Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-12-10
FIRE INSURANCE.
Good, Bad and Indifferent.
What fhe Underwriters Have 10 say
and Reflections by One of the AZ

Sure0.
We have received the following comlnu-
nication, which we deem of sufficient IN
.a-nc' to give to orr readers entlre--oi'Y
remarklnS That Wc reec.tosi 'gy "a 'iie
circular referred to entitled "Cheap lns'lf-
ance,n as quoted by the writer:
To the Union and American:
am in receipt of the following printed
circular through the postofiice, which pllr-
ports to be ''published by the Nashville
Board of Underwriters:
CHEAP INSURANCE.
An article offered cheap to shrewd ana
thoughtful man cannot escape his closest
scrutiny He regards it with doubt, con-
sidering purchase as cheap only, when
from his knowledge of it he is assured that
it possesses an intrinsic value to him, or IN
the market in excess of the price demand
ed for it; this price may be below the cost
of production, and the seller by so dIspos-
ing if his wares may be banBrupted, and
most generally is-the purchaser when sat
iSfied of its value has the article in hand
and enjoys or sells it again unaffected by
the condition of the original owner. This
is not the case in inSurance-the policy is
promise to pay for property arhen at IS de-
strOged, and the test of its goodness comes
only when it is too late to retrace steps.
Before fire one policy is as good as anoth-
er-afterwards the assured wants to know
whether his company has collected enough
premiums and is able to pay his and other
losses. No fact has been made more appar-
ent than the cheapest policies have dllcdys
proved the highest priced articles mer-
chant can invest in-this information which
has cost many persons large sums is given
gratis.
The rates now charged are deemed bare
ly adequate to pay ordinary losses and hay
up reserve for the extraordinary ones that
neUeT. fail to come; they are founded on the
experience Of the best companies (many OF
them a century old); to 60 below them will
certainly destroy the power to confer the
benefit promised by the policy when the
contingency arises. When a merchant is
known to be selling his goods 6eiOlv cost,
(the market price being firm, he may be
impelled to do it by bis want of money
only and he may be taking one of the first
steps that leads to fraud-hiS action ex-
cites comment always. Can the case be
different with an insurance company? They
acknowledge that their policies are not
worth as much as those of other cOmpa-
MES; they confess that they lack the conf
dence Of she public; that they can compete
for business only by under bidding-they
announce their own dement's; no other in
ference can be drawn from their acts. The
real fact is that both honor and pride actu-
ate companies when they declare that their
policies must always be worth their face
value and their determination to collect
rates to make them so.
no AnIac
and Triumph Insurance Companies of Gin
cinnati. were formed under the same man
agement and went to work defying all the
well known rules of underwriting. The
Andes and Triumph failed, sinking two
million dollars in their endeavOr to make
money by selling goods below cost. 4
more recent example is the North Missouri,
an undercutter now in the tolls Of bank
ruptcy-this fate has been proven inevitable
where the business of companies is not con-
Quoted on a safe basis. SO forcibly has
this fact been brought home TO the compa-
MES themselves, that it is not belived there
is in the length and breadth of the land,
single one Of responsibility, standing and
influence that dares to depart from the as
certained cost of insurance in carrying
risks. II is this class Of companies that
submit confidently and without prejudice
to the public, whether both judgment and
interest do not demand that they receive
support, and whether it is not false economy
to save for the present few dollars and
risk in the future many thousands. Pub
lishcd by the Nashville Board Of Under
writers.
If you grant publication to this circular,
| beg leave to offer few reflections there
on, to 90 to the public with it, which l will
make as brief as possible.
Why should receive such a circular as
this at this time? | have never had any
thing of the sort before. It singles out fail
ures Of certain companies by name. Why
is this? Are there other companies doing
business in Nashville likely to fail, as those
named have done? andis this warning from
the Nashville Board of Underwriters" to
give those people of Nashville who insure
their property information in relation to
shaky companies? Ifthis is their purpose
they have failed to give the information
desired. '.The Nashville Board of Under
writer's have told me, and if you
publish this, have told the public
only enough to guard them against
all companies which insure at cheap rates.
They, in effect say, the higher premium
you pay the safer You are, and the smaller
the premium you pay the more unsafe you
are. l interpret the circular addressed to
me as above set forth, to have for its OBJ
iect to reconcile the high rates of insurance
| may pay, Or to cause me to abandon any
.'cheap insurance" l may have, and resort
to higher rates for safety. As this is a sub
| ject which interests every property owner
in Nashville, and, as for that matter.
throughout the country, l ask permission
TO trespass so far on your space as to fur
ther point out the points of this circular.
The Nashville Underwriters say, ''the
policy is a promise to pay for property
| 2rhen It is destroyed Before
a fire, one policy is as good as another
afterwards the assured wants to know
whether his Company is able to pay his and
| other losses" Now, | do not look at it
that way. When | take my policy and pay
my money, l want to know at thai moment
| that the Company | insure in is able, lin case
ofloSs, to pay to the extent Of the risk. If
am to find out, after the loss, ! may find
! that | am the victim of an unmitigated
| swindle, and then my money is gone and
my property is gone. This surely the advice
| of jobs Comforter! If some Companies
are good and some are bad-and one is as
| good as another before fire, the insurer is
tossing ''cross and piles" in taking policy,
and is taking his own insurance at last
and had better take it at first, by saving the
money he pays out for it.
The Underwriters of Nashville further
say, in. substance, that when one company
takes a risk at less than its neighbor, it
thereby advertises its own dement's, in that
it does not hold its policy to be equal in
value to that Of its neighl or who receives a
higher rate of premium on the same class
of risks. Now, this may all be true. It is
possible, perhaps, that a company which
charges % per cent. on risks iudiciously
taken, and is economically administered,
could manage to pay, to the last farthing,
any loss it might sustain. But does the
theory of insurance imply any such rates
| Is 1t not, on the contrary, an assessment on
given amount Of property for the benefit
and security of the whole! And is it not
a fact established by insurance records,
that the companies doing the largest
amount Of business can afford to take risks
| at lower rate than those taking
a small amount of risks? If the
smaller the risk, the greater the .sOlvency,
why should not every one be his own liz
surer There is not a Company, l VEN
ture to say, now doing business in Nash
| vile, determines its rate Of premium ~ the
| aggregate of receipts and losses in this CITY