The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1907-10-15

mittee of the Merchants Association,
are not paying too high a rate for
their fire insurance, although the aver
age rate paid here is above the ordi-
nary on the mainland. This Is &C
counted for by the high rates charged
by all the companies on their risks
throughout Chinatown.
For some time the committee has
been investigating the subject, and al
though their findings are not going to
bring about any reduction in the in
surance rates just at present, the re-
suit will be a considerable saving to
the Honolulu merchants in the fact
that the investigation has brought to
the attention of the merchants ways in
which the rates in individual instances
can be brought down by observing
hitherto UNDECIDED conditions in their
policies.
The matter Of insurance rates was
brought before the association through
the efforts of James Wakefield, of Da-
vies & Co., who prepared statements
and statistics showing that the rates
here were too high and the profits Of
the insurance companies for the past
four years excessive. In the past four
years, according to Mr.. Wakefield s
figures, the premium revenues for 1903
1876 totalled $1,529,225 while the losses
only amounted to S,626, the net earn
ings, deducting reserve, operating ex-
penses and losses being 1928 per cent.
of the premiums. The average rate
during these four years in Honolulu
1ox 1 It'll he
average throughout the United States
for the past thirteen years has been
only LOS.
In a carefully prepared statement,
Mr.. Wakefield found that the Honolulu
Fire Department is remarkably eff
cient and its equipment up-to-date.
He finds that the water supply is ade-
quate and reliable, the gravity sys-
tenn being well supplemented by the
pumping system.
THE COMMITTEE REPORT.
While admitting the correctness Of
the statistics presented by Mr.. Wake
fered greatly from him in it's conclu-
sions. The report was:
Honolulu, September 16, 1907.
George w. Smith, President Mer-
chants Association, Honolulu.
"Dear Sir:-Your committee on
Trade and Finance, to whom was refer
red some Statements and Statistics,
compiled by Mr.. James Wakefield, rela-
tive to fire insurance rates, beg leave
to report as follows:
"These Statements and Statistics
which Of nd IL cd
A, B, c, D, purport to show that during
the last four years the profits from
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 1 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
writer's. 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 out 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.
"The 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 If, 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.
"In line with the statement which we
have made that the basis rate does not
appear to be excessive under the cir
your committee have salts
fed themselves that the City of Honolu-
lu is a hazardous risk. First, because
the fire limits are too circumscribed,
and apparently efforts to extend them
are fruitless.
Crane buildings are rapidly being
erected where they should never be al
lowed, and constitute rapidly increas-
ing menace to the safety of the city.