Iowa voter. [volume] (Knoxville, Iowa) 1867-1874, 1870-03-10
The DeiusiOn OF Low Rates
Cor Fire Insurance.

OF all the fallacies to which the
public is given, none Is more paipa-
Die. and vet none Is more universally
prevalent, than the notion that cheap
insurance is real economy. Men,
shrewd in their own department OF
business, skillful financiers, success
full merchants, will, in the matter OF
insurance, commit the most glaring
absurdities by practically relying for
security upon parties who are newt
ably running themselves by selling
their wares belowcost. They do not
act thus in other business. Sagacious
men will not ordinarily cntrust the
protection Of valuable interests to
those who manage recklessly; but
insurance seems To furnish an excep-
ton to all sound rules, for good bust
ness men do take the policies Of in
ferior companies, frequently, in
preference to those Of solid ability,
because the rate Is Il shade lower in
the former. Is not this because the
subject has never been placed before
them in its proper light: Do not
men cOnfound the purchase Of an
insurance policy with ordinary mer-
camille transactions,not con. prehend-
ing that the policy is not the thing
itself, but merely the representative
of q future possible something's
mere promise to pay ulon the occur
renee Of q distant contingency.
Ifone buys a house and pays for it,
he enters mt once into the enjoyment
of that for which he spends his mon
ey, by possession of the thing itself;
but, il one obtains insurance and pays
for it, the policy Is not the thing it.
self, but is merely the evidence of nm
expected benefit In the indefinite
future, under certain contingencies.
The power to confer the benefit may
cease before the contingency arises,
or may never have existed. He did
not secure the thing itself in the
policy for which he poid.
If he purchase boots for two dollars
that cost the maker five, he may
wear them at once, enjoying the
purchase and testing its value inn
lnediately; the seller may be ruined
before the boots are half Worn, but
that does not injure either the pur-
chaser or the boots. Not SO with n
cheap Insurance policy: the very
figure ut whit n he buys 1t, instead Of
suggesting tho notion of Il good bar
gain, furnish es most substantial evil
dence that Re is swindled, because its
value lies in its future strength, and
that strength comes solely from the
price which he and others are now
paying. The money for losses and
expenses must come from the pre-
ninms, and X the premiums are
inadequate, he is leaning for future
support upol broken staff, which,
instead OF proving stay, will, In
due time, pAerce the hand that rests
upon 1t. The conclusion Is in
evitable. .as4rs IA @
Let this distinction be well under
stood and frequently talked about by
officers, solicitors, agents and others
who come in direct contact with the
public, Let gentlemen understand
that there is no similarity whatever
between an ordinary purchase and
the purchase of an insurance policy,
because the result Of the one is i'm
mediate possession, while the other
is a mere promise, a deferred deliv-
cry of the thing itself to some point
placed indefinitely in the future,
Let them also understand that by
long experience, the better compa.
nies have come to know Just about
what the risks are worth. and any
considerable departures from the
rates established by companies or
long standing, wide experience and
good repute, are sure to be ruinous
to companies who make them. And
II ruinous to companies, Just as cer-
tainly ruin0us to those who accept
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