time of effecting the insurance, it is stated that the interest is to be hereafter declared. The interest so insured may be either indefinite, as when it is not known what property is to

be shipped, or it may be made definite by giving it a ratable value.

RUNNING POLICIES.

Sometimes an insured interest partakes of both the preceding characters, and open policies are frequently of the class called Running Policies, when the risk attaches to the property on board of ship or ships, during a season, or to a specified day.

RETURN OF PREMIUM FOR CANCELMENT OF THE

POLICY.

A want of interest may arise either from the contemplated voyage or hazard of the goods not taking place, from the voyage not having been commenced within a specified time, from the goods not having been sent by the vessel named in the policy, or from any departure from the terms of the policy before the risk has begun. In all such cases, if the subject of the insurance has not been illegal, the underwriters or companies are bound to return the premium, or to allow it in account.

The brokerage is, however, always to be deducted or allowed on such returns; for if the assured has transacted his own business, he has had it previously allowed to him, or if he has employed a broker, the latter, being his agent, has had a claim to the commission.

The discount, with the companies, comes under the same rule, for if before allowed upon the premium, it must be allowed on the return..

In insurance at Lloyd's, the policies are furnished by the brokers. In insurances with the companies, the policies are provided by them. In both cases, necessarily, at the expense of the assured.

RETURN OF PREMIUM FOR SHORT INTEREST.

When at the time of effecting an insurance it is un-. certain what quantity or what sort of goods may be shipped, it is usual to insert, in that clause of the policy which states the agreement between the assurers and the assured as to the value, words to this effect; that the insurance is upon goods as interest shall appear or be hereafter declared, and it is generally added, that certain enumerated goods, as sugar, indigo, silk, etc., are to be valued at a stated rate per hhd., chest, bale, etc., either in sterling or in foreign money at a specified rate of exchange. This rate of exchange is also sometimes expressed, when it is possible that a valuation may have to be made upon the invoice amount of an undefined shipment. If, therefore, in such an insurance the interest declared or shipped does not amount to the sum insured, the assured has a claim for a return of premium on the short interest or the amount overinsured, under the same conditions as on the cancelment of the policy.

Example.

To find the amount of the claim for return for short interest upon a policy of insurance effected at Lloyd's, for £1,700 at 50s. per cent., the amount of the declared interest being £1,464.

RETURN OF PREMIUM

FOR VARIOUS CLAIMS Combined.

To find the amount of the claim for returns upon an insurance for £5,000, effected with the Universal Marine Insurance, on bullion and specie from Vera Cruz to London, at 20s. per cent., to return at 4s. 9d. per cent., if shipped per packet or man-of-war, the amount of the declared interest which arrived per packet being $16,500, valued at 4s. 2d. per $, the premium having been settled in monthly account.

When it is required to ascertain what amount will cover the amount of the goods, and of other charges except those of insurance, this amount is to be found by the following rule:

Rule.-Subtract the amount of the premium, policy and other percentage insurance charges, if any, from £100; then say, as the remainder is to £100 so is the sum to be covered to the amount of the covered interest.

Example.

To find the amount of the covered interest to include £567 10s. 6d., the premium being 24 guineas, the policy 4s., and the agent's commission per cent.

When a claim is made upon the underwriters for any partial loss upon the declared interest, the amount of such claim is taken from the amount of that interest, and any return of premium for short distance (or for convoy in time of war), etc., is calculated on the remainder.

When the insurance has been effected at Lloyd's, the amount of the return for short interest is to be percentaged upon the amount insured, in order to distribute it among the separate underwriters, and then the amount to be recovered from them is to be calculated, with this rate upon the insured interest; but in insurances with the companies this is not required to be done.

RETURN OF STAMP-DUTY.

A return of the stamp-duty is allowed in exchange for another policy, at the stamp office, provided the original policy has not been signed by the underwriters and has never been in force.