New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1900-02-18
FIRE RISKS AND LOSSES.
INSURANCE COMPANIES HAMPERED BY
LAW IN COOPERATING ON RATES.

INSURANCE COMPANIES HAMPERED BY
LAW IN COOPERATING ON RATES.
To the Editor of The Tribune
Sir; In an editorial on Monday you referred
20 the excessive fire losses last year. particu-
larry in this State. and directed attention for
cfbly 10 the electrical hazard and the faults Of
landlords and tenants in the care OF property
lamps. candles. matches. etc Then Won have a
vord with the insurance COMPANIES and ask.
Is il not practicable for them TO roach some
diminished IN the future? Why should they not
act IN harmony and impose high rates on
buildings and on stocks which are not rroperiv
protected. and in all instances where owners
give reason 10 suspect that they are negligent?
II there is one thing in this busy world that
the insurance companies would like 10 do sue
oessfully it is TO act in harmony with rates
Proportioned 70 hazards They have attempted
70 do this but anti-compact laws and agftators
have put I'D the bars IN many States In
Eurance companies are hampered by laws that
prevent cooperation in inspecting risks and
making and maintaining fair rates-fair for
the companies and fair for the people Intelli-
gent ratemakng has been the means Of i'm
proving risks and reducing both premiums and
fire losses wherever modern insurance tariffs
have been applied
You say rightly that pressure applied nv the
a
ards would be Legitimate and proper" The in
surance companies believe the same thing and
have attempted 10 conduct their business ac-
eordingly, but they labor under difficulties in
the way Of hostile laws and unfair popular criti-
cism- The position OF the companies is shown
clearly IN the following extract from pamphlet
published recently by the National Board Of
FIRE Cnoer"ri1ers on The Relation Of Fire In
surance 10 the Community.
panies conduct their business without interior
ence. IN the same manner that they permit ruer-
chants 10 conduct their caIlings without Iegis-
lauVe RESTRICTIONS, the business would regulate
itself but II they undertake conscienttouslv 70
regulate insurance in the real interest of the
community they should insist upon intelligent
rating. which would carefully discrinfnare nv
higher charges for faults Of construction faults
q management and negligence resulting in 1res
and upon careful inspection and conference
20 secure comparison Of experience and the
broadcast basis for fixing prices. Il should be
borne IN mind that the payment for a fire by an
insurance company simply distributes the loss
OF the individual upon the entire community; il
does not restore anything Such drains upon the
resources OF the country must be felt in higher
rates for Insurance, higher taxation and in finar
ca oppression Lhey are 10 large extent pre-
FenIabie and intelligent inspection and discrin-
mating rating by insurance companies would
Secure this end.
Where buildings are rated by q system which
charges for defects in construction and faults
OF management, for negligence as TO the care
q ashes. rubbish and other faults which tend
faint the result VIII Inevitably be 70 correct
such faults by the property owner, who win nat
uraL-y wish 70 save the annual charge which
would otherwise he g burden for the entire life
OF the structure. and those who erect new build
ings would be led 70 construct them properly
with view TO saving this expense
L may safely be asserted that the enormous
IRE waste OF the country. costing at present AT
the rate Of more than S125 100000 per annurn.
or more than SO 900 600 a month, would be ma
terially increased but for the inspections and
suggestions OF insurance companies. enforced
by higher rates charged TO those property own
ers who are careless Indifferent as TO fire:
and would be materially decreased II legislative
restrictions in various States did not prohibit
the corporation Of insurance companies for
lsudable purpose directly in the interest Of
the community
You have been misinformed evidently the
subject OF insurance old fashioned. cheaply
constructed and badly planned buildings" at
Extremely low rates" Some old fashioned"
buildings better risks than many modern
buildings. Practically all the buildings in Eu-
ropean cities are old fashioned but the loss
ratio thereon is small. "Cheaply constructed
and badly planned buildings too hazardous
for large amounts Of insurance, even at high
rates. FRANKLIN WEBSTER,
Editor Of The Insurance Press"
New-York Feb. Il, 1900.