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B-165435, MAY 14, 1970

B-165435 May 14, 1970
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850 FOR WHICH POSTAL INSURANCE FEES PRESCRIBED FOR ARTICLES NOT COVERED BY OTHER INSURANCE WERE PAID AND FOR WHICH CLAIMANT HAS COLLECTED ARTICLE'S VALUE LESS $10. IS CONSIDERED VALID. AS VIEW THAT ARTICLE IS TO BE CONSIDERED INSURED. EVEN THOUGH FULL REIMBURSEMENT UNDER COMMERCIAL POLICY IS PRECLUDED BY DEDUCTIBLE CLAUSE. WE ARE OF THE OPINION THE COMPANY MAY BE INDEMNIFIED IN THE AMOUNT CLAIMED. 000 AND A SURCHARGE OF $2.70 BASED ON THE BALANCE OF THE VALUE OF THE MAILED ARTICLE WERE PAID BY THE CLAIMANT. INVOLVED HEREIN ARE THE PROVISIONS OF TITLE 39. 000 "WHEN THE ARTICLE IS NOT INSURED WITH ANOTHER INSURING AGENCY.". THE QUESTION IS WHETHER THE LOST ARTICLE IS TO BE VIEWED AS "INSURED WITH ANOTHER INSURING AGENCY" WITHIN THE CONTEMPLATION OF SECTION 5001 (B) SO AS TO PRECLUDE PAYMENT IN EXCESS OF $1.

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B-165435, MAY 14, 1970

POST OFFICE DEPARTMENT--MAILS--THEFT, LOSS, DAMAGE, ETC.--INSURANCE COVERAGE CLAIM FOR $10,000 INCIDENT TO LOSS OF REGISTERED ARTICLE VALUED AT $27,850 FOR WHICH POSTAL INSURANCE FEES PRESCRIBED FOR ARTICLES NOT COVERED BY OTHER INSURANCE WERE PAID AND FOR WHICH CLAIMANT HAS COLLECTED ARTICLE'S VALUE LESS $10,000 UNDER COMMERCIAL POLICY, IS CONSIDERED VALID, AS VIEW THAT ARTICLE IS TO BE CONSIDERED INSURED, AND INDEMNITY THUS LIMITED, EVEN THOUGH FULL REIMBURSEMENT UNDER COMMERCIAL POLICY IS PRECLUDED BY DEDUCTIBLE CLAUSE, APPEARS UNREALISTIC AND NOT IN KEEPING WITH OTHERWISE PRACTICAL TENOR OF STATUTORY PROVISIONS DEALING WITH INDEMNIFICATION FOR LOSS OF REGISTERED ARTICLES IN MAIL. SEE 48 COMP. GEN. 435.

TO MR. POSTMASTER GENERAL:

PURSUANT TO YOUR RECENT REQUEST WE CONSIDERED THE CLAIM OF L. A. MONTELL & COMPANY, ST. LOUIS, MISSOURI, FOR INDEMNIFICATION IN THE AMOUNT OF $10,000 FOR THE LOSS OF A REGISTERED ARTICLE. WE ARE OF THE OPINION THE COMPANY MAY BE INDEMNIFIED IN THE AMOUNT CLAIMED.

THE CLAIM INVOLVES THE LOSS OF JEWELRY VALUED AT $27,850, MAILED BY THE CLAIMANT. A REGISTRY FEE OF $4.45 FOR POSTAL INSURANCE COVERAGE OF $10,000 AND A SURCHARGE OF $2.70 BASED ON THE BALANCE OF THE VALUE OF THE MAILED ARTICLE WERE PAID BY THE CLAIMANT, THE FEES PRESCRIBED FOR ARTICLES NOT COVERED BY COMMERCIAL OR OTHER INSURANCE. THE CLAIMANT HAS COLLECTED THE VALUE OF THE ARTICLE LESS $10,000 UNDER A COMMERCIAL INSURANCE POLICY WHICH STATED, "* * * THIS INSURANCE DOES NOT APPLY TO REGISTERED MAIL AND REGISTERED AIRMAIL SHIPMENTS VALUED AT $10,000.00 OR LESS PER PACKAGE, NOR TO THE FIRST $10,000.00 OF THE VALUE OF ANY PACKAGE HAVING A VALUE IN EXCESS OF THAT AMOUNT * * *."

INVOLVED HEREIN ARE THE PROVISIONS OF TITLE 39, U.S.C. PERTAINING TO THE POSTAL REGISTRY SYSTEM, PARTICULARLY SECTION 5001 (B) PRESCRIBING THE LIMITATIONS ON AUTHORIZED INDEMNITY PAYMENTS. THAT SECTION, IN THE CASE OF A REGISTERED ARTICLE HAVING A VALUE IN EXCESS OF $1,000, AUTHORIZES PAYMENT OF INDEMNITY FOR THE ACTUAL VALUE OF THE REGISTERED ARTICLE TO THE EXTENT OF $10,000 "WHEN THE ARTICLE IS NOT INSURED WITH ANOTHER INSURING AGENCY." SPECIFICALLY, THE QUESTION IS WHETHER THE LOST ARTICLE IS TO BE VIEWED AS "INSURED WITH ANOTHER INSURING AGENCY" WITHIN THE CONTEMPLATION OF SECTION 5001 (B) SO AS TO PRECLUDE PAYMENT IN EXCESS OF $1,000.

IN THE DECISION OF DECEMBER 23, 1968 (48 COMP. GEN. 435), TO WHICH YOU REFER, THERE WAS CONSIDERED THE QUESTION OF INDEMNIFICATION IN THE CLOSELY RELATED SITUATION OF THE LOSS OF A REGISTERED ARTICLE HAVING A VALUE OF $7,448, LESS THAN THE AMOUNT OF THE DEDUCTIBLE CLAUSE ($10,000) CONTAINED IN THE COMMERCIAL INSURANCE POLICY CARRIED BY THE CLAIMANT. WE HELD IN THAT CASE THAT INDEMNIFICATION IN THE AMOUNT OF THE VALUE OF THE LOST ARTICLE, $7,448, WAS WARRANTED--

"WHETHER THE INDEMNITY PAYMENT HEREIN OF THE TOTAL VALUE OF THE LOST PACKAGE WAS PRECLUDED BY STATUTE TURNS UPON THE INTERPRETATION OF THE SECOND SENTENCE OF SUBSECTION 5001 (B), PARTICULARLY THE CLAUSE 'WHEN THE ARTICLE IS NOT INSURED WITH ANOTHER INSURING AGENCY.' THE VIEW THAT AN ARTICLE IS TO BE CONSIDERED AS INSURED, AND THUS INDEMNITY LIMITED TO $1,000, EVEN THOUGH REIMBURSEMENT UNDER THE COMMERCIAL INSURANCE POLICY IS PRECLUDED BY THE EXISTENCE OF A DEDUCTIBLE CLAUSE, APPEARS TO US UNREALISTIC AND NOT IN KEEPING WITH THE OTHERWISE PRACTICAL TENOR OF THE REFERRED TO STATUTORY PROVISIONS DEALING WITH INDEMNIFICATION FOR THE LOSS, RIFLING, OR DAMAGE OF REGISTERED ARTICLES IN THE MAIL."

WE ARE OF THE OPINION THE POSITION TAKEN IN THE DECISION OF DECEMBER 23, 1968, IS EQUALLY VALID HEREIN, AND CONCLUDE THAT THE CLAIM OF L. A. MONTELL & COMPANY IN THE AMOUNT OF $10,000 IS VALID.

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