River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1899-11-09
The Insurance Situation

The Insurance Situation.
The statement in the last issue of
the JOURNAL with reference to in
surance rates in this city seems to
have stirred up some OF our insurance
friends Of the Underwriters combine.
They have issued circular in which
our statement as to the rate quoted
on the public school building, and the
statement that the rates have been
doubled since the construction of the
waterworks, are criticised. Whatever
the fact may be it nevertheless
remains true, that IL the Northwest
ern Fire Insurance Company can
afford to insure property in this city
at one-third of the old line rates, the
rates asked by the gentlemen who
except to the statement of the
JOURNAL, then those rates are al
least three times anhat they ought to BE- We
presume that the Northwestern Fire
ms. Co. is not doing business at a
losing rate. What profits do the
other companies expect9 We believe
the JOURNAL is absolutely safe in
saying that the insurance rates were
not lowered in this city by reason of
the facilities for extinguishing fires
afforded by our excellent water system.
For several years after the water
works were constructed the insurance
companies held TO their old figures
(if they did not raise them), and it
was only when the local company
came into the field on the mutual
plan that they made any cut. The
River Falls City Mutual Fire Insur-
ance Company deserves the credit for
any lowering of the rates, and anyone
insuring his property with it may
rest assured that in the end he will
pay the actual cost of insurance only,
while the stock companies have ex-
pensiye agencies, highly paid officials
and expect to pay large dividends, all
Of which is paid by the consumer"
which in this instance is the insured.
Then there is the "moral hazard"
which is much greater in the case Of
a nonresident stock company, than
in mutual company where the
neighbors insure each other. The
mutual companies have thus far been
an unqualified success In this state,
and even in this city the mutual
company has served its purpose we'll
by securing to our people more
reasonable rates. Since the 18th Of
May, 1897, when it commenced
business, it has issued 146 policies
representing total insurance Of
$l20,025. 1t has saved in premiums
to our citizens directly at least a
thousand dollars, and indirectly
probably three times that amount.
The slight premiums collected by it
have remained in our own community,
while every cent paid to the stock
ompanies, except what is retained by
the agent as commission, is sent to
distant parts of the country. We are
also safe in saying that the local
company is more guarded as to over
insurance than companies represent
ed by agents whose living depends in
whole or in part upon the amount Of
premiums they are able to collect.
This itself is safeguard and reduces
the moral hazard which plays such an
important figure in fixing the rates
by the stock companies. The local
company has not canvassed for insur-
ance; it has appealed to the reason Of
our citizens only; it has been fought
from its very birth by every insurance
agent in the city; still its growth has
been steady and uninterrupted, and,
whether the Northwestern f. /. Co.
holds to its cut rate or not, the local
company deserves the support Of cur
citizens as the only force which will
in the end secure to them insurance
at the actual cost. We are informed
claim that the N. w. f. l. Co. is in
the field for the sole and only purpose
of driving out the local company. If
so, what is the purpose? Is it to give
our people cheaper insurance? Do
not be deceived. If its purpose be to
drive the local company out of the
| field it must be because that company
has interfered with the earnings of
| the N. w. and other stock companies,
and the only way to reestablish those
earnings is to raise the rates as soon
as they have driven the River Falls
company out of business. Hence the
only way to secure permanently fair
rates of insurance is to stand by the
local company. Seeits advertisement
in another column of the JOURNALS;
examine your policy and, when it
expires, insure your property in the
River Falls City Mutual Fire Insurance
| Company.