The river press. [volume] (Fort Benton, Mont.) 1880-current, 1906-06-06
The River Press.
Published erery Wednesday Morning
By the Rirer Press Publish
ing Company.
FIRE INSURANCE RATES.

FIRE INSURANCE RATES.
The Montana representatives of fire
insurance companies have been mott.
fed that, in order to ecove the losses
sustained in the San Francisco disas.
ter, assurances rates upon many classes
of Montana property will be raised %
per cent. This addition to rates tina,
were already exhorbitant is q gross
imposition upon citizens OF Montana.
The official records in the state audi.
tors office show that fire insurance
companies have been making enor.
mous profits upon their Montana bust.
ness. For the years 1903 and 1904,
the insurance premiums collected from
residents of Montana amounted to
about a million dollars in excess of
the losses paid in this state by the in
surance companies. These handsome
annual profits from Montana should
suggest q reduction of rates in this
state, instead of an increase, but as
the fire insurance companies have
formed a trust to eliminate competi.
ton and collect as much event az
possible from the public, the rates
have been maintained at the highest
figure in force in any part of the coun.
try.
In commenting upon this evidence of
fire insurance extortion, the Great
Falls Tribune makes these pertinent
remarks: 1t will raise in the minds
of q good many business men the
question whether it would not on the
whole be better to insure themselves
instead OF submitting to what seems
on the face of aft airs a gross injustice.
The stock of many of these insurance
companies sells at a great premium,
on account Of the enormous dividends
they paid. We learn from the eastern
press that q of the big Connecticut
fire insurance companies, which lost
largely in the San Francisco dis aster,
determined to replace this loss made
in their surplus by the issue of new
stock, and as a special favor to the
old stockholders they we're given the
first chance to subscribe for the new
stock at 400 per cent. premium. 1t was
quickly taken by the old stockholders
on this basis.
The fact is that the fire insurance
are not willing TO take the
lean with the fat in their business. 1t
looks as though they want to play at
q "Heads l win and tails you lose"
game. When they enjoy Q period Of
good luck and small losses, they pay
big dividends to their stockholders
and pile up surplus, and when the
evil day of losses ONE to them they
camly shove the loss back at their
customers in the shape of increased
premiums. There ia such q thing as
"killing the goose that lays the golden
eggs" in an effort to acquire eggs
faster than the goose can lay them.
1t looks as though the fire insurance
magnates might come to appreciate
the moral Of the fable. They pros
pered for years at the present rates in
spite Of the expensive methods of do.
ing business that strenuous competi.
ton engendered. To suddenly raise the
rates 25 per cent. can by no possibility
be considered other than q gross ex.
action. Nearly all the companies paid
or are able to pay their losses out of
their surplus accumulations. This
surplus represents the excess In prem
iums received from the public over the
cost OF doing business, ordinary risks
and dividends. Its announced pur-
pose was to meet any extraordinary
conAagration loss which might come
to it without imperiling the financial
soundness of the company. To load
the loss back on the insured in vastly
increased rates Is to make them pay
the loss twice. They paid it first when
they contributed in premiums enough
money to pay all ordinary risks, ex-
penses and profits, and besides to pile
up this surplus.
II the fire insurance companies find
it necessary to reduce their expenLi.
lures in fire losses or cost of doing
business, that is another matter. Ii
they would exercise u little more care
in accepting insurance when the moral
risk is plainly present as a feature,
and make an earnest campaign against
arson instead of practically encour.
aging it by paying doubtful losses
without question, and then rushing in
to secure another risk from the same
party, insurance rates could be re-
duced instead Of increased, with no
loss Of profit to the company.
1t may be that the insuring public
will walk up to the counter and pay
the % per cent. increase in rates asked
by the insurance companies in this