The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1907-10-12
LOCAL INSURANCE
RATES ARE NOT
EXTORTIONATE.
Merchants Association Find That Savings Can
Be Made by Studying the
Insurance Rules

premiums in the Territory have been
abnormal and out of all proportion for
the prosecution of fire insurance on a
reasonably" profitable basis.
'' 1t is also stated that owing to these
facts the Merchants Association should
request the Board of Underwriters of
Honolulu to forthwith make a substan-
tial reduction of fire insurance rates.
This committee regrets that they are
unable to favor this plan and do not
believe the present rates to be excessive
under the circumstances.
"The method of rating risks, adopted
by the Board of Underwriters of this
Territory and which seems, as far as
this committee is aware, to be similar
to the method in use in the larger cities
of the Pacific Coast, is to start with a
basis or key rate of l per cent.
''This basis is fixed on what are
known as standard commercial build
ings, built of brick, stone or concrete,
and which comply with certain build
ing requirements fixed by the Under
writers. Why this basis rate of l per
cent was adopted we do not know and
have been unable to find out, but it is
the same rate that prevails in most
Pacific Coast cities and was the rate
in San Francisco at the time of the
earthquake. 1t is also the same rate
prevailing in many Eastern cities.
''To this basis rate is added or de-
Quoted, as the case may be, certain
charges for deficiencies or Improvements
from or to the Standard and right
here is where, by little attention to
details, Honolulu property owners can
obtain substantial reductions in their
rates, at no great outlay, by meeting
the requirements of the Board of I'm
derwriters.
''There are several buildings in Ho-
nolulu paying less than the basis rate
'of l per cent by having complied with
the requirements and put their property
in good shape. This basis rate does
not appear to your committee to be un-
fair when everything is taken into con-
sideration.
'FThe history of city should, of
course, be considered in the calculation
of its rates, but not to an extent that
some imagine. The structural excel
lence or deficiency, the amount of water
available, and the completeness of the
system of handling it, the nearness or
absence of other cities that can aid in
the extinction of large fire, the disci- |
pline of the department, etc, each of |
these items enters into the calculation |
more forcefully than does the fire his |
tory of city.
I'm line with the statement which we
have made that the basis rate does not |
appear to be excessive under the cir
cumstances, your committee have salts !,
fed themselves that the City of Honolu- |
lu is a hazardous risk First, because /
the fire limits are too cireumscribed, |
and apparently efforts te extend them
are fruitless.
''Frame buildings are rapidly being |
erected where they should never be al
lowed, and constitute rapidly increas-
ing menace to the safety of the city.
'FMany of our best buildings, and
;ome of them of recent construction,
show glaring disregard for ordinary
precautions against fire, if not a dis
'egard of the building laws of the Ter
'itory.
"Our water supply is precarious.
Our fire department is inadequate.
t is effective and well handled as far
Is it goes, but unable to cope with
arge .confagration.
cit has come to the notice of this
that it has been difficult
ince the fire in San Francisco to OBJ
ain sufficient insurance on many of
ur local risks, and we have been told
Continued on Page Three.)